Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2020 | Jun. 28, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-36603 | ||
Entity Registrant Name | LIBERTY TRIPADVISOR HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-3337365 | ||
Entity Address, Address Line One | 12300 Liberty Boulevard | ||
Entity Address, City or Town | Englewood | ||
Entity Address, State or Province | CO | ||
Entity Address, Postal Zip Code | 80112 | ||
City Area Code | 720 | ||
Local Phone Number | 875-5200 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 854 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001606745 | ||
Amendment Flag | false | ||
Series A | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Series A common stock, par value $.01 per share | ||
Trading Symbol | LTRPA | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 72,154,703 | ||
Series B | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Series B common stock, par value $.01 per share | ||
Trading Symbol | LTRPB | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 2,929,401 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 341 | $ 672 |
Accounts receivable and contract assets, net of allowance for doubtful accounts of $25 million and $21 million, respectively | 183 | 212 |
Other current assets | 33 | 48 |
Total current assets | 557 | 932 |
Property and equipment, at cost | 254 | 234 |
Accumulated depreciation | (99) | (80) |
Property and equipment, net | 155 | 154 |
Intangible assets not subject to amortization (note 6): | ||
Goodwill | 2,527 | 2,443 |
Trademarks | 980 | 1,266 |
Intangible assets not subject to amortization | 3,507 | 3,709 |
Intangible assets subject to amortization, net (note 6) | 277 | 311 |
Other assets, at cost, net of accumulated amortization | 230 | 118 |
Total assets | 4,726 | 5,224 |
Current liabilities: | ||
Deferred merchant and other payables | 170 | 179 |
Current portion of debt (note 7) | 220 | |
Deferred revenue | 62 | 63 |
Accrued liabilities and other current liabilities | 205 | 151 |
Total current liabilities | 437 | 613 |
Long-term debt (note 7) | 353 | 267 |
Deferred income tax liabilities (note 9) | 254 | 325 |
Other liabilities | 381 | 283 |
Total liabilities | 1,425 | 1,488 |
Equity | ||
Preferred stock, $.01 par value. Authorized 50,000,000 shares; no shares issued. | ||
Additional paid-in capital | 237 | 231 |
Accumulated other comprehensive earnings (loss), net of taxes | (29) | (29) |
Retained earnings | 111 | 133 |
Total stockholders' equity | 320 | 336 |
Noncontrolling interests in equity of subsidiaries | 2,981 | 3,400 |
Total equity | 3,301 | 3,736 |
Commitments and contingencies (note 13) | ||
Total liabilities and equity | 4,726 | 5,224 |
Series A | ||
Equity | ||
Common stock value | 1 | 1 |
Series B | ||
Equity | ||
Common stock value | ||
Series C | ||
Equity | ||
Common stock value |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts receivables and contract assets, allowance for doubtful accounts | $ 25 | $ 21 |
Preferred Stock | ||
Equity: | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Series A | ||
Equity: | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 72,152,848 | 72,146,903 |
Common stock, shares outstanding | 72,152,848 | 72,146,903 |
Series B | ||
Equity: | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock shares issued | 2,929,401 | 2,929,777 |
Common stock, shares outstanding | 2,929,401 | 2,929,777 |
Series C | ||
Equity: | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenue, net | $ 1,560 | $ 1,615 | $ 1,569 |
Operating costs and expenses: | |||
Operating expense, including stock-based compensation (note 2 and 11) | 388 | 361 | 329 |
Selling, general and administrative, including stock-based compensation (note 2 and 11) | 874 | 966 | 1,021 |
Depreciation and amortization | 169 | 160 | 213 |
Impairment of intangible assets (note 6) | 288 | 1,798 | |
Total operating costs and expenses | 1,719 | 1,487 | 3,361 |
Operating income (loss) | (159) | 128 | (1,792) |
Other income (expense): | |||
Interest expense | (22) | (26) | (25) |
Realized and unrealized gains (losses) on financial instruments, net | 36 | (59) | 24 |
Other, net | 13 | 5 | (17) |
Total other income (expense) | 27 | (80) | (18) |
Earnings (loss) before income taxes | (132) | 48 | (1,810) |
Income tax (expense) benefit (note 9) | 16 | (57) | 229 |
Net earnings (loss) | (116) | (9) | (1,581) |
Less net earnings (loss) attributable to the noncontrolling interests | (94) | 55 | (1,184) |
Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders | $ (22) | $ (64) | $ (397) |
Basic net earnings (loss) attributable to Series A and Series B Liberty TripAdvisor Holdings, Inc. shareholders per common share (note 2): | $ (0.29) | $ (0.86) | $ (5.29) |
Diluted net earnings (loss) attributable to Series A and Series B Liberty TripAdvisor Holdings, Inc. shareholders per common share (note 2): | $ (0.29) | $ (0.86) | $ (5.29) |
Service revenue | |||
Total revenue, net | $ 1,560 | $ 1,615 | $ 1,556 |
Other revenue | |||
Total revenue, net | $ 13 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Earnings (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Earnings (Loss) | |||
Net earnings (loss) | $ (116) | $ (9) | $ (1,581) |
Other comprehensive earnings (loss), net of taxes: | |||
Foreign currency translation adjustments | 5 | (28) | 59 |
Reclassification adjustment for net losses included in net income | (2) | ||
Other comprehensive earnings (loss) | 3 | (28) | 59 |
Comprehensive earnings (loss) | (113) | (37) | (1,522) |
Less comprehensive earnings (loss) attributable to the noncontrolling interests | (91) | 33 | (1,138) |
Comprehensive earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders | $ (22) | $ (70) | $ (384) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net earnings (loss) | $ (116) | $ (9) | $ (1,581) |
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities | |||
Depreciation and amortization | 169 | 160 | 213 |
Stock-based compensation | 131 | 123 | 103 |
Impairment of intangible assets (note 6) | 288 | 1,798 | |
Realized and unrealized (gains) losses on financial instruments, net | (36) | 59 | (24) |
Deferred income tax expense (benefit) | (79) | (8) | (329) |
Other charges (credits), net | (18) | 10 | 25 |
Changes in operating assets and liabilities | |||
Current and other assets | 52 | 38 | (71) |
Payables and other liabilities | 27 | 85 | |
Net cash provided (used) by operating activities | 391 | 400 | 219 |
Cash flows from investing activities: | |||
Capital expended for property and equipment, including internal-use software and website development | (83) | (61) | (65) |
Acquisitions, net of cash acquired (note 3) | (108) | (24) | |
Purchases of short term investments and other marketable securities | (133) | (16) | (63) |
Sales and maturities of short term investments and other marketable securities | 150 | 64 | 133 |
Other investing activities, net | (2) | (12) | (6) |
Net cash provided (used) by investing activities | (176) | (49) | (1) |
Cash flows from financing activities: | |||
Borrowings of debt | 235 | 7 | 435 |
Repayments of debt | (359) | (245) | (369) |
Cash dividend paid by Tripadvisor to noncontrolling interests (note 10) | (380) | ||
Shares repurchased by subsidiary (note 10) | (60) | (100) | (250) |
Payment of withholding taxes on net share settlements of equity awards | (29) | (26) | (17) |
Derivative proceeds from counterparties | 71 | ||
Other financing activities, net | (20) | 6 | 2 |
Net cash provided (used) by financing activities | (542) | (358) | (199) |
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | (4) | (16) | 17 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (331) | (23) | 36 |
Cash, cash equivalents and restricted cash at beginning of period | 672 | 695 | 659 |
Cash, cash equivalents and restricted cash at end of period | $ 341 | $ 672 | $ 695 |
Consolidated Statement of Equit
Consolidated Statement of Equity - USD ($) $ in Millions | Series ACommon Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Earnings (Loss) | Retained Earnings | Noncontrolling Interest in Equity of Subsidiaries | Total |
Balance at beginning of the period at Dec. 31, 2016 | $ 1 | $ 245 | $ (36) | $ 593 | $ 4,621 | $ 5,424 |
Net earnings (loss) | (397) | (1,184) | (1,581) | |||
Other comprehensive earnings (loss) | 13 | 46 | 59 | |||
Stock-based compensation | 30 | 85 | 115 | |||
Withholding taxes on net share settlements of stock-based compensation | (17) | (17) | ||||
Shares repurchased by subsidiary (note 10) | (2) | (248) | (250) | |||
Other, net | (6) | 9 | 3 | |||
Balance at end of the period at Dec. 31, 2017 | 1 | 250 | (23) | 196 | 3,329 | 3,753 |
Net earnings (loss) | (64) | 55 | (9) | |||
Other comprehensive earnings (loss) | (6) | (22) | (28) | |||
Stock-based compensation | 35 | 101 | 136 | |||
Withholding taxes on net share settlements of stock-based compensation | (26) | (26) | ||||
Shares repurchased by subsidiary (note 10) | (20) | (80) | (100) | |||
Other, net | (8) | 1 | 17 | 10 | ||
Balance at end of the period at Dec. 31, 2018 | 1 | 231 | (29) | 133 | 3,400 | 3,736 |
Net earnings (loss) | (22) | (94) | (116) | |||
Other comprehensive earnings (loss) | 3 | 3 | ||||
Stock-based compensation | 37 | 109 | 146 | |||
Withholding taxes on net share settlements of stock-based compensation | (29) | (29) | ||||
Cash dividend paid by Tripadvisor to noncontrolling interests (note 10) | (380) | (380) | ||||
Shares repurchased by subsidiary (note 10) | 7 | (67) | (60) | |||
Other, net | (9) | 10 | 1 | |||
Balance at end of the period at Dec. 31, 2019 | $ 1 | $ 237 | $ (29) | $ 111 | $ 2,981 | $ 3,301 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation Liberty TripAdvisor Holdings, Inc. (“TripCo” or the “Company”) was formed in 2013 as a Delaware corporation. TripCo was a subsidiary of Liberty Interactive Corporation (subsequently renamed Qurate Retail, Inc. (“Qurate Retail”)) until the completion of its spin-off from Qurate Retail on August 27, 2014 (“TripCo Spin-Off”). TripCo does not have any operations outside of its controlling interest in its subsidiary Tripadvisor, Inc. (“Tripadvisor”) and its former wholly owned subsidiary, BuySeasons, Inc. (“BuySeasons”). TripCo sold its ownership in BuySeasons effective June 30, 2017. Both Tripadvisor and BuySeasons operated as stand-alone operating entities. Tripadvisor’s financial performance tends to be seasonally highest in the second and third quarters of a given year, which includes the seasonal peak in consumer demand, traveler hotel and rental stays, and travel activities and experiences taken, compared to the first and fourth quarters, which represent seasonal low points. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and represent a consolidation of the historical financial information of Tripadvisor (see note 4 for a more detailed discussion of transactions related to Tripadvisor) and BuySeasons. The results of BuySeasons are included in the accompanying consolidated financial results of TripCo until June 30, 2017. These financial statements refer to the consolidation of Tripadvisor and BuySeasons as “TripCo,” “the Company,” “us,” “we” and “our” in the notes to the consolidated financial statements. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation. Description of Business Tripadvisor is a leading online travel company and its mission is to help people around the world plan, book and experience the perfect trip. Tripadvisor operates a global travel platform that connects the world’s largest audience of prospective travelers with travel partners through rich content, price comparison tools and online reservations and related services for destinations, travel activities and experiences, and restaurants. Under its flagship brand, Tripadvisor, it launched www.Tripadvisor.com in the United States in 2000. Since then, Tripadvisor has launched localized versions of the Tripadvisor website in 48 markets and 28 languages worldwide. Tripadvisor’s rich content and engaged community attract the world’s largest travel audience based on monthly unique visitors, including 463 million average monthly unique visitors in the third quarter of 2019 during the peak summer travel season. In addition to the flagship Tripadvisor brand, Tripadvisor owns and operates a portfolio of travel media brands and businesses, operating under various websites, connected by the common goal of providing consumers the most comprehensive travel-planning and trip-taking resources in the travel industry. During the first quarter of 2019, as part of our continuous review of the business, we evaluated our operations and realigned the reportable segment information which our chief operating decision maker, or CODM, regularly assesses to evaluate performance for operating decision-making purposes, including evaluation and allocation of resources. The revised segment reporting structure includes the following reportable segments: (1) Hotels, Media & Platform; and (2) Experiences & Dining. Spin-Off of TripCo from Qurate Retail The TripCo Spin-Off was completed on August 27, 2014. Following the TripCo Spin-Off, Qurate Retail and TripCo operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. In connection with the TripCo Spin-Off, TripCo entered into certain agreements, including the services agreement, the facilities sharing agreement and the tax sharing agreement, with Qurate Retail and/or Liberty Media Corporation (“Liberty Media”) (or certain of their subsidiaries) in order to govern certain of the ongoing relationships between the companies after the TripCo Spin-Off and to provide for an orderly transition. Pursuant to the services agreement (except as described below in respect to Gregory B. Maffei), Liberty Media provides TripCo with general and administrative services including legal, tax, accounting, treasury and investor relations support. Liberty TripCo reimburses Liberty Media for direct, out-of-pocket expenses incurred by Liberty Media in providing these services and TripCo pays a services fee to Liberty Media under the services agreement that is subject to adjustment semi-annually, as necessary. In December 2019, TripCo entered into an amendment to the services agreement with Liberty Media in connection with Liberty Media’s entry into a new employment arrangement with Gregory B. Maffei, TripCo’s Chairman, President and Chief Executive Officer. Under the amended services agreement, components of his compensation will either be paid directly to him by each of TripCo, Liberty Broadband Corporation, GCI Liberty, Inc. and Qurate Retail (collectively, the “Service Companies”) or reimbursed to Liberty Media, in each case, based on allocations among Liberty Media and the Service Companies set forth in the amended services agreement, currently set at 5% for the Company. The new agreement between Liberty Media and Mr. Maffei provides for a five year employment term which began on January 1, 2020 and ends December 31, 2024, with an aggregate annual base salary of $3 million (with no contracted increase), an aggregate one-time cash commitment bonus of $5 million, an aggregate annual target cash performance bonus of $17 million, aggregate annual equity awards of $17.5 million and aggregate equity awards granted in connection with his entry into his new agreement of $90 million (the “upfront awards”). A portion of the grants made to our CEO in the year ended December 31, 2019 related to our company’s allocable portion of these upfront awards. Under the facilities sharing agreement, TripCo shares office space with Liberty Media and related amenities at Liberty Media’s corporate headquarters in Englewood, Colorado. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Qurate Retail and TripCo and other agreements related to tax matters. Pursuant to the tax sharing agreement, TripCo has agreed to indemnify Qurate Retail, subject to certain limited exceptions, for losses and taxes resulting from the TripCo Spin-Off to the extent such losses or taxes result primarily from, individually or in the aggregate, the breach of certain restrictive covenants made by TripCo (applicable to actions or failures to act by TripCo and its subsidiaries following the completion of the TripCo Spin-Off). Under these agreements, approximately $4 million and $3 million were reimbursable to Liberty Media for the years ended December 31, 2019 and 2018, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Cash and Cash Equivalents Cash equivalents consist of highly liquid investments, including money market funds and marketable debt securities, with maturities of three months or less at the time of acquisition. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recognized when the right to consideration becomes unconditional and are recorded net of an allowance for doubtful accounts. Such allowance aggregated $25 million and $21 million at December 31, 2019 and 2018, respectively. Our customer invoices are generally due 30 days from the time of invoicing. For accounts outstanding longer than the contractual payment terms, the Company determines an allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, a specific customer’s ability to pay its obligations to us, and the condition of the general economy and industry as a whole. Investments All marketable debt and equity securities held by the Company are carried at fair value, generally based on quoted market prices. Fair values are determined for each individual security in the investment portfolio. Unrealized gains and losses, net of taxes, arising from changes in fair value are reported in accumulated other comprehensive income (loss) as a component of equity. For those investments in which the Company has the ability to exercise significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the affiliate as they occur rather than as dividends or other distributions are received. Losses are limited to the extent of the Company’s investment in, advances to and commitments for the investee. In the event the Company is unable to obtain accurate financial information from an equity affiliate in a timely manner, the Company records its share of earnings or losses on a lag. For those equity securities without readily determinable values, the Company elected the measurement alternative (defined as the cost of the security, adjusted for changes in fair value when there are observable prices, less impairments). The classification of investments is determined at the time of purchase and reevaluated at each balance sheet date. We invest in highly-rated securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. The policy requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and providing liquidity of investments sufficient to meet our operating and capital spending requirements and debt repayments. Marketable debt securities are classified as either short-term or long-term based on each instrument’s underlying contractual maturity date and as to whether and when we intend to sell a particular security prior to its maturity date. Marketable debt securities with maturities greater than 90 days at the date of purchase and 12 months or less remaining at the balance sheet date will be classified as short-term and marketable debt securities with maturities greater than 12 months from the balance sheet date will generally be classified as long-term. We classify our marketable equity securities, limited to money market funds and mutual funds, as either a cash equivalent, short-term or long-term based on the nature of each security and its availability for use in current operations. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis. We may sell certain of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and liquidity and duration management. The weighted average maturity of our total invested cash shall not exceed 18 months, and no security shall have a final maturity date greater than three years. Derivative Instruments All of the Company’s derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive earnings and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. If the derivative is not designated as a hedge, changes in the fair value of the derivative are recognized in earnings. None of the Company’s derivatives are currently designated as hedges. The fair value of certain of the Company’s derivative instruments are estimated using the Black-Scholes-Merton model. The Black-Scholes-Merton model incorporates a number of variables in determining such fair values, including expected volatility of the underlying security and an appropriate discount rate. The Company obtains volatility rates from pricing services based on the expected volatility of the underlying security over the remaining term of the derivative instrument. A discount rate is obtained at the inception of the derivative instrument and updated each reporting period, based on the Company’s estimate of the discount rate at which it could currently settle the derivative instrument. The Company considered its own credit risk as well as the credit risk of its counterparties in estimating the discount rate. Management judgment is required in estimating the Black-Scholes-Merton model variables. Property and Equipment Property and equipment consists of the following (amounts in millions): December 31, 2019 2018 Buildings (1) $ — 123 Finance lease right-of-use asset (1) 114 — Leasehold improvements 49 41 Computer equipment and purchased software 70 52 Furniture, office equipment and other 21 18 Total property and equipment $ 254 234 (1) Refer to note 8 regarding the transition accounting related to the adoption of ASC 842 and subsequent accounting for Tripadvisor’s headquarters lease in Needham, Massachusetts (Tripadvisor’s “Headquarters Lease”). Property and equipment is recorded at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is three Leases The Company, through its consolidated companies, leases facilities in several countries around the world and certain equipment under non-cancelable lease agreements. Refer to note 8 for a discussion on accounting for leases and other financial disclosures. Intangible Assets Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment upon certain triggering events. Goodwill and other intangible assets with indefinite useful lives (collectively, "indefinite lived intangible assets") are not amortized, but instead are tested for impairment at least annually. Our annual impairment assessment of our indefinite-lived intangible assets is performed during the fourth quarter of each year. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. The accounting guidance also allows entities the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test. The entity may resume performing the qualitative assessment in any subsequent period. In evaluating goodwill on a qualitative basis, the Company reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it was more likely than not that an indicated impairment exists for any of our reporting units. The Company considers whether there are any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, the legal environments and how these factors might impact company specific performance in future periods. As part of the analysis, the Company also considers fair value determinations for certain reporting units that have been made at various points throughout the current year and prior year for other purposes. If, based on the qualitative analysis, it is more likely than not that an impairment exists, the Company performs the quantitative impairment test. The quantitative goodwill impairment test compares the estimated fair value of a reporting unit to its carrying value. Developing estimates of fair value requires significant judgments, including making assumptions about appropriate discount rates, perpetual growth rates, relevant comparable market multiples, public trading prices and the amount and timing of expected future cash flows. The cash flows employed in TripCo's valuation analyses, where applicable, are based on management's best estimates considering current marketplace factors and risks as well as assumptions of growth rates in future years. There can be no assurance that actual results will approximate these forecasts. The accounting guidance also permits entities to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. The accounting guidance also allows entities the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to the quantitative impairment test. The entity may resume performing the qualitative assessment in any subsequent period. If the qualitative assessment supports that it is more likely than not that the carrying value of the Company’s indefinite-lived intangible assets, other than goodwill, exceeds its fair value, then a quantitative assessment is performed. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. See note 6 for discussion of goodwill and trademark impairments. Websites and Internal Use Software Development Costs Certain costs incurred during the application development stage related to the development of websites and internal use software are capitalized and included in other intangible assets subject to amortization. Capitalized costs include internal and external costs, if direct and incremental, and deemed by management to be significant. Costs related to the planning and post-implementation phases of software and website development are expensed as these costs are incurred. Maintenance and enhancement costs (including those costs in the post-implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software resulting in added functionality, in which case the costs are capitalized. Impairment of Long-lived Assets The Company periodically reviews the carrying amounts of its property and equipment and its intangible assets (other than goodwill and indefinite-lived intangibles) to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. If the carrying amount of the asset group is greater than the expected undiscounted cash flows to be generated by such asset group, including its ultimate disposition, an impairment adjustment is recognized. Such adjustment is measured by the amount that the carrying value of such asset groups exceeds their fair value. The Company generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows using an appropriate discount rate. Considerable management judgment is necessary to estimate the fair value of asset groups. Accordingly, actual results could vary significantly from such estimates. Asset groups to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. Noncontrolling Interests Noncontrolling interest relates to the equity ownership interest in Tripadvisor that the Company does not own. The Company reports noncontrolling interests of consolidated companies within equity in the consolidated balance sheets and the amount of net income attributable to the parent and to the noncontrolling interest is presented in the consolidated statements of operations. Also, changes in ownership interests in consolidated companies in which the Company maintains a controlling interest are recorded in equity. Foreign Currency Translation and Transaction Gains and Losses The functional currency of the Company is the United States (“U.S.”) dollar. The functional currency of the Company’s foreign operations generally is the applicable local currency for each foreign subsidiary. Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date, and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is recorded as a component of accumulated other comprehensive earnings (loss) in equity. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses which are reflected in the accompanying consolidated statements of operations and comprehensive earnings (loss) as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions. Accordingly, we have recorded foreign currency exchange losses of $3 million and $6 million and gains of $1 million for the years ended December 31, 2019, 2018, and 2017, respectively, in other, net on our consolidated statements of operations. Revenue Recognition Tripadvisor generates all of its revenue from contracts with customers. It recognizes revenue when it satisfies a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that it expects to receive in exchange for those services. When Tripadvisor acts as an agent in the transaction, it recognizes revenue for only its commission on the arrangement. Tripadvisor determines revenue recognition through the following steps: (1) (2) (3) (4) (5) At contract inception, Tripadvisor assesses the services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, Tripadvisor considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. There was no significant revenue recognized in the years ended December 31, 2019 and 2018 related to performance obligations satisfied in prior periods. Tripadvisor has applied a practical expedient and does not disclose the value of unsatisfied performance obligations that have an original expected duration of less than one year, and Tripadvisor does not have any material unsatisfied performance obligations over one year. The value related to Tripadvisor’s remaining or partially satisfied performance obligations relates to subscription services that are satisfied over time or services that are recognized at a point in time, but not yet achieved. The timing of services, invoicing and payments do not include a significant financing component. Tripadvisor’s customer invoices are generally due 30 days from the time of invoicing. Tripadvisor recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. Although the substantial majority of its contract costs have an amortization period of less than one year, Tripadvisor has determined contract costs arising from certain sales incentives have an amortization period in excess of one year given the high likelihood of contract renewal. Sales incentives are not paid upon renewal of these contracts and therefore are not commensurate with the initial sales incentive costs. Total capitalized costs to obtain a contract were approximately $4 million and $2 million as of December 31, 2019 and 2018, respectively. These contract costs are amortized on a straight-line basis over the estimated customer life, which is based on historical customer retention rates. Amortization expense recorded to selling, general and administrative expense during years ended December 31, 2019 and 2018, respectively, were $1 million and not material. Tripadvisor assesses such assets for impairment when events or circumstances indicate that the carrying amount may not be recoverable. The recognition of revenue may require the application of judgment related to the determination of the performance obligations, the timing of when the performance obligations are satisfied and other areas. The determination of Tripadvisor’s performance obligations does not require significant judgment given that it generally does not provide multiple services to a customer in a transaction, and the point in which control is transferred to the customer is readily determinable. In instances where Tripadvisor recognizes revenue over time, it generally has either a subscription service that is recognized over time on a straight-line basis using the time-elapsed output method, or based on other output measures that provide a faithful depiction of the transfer of Tripadvisor’s services. When an estimate for cancellations is included in the transaction price, the estimate is based on historical cancellation rates. There have been no significant adjustments to Tripadvisor’s cancellation estimates and the cancellation estimates are not material. Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue–producing transaction, that are collected by Tripadvisor from a customer, are reported on a net basis, or in other words, excluded from revenue on its consolidated financial statements, which is consistent with prior periods. The application of Tripadvisor’s revenue recognition policies and a description of the principal activities from which it generates revenue, are presented below. Hotels, Media & Platform Segment Tripadvisor-branded Hotels Revenue In addition, Tripadvisor offers subscription-based advertising to hotel partners, owners of B&Bs and other specialty lodging properties. Subscription-based advertising services are predominantly sold for a flat fee for a contracted period of time of one year or less and revenue is recognized on a straight-line basis over the period of the subscription service as efforts are expended evenly throughout the contract period. Tripadvisor also offers travel partners the opportunity to advertise and promote their business through hotel sponsored placements on Tripadvisor’s websites. This service is generally priced on a fixed CPC basis, with payments from travel partners determined by the number of travelers who click on the sponsored link multiplied by the CPC rate for each specific click. To a lesser extent, Tripadvisor generates transaction revenue from Tripadvisor’s hotel instant booking feature, which enables hotel shoppers to book directly with a travel partner, with the latter serving as the merchant of record for the transaction, without leaving Tripadvisor’s website. Tripadvisor earns a commission from its travel partners for each traveler that completes a hotel reservation on Tripadvisor’s website, based on a pre-determined contractual commission rate. Tripadvisor-branded Display and Platform Revenue Experiences & Dining Segment Tripadvisor provides information and services that allow consumers to research and book activities and attractions in popular travel destinations primarily through Viator, Tripadvisor’s dedicated Experiences offering, and on the Tripadvisor website and mobile apps. Tripadvisor generates commissions for each booking transaction it facilitates through its online reservation system. Tripadvisor also provides information and services for consumers to research and book restaurants in popular travel destinations through its dedicated restaurant reservations offering, TheFork, and on Tripadvisor-branded websites and mobile apps. TheFork is an online restaurant booking platform operating on a number of websites with a network of restaurant partners located primarily across the United Kingdom (the “U.K.”), Europe, Australia, and South America. Tripadvisor primarily generates transaction fees (or per seated diner fees) that are paid by restaurants for diners seated primarily from bookings through TheFork’s online reservation system. Other Tripadvisor provides information and services that allow travelers to research and book vacation and short-term rental properties. The Rentals offering generates revenue primarily by offering individual property owners and managers the ability to list their properties on Tripadvisor’s websites and mobile apps thereby connecting with travelers through a free-to-list, commission-based option or, to a lesser extent, by an annual subscription-based fee structure. Tripadvisor earns commissions associated with rental transactions through its free-to-list model from both the traveler, and the property owner or manager. In addition, www.cruisecritic.com, www.onetime.com and www.smartertravel.com, and Tripadvisor China, which primarily includes click-based advertising and display-based advertising revenue. Practical Expedients and Exemptions Tripadvisor expenses costs to obtain a contract as incurred, such as sales incentives, when the amortization period would have been one Tripadvisor does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one Disaggregation of Revenue Years ended December 31, 2019 2018 amounts in millions Hotels, Media & Platform Tripadvisor-branded hotels $ 779 848 Tripadvisor-branded display and platform 160 153 Total Hotels, Media & Platform 939 1,001 Experiences & Dining 456 372 Corporate and other 165 242 Total Revenue $ 1,560 1,615 December 31, December 31, 2019 2018 Accounts receivable $ 176 205 Contract assets 7 7 Total $ 183 212 Operating Expense Operating expenses consist primarily of certain technology and content expenses, including personnel and overhead expenses which include salaries, benefits and bonuses for salaried employees and contractors engaged in the design, development, testing content support and maintenance of Tripadvisor’s websites and mobile apps. Operating expense also includes, to a lesser extent, costs of services which are expenses that are closely correlated or directly related to service revenue generated, including credit card and other booking transaction payment fees, data center costs, costs associated with prepaid tour tickets, ad serving fees, flight search fees and other transactions. Other costs include licensing, maintenance expense, computer supplies, telecom costs, content translation and localization costs and consulting costs. General and Administrative General and administrative expenses consist primarily of personnel and related overhead costs, including personnel engaged in leadership, finance, legal and human resource functions as well as professional service fees and other fees including audit, legal, tax and accounting, and other costs including bad debt expense and non-income taxes, such as sales, use and other non-income related taxes. Selling and Marketing Selling and marketing expenses primarily consist of direct costs, including traffic generation costs from search engine marketing, or SEM, and other online traffic acquisition costs, syndication costs and affiliate program commissions, social media costs, brand advertising (including television and other offline advertising), promotions and public relations. In addition, our indirect sales and marketing expense consists of personnel and overhead expenses, including salaries, commissions, benefits, and bonuses for sales, sales support, customer support and marketing employees. Tripadvisor incurs advertising expense consisting of traffic generation costs from SEM and other online traffic costs, affiliate program commissions, display advertising, social media, other online and offline (primarily television) advertising expense, and promotions and public relations to promote its brands. Costs associated with communicating the advertisements are expensed in the period in which the advertisement takes place. Production costs associated with advertisements are expensed in the period in which the advertisement first takes place. Stock-Based Compensation As more fully described in note 11, TripCo grants to its directors, employees and employees of its subsidiaries restricted stock and options (collectively, “Awards”) to purchase shares of TripCo common stock. TripCo measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock) based on the grant-date fair value of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). TripCo measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date. Certain outstanding awards that were previously granted by Qurate Retail were assumed by TripCo upon the completion of the TripCo Spin-Off. Additionally, Tripadvisor is a consolidated company and has issued stock-based compensation to its employees related to its common stock. The consolidated statements of operations include stock-based compensation related to TripCo Awards and Tripadvisor equity awards. Included in the accompanying consolidated statements of operations are the following amounts of stock-based compensation for the years ended December 31, 2019, 2018 and 2017 (amounts in millions): December 31, 2019 2018 2017 Operating expense $ 56 52 40 Selling, general and administrative 75 71 63 $ 131 123 103 During the years ended December 31, 2019, 2018 and 2017, Tripadvisor capitalized $19 million, $13 million and $13 million, respectively, of stock-based compensation expense as internal-use software and website development costs. Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts and income tax bases of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards. The deferred tax assets and liabilities are calculated using enacted income tax rates in effect for each taxing jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are then reduced by a valuation allowance if the Company believes it more likely than not that such net deferred tax assets will not be realized. We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies. The effect on deferred tax assets and liabilities of an enacted change in tax rates is recognized in income in the period that includes the enactment date. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. Such interest expense is included in income tax (expense) benefit in the accompanying consolidated statements of operations. Any accrual of penalties related to underpayment of income taxes on uncertain tax positions is included in income tax (expense) benefit in the accompanying consolidated statements of operations. We recognize in our consolidated financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. Deferred Merchant Payables In Tripadvisor’s Rentals free-to-list model and its Experiences businesses, Tripadvisor receives cash from travelers at the time of booking and it records these amounts, net of commissions, on its consolidated balance sheets as deferred merchant payables. Tripadvisor pays the suppliers, or the vacation rental owners and tour providers, respectively, after the travelers’ use. Therefore, it receives cash from the traveler prior to paying the suppliers and this operating cycle represents a working capital source or use of cash to Tripadvisor. Tripadvisor’s deferred merchant payables balance was $159 million and $164 million for the years ended December 31, 2019 and 2018, respectively. Certain Risks and Concentrations The Tripadvisor business is subject to certain risks and concentrations, including concentrations related to dependence on relationships with its customers. For the years ended December 31, 2019, 2018 and 2017, Tripadvisor’s two most significant travel partners, Expedia Group Inc. (“Expedia”) and Booking Holdings Inc., which each accounted for more than 10% of Tripadvisor’s consolidated revenue and combined accounted for approximately 33%, 37% and 43%, respectively, of its total revenue. Contingent Liabilities Periodically, the Company reviews the status of all significant outstanding matters to assess any potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of operations. The Company provides disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the consolidated financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. Accruals are based on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss), cumulative foreign currency translation adjustments, and unrealized gains and losses on available-for-sale securities, net of tax. Earnings (Loss) per Common Share (EPS) Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been conve |
Supplemental Disclosures to Con
Supplemental Disclosures to Consolidated Statements of Cash Flows | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Disclosures to Consolidated Statements of Cash Flow | |
Supplemental Disclosures to Consolidated Statements of Cash Flow | (3) Supplemental Disclosures to Consolidated Statements of Cash Flows Years ended December 31, 2019 2018 2017 amounts in millions Acquisitions, net of cash acquired: Intangibles not subject to amortization $ 85 12 — Intangibles subject to amortization 26 14 — Fair value of other assets acquired 5 — — Net liabilities assumed (8) — — Deferred tax assets (liabilities) — (2) — Acquisitions, net of cash acquired $ 108 24 — Equity method investment acquired for non-cash consideration $ 41 — — Cash paid for interest $ 28 8 13 Cash paid for income taxes $ 47 53 62 |
Acquisitions and Dispositions
Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions and Dispositions | |
Acquisitions and Dispositions | (4) Acquisitions and Dispositions Acquisitions During the year ended December 31, 2019, Tripadvisor completed three acquisitions of businesses aggregating total purchase price consideration of $110 million. Tripadvisor acquired 100% ownership of the following: SinglePlatform, a leading online content management and syndication platform company based in the U.S.; BookaTable, an online restaurant reservation and booking platform company based in the U.K.; and Restorando, an online restaurant reservation and booking platform company based in Argentina. Tripadvisor paid cash consideration of $108 million, net of $2 million of cash acquired. During the year ended December 31, 2018, Tripadvisor acquired one business for a purchase price and net cash consideration of $23 million. The following table presents the preliminary purchase price allocation for the 2019 acquisitions and the final purchase price allocation for the 2018 acquisition as recorded on our consolidated balance sheet: Years ended December 31, 2019 2018 2017 amounts in millions Goodwill (1) $ 85 11 — Intangible assets 26 14 — Net tangible assets (liabilities) (1) — — Deferred tax liabilities, net — (2) — Total purchase price consideration $ 110 23 — (1) Goodwill of $50 million is not deductible for tax purposes. million. The overall weighted-average life of the intangible assets acquired in the purchase of these businesses was 6 years , and will be amortized on a straight-line basis over the estimated useful lives from acquisition date. Intangible assets acquired during 2018 were comprised of supplier relationships of $6 million and technology and other of $8 million. The overall weighted-average life of the intangible assets acquired in the purchase of this business was 8 years, and will be amortized on a straight-line basis over the estimated useful lives from acquisition date. Dispositions On June 30, 2017, TripCo sold BuySeasons. The sale resulted in an $18 million loss, which is included in other, net in the accompanying consolidated statement of operations. BuySeasons is not presented as a discontinued operation as the sale did not represent a strategic shift that had a major effect on TripCo’s operations and financial results. Included in other revenue in the accompanying consolidated statements of operations is $13 million for the year ended December 31, 2017, related to BuySeasons. Included in net earnings (loss) in the accompanying consolidated statements of operations are losses of $2 million for the year ended December 31, 2017, related to BuySeasons. |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 12 Months Ended |
Dec. 31, 2019 | |
Assets and Liabilities Measured at Fair Value | |
Assets and Liabilities Measured at Fair Value | (5) Assets and Liabilities Measured at Fair Value For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company does not have any recurring assets or liabilities measured at fair value that would be considered Level 3. The Company’s assets and liabilities measured at fair value are as follows: December 31, 2019 December 31, 2018 Quoted prices Significant Quoted prices Significant in active other in active other markets for observable markets for observable identical assets inputs identical assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) amounts in millions Cash equivalents $ 22 22 — 145 140 5 Marketable securities $ — — — 15 — 15 Variable postpaid forward $ — — — 20 — 20 On June 6, 2016, TripCo entered into a variable postpaid forward transaction (the “VPF”) with a financial institution with respect to 7 million Tripadvisor common shares held by the Company with a forward floor price of $38.90 per share and a forward cap price of $98.96 per share. TripCo borrowed $259 million against the VPF on June 23, 2016 (see note 7). TripCo unwound and terminated the VPF during the fourth quarter of 2019. The proceeds from the unwind of the VPF, together with additional borrowings under the Margin Loan (defined in note 7) and a special dividend from Tripadvisor, were used to pay all outstanding borrowings against the VPF, which aggregated $270 million, including accrued interest (see note 7). The asset associated with this instrument was included in the other assets line item in the consolidated balance sheet at December 31, 2018. Changes in the fair value of the VPF were recognized in realized and unrealized gains (losses) on financial instruments in the consolidated statements of operations. The fair value of Level 2 cash equivalents and marketable securities were obtained from pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Marketable securities are included in other current assets in the accompanying consolidated balance sheets. The fair value of Level 2 derivative assets were derived from a Black-Scholes-Merton model using observable market data as the significant inputs. Other Financial Instruments Other financial instruments not measured at fair value on a recurring basis include trade receivables, trade payables, accrued and other current liabilities, current portion of debt and long-term debt. With the exception of debt, the carrying amount approximates fair value due to the short maturity of these instruments as reported on our consolidated balance sheets. The carrying value of our debt bears interest at a variable rate and therefore is also considered to approximate fair value. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | (6) Goodwill and Other Intangible Assets Goodwill and Indefinite Lived Intangible Assets Changes in the carrying amount of goodwill are as follows: Tripadvisor Hotels, Media & Platform Experiences & Dining Corporate and other Total (in millions) Balance at January 1, 2018 $ 2,445 - - - 2,445 Acquisition (1) 11 - - - 11 Other (2) (13) - - - (13) Balance at December 31, 2018 $ 2,443 - - - 2,443 Allocation to new segments (3) (2,443) 1,923 250 270 - Acquisition (1) - - 85 - 85 Other (2) - - (2) 1 (1) Balance at December 31, 2019 $ - 1,923 333 271 2,527 (1) Additions to goodwill relate to Tripadvisor’s acquisitions (see note 4). (2) Other changes are primarily due to foreign currency translation on goodwill. (3) See note 14 for information regarding changes to our reportable segments in the first quarter of 2019. As presented in the accompanying consolidated balance sheets, trademarks are the other significant indefinite lived intangible asset. See the disclosure below for information related to the 2019 and 2017 impairments of the Company’s trademarks. Other fluctuations in the trademark balance from the prior year were due to the change in foreign exchange rates. Intangible Assets subject to amortization Intangible assets subject to amortization are comprised of the following: December 31, 2019 December 31, 2018 Weighted Average Gross Net Gross Net Remaining carrying Accumulated carrying carrying Accumulated carrying Useful Life amount amortization amount amount amortization amount in years amounts in millions Customer relationships 2 $ 1,036 (910) 126 1,007 (838) 169 Other 3 552 (401) 151 466 (324) 142 Total $ 1,588 (1,311) 277 1,473 (1,162) 311 Intangible assets are being amortized generally on an accelerated basis as reflected in amortization expense and in the future amortization table below. Amortization expense was $139 million, $137 million and $188 million for the years ended December 31, 2019, 2018 and 2017, respectively. The estimated future amortization expense for the next five years related to intangible assets with definite lives as of December 31, 2019, assuming no subsequent impairment of the underlying assets, is as follows (amounts in millions): 2020 $ 92 2021 $ 77 2022 $ 35 2023 $ 32 2024 $ 29 Impairments Due to deteriorations in revenue, impairment losses of $288 million and $527 million were recorded during the years ended December 31, 2019 and December 31, 2017, respectively, related to trademarks. The trademarks were related to the hotels, media & platform reporting unit in 2019 and the legacy hotels reporting unit in 2017, which is now included in the hotels, media & platform reporting unit. The fair value of the trademarks was determined using the relief from royalty method. Due to certain marketplace factors impacting Tripadvisor’s operating results, which led to a decline in Tripadvisor’s stock price, an impairment loss of $1,271 million was recorded during the year ended December 31, 2017 related to goodwill, related to the legacy hotel reporting unit, which is now included in the hotels, media & platform reporting unit. The fair values of the reporting units were determined using a combination of market multiples (market approach) and discounted cash flow (income approach) calculations (Level 3). As of December 31, 2019, accumulated goodwill impairment losses for Tripadvisor totaled $1,271 million. There were no impairments recognized for the year ended December 31, 2018. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt | |
Debt | (7) Debt Outstanding debt at December 31, 2019 and 2018 is summarized as follows: December 31, December 31, 2019 2018 amounts in millions TripCo margin loans $ 355 220 TripCo variable postpaid forward — 267 Deferred financing costs (2) — Total consolidated TripCo debt $ 353 487 Less debt classified as current — (220) Total long-term debt $ 353 267 TripCo Margin Loans and Variable Postpaid Forward In connection with the VPF transaction entered into on June 6, 2016, as described in note 5, TripCo borrowed $259 million against the VPF on June 23, 2016. TripCo unwound and terminated the VPF during the fourth quarter of 2019. The proceeds from the VPF, together with additional borrowings under the Margin Loan (defined below) and a special dividend from Tripadvisor were used to pay all outstanding borrowings against the VPF, which aggregated $270 million, including accrued interest. Based on the lenders involved and terms of the Margin Loan, the November 19, 2019 amendment was treated as a modification of debt. Common Stock and Class B Common Stock of Tripadvisor were pledged as collateral pursuant to this agreement. The agreement contains language that indicates that TripSPV, as transferor of underlying shares as collateral, has the right to exercise all voting, consensual and other powers of ownership pertaining to the transferred shares for all purposes, provided that it will not vote the shares in any manner that would reasonably be expected to give rise to transfer or certain other restrictions. Similarly, the loan agreement indicates that no lender party shall have any voting rights with respect to the shares transferred, except to the extent that a lender party buys any shares in a sale or other disposition made pursuant to the terms of the loan agreement. The agreement also contains certain restrictions related to additional indebtedness and margin calls. The initial margin call would require the outstanding balance to be reduced to $157.5 million, plus 50% of the additional borrowings on December 20, 2019, if at any time the closing price per share of Tripadvisor common stock were to fall below a certain minimum value. The maturity date of the Margin Loan is November 19, 2022. The Margin Loan contains various affirmative and negative covenants that restrict the activities of the borrower. The loan agreement does not include any financial covenants. During the year ended December 31, 2019, TripCo recorded $6 million of non-cash interest related to the Margin Loan. As of December 31, 2019, the values of Tripadvisor’s shares pledged as collateral pursuant to the Margin Loan, determined based on the trading price of the Common Stock and on an as-if converted basis for the Class B Common Stock, are as follows: Number of Shares Pledged as Collateral as of Share value as of Pledged Collateral December 31, 2019 December 31, 2019 amounts in millions Common Stock 18.2 $ 552 Class B Common Stock 12.8 $ 389 Tripadvisor Credit Facilities Tripadvisor is party to a credit agreement, with a group of lenders, which, among other things, provides for a $1.2 billion unsecured revolving credit facility (the “2015 Credit Facility”) with a maturity date of May 12, 2022. Borrowings under the 2015 Credit Facility generally bear interest, at Tripadvisor’s option, at a rate per annum equal to either (i) the Eurocurrency Borrowing rate, or the adjusted LIBOR 1/2 As of both December 31, 2019 and 2018, Tripadvisor had no outstanding borrowings and approximately $1.2 billion of borrowing capacity under the 2015 Credit Facility. During the year ended December 31, 2018, Tripadvisor made a net repayment of $230 million on the 2015 Credit Facility. These net repayments were primarily made from a one-time cash repatriation of $325 million of foreign earnings to the United States during the first quarter of 2018. There is no specific repayment date prior to the maturity date for any borrowings under this credit agreement. Tripadvisor may voluntarily repay any outstanding borrowing under the 2015 Credit Facility at any time without premium or penalty, other than customary breakage costs with respect to Eurocurrency loans. Additionally, Tripadvisor believes that the likelihood of the lender exercising any subjective acceleration rights, which would permit the lenders to accelerate repayment of any outstanding borrowings, is remote. As such, Tripadvisor classifies any borrowings under this facility as long-term debt. The 2015 Credit Facility contains a number of covenants that, among other things, restrict Tripadvisor’s ability to: incur additional indebtedness, create liens, enter into sale and leaseback transactions, engage in mergers or consolidations, sell or transfer assets, pay dividends and distributions, make investments, loans or advances, prepay certain subordinated indebtedness, make certain acquisitions, engage in certain transactions with affiliates, amend material agreements governing certain subordinated indebtedness, and change its fiscal year. The 2015 Credit Facility also requires Tripadvisor to maintain a maximum leverage ratio and contains certain customary affirmative covenants and events of default, including a change of control. If an event of default occurs, the lenders under the 2015 Credit Facility will be entitled to take various actions, including the acceleration of all amounts due under the 2015 Credit Facility. Tripadvisor’s Chinese subsidiary is party to a $30 million, one-year revolving credit facility with the Bank of America (the “Tripadvisor Chinese Credit Facility—BOA”) that is currently subject to review on a periodic basis with no specific expiration period. This credit facility generally bears interest at a rate based on the People’s Bank of China benchmark, including certain adjustments, which may be made in accordance with market conditions at the time of borrowing. As of both December 31, 2019 and 2018, there were no outstanding borrowings under this credit facility. Fair Value Due to the primarily variable rate nature, TripCo believes that the carrying amount of its debt approximated fair value at December 31, 2019 and 2018. Debt Covenants |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | (8) Leases In February 2016 and subsequently, the FASB issued new guidance which revises the accounting for leases (“ASC 842”). Under the new guidance, entities that lease assets are required to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases regardless of whether they are classified as finance or operating leases. In addition, new disclosures are required to meet the objective of enabling users of the financial statements to better understand the amount, timing, and uncertainty of cash flows arising from leases. We adopted ASC 842 on January 1, 2019 and elected the optional transition method that allowed for a cumulative-effect adjustment in the period of adoption. Results for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported under the accounting standards in effect for those periods. We elected the following practical expedients available in transition upon adoption of ASC 842 and accounting policy updates: 1) the “practical expedients package Tripadvisor’s lease contracts contain both lease and non-lease components. Tripadvisor accounts separately for the lease and non-lease components of office space leases and certain other leases, such as data center leases. However, for certain categories of equipment leases, such as network equipment and others, Tripadvisor accounts for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases that have similar characteristics, Tripadvisor applies a portfolio approach to effectively account for operating lease ROU assets and lease liabilities, hence Tripadvisor does not expect the outcome to differ materially from applying the new guidance to individual leases. The adoption of ASC 842 did not have a material impact to our consolidated statement of operations and statement of cash flows during the year ended December 31, 2019. The effect of the adoption on our consolidated balance sheet as of January 1, 2019 from the adoption of ASC 842 is as follows: Balance at December 31, 2018 Adjustments due to ASC 842 Balance at January 1, 2019 in millions Assets: Other current assets $ 48 (3) 45 Property and equipment, net $ 154 8 162 Other assets, at cost, net of accumulated amortization $ 118 73 191 Liabilities: Accrued liabilities and other current liabilities $ 151 21 172 Deferred income tax liabilities $ 325 1 326 Other liabilities $ 283 53 336 Retained earnings $ 133 1 134 Noncontrolling interests in equity of subsidiaries $ 3,400 2 3,402 Operating Leases Tripadvisor leases office space in a number of countries around the world under non-cancelable lease agreements. Tripadvisor’s office space leases, exclusive of its Headquarters Lease, are operating leases. Operating lease ROU assets and liabilities are recognized at the lease commencement date, or the date the lessor makes the leased asset available for use, based on the present value of the lease payments over the lease term using Tripadvisor’s estimated incremental borrowing rate. Tripadvisor’s office space operating leases expire at various dates with the latest maturity in June 2027. Certain leases include options to extend terminate Finance Lease extend the term million, primarily related to structural improvements paid by Tripadvisor, net of tenant incentives and accumulated amortization, which is classified as prepaid rent under the new guidance. Finance lease ROU assets and finance lease liabilities commencing after January 1, 2019 are recognized similar to an operating lease, at the lease commencement date or the date the lessor makes the leased asset available for use. Finance lease ROU assets are generally amortized on a straight-line basis over the lease term, and the carrying amount of the finance lease liabilities are (1) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable, and (2) reduced to reflect lease payments made during the period. Amortization expense for finance lease ROU assets and interest accretion on finance lease liabilities are recorded to depreciation and interest expense, respectively, in the consolidated statements of operations. The components of lease expense during the year ended December 31, 2019 were as follows: Year ended December 31, 2019 in millions Operating lease cost (1) $ 24 Finance lease cost: Amortization of right-of-use assets (2) $ 9 Interest on lease liabilities (3) 4 Total finance lease cost $ 13 Sublease income (1) (3) Total lease cost, net $ 34 (1) Included in operating expense, including stock-based compensation in the consolidated statement of operations. (2) Included in depreciation expense in the consolidated statement of operations. (3) Included in interest expense in the consolidated statement of operations. For the years ended December 31, 2018 and 2017, TripCo recorded rental expense of $17 million and $19 million, respectively. Supplemental balance sheet information related to leases is as follows: December 31, 2019 in millions Operating leases: Operating lease right-of-use assets (1) $ 74 Current operating lease liabilities (2) $ 20 Operating lease liabilities (3) 64 Total operating lease liabilities $ 84 Finance Lease: Finance lease right-of-use assets (4) $ 105 Current finance lease liabilities (2) $ 5 Finance lease liabilities (3) 78 Total finance lease liabilities $ 83 (1) Included in other assets, at cost, net of accumulated amortization in the consolidated balance sheet. (2) Included in accrued liabilities and other current liabilities in the consolidated balance sheet. (3) Included in other liabilities in the consolidated balance sheet. (4) Included in property and equipment, net in the consolidated balance sheet . Additional information related to leases is as follows for the periods presented: Year ended December 31, 2019 in millions Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 26 Operating cash outflows from finance lease $ 4 Financing cash outflows from finance lease $ 5 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 106 Finance lease $ 88 As of December 31, 2019 Weighted-average remaining lease term Operating leases 4.4 years Finance lease 11.0 years Weighted-average discount rate Operating leases 4.11% Finance lease 4.49% Future lease payments under non-cancellable leases as of December 31, 2019 were as follows: Operating Leases Finance Lease in millions 2020 $ 23 9 2021 23 10 2022 19 10 2023 13 10 2024 8 10 Thereafter 6 57 Total future lease payments $ 92 106 Less: imputed interest (8) (23) Total $ 84 83 As of December 31, 2019, we did not have any additional operating or finance leases that have not yet commenced but that create significant rights and obligations. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | (9) Income Taxes On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code, the most significant of which was a reduction to the U.S. federal corporate tax rate from 35 percent to 21 percent. The Company reflected the income tax effects of those aspects of the Tax Act for which the accounting was known as of December 31, 2017 and made immaterial revisions to such amounts during the allowed one year measurement period. As of December 31, 2018, the Company had completed its analysis of the tax effects of the Tax Act. The corporate tax rate reduction was applied to our inventory of deferred tax assets and deferred tax liabilities, which resulted in the net tax benefit in the period ending December 31, 2017. Additionally, we are subject to the one-time transition tax on certain unrepatriated earnings on previously untaxed accumulated and current earnings and profits. Income tax benefit (expense) consists of: Years ended December 31, 2019 2018 2017 amounts in millions Current: Federal $ (31) (39) (92) State and local (6) (12) (2) Foreign (26) (14) (6) $ (63) (65) (100) Deferred: Federal $ 27 14 288 State and local 20 (5) 30 Foreign 32 (1) 11 79 8 329 Income tax benefit (expense) $ 16 (57) 229 The following table presents a summary of our domestic and foreign earnings (losses) from continuing operations before income taxes: Years ended December 31, 2019 2018 2017 amounts in millions Domestic $ (178) 3 (1,720) Foreign 46 45 (90) Total $ (132) 48 (1,810) Income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 21% for the years ended December 31, 2019 and 2018 and 35% for the year ended December 31, 2017 as a result of the following: Years ended December 31, 2019 2018 2017 amounts in millions Computed expected tax benefits (expense) $ 28 (10) 634 State and local taxes, net of federal income taxes 2 (14) 17 Foreign taxes, net of foreign tax credits 13 11 2 Transition tax — — (67) Change in tax rate due to Tax Act — — 139 Taxable dividend net of dividends received deduction (13) — — Basis difference in consolidated subsidiary 22 (17) (8) Change in valuation allowance (11) (4) (27) Change in unrecognized tax benefits (25) (12) (11) Federal tax credits 11 9 8 Stock-based compensation (4) (8) (12) Impairment of nondeductible goodwill — — (445) Other (7) (12) (1) Income tax (expense) benefit $ 16 (57) 229 During 2019, the Company recognized additional tax expense for changes in unrecognized tax benefits and dividends from Tripadvisor not recognized for book purposes, net of a dividends received deduction. These expense items were partially offset by a net income tax benefit from earnings in foreign jurisdictions taxed at rates other than the 21% U.S. federal tax rate and federal income tax credits. During 2018, the Company recognized additional tax expense related to the recognition of deferred tax liabilities for basis differences in the stock of a consolidated subsidiary and changes in unrecognized tax benefits. These expense items were partially offset by a net income tax benefit from earnings in foreign jurisdictions taxed at rates other than the 21% U.S. federal tax rate. During 2017, the Company recognized an impairment loss on its goodwill that is not deductible for tax purposes. In connection with the initial analysis of the impact of the Tax Act, the Company estimated a one-time increase in tax expense of $67 million on the deemed repatriation of undistributed earnings of non-U.S. shareholders as a result of the Tax Act. In addition, the Company recorded a discrete net tax benefit of $139 million in the period ending December 31, 2017. This net benefit primarily consists of a net benefit for the corporate rate reduction. The tax effects of temporary differences and tax attributes that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are presented below: December 31, 2019 2018 amounts in millions Deferred tax assets: Tax loss and credit carryforwards $ 89 77 Stock-based compensation 53 48 Lease financing obligation 24 22 Other (23) 78 Total deferred tax assets 143 225 Less: valuation allowance (80) (60) Net deferred tax assets 63 165 Deferred tax liabilities: Intangible assets (297) (387) Investments (17) (41) Other 3 (62) Total deferred tax liabilities (311) (490) Net deferred tax liability $ (248) (325) During the year ended December 31, 2019, there was an $11 million increase in the Company’s valuation allowance that affected tax expense and a $9 million increase related to acquisitions in 2019. As a result of the Tax Act, foreign earnings may now generally be repatriated back to the U.S. without incurring U.S. federal income tax. Historically, Tripadvisor had asserted its intention to indefinitely reinvest the cumulative undistributed earnings of its foreign subsidiaries. In response to increased cash requirements in the U.S. related to Tripadvisor’s declaration of a special cash dividend and other strategic initiatives during the fourth quarter of 2019, Tripadvisor determined it no longer considers $501 million of these foreign earnings to be indefinitely reinvested. During the year ended December 31, 2019, Tripadvisor has recorded a deferred tax liability of $1 million for the U.S. state income tax and foreign withholding tax liabilities on the cumulative undistributed foreign earnings that are not indefinitely invested. Tripadvisor intends to indefinitely reinvest $118 million of its foreign earnings in its non-U.S. subsidiaries. Determination of the amount of unrecognized deferred income tax liability related to these earnings is not practicable. At December 31, 2019, the Company has a deferred tax asset of $89 million for federal, state, and foreign net operating losses (“NOLs”), interest expense carryforwards and tax credit carryforwards. Of this amount, $72 million is recorded at Tripadvisor. If not utilized to reduce income tax liabilities at Tripadvisor in future periods, these loss carryforwards and tax credits will expire at various times between 2020 and 2038. The remaining deferred tax asset of $17 million relates to federal and state net operating loss carryforwards recorded at TripCo. If not utilized to reduce income tax liabilities at TripCo in future periods, these net operating loss carryforwards will expire at various times between 2023 and 2037. These carryforwards recorded at Tripadvisor and TripCo are expected to be utilized prior to expiration, except for $80 million of NOLs, interest expense carryforwards, and tax credit carryforwards, which based on current projections may expire unused. A reconciliation of unrecognized tax benefits is as follows (amounts in millions): Years ended December 31, 2019 2018 2017 Balance at beginning of year $ 136 123 105 Additions based on tax positions related to the current year 11 11 17 Additions for tax positions of prior years 1 2 1 Reductions for tax positions of prior years (8) — — Balance at end of year $ 140 136 123 As of December 31, 2019, 2018 and 2017, the Company had recorded tax reserves of $140 million, $136 million and $123 million, respectively, related to unrecognized tax benefits for uncertain tax positions, which is classified as long-term and included in other long-term liabilities on the consolidated balance sheets. Prior to the acquisition of a controlling interest in Tripadvisor in December 2012, the Company did not have any unrecognized tax benefits for uncertain tax positions. If the unrecognized tax benefits were to be recognized for financial statement purposes, approximately $82 million, $87 million and $78 million for the years ended December 31, 2019, 2018 and 2017, respectively, would be reflected in the Company’s tax expense and affect its effective tax rate. The Company’s estimate of its unrecognized tax benefits related to uncertain tax positions requires a high degree of judgment. The Company anticipates that the liability for unrecognized tax benefits could decrease by up to $12 million within the next twelve months due to the settlement of examinations of issues with tax authorities. As of December 31, 2019 and 2018, the Company had recorded approximately $29 million and $20 million, respectively, of accrued interest and penalties related to uncertain tax positions. As of December 31, 2019, TripCo’s tax years prior to 2015 are closed for federal income tax purposes, and the Internal Revenue Service (“IRS”) has completed its examination of TripCo’s 2016 and 2017 tax years. TripCo’s 2018 and 2019 tax years are being examined currently as part of the IRS’s Compliance Assurance Process program. Because TripCo’s ownership of Tripadvisor is less than the required 80%, Tripadvisor does not consolidate with TripCo for federal income tax purposes. Prior to December 2011, Tripadvisor was included in the consolidated federal income tax returns filed by Expedia. Expedia’s 2009, 2010 and short-period 2011 tax years are currently being audited by the IRS. Tripadvisor and Expedia are parties to a tax sharing agreement whereby Tripadvisor is generally required to indemnify Expedia for any taxes resulting from the Expedia spin-off (and any related interest, penalties, legal and professional fees, and all costs and damages associated with related stockholder litigation or controversies) to the extent such amounts resulted from (i) any act or failure to act by Tripadvisor described in the covenants in the tax sharing agreement, (ii) any acquisition of Tripadvisor’s equity securities or assets or those of a member of its group, or (iii) any failure of the representations with respect to Tripadvisor or any member of its group to be true or any breach by Tripadvisor or any member of its group of any covenant, in each case, which is contained in the separation documents or in the documents relating to the IRS private letter ruling and/or the opinion of counsel. Tripadvisor is undergoing an audit by the IRS for the short-period 2011, 2012-2016 tax years under an employment tax audit by the IRS for the 2013 and 2014 tax years. Various states are currently examining Tripadvisor’s prior year’s state income tax returns. Tripadvisor is no longer subject to tax examinations by tax authorities for years prior to 2009. As of December 31, 2019, no material assessments have resulted, except as noted below. In January 2017 and April 2019, as part of Expedia’s IRS audit, Tripadvisor received Notices of Proposed Adjustment from the IRS for the 2009, 2010 and 2011 tax years. Subsequently, in September 2019, as part of Tripadvisor’s standalone audit, Tripadvisor received Notices of Proposed Adjustment from the IRS for the 2012 and 2013 tax years. These proposed adjustments are related to certain transfer pricing arrangements with Tripadvisor’s foreign subsidiaries, and would result in an increase to Tripadvisor’s worldwide income tax expense in an estimated range of $35 million to $40 million at the close of the audit if the IRS prevails, after consideration of competent authority relief and transition tax, exclusive of interest and penalties. Tripadvisor disagrees with the proposed adjustments and intends to defend its position through applicable administrative and, if necessary, judicial remedies. Tripadvisor’s policy is to review and update tax reserves as facts and circumstances change. Based on Tripadvisor’s interpretation of the regulations and available case law, it believes the position taken with regard to transfer pricing with its foreign subsidiaries is sustainable. In addition to the risk of additional tax for 2009 through 2013 transactions, if the IRS were to seek transfer pricing adjustments of a similar nature for transactions in subsequent years, Tripadvisor would be subject to significant additional tax liabilities. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | (10) Stockholders’ Equity Preferred Stock Common Stock Subsidiary Purchases of Common Stock On January 25, 2017, Tripadvisor’s Board of Directors authorized the repurchase of $250 million of its shares of common stock under a share repurchase program. During the year ended December 31, 2017, Tripadvisor repurchased a total of 6,079,003 shares of its outstanding common stock for $250 million in the aggregate, and completed this share repurchase program. On January 31, 2018, Tripadvisor’s Board of Directors authorized an additional repurchase of up to $250 million of its shares of common stock under a share repurchase program. This share repurchase program has no expiration date but may be suspended or terminated by Tripadvisor’s Board of Directors at any time. During the year ended December 31, 2018, Tripadvisor repurchased 2,582,198 shares of its outstanding common stock for $100 million in the aggregate. On November 1, 2019, Tripadvisor’s Board of Directors authorized the repurchase of an additional $100 million in shares of its common stock under its existing share repurchase program, which increased the amount available under this share repurchase program to $250 million. During the year ended December 31, 2019, Tripadvisor repurchased 2,059,846 shares of its outstanding common stock for $60 million in the aggregate. As of December 31, 2019, Tripadvisor had approximately $190 million remaining available to repurchase shares of its common stock under this share repurchase program. Subsidiary Dividends On November 1, 2019, Tripadvisor’s Board of Directors declared a special cash dividend of $3.50 per share, or approximately $488 million in the aggregate. The dividend was payable on December 4, 2019 to stockholders of record on November 20, 2019. TripCo’s share of the dividend was $108 million based on our ownership in Tripadvisor. During the years ended December 31, 2018 and 2017, Tripadvisor’s Board of Directors did not declare any dividends on its common stock. Any determination by Tripadvisor to pay dividends in the future will be at the discretion of Tripadvisor’s Board of Directors and will depend on its results of operations, earnings, capital requirements, financial condition, future prospects, contractual restrictions and other factors deemed relevant by Tripadvisor’s Board of Directors. Tripadvisor’s ability to pay dividends is also limited by the terms of the 2015 Credit Facility. In connection with the declaration of such dividends, Tripadvisor’s non-vested RSUs are entitled to dividend equivalents, which will be payable to the holder subject to, and upon vesting of, the underlying awards. Tripadvisor’s outstanding stock options are not entitled to dividend or dividend equivalents. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | (11) Stock-Based Compensation TripCo Incentive Plans Pursuant to the Liberty TripAdvisor Holdings, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”), the Company may grant Awards in respect of a maximum of 5.0 million shares of TripCo common stock. Awards generally vest over 1 7 TripCo – Grants During the year ended December 31, 2019, TripCo granted 27 thousand options to purchase shares of Series B TripCo common stock, 35 thousand performance-based restricted stock units (“RSUs”) of Series B TripCo common stock and 320 thousand time-based RSUs of Series B TripCo common stock to our CEO. Such options had a grant-date fair value (“GDFV”) of $6.41 per share. The performance-based RSUs had a GDFV of $14.17 per share and the time-based RSUs had a GDFV of $7.23 per share at the time they were granted. The options vested on December 31, 2019, and the performance-based RSUs cliff vest one year from the month of grant, subject to the satisfaction of certain performance objectives. Performance objectives, which are subjective, are considered in determining the timing and amount of the compensation expense recognized. When the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The probability of satisfying the performance objectives is assessed at the end of each reporting period. The time-based RSUs cliff vest on December 15, 2023, and represent the first upfront grant related to the CEO’s new employment agreement. See discussion in note 1 regarding the new compensation agreement with TripCo’s CEO. Also during the year ended December 31, 2019, TripCo granted to its employees 73 thousand options to purchase shares of Series A TripCo common stock. Such options had a weighted average GDFV of $3.53 and vest between three During the years ended December 31, 2019, 2018 and 2017, TripCo granted 79 thousand, 59 thousand and 105 thousand options, respectively, to purchase shares of Series A TripCo common stock to its non-employee directors. Such options had a weighted average GDFV of $3.42, $8.83 and $4.11 per share, respectively, and cliff vest over a 1-year vesting period. There were no exercises, forfeitures The Company has calculated the GDFV for all of its equity classified awards and any subsequent remeasurement of its liability classified awards using the Black-Scholes-Merton Model. The Company estimates the expected term of the Awards based on historical exercise and forfeiture data. For grants made in 2019, 2018 and 2017, the range of expected terms was 4.8 years to 6.3 years. The volatility used in the calculation for Awards is based on the historical volatility of TripCo common stock. For grants made in 2019, 2018 and 2017, the range of volatilities was 49.1% to 54.2%. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options. The Company recognizes the cost of an Award over the period during which the employee is required to provide service (usually the vesting period of the Award). TripCo - Outstanding Awards The following tables present the number and weighted average exercise price (“WAEP”) of Awards to purchase TripCo common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the Awards. Weighted average remaining Aggregate contractual intrinsic Series A WAEP life value in thousands in years in millions Outstanding at January 1, 2019 570 $ 15.40 Granted 151 $ 7.20 Exercised — $ — Forfeited/Cancelled (4) $ 17.19 Outstanding at December 31, 2019 717 $ 13.65 3.3 $ — Exercisable at December 31, 2019 565 $ 15.38 2.3 $ — Weighted average remaining Aggregate contractual intrinsic Series B WAEP life value in thousands in years in millions Outstanding at January 1, 2019 1,797 $ 27.83 Granted 27 $ 14.28 Exercised — $ — Forfeited/Cancelled — $ — Outstanding at December 31, 2019 1,824 $ 27.63 5.0 $ — Exercisable at December 31, 2019 1,824 $ 27.63 5.0 $ — As of December 31, 2019, the total unrecognized compensation cost related to unvested equity Awards was $485 thousand. Such amount will be recognized in the Company’s statements of operations over a weighted average period of approximately two years. As of December 31, 2019, TripCo reserved 2.5 million shares of Series A and Series B TripCo common stock for issuance under exercise privileges of outstanding stock Awards. TripCo - Exercises The aggregate intrinsic value of all TripCo options exercised during the years ended December 31, 2018 and 2017 was $117 thousand and $478 thousand, respectively. No TripCo options were exercised in 2019. TripCo — Restricted Stock The aggregate fair value of all restricted shares of TripCo common stock that vested during the years ended December 31, 2019, 2018 and 2017 was $159 thousand, $9 thousand and $13 thousand, respectively. As of December 31, 2019, TripCo had approximately 402 thousand unvested restricted shares of Series A and Series B TripCo common stock held by certain directors, officers and employees of the Company with a weighted average GDFV of $8.26 per share. Tripadvisor Equity Grant Awards On June 21, 2018, Tripadvisor’s stockholders approved the 2018 Stock and Annual Incentive Plan (the “2018 Plan”) primarily for the purpose of providing sufficient reserves of shares of Tripadvisor’s common stock to ensure its ability to continue to provide new hires, employees and management with equity incentives. The number of shares reserved and available for issuance under the 2018 Plan is 6,000,000 plus the number of shares available for issuance (and not subject to outstanding awards) under the Amended and Restated 2011 Stock and Annual Incentive Plan (the “2011 Plan”), as of the effective date of the 2018 Plan and no additional awards will be granted under the 2011 Plan. The 2018 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, RSUs, and other stock-based awards to Tripadvisor’s directors, officers, employees and consultants. Grants were valued using a volatility of 42.1% and the applicable risk free rate for an expected term of 5.2 years for the year ended December 31, 2019, volatility of 41.9% and the applicable risk free rate for an expected term of 5.5 years for the year ended December 31, 2018 and a volatility of 42.1% and the applicable risk free rate for an expected term of 6.1 years for the year ended December 31, 2017. Performance-based stock options and RSUs vest upon achievement of certain Tripadvisor company-based performance conditions and a requisite service period. On the date of grant, the fair value of stock options is calculated using a Black-Scholes-Merton model, which incorporates assumptions to value stock-based awards, including the risk-free rate of return, expected volatility, expected term and expected dividend yield. If, upon grant, Tripadvisor assesses the achievement of performance targets as probable, compensation expense is recorded for the awards over the estimated performance period on a straight-line basis. At each reporting period, the probability of achieving the performance targets and the performance period required to meet those targets is assessed. To the extent actual results or updated estimates differ from Tripadvisor’s estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised, or the change in estimate will be applied prospectively depending on whether the change affects the estimate of total compensation cost to be recognized or merely affects the period over which compensation cost is to be recognized. The following table presents the number, WAEP and aggregate intrinsic value of stock options to purchase Tripadvisor common stock granted under their 2011 Plan and 2018 Plan: Weighted Average Remaining Aggregate Number of Contractual Intrinsic Options WAEP Life Value in thousands in years in millions Outstanding at January 1, 2019 6,041 $ 54.00 Granted 752 $ 48.30 Exercised (195) $ 42.17 Cancelled or expired (581) $ 56.97 Outstanding at December 31, 2019 6,017 $ 50.27 5.9 $ — Exercisable at December 31, 2019 3,425 $ 57.27 4.2 $ — The weighted average GDFV of service based stock options under their 2011 Plan and 2018 Plan was $21.25 for the year ended December 31, 2019. These stock options generally have a term of ten years from the date of grant and typically vest equally over a four year requisite service period. As of December 31, 2019, the total number of shares reserved for future stock-based awards under the 2018 Plan is approximately 10.1 million shares. Tripadvisor related stock-based compensation for the year ended December 31, 2019 was approximately $124 million. As of December 31, 2019, the total unrecognized compensation cost related to unvested Tripadvisor stock options was approximately $32 million and will be recognized over a weighted average period of approximately 2.6 years. Restricted Stock Units and Market-based Restricted Stock Units RSUs are stock awards that are granted to employees entitling the holder to shares of Tripadvisor common stock as the award vests. RSUs are measured at fair value based on the quoted price of Tripadvisor common stock at the date of grant. The fair value of RSUs is amortized as stock-based compensation expense over the vesting term on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the GDFV of the award that is vested at that date. Tripadvisor issues market-based performance restricted stock units (“MSUs”), which vest upon achievement of specified levels of market conditions. The fair value of the MSUs is estimated at the date of grant using a Monte-Carlo simulation model. The probabilities of the actual number of market-based performance units expected to vest and resultant actual number of shares of Tripadvisor common stock expected to be awarded are reflected in the grant date fair values; therefore, the compensation expense for these awards will be recognized assuming the requisite service period is rendered and are not adjusted based on the actual number of awards that ultimately vest. During the year ended December 31, 2019, Tripadvisor granted approximately 5 million of primarily service-based RSUs and market-based MSUs under the 2018 Plan. The RSUs’ fair value was measured based on the quoted price of Tripadvisor common stock at the date of grant. As the MSUs provide for vesting based upon Tripadvisor’s total shareholder return, or “TSR,” performance, the potential outcomes of future stock prices and TSR of Tripadvisor and the Nasdaq Composite Total Return Index, was used to calculate the GDFV of these awards. The weighted average GDFV for RSUs and MSUs granted during 2019 was $47.61 per share. As of December 31, 2019, the total unrecognized compensation cost related to 9 million unvested Tripadvisor RSUs and MSUs outstanding was approximately $248 million which will be recognized over the remaining vesting term of approximately 2.5 years. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Employee Benefit Plans | |
Employee Benefit Plans | (12) Employee Benefit Plans Tripadvisor sponsors a 401(k) plan and makes matching contributions to the plans based on a percentage of the amount contributed by employees. Employer cash contributions related to Tripadvisor were $14 million, $13 million and $9 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | (13) Commitments and Contingencies Off-Balance Sheet Arrangements TripCo did not have any other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures or capital resources. Litigation In the ordinary course of business, the Company and its subsidiaries are parties to legal proceedings and claims arising out of our operations. These matters may relate to claims involving patent and intellectual property rights (including alleged infringement of third-party intellectual property rights), tax matters (including value-added, excise, transient occupancy and accommodation taxes), regulatory compliance (including competition and consumer matters), defamation and other claims. Although it is reasonably possible that the Company may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying consolidated financial statements. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Information | |
Segment Information | (14) Segment Information TripCo, through its ownership interests in Tripadvisor, is primarily engaged in the online commerce industries. TripCo identifies its reportable segments as (A) those operating segments that represent 10% or more of its consolidated annual revenue, annual adjusted operating income before depreciation and amortization (“Adjusted OIBDA”) or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of TripCo’s annual pre-tax earnings. During the first quarter of 2019, as part of a continuous review of our business, we realigned our reportable segment information which our chief operating decision maker, or CODM, regularly assesses to evaluate performance for operating decision-making purposes, including evaluation and allocation of resources. The revised segment reporting structure includes the following reportable segments: (1) Hotels, Media & Platform; and (2) Experiences & Dining. All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Form 10-K. These reclassifications had no effect on our consolidated financial statements in any period. ● Hotels, Media & Platform – includes the following revenue sources: (1) Tripadvisor-branded hotels revenue – primarily consisting of Tripadvisor-branded hotel metasearch auction-based revenue, transaction revenue from Tripadvisor’s hotel instant booking feature, subscription-based advertising and hotel sponsored placements revenue; and (2) Tripadvisor-branded display and platform revenue – consisting of Tripadvisor-branded display-based revenue. All direct general and administrative costs are included in the applicable business, however, all corporate general and administrative costs are included in the Hotels, Media & Platform reportable segment. In addition, the Hotels, Media & Platform reportable segment includes all Tripadvisor-related brand advertising expenses (primarily television advertising) and technical infrastructure and other costs supporting the Tripadvisor platform. ● Experiences & Dining – Tripadvisor provides information and services for consumers to research, book and experience activities and attractions in popular travel destinations primarily through Viator, Tripadvisor’s dedicated Experiences business, and on Tripadvisor’s website and mobile apps. Tripadvisor generates commissions for each booking transaction it facilitates through its online reservation system. Tripadvisor also provides information and services for consumers to research and book restaurants in popular travel destinations through its dedicated restaurant reservations business, TheFork, and on Tripadvisor-branded websites and mobile apps. Performance Measures For segment reporting purposes, TripCo defines Adjusted OIBDA as revenue less operating expenses, and selling, general and administrative expenses (excluding stock-based compensation and specifically identified non-recurring transactions). TripCo believes this measure is an important indicator of the operational strength and performance of its businesses, by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results, and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, stock-based compensation, separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. TripCo generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices. Revenue and Adjusted OIBDA are summarized as follows: Years ended December 31, 2019 2018 2017 Adjusted Adjusted Adjusted Revenue OIBDA Revenue OIBDA Revenue OIBDA amounts in millions Hotels, Media & Platform $ 939 378 1,001 329 1,022 267 Experiences & Dining 456 5 372 48 264 23 Corporate and other 165 47 242 39 283 32 Consolidated TripCo $ 1,560 430 1,615 416 1,569 322 In addition, we do not report assets, capital expenditures and related depreciation expense by segment as our CODM does not use this information to evaluate operating segments. Accordingly, we do not regularly provide such information by segment to our CODM. Revenue by Geographic Area The Company measures its geographic revenue information to the physical location of the Tripadvisor subsidiary which generates the revenue, which is consistent with the measurement of long-lived physical assets, or property and equipment, net. December 31, 2019 2018 2017 amounts in millions United States $ 821 835 815 United Kingdom 466 508 530 Other countries 273 272 224 Consolidated TripCo $ 1,560 1,615 1,569 Long-lived Assets by Geographic Area December 31, 2019 2018 amounts in millions United States $ 137 137 Other countries 18 17 Consolidated TripCo $ 155 154 The following table provides a reconciliation of Adjusted OIBDA to operating income and earnings (loss) before income taxes: Years ended December 31, 2019 2018 2017 amounts in millions Adjusted OIBDA $ 430 416 322 Restructuring and related reorganization costs (1) — — Legal settlement — (5) — Stock-based compensation (131) (123) (103) Depreciation and amortization (169) (160) (213) Impairment of intangible assets (288) — (1,798) Operating income (loss) (159) 128 (1,792) Interest expense (22) (26) (25) Realized and unrealized gains (losses) on financial instruments, net 36 (59) 24 Other, net 13 5 (17) Earnings (loss) before income taxes $ (132) 48 (1,810) |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information (Unaudited) | |
Quarterly Financial Information (Unaudited) | (15) Quarterly Financial Information (Unaudited) 1 st 2 nd 3 rd 4 th Quarter Quarter Quarter Quarter amounts in millions, except per share amounts 2019: Revenue $ 376 422 428 334 Operating income (loss) $ 16 51 55 (281) Net earnings (loss) $ 11 23 48 (198) Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders $ (2) 3 16 (39) Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ (0.03) 0.04 0.21 (0.52) Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ (0.03) 0.04 0.21 (0.52) 1 st 2 nd 3 rd 4 th Quarter Quarter Quarter Quarter amounts in millions, except per share amounts 2018: Revenue $ 378 433 458 346 Operating income (loss) $ 9 34 76 9 Net earnings (loss) $ (35) (22) 57 (9) Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders $ (31) (39) 14 (8) Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ (0.41) (0.52) 0.19 (0.11) Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ (0.41) (0.52) 0.19 (0.11) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments, including money market funds and marketable debt securities, with maturities of three months or less at the time of acquisition. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recognized when the right to consideration becomes unconditional and are recorded net of an allowance for doubtful accounts. Such allowance aggregated $25 million and $21 million at December 31, 2019 and 2018, respectively. Our customer invoices are generally due 30 days from the time of invoicing. For accounts outstanding longer than the contractual payment terms, the Company determines an allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, a specific customer’s ability to pay its obligations to us, and the condition of the general economy and industry as a whole. |
Investments | Investments All marketable debt and equity securities held by the Company are carried at fair value, generally based on quoted market prices. Fair values are determined for each individual security in the investment portfolio. Unrealized gains and losses, net of taxes, arising from changes in fair value are reported in accumulated other comprehensive income (loss) as a component of equity. For those investments in which the Company has the ability to exercise significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the affiliate as they occur rather than as dividends or other distributions are received. Losses are limited to the extent of the Company’s investment in, advances to and commitments for the investee. In the event the Company is unable to obtain accurate financial information from an equity affiliate in a timely manner, the Company records its share of earnings or losses on a lag. For those equity securities without readily determinable values, the Company elected the measurement alternative (defined as the cost of the security, adjusted for changes in fair value when there are observable prices, less impairments). The classification of investments is determined at the time of purchase and reevaluated at each balance sheet date. We invest in highly-rated securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. The policy requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and providing liquidity of investments sufficient to meet our operating and capital spending requirements and debt repayments. Marketable debt securities are classified as either short-term or long-term based on each instrument’s underlying contractual maturity date and as to whether and when we intend to sell a particular security prior to its maturity date. Marketable debt securities with maturities greater than 90 days at the date of purchase and 12 months or less remaining at the balance sheet date will be classified as short-term and marketable debt securities with maturities greater than 12 months from the balance sheet date will generally be classified as long-term. We classify our marketable equity securities, limited to money market funds and mutual funds, as either a cash equivalent, short-term or long-term based on the nature of each security and its availability for use in current operations. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis. We may sell certain of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and liquidity and duration management. The weighted average maturity of our total invested cash shall not exceed 18 months, and no security shall have a final maturity date greater than three years. |
Derivatives Instruments | Derivative Instruments All of the Company’s derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive earnings and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. If the derivative is not designated as a hedge, changes in the fair value of the derivative are recognized in earnings. None of the Company’s derivatives are currently designated as hedges. The fair value of certain of the Company’s derivative instruments are estimated using the Black-Scholes-Merton model. The Black-Scholes-Merton model incorporates a number of variables in determining such fair values, including expected volatility of the underlying security and an appropriate discount rate. The Company obtains volatility rates from pricing services based on the expected volatility of the underlying security over the remaining term of the derivative instrument. A discount rate is obtained at the inception of the derivative instrument and updated each reporting period, based on the Company’s estimate of the discount rate at which it could currently settle the derivative instrument. The Company considered its own credit risk as well as the credit risk of its counterparties in estimating the discount rate. Management judgment is required in estimating the Black-Scholes-Merton model variables. |
Property and Equipment | Property and Equipment Property and equipment consists of the following (amounts in millions): December 31, 2019 2018 Buildings (1) $ — 123 Finance lease right-of-use asset (1) 114 — Leasehold improvements 49 41 Computer equipment and purchased software 70 52 Furniture, office equipment and other 21 18 Total property and equipment $ 254 234 (1) Refer to note 8 regarding the transition accounting related to the adoption of ASC 842 and subsequent accounting for Tripadvisor’s headquarters lease in Needham, Massachusetts (Tripadvisor’s “Headquarters Lease”). Property and equipment is recorded at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is three |
Leases | Leases The Company, through its consolidated companies, leases facilities in several countries around the world and certain equipment under non-cancelable lease agreements. Refer to note 8 for a discussion on accounting for leases and other financial disclosures. |
Intangible Assets | Intangible Assets Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment upon certain triggering events. Goodwill and other intangible assets with indefinite useful lives (collectively, "indefinite lived intangible assets") are not amortized, but instead are tested for impairment at least annually. Our annual impairment assessment of our indefinite-lived intangible assets is performed during the fourth quarter of each year. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. The accounting guidance also allows entities the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test. The entity may resume performing the qualitative assessment in any subsequent period. In evaluating goodwill on a qualitative basis, the Company reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it was more likely than not that an indicated impairment exists for any of our reporting units. The Company considers whether there are any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, the legal environments and how these factors might impact company specific performance in future periods. As part of the analysis, the Company also considers fair value determinations for certain reporting units that have been made at various points throughout the current year and prior year for other purposes. If, based on the qualitative analysis, it is more likely than not that an impairment exists, the Company performs the quantitative impairment test. The quantitative goodwill impairment test compares the estimated fair value of a reporting unit to its carrying value. Developing estimates of fair value requires significant judgments, including making assumptions about appropriate discount rates, perpetual growth rates, relevant comparable market multiples, public trading prices and the amount and timing of expected future cash flows. The cash flows employed in TripCo's valuation analyses, where applicable, are based on management's best estimates considering current marketplace factors and risks as well as assumptions of growth rates in future years. There can be no assurance that actual results will approximate these forecasts. The accounting guidance also permits entities to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. The accounting guidance also allows entities the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to the quantitative impairment test. The entity may resume performing the qualitative assessment in any subsequent period. If the qualitative assessment supports that it is more likely than not that the carrying value of the Company’s indefinite-lived intangible assets, other than goodwill, exceeds its fair value, then a quantitative assessment is performed. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. See note 6 for discussion of goodwill and trademark impairments. |
Websites and Internal Use Software Development Costs | Websites and Internal Use Software Development Costs Certain costs incurred during the application development stage related to the development of websites and internal use software are capitalized and included in other intangible assets subject to amortization. Capitalized costs include internal and external costs, if direct and incremental, and deemed by management to be significant. Costs related to the planning and post-implementation phases of software and website development are expensed as these costs are incurred. Maintenance and enhancement costs (including those costs in the post-implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software resulting in added functionality, in which case the costs are capitalized. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company periodically reviews the carrying amounts of its property and equipment and its intangible assets (other than goodwill and indefinite-lived intangibles) to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. If the carrying amount of the asset group is greater than the expected undiscounted cash flows to be generated by such asset group, including its ultimate disposition, an impairment adjustment is recognized. Such adjustment is measured by the amount that the carrying value of such asset groups exceeds their fair value. The Company generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows using an appropriate discount rate. Considerable management judgment is necessary to estimate the fair value of asset groups. Accordingly, actual results could vary significantly from such estimates. Asset groups to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interest relates to the equity ownership interest in Tripadvisor that the Company does not own. The Company reports noncontrolling interests of consolidated companies within equity in the consolidated balance sheets and the amount of net income attributable to the parent and to the noncontrolling interest is presented in the consolidated statements of operations. Also, changes in ownership interests in consolidated companies in which the Company maintains a controlling interest are recorded in equity. |
Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses The functional currency of the Company is the United States (“U.S.”) dollar. The functional currency of the Company’s foreign operations generally is the applicable local currency for each foreign subsidiary. Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date, and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is recorded as a component of accumulated other comprehensive earnings (loss) in equity. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses which are reflected in the accompanying consolidated statements of operations and comprehensive earnings (loss) as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions. Accordingly, we have recorded foreign currency exchange losses of $3 million and $6 million and gains of $1 million for the years ended December 31, 2019, 2018, and 2017, respectively, in other, net on our consolidated statements of operations. |
Revenue Recognition | Revenue Recognition Tripadvisor generates all of its revenue from contracts with customers. It recognizes revenue when it satisfies a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that it expects to receive in exchange for those services. When Tripadvisor acts as an agent in the transaction, it recognizes revenue for only its commission on the arrangement. Tripadvisor determines revenue recognition through the following steps: (1) (2) (3) (4) (5) At contract inception, Tripadvisor assesses the services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, Tripadvisor considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. There was no significant revenue recognized in the years ended December 31, 2019 and 2018 related to performance obligations satisfied in prior periods. Tripadvisor has applied a practical expedient and does not disclose the value of unsatisfied performance obligations that have an original expected duration of less than one year, and Tripadvisor does not have any material unsatisfied performance obligations over one year. The value related to Tripadvisor’s remaining or partially satisfied performance obligations relates to subscription services that are satisfied over time or services that are recognized at a point in time, but not yet achieved. The timing of services, invoicing and payments do not include a significant financing component. Tripadvisor’s customer invoices are generally due 30 days from the time of invoicing. Tripadvisor recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. Although the substantial majority of its contract costs have an amortization period of less than one year, Tripadvisor has determined contract costs arising from certain sales incentives have an amortization period in excess of one year given the high likelihood of contract renewal. Sales incentives are not paid upon renewal of these contracts and therefore are not commensurate with the initial sales incentive costs. Total capitalized costs to obtain a contract were approximately $4 million and $2 million as of December 31, 2019 and 2018, respectively. These contract costs are amortized on a straight-line basis over the estimated customer life, which is based on historical customer retention rates. Amortization expense recorded to selling, general and administrative expense during years ended December 31, 2019 and 2018, respectively, were $1 million and not material. Tripadvisor assesses such assets for impairment when events or circumstances indicate that the carrying amount may not be recoverable. The recognition of revenue may require the application of judgment related to the determination of the performance obligations, the timing of when the performance obligations are satisfied and other areas. The determination of Tripadvisor’s performance obligations does not require significant judgment given that it generally does not provide multiple services to a customer in a transaction, and the point in which control is transferred to the customer is readily determinable. In instances where Tripadvisor recognizes revenue over time, it generally has either a subscription service that is recognized over time on a straight-line basis using the time-elapsed output method, or based on other output measures that provide a faithful depiction of the transfer of Tripadvisor’s services. When an estimate for cancellations is included in the transaction price, the estimate is based on historical cancellation rates. There have been no significant adjustments to Tripadvisor’s cancellation estimates and the cancellation estimates are not material. Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue–producing transaction, that are collected by Tripadvisor from a customer, are reported on a net basis, or in other words, excluded from revenue on its consolidated financial statements, which is consistent with prior periods. The application of Tripadvisor’s revenue recognition policies and a description of the principal activities from which it generates revenue, are presented below. Hotels, Media & Platform Segment Tripadvisor-branded Hotels Revenue In addition, Tripadvisor offers subscription-based advertising to hotel partners, owners of B&Bs and other specialty lodging properties. Subscription-based advertising services are predominantly sold for a flat fee for a contracted period of time of one year or less and revenue is recognized on a straight-line basis over the period of the subscription service as efforts are expended evenly throughout the contract period. Tripadvisor also offers travel partners the opportunity to advertise and promote their business through hotel sponsored placements on Tripadvisor’s websites. This service is generally priced on a fixed CPC basis, with payments from travel partners determined by the number of travelers who click on the sponsored link multiplied by the CPC rate for each specific click. To a lesser extent, Tripadvisor generates transaction revenue from Tripadvisor’s hotel instant booking feature, which enables hotel shoppers to book directly with a travel partner, with the latter serving as the merchant of record for the transaction, without leaving Tripadvisor’s website. Tripadvisor earns a commission from its travel partners for each traveler that completes a hotel reservation on Tripadvisor’s website, based on a pre-determined contractual commission rate. Tripadvisor-branded Display and Platform Revenue Experiences & Dining Segment Tripadvisor provides information and services that allow consumers to research and book activities and attractions in popular travel destinations primarily through Viator, Tripadvisor’s dedicated Experiences offering, and on the Tripadvisor website and mobile apps. Tripadvisor generates commissions for each booking transaction it facilitates through its online reservation system. Tripadvisor also provides information and services for consumers to research and book restaurants in popular travel destinations through its dedicated restaurant reservations offering, TheFork, and on Tripadvisor-branded websites and mobile apps. TheFork is an online restaurant booking platform operating on a number of websites with a network of restaurant partners located primarily across the United Kingdom (the “U.K.”), Europe, Australia, and South America. Tripadvisor primarily generates transaction fees (or per seated diner fees) that are paid by restaurants for diners seated primarily from bookings through TheFork’s online reservation system. Other Tripadvisor provides information and services that allow travelers to research and book vacation and short-term rental properties. The Rentals offering generates revenue primarily by offering individual property owners and managers the ability to list their properties on Tripadvisor’s websites and mobile apps thereby connecting with travelers through a free-to-list, commission-based option or, to a lesser extent, by an annual subscription-based fee structure. Tripadvisor earns commissions associated with rental transactions through its free-to-list model from both the traveler, and the property owner or manager. In addition, www.cruisecritic.com, www.onetime.com and www.smartertravel.com, and Tripadvisor China, which primarily includes click-based advertising and display-based advertising revenue. Practical Expedients and Exemptions Tripadvisor expenses costs to obtain a contract as incurred, such as sales incentives, when the amortization period would have been one Tripadvisor does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one Disaggregation of Revenue Years ended December 31, 2019 2018 amounts in millions Hotels, Media & Platform Tripadvisor-branded hotels $ 779 848 Tripadvisor-branded display and platform 160 153 Total Hotels, Media & Platform 939 1,001 Experiences & Dining 456 372 Corporate and other 165 242 Total Revenue $ 1,560 1,615 December 31, December 31, 2019 2018 Accounts receivable $ 176 205 Contract assets 7 7 Total $ 183 212 |
Operating Expense | Operating Expense Operating expenses consist primarily of certain technology and content expenses, including personnel and overhead expenses which include salaries, benefits and bonuses for salaried employees and contractors engaged in the design, development, testing content support and maintenance of Tripadvisor’s websites and mobile apps. Operating expense also includes, to a lesser extent, costs of services which are expenses that are closely correlated or directly related to service revenue generated, including credit card and other booking transaction payment fees, data center costs, costs associated with prepaid tour tickets, ad serving fees, flight search fees and other transactions. Other costs include licensing, maintenance expense, computer supplies, telecom costs, content translation and localization costs and consulting costs. |
General and Administrative | General and Administrative General and administrative expenses consist primarily of personnel and related overhead costs, including personnel engaged in leadership, finance, legal and human resource functions as well as professional service fees and other fees including audit, legal, tax and accounting, and other costs including bad debt expense and non-income taxes, such as sales, use and other non-income related taxes. |
Selling and Marketing | Selling and Marketing Selling and marketing expenses primarily consist of direct costs, including traffic generation costs from search engine marketing, or SEM, and other online traffic acquisition costs, syndication costs and affiliate program commissions, social media costs, brand advertising (including television and other offline advertising), promotions and public relations. In addition, our indirect sales and marketing expense consists of personnel and overhead expenses, including salaries, commissions, benefits, and bonuses for sales, sales support, customer support and marketing employees. Tripadvisor incurs advertising expense consisting of traffic generation costs from SEM and other online traffic costs, affiliate program commissions, display advertising, social media, other online and offline (primarily television) advertising expense, and promotions and public relations to promote its brands. Costs associated with communicating the advertisements are expensed in the period in which the advertisement takes place. Production costs associated with advertisements are expensed in the period in which the advertisement first takes place. |
StockBased Compensation | Stock-Based Compensation As more fully described in note 11, TripCo grants to its directors, employees and employees of its subsidiaries restricted stock and options (collectively, “Awards”) to purchase shares of TripCo common stock. TripCo measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock) based on the grant-date fair value of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). TripCo measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date. Certain outstanding awards that were previously granted by Qurate Retail were assumed by TripCo upon the completion of the TripCo Spin-Off. Additionally, Tripadvisor is a consolidated company and has issued stock-based compensation to its employees related to its common stock. The consolidated statements of operations include stock-based compensation related to TripCo Awards and Tripadvisor equity awards. Included in the accompanying consolidated statements of operations are the following amounts of stock-based compensation for the years ended December 31, 2019, 2018 and 2017 (amounts in millions): December 31, 2019 2018 2017 Operating expense $ 56 52 40 Selling, general and administrative 75 71 63 $ 131 123 103 During the years ended December 31, 2019, 2018 and 2017, Tripadvisor capitalized $19 million, $13 million and $13 million, respectively, of stock-based compensation expense as internal-use software and website development costs. |
Income taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts and income tax bases of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards. The deferred tax assets and liabilities are calculated using enacted income tax rates in effect for each taxing jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are then reduced by a valuation allowance if the Company believes it more likely than not that such net deferred tax assets will not be realized. We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies. The effect on deferred tax assets and liabilities of an enacted change in tax rates is recognized in income in the period that includes the enactment date. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. Such interest expense is included in income tax (expense) benefit in the accompanying consolidated statements of operations. Any accrual of penalties related to underpayment of income taxes on uncertain tax positions is included in income tax (expense) benefit in the accompanying consolidated statements of operations. We recognize in our consolidated financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. |
Deferred Merchant Payables | Deferred Merchant Payables In Tripadvisor’s Rentals free-to-list model and its Experiences businesses, Tripadvisor receives cash from travelers at the time of booking and it records these amounts, net of commissions, on its consolidated balance sheets as deferred merchant payables. Tripadvisor pays the suppliers, or the vacation rental owners and tour providers, respectively, after the travelers’ use. Therefore, it receives cash from the traveler prior to paying the suppliers and this operating cycle represents a working capital source or use of cash to Tripadvisor. Tripadvisor’s deferred merchant payables balance was $159 million and $164 million for the years ended December 31, 2019 and 2018, respectively. |
Certain Risks and Concentrations | Certain Risks and Concentrations The Tripadvisor business is subject to certain risks and concentrations, including concentrations related to dependence on relationships with its customers. For the years ended December 31, 2019, 2018 and 2017, Tripadvisor’s two most significant travel partners, Expedia Group Inc. (“Expedia”) and Booking Holdings Inc., which each accounted for more than 10% of Tripadvisor’s consolidated revenue and combined accounted for approximately 33%, 37% and 43%, respectively, of its total revenue. |
Contingent Liabilities | Contingent Liabilities Periodically, the Company reviews the status of all significant outstanding matters to assess any potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of operations. The Company provides disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the consolidated financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. Accruals are based on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss), cumulative foreign currency translation adjustments, and unrealized gains and losses on available-for-sale securities, net of tax. |
Earnings (Loss) per Common Share (EPS) | Earnings (Loss) per Common Share (EPS) Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. Excluded from EPS for each of the years ended December 31, 2019, 2018 and 2017 are 2 million potential common shares because their inclusion would be antidilutive. Years ended December 31, 2019 2018 2017 number of shares in millions Basic EPS 75 74 75 Potentially dilutive shares — — — Diluted EPS 75 74 75 |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers (i) recoverability and recognition of goodwill, intangible and long-lived assets and (ii) accounting for income taxes to be its most significant estimates. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of property and equipment | Property and equipment consists of the following (amounts in millions): December 31, 2019 2018 Buildings (1) $ — 123 Finance lease right-of-use asset (1) 114 — Leasehold improvements 49 41 Computer equipment and purchased software 70 52 Furniture, office equipment and other 21 18 Total property and equipment $ 254 234 (1) Refer to note 8 regarding the transition accounting related to the adoption of ASC 842 and subsequent accounting for Tripadvisor’s headquarters lease in Needham, Massachusetts (Tripadvisor’s “Headquarters Lease”). |
Schedule of disaggregation of revenue | Years ended December 31, 2019 2018 amounts in millions Hotels, Media & Platform Tripadvisor-branded hotels $ 779 848 Tripadvisor-branded display and platform 160 153 Total Hotels, Media & Platform 939 1,001 Experiences & Dining 456 372 Corporate and other 165 242 Total Revenue $ 1,560 1,615 December 31, December 31, 2019 2018 Accounts receivable $ 176 205 Contract assets 7 7 Total $ 183 212 |
Schedule of contract balances | Years ended December 31, 2019 2018 amounts in millions Hotels, Media & Platform Tripadvisor-branded hotels $ 779 848 Tripadvisor-branded display and platform 160 153 Total Hotels, Media & Platform 939 1,001 Experiences & Dining 456 372 Corporate and other 165 242 Total Revenue $ 1,560 1,615 |
Schedule of stock-based compensation expense | Included in the accompanying consolidated statements of operations are the following amounts of stock-based compensation for the years ended December 31, 2019, 2018 and 2017 (amounts in millions): December 31, 2019 2018 2017 Operating expense $ 56 52 40 Selling, general and administrative 75 71 63 $ 131 123 103 |
Reconciliation of Basic and Diluted Weighted Average Shares | Years ended December 31, 2019 2018 2017 number of shares in millions Basic EPS 75 74 75 Potentially dilutive shares — — — Diluted EPS 75 74 75 |
Supplemental Disclosures to C_2
Supplemental Disclosures to Consolidated Statements of Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Disclosures to Consolidated Statements of Cash Flow | |
Schedule of supplemental cash flow | Years ended December 31, 2019 2018 2017 amounts in millions Acquisitions, net of cash acquired: Intangibles not subject to amortization $ 85 12 — Intangibles subject to amortization 26 14 — Fair value of other assets acquired 5 — — Net liabilities assumed (8) — — Deferred tax assets (liabilities) — (2) — Acquisitions, net of cash acquired $ 108 24 — Equity method investment acquired for non-cash consideration $ 41 — — Cash paid for interest $ 28 8 13 Cash paid for income taxes $ 47 53 62 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions and Dispositions | |
Schedule of purchase price allocations | Years ended December 31, 2019 2018 2017 amounts in millions Goodwill (1) $ 85 11 — Intangible assets 26 14 — Net tangible assets (liabilities) (1) — — Deferred tax liabilities, net — (2) — Total purchase price consideration $ 110 23 — (1) Goodwill of $50 million is not deductible for tax purposes. |
Assets and Liabilities Measur_2
Assets and Liabilities Measured at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Assets and Liabilities Measured at Fair Value | |
Schedule of assets and liabilities measured at fair value | December 31, 2019 December 31, 2018 Quoted prices Significant Quoted prices Significant in active other in active other markets for observable markets for observable identical assets inputs identical assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) amounts in millions Cash equivalents $ 22 22 — 145 140 5 Marketable securities $ — — — 15 — 15 Variable postpaid forward $ — — — 20 — 20 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Other Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | Tripadvisor Hotels, Media & Platform Experiences & Dining Corporate and other Total (in millions) Balance at January 1, 2018 $ 2,445 - - - 2,445 Acquisition (1) 11 - - - 11 Other (2) (13) - - - (13) Balance at December 31, 2018 $ 2,443 - - - 2,443 Allocation to new segments (3) (2,443) 1,923 250 270 - Acquisition (1) - - 85 - 85 Other (2) - - (2) 1 (1) Balance at December 31, 2019 $ - 1,923 333 271 2,527 (1) Additions to goodwill relate to Tripadvisor’s acquisitions (see note 4). (2) Other changes are primarily due to foreign currency translation on goodwill. (3) See note 14 for information regarding changes to our reportable segments in the first quarter of 2019. |
Schedule of intangible assets subject to amortization | December 31, 2019 December 31, 2018 Weighted Average Gross Net Gross Net Remaining carrying Accumulated carrying carrying Accumulated carrying Useful Life amount amortization amount amount amortization amount in years amounts in millions Customer relationships 2 $ 1,036 (910) 126 1,007 (838) 169 Other 3 552 (401) 151 466 (324) 142 Total $ 1,588 (1,311) 277 1,473 (1,162) 311 |
Schedule of future amortization expense | The estimated future amortization expense for the next five years related to intangible assets with definite lives as of December 31, 2019, assuming no subsequent impairment of the underlying assets, is as follows (amounts in millions): 2020 $ 92 2021 $ 77 2022 $ 35 2023 $ 32 2024 $ 29 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of outstanding debt | December 31, December 31, 2019 2018 amounts in millions TripCo margin loans $ 355 220 TripCo variable postpaid forward — 267 Deferred financing costs (2) — Total consolidated TripCo debt $ 353 487 Less debt classified as current — (220) Total long-term debt $ 353 267 |
Tripadvisor | |
Value of shares pledged as collateral | Number of Shares Pledged as Collateral as of Share value as of Pledged Collateral December 31, 2019 December 31, 2019 amounts in millions Common Stock 18.2 $ 552 Class B Common Stock 12.8 $ 389 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of impact of adoption of ASC 842 | Balance at December 31, 2018 Adjustments due to ASC 842 Balance at January 1, 2019 in millions Assets: Other current assets $ 48 (3) 45 Property and equipment, net $ 154 8 162 Other assets, at cost, net of accumulated amortization $ 118 73 191 Liabilities: Accrued liabilities and other current liabilities $ 151 21 172 Deferred income tax liabilities $ 325 1 326 Other liabilities $ 283 53 336 Retained earnings $ 133 1 134 Noncontrolling interests in equity of subsidiaries $ 3,400 2 3,402 |
Components of lease expense | Year ended December 31, 2019 in millions Operating lease cost (1) $ 24 Finance lease cost: Amortization of right-of-use assets (2) $ 9 Interest on lease liabilities (3) 4 Total finance lease cost $ 13 Sublease income (1) (3) Total lease cost, net $ 34 (1) Included in operating expense, including stock-based compensation in the consolidated statement of operations. (2) Included in depreciation expense in the consolidated statement of operations. (3) Included in interest expense in the consolidated statement of operations. |
Schedule of balance sheet information | December 31, 2019 in millions Operating leases: Operating lease right-of-use assets (1) $ 74 Current operating lease liabilities (2) $ 20 Operating lease liabilities (3) 64 Total operating lease liabilities $ 84 Finance Lease: Finance lease right-of-use assets (4) $ 105 Current finance lease liabilities (2) $ 5 Finance lease liabilities (3) 78 Total finance lease liabilities $ 83 (1) Included in other assets, at cost, net of accumulated amortization in the consolidated balance sheet. (2) Included in accrued liabilities and other current liabilities in the consolidated balance sheet. (3) Included in other liabilities in the consolidated balance sheet. (4) Included in property and equipment, net in the consolidated balance sheet . |
Schedule of cash flow information related to leases | Year ended December 31, 2019 in millions Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 26 Operating cash outflows from finance lease $ 4 Financing cash outflows from finance lease $ 5 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 106 Finance lease $ 88 |
Schedule of weighted-average lease term and discount rate | As of December 31, 2019 Weighted-average remaining lease term Operating leases 4.4 years Finance lease 11.0 years Weighted-average discount rate Operating leases 4.11% Finance lease 4.49% |
Schedule of operating lease maturities | Operating Leases Finance Lease in millions 2020 $ 23 9 2021 23 10 2022 19 10 2023 13 10 2024 8 10 Thereafter 6 57 Total future lease payments $ 92 106 Less: imputed interest (8) (23) Total $ 84 83 |
Schedule of finance lease maturities | Operating Leases Finance Lease in millions 2020 $ 23 9 2021 23 10 2022 19 10 2023 13 10 2024 8 10 Thereafter 6 57 Total future lease payments $ 92 106 Less: imputed interest (8) (23) Total $ 84 83 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of income tax benefit (expense) | Years ended December 31, 2019 2018 2017 amounts in millions Current: Federal $ (31) (39) (92) State and local (6) (12) (2) Foreign (26) (14) (6) $ (63) (65) (100) Deferred: Federal $ 27 14 288 State and local 20 (5) 30 Foreign 32 (1) 11 79 8 329 Income tax benefit (expense) $ 16 (57) 229 |
Schedule of income before income taxes | Years ended December 31, 2019 2018 2017 amounts in millions Domestic $ (178) 3 (1,720) Foreign 46 45 (90) Total $ (132) 48 (1,810) |
Schedule of income tax benefit (expense) reconciliation to the effective tax rate | Years ended December 31, 2019 2018 2017 amounts in millions Computed expected tax benefits (expense) $ 28 (10) 634 State and local taxes, net of federal income taxes 2 (14) 17 Foreign taxes, net of foreign tax credits 13 11 2 Transition tax — — (67) Change in tax rate due to Tax Act — — 139 Taxable dividend net of dividends received deduction (13) — — Basis difference in consolidated subsidiary 22 (17) (8) Change in valuation allowance (11) (4) (27) Change in unrecognized tax benefits (25) (12) (11) Federal tax credits 11 9 8 Stock-based compensation (4) (8) (12) Impairment of nondeductible goodwill — — (445) Other (7) (12) (1) Income tax (expense) benefit $ 16 (57) 229 |
Schedule of deferred income tax assets and liabilities | December 31, 2019 2018 amounts in millions Deferred tax assets: Tax loss and credit carryforwards $ 89 77 Stock-based compensation 53 48 Lease financing obligation 24 22 Other (23) 78 Total deferred tax assets 143 225 Less: valuation allowance (80) (60) Net deferred tax assets 63 165 Deferred tax liabilities: Intangible assets (297) (387) Investments (17) (41) Other 3 (62) Total deferred tax liabilities (311) (490) Net deferred tax liability $ (248) (325) |
Schedule of reconciliation of unrecognized tax benefits | A reconciliation of unrecognized tax benefits is as follows (amounts in millions): Years ended December 31, 2019 2018 2017 Balance at beginning of year $ 136 123 105 Additions based on tax positions related to the current year 11 11 17 Additions for tax positions of prior years 1 2 1 Reductions for tax positions of prior years (8) — — Balance at end of year $ 140 136 123 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Series A | |
Schedule of stock-based compensation activity | Weighted average remaining Aggregate contractual intrinsic Series A WAEP life value in thousands in years in millions Outstanding at January 1, 2019 570 $ 15.40 Granted 151 $ 7.20 Exercised — $ — Forfeited/Cancelled (4) $ 17.19 Outstanding at December 31, 2019 717 $ 13.65 3.3 $ — Exercisable at December 31, 2019 565 $ 15.38 2.3 $ — |
Series B | |
Schedule of stock-based compensation activity | Weighted average remaining Aggregate contractual intrinsic Series B WAEP life value in thousands in years in millions Outstanding at January 1, 2019 1,797 $ 27.83 Granted 27 $ 14.28 Exercised — $ — Forfeited/Cancelled — $ — Outstanding at December 31, 2019 1,824 $ 27.63 5.0 $ — Exercisable at December 31, 2019 1,824 $ 27.63 5.0 $ — |
Tripadvisor | |
Schedule of stock-based compensation activity | Weighted Average Remaining Aggregate Number of Contractual Intrinsic Options WAEP Life Value in thousands in years in millions Outstanding at January 1, 2019 6,041 $ 54.00 Granted 752 $ 48.30 Exercised (195) $ 42.17 Cancelled or expired (581) $ 56.97 Outstanding at December 31, 2019 6,017 $ 50.27 5.9 $ — Exercisable at December 31, 2019 3,425 $ 57.27 4.2 $ — |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Information | |
Schedule of performance measures | Years ended December 31, 2019 2018 2017 Adjusted Adjusted Adjusted Revenue OIBDA Revenue OIBDA Revenue OIBDA amounts in millions Hotels, Media & Platform $ 939 378 1,001 329 1,022 267 Experiences & Dining 456 5 372 48 264 23 Corporate and other 165 47 242 39 283 32 Consolidated TripCo $ 1,560 430 1,615 416 1,569 322 |
Schedule of revenue by geographic area | December 31, 2019 2018 2017 amounts in millions United States $ 821 835 815 United Kingdom 466 508 530 Other countries 273 272 224 Consolidated TripCo $ 1,560 1,615 1,569 |
Schedule of long-lived assets by geographic area | December 31, 2019 2018 amounts in millions United States $ 137 137 Other countries 18 17 Consolidated TripCo $ 155 154 |
Reconciliation of consolidated Adjusted OIBDA to operating income and earnings (loss) before income taxes | Years ended December 31, 2019 2018 2017 amounts in millions Adjusted OIBDA $ 430 416 322 Restructuring and related reorganization costs (1) — — Legal settlement — (5) — Stock-based compensation (131) (123) (103) Depreciation and amortization (169) (160) (213) Impairment of intangible assets (288) — (1,798) Operating income (loss) (159) 128 (1,792) Interest expense (22) (26) (25) Realized and unrealized gains (losses) on financial instruments, net 36 (59) 24 Other, net 13 5 (17) Earnings (loss) before income taxes $ (132) 48 (1,810) |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information (Unaudited) | |
Schedule of quarterly financial information | 1 st 2 nd 3 rd 4 th Quarter Quarter Quarter Quarter amounts in millions, except per share amounts 2019: Revenue $ 376 422 428 334 Operating income (loss) $ 16 51 55 (281) Net earnings (loss) $ 11 23 48 (198) Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders $ (2) 3 16 (39) Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ (0.03) 0.04 0.21 (0.52) Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ (0.03) 0.04 0.21 (0.52) 1 st 2 nd 3 rd 4 th Quarter Quarter Quarter Quarter amounts in millions, except per share amounts 2018: Revenue $ 378 433 458 346 Operating income (loss) $ 9 34 76 9 Net earnings (loss) $ (35) (22) 57 (9) Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders $ (31) (39) 14 (8) Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ (0.41) (0.52) 0.19 (0.11) Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ (0.41) (0.52) 0.19 (0.11) |
Basis of Presentation - Descrip
Basis of Presentation - Description of Business (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019USD ($)item | Sep. 30, 2019item | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Number of markets have localized versions of the website | item | 48 | 48 | ||
Number of languages for the website | item | 28 | 28 | ||
Number of average monthly unique visitors | item | 463 | |||
Liberty Media | ||||
Related Party Transaction, Amounts of Transaction | $ 4 | $ 3 | ||
Liberty Media | CEO | ||||
CEO compensation allocation percentage | 5.00% | |||
Employment agreement term | 5 years | |||
Annual base salary | $ 3 | |||
One-time cash commitment bonus | 5 | |||
Annual target cash performance bonus | 17 | |||
Annual equity awards | 17.5 | |||
Upfront awards | $ 90 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for doubtful accounts | $ 25 | $ 21 | |
Customer invoices due | 30 days | ||
Maximum invested cash maturity period | 18 months | ||
Maximum security maturity period | 3 years | ||
Total property and equipment | $ 254 | 234 | |
Foreign currency exchange gain (loss) | (3) | (6) | $ 1 |
Buildings | |||
Total property and equipment | 123 | ||
Finance lease right-of-use assets | |||
Total property and equipment | 114 | ||
Leasehold improvements | |||
Total property and equipment | 49 | 41 | |
Computer equipment and purchased software | |||
Total property and equipment | 70 | 52 | |
Furniture, office equipment and other | |||
Total property and equipment | $ 21 | $ 18 | |
Computer Equipment, Furniture, Office Equipment and Other | Minimum | |||
Property estimated useful life | 3 years | ||
Computer Equipment, Furniture, Office Equipment and Other | Maximum | |||
Property estimated useful life | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Customer invoices due | 30 days | |
Tripadvisor | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Maximum subscription advertising service contact period | 1 year | |
Capitalized contract costs | $ 4 | $ 2 |
Customer invoices due | 30 days | |
Practical expedient, incremental costs | true | |
Practical expedient, remaining performance obligation | true | |
Tripadvisor | Selling, general and administrative | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract cost amortization | $ 1 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 334 | $ 428 | $ 422 | $ 376 | $ 346 | $ 458 | $ 433 | $ 378 | $ 1,560 | $ 1,615 | $ 1,569 |
Corporate and other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 165 | 242 | 283 | ||||||||
Tripadvisor | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,560 | 1,615 | |||||||||
Tripadvisor | Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 456 | 372 | |||||||||
Tripadvisor | Corporate and other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 165 | 242 | |||||||||
Hotel, Media & Platform | Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 939 | 1,001 | 1,022 | ||||||||
Hotel, Media & Platform | Tripadvisor | Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 939 | 1,001 | |||||||||
Tripadvisor-branded hotels | Tripadvisor | Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 779 | 848 | |||||||||
Tripadvisor-branded display and platform | Tripadvisor | Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 160 | 153 | |||||||||
Experiences & Dining | Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 456 | $ 372 | $ 264 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
Accounts receivable | $ 176 | $ 205 | ||
Contract assets | 7 | 7 | ||
Total | 183 | 212 | ||
Tripadvisor | ||||
Deferred revenue | $ 63 | $ 59 | ||
Contract with customer revenue recognized | $ 61 | 57 | ||
Reversal of revenue recognized due to cancellation by travelers | $ 2 | $ 2 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | $ 131 | $ 123 | $ 103 |
Operating expense | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | 56 | 52 | 40 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | 75 | 71 | 63 |
Tripadvisor | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | 124 | ||
Capitalized Stock Based Compensation | $ 19 | $ 13 | $ 13 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Deferred Merchant Payables, Certain Risks and Concentrations, Earnings (Loss) per Common Share (Details) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)itemshares | Dec. 31, 2018USD ($)itemshares | Dec. 31, 2017itemshares | |
Earnings (Loss) Per Common Share (EPS) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2 | 2 | 2 |
Basic EPS (In Shares) | 75 | 74 | 75 |
Diluted EPS (In Shares) | 75 | 74 | 75 |
Tripadvisor | |||
Product Information [Line Items] | |||
Deferred merchant payable | $ | $ 159 | $ 164 | |
Number of most significant travel partners | item | 2 | 2 | 2 |
Tripadvisor | Expedia and Booking Holdings Inc. | Customer | Revenue | |||
Product Information [Line Items] | |||
Customer concentration (as a percent) | 33.00% | 37.00% | 43.00% |
Supplemental Disclosures to C_3
Supplemental Disclosures to Consolidated Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Acquisitions, net of cash acquired: | |||
Intangibles not subject to amortization | $ 85 | $ 12 | |
Intangibles subject to amortization | 26 | 14 | |
Fair value of other assets acquired | 5 | ||
Net liabilities assumed | (8) | ||
Deferred tax assets (liabilities) | (2) | ||
Acquisitions, net of cash acquired | 108 | 24 | |
Equity method investment acquired for non-cash consideration | 41 | ||
Cash paid for interest | 28 | 8 | $ 13 |
Cash paid for income taxes | $ 47 | $ 53 | $ 62 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | |
Acquisitions | |||
Goodwill | $ 2,527 | $ 2,443 | $ 2,445 |
Tripadvisor | |||
Acquisitions | |||
Goodwill not expected to be tax deductible | $ 50 | ||
Tripadvisor | 2019 Acquisitions | |||
Tripadvisor, Inc. transactions | |||
Number of businesses acquired | item | 3 | ||
Cash consideration for acquisition | $ 108 | ||
Cash Acquired from Acquisition | $ 2 | ||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||
Acquisitions | |||
Goodwill | $ 85 | ||
Intangible assets | 26 | ||
Net tangible assets (liabilities) | (1) | ||
Total purchase price consideration | $ 110 | ||
Definite-lived intangible assets weighted-average life | 6 years | ||
Tripadvisor | 2019 Acquisitions | Trademarks | |||
Acquisitions | |||
Intangible assets | $ 2 | ||
Tripadvisor | 2019 Acquisitions | Customer Lists and Relationships | |||
Acquisitions | |||
Intangible assets | 10 | ||
Tripadvisor | 2019 Acquisitions | Subscriber Relationships | |||
Acquisitions | |||
Intangible assets | 6 | ||
Tripadvisor | 2019 Acquisitions | Technology-Based Intangible Assets | |||
Acquisitions | |||
Intangible assets | $ 8 | ||
Tripadvisor | 2018 Acquisitions | |||
Tripadvisor, Inc. transactions | |||
Number of businesses acquired | item | 1 | ||
Cash consideration for acquisition | $ 23 | ||
Acquisitions | |||
Goodwill | 11 | ||
Intangible assets | 14 | ||
Deferred tax liabilities, net | (2) | ||
Total purchase price consideration | $ 23 | ||
Definite-lived intangible assets weighted-average life | 8 years | ||
Tripadvisor | 2018 Acquisitions | Customer Lists and Relationships | |||
Acquisitions | |||
Intangible assets | $ 6 | ||
Tripadvisor | 2018 Acquisitions | Technology-Based Intangible Assets | |||
Acquisitions | |||
Intangible assets | $ 8 |
Acquisitions and Dispositions_3
Acquisitions and Dispositions (Details) - Buy Seasons - Disposed of by Sale $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Gain (Loss) on Dispositions, Net | $ (18) |
Disposal Group, Including Discontinued Operation, Revenue | 13 |
Disposal Group Net Earnings Loss | $ (2) |
Assets and Liabilities Measur_3
Assets and Liabilities Measured at Fair Value (Details) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 23, 2016USD ($) | Jun. 06, 2016$ / itemshares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Repayments of Long-term Debt | $ 359 | $ 245 | $ 369 | |||
Forward Contracts | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Forward floor price | $ / item | 38.90 | |||||
Forward cap price | $ / item | 98.96 | |||||
Forward Contracts | Variable postpaid forward | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Total borrowings | $ 259 | |||||
Repayments of Long-term Debt | $ 270 | |||||
Tripadvisor | Forward Contracts | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Forward Contract Shares indexed | shares | 7 | |||||
Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash equivalents | 22 | 22 | 145 | |||
Marketable securities | 15 | |||||
Recurring | Variable postpaid forward | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Derivative Asset | 20 | |||||
Recurring | Level 1 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash equivalents | $ 22 | $ 22 | 140 | |||
Recurring | Level 2 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash equivalents | 5 | |||||
Marketable securities | 15 | |||||
Recurring | Level 2 | Variable postpaid forward | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Derivative Asset | $ 20 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill | ||
Goodwill, beginning balance | $ 2,443 | $ 2,445 |
Acquisition | 85 | 11 |
Other | (1) | (13) |
Goodwill, ending balance | 2,527 | 2,443 |
Corporate and other | ||
Goodwill | ||
Allocation to new segments | 270 | |
Other | 1 | |
Goodwill, ending balance | 271 | |
Tripadvisor | ||
Goodwill | ||
Goodwill, beginning balance | 2,443 | 2,445 |
Allocation to new segments | (2,443) | |
Acquisition | 11 | |
Other | (13) | |
Goodwill, ending balance | $ 2,443 | |
Hotel, Media & Platform | ||
Goodwill | ||
Allocation to new segments | 1,923 | |
Goodwill, ending balance | 1,923 | |
Experiences & Dining | ||
Goodwill | ||
Allocation to new segments | 250 | |
Acquisition | 85 | |
Other | (2) | |
Goodwill, ending balance | $ 333 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets subject to amortization | |||
Gross carrying amount | $ 1,588 | $ 1,473 | |
Accumulated amortization | (1,311) | (1,162) | |
Net carrying amount | 277 | 311 | |
Amortization expense | $ 139 | 137 | $ 188 |
Customer relationships | |||
Intangible Assets subject to amortization | |||
Weighted Average Remaining Useful Life | 2 years | ||
Gross carrying amount | $ 1,036 | 1,007 | |
Accumulated amortization | (910) | (838) | |
Net carrying amount | $ 126 | 169 | |
Other | |||
Intangible Assets subject to amortization | |||
Weighted Average Remaining Useful Life | 3 years | ||
Gross carrying amount | $ 552 | 466 | |
Accumulated amortization | (401) | (324) | |
Net carrying amount | $ 151 | $ 142 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Future amortization expense | |||
2020 | $ 92 | ||
2021 | 77 | ||
2022 | 35 | ||
2023 | 32 | ||
2024 | 29 | ||
Tripadvisor | |||
Impairments | |||
Impairment of intangible assets | $ 0 | ||
Goodwill impairment | $ 1,271 | ||
Accumulated goodwill impairment | 1,271 | ||
Tripadvisor | Trademarks | |||
Impairments | |||
Impairment of intangible assets | $ 288 | $ 527 |
Debt - Outstanding debt (Detail
Debt - Outstanding debt (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Financing | ||
Deferred financing costs | $ (2) | |
Total consolidated TripCo debt | 353 | $ 487 |
Less debt classified as current | (220) | |
Total long-term debt | 353 | 267 |
Margin loan member | ||
Debt Financing | ||
Carrying amount of debt | $ 355 | 220 |
Variable postpaid forward | ||
Debt Financing | ||
Carrying amount of debt | $ 267 |
Debt - TripCo Margin Loans and
Debt - TripCo Margin Loans and Variable Postpaid Forward (Details) shares in Millions, $ in Millions | Dec. 20, 2019USD ($) | Nov. 19, 2019USD ($) | Nov. 13, 2019USD ($) | Jun. 10, 2019USD ($) | Nov. 07, 2017 | Jun. 23, 2016USD ($)agreement | Dec. 31, 2019USD ($)shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Financing | ||||||||||
Repayments of long term debt | $ 359 | $ 245 | $ 369 | |||||||
Margin Loan 2019 | ||||||||||
Debt Financing | ||||||||||
Interest rate | 3.225% | |||||||||
Paid-in-Kind Interest | 6 | |||||||||
Outstanding Margin Loan Balance If Initial Margin Call Threshold is Met | $ 157.5 | |||||||||
Additional borrow reduction percentage if Tripadvisor common stock falls below a certain minimum balance | 50 | |||||||||
Commitment fee | 0.75% | |||||||||
Margin Loan 2019 | LIBOR | ||||||||||
Debt Financing | ||||||||||
Margin | 3.00% | 2.00% | ||||||||
Variable rate basis | LIBOR | LIBOR | ||||||||
Term Loan 2019 | ||||||||||
Debt Financing | ||||||||||
Borrowed amount | $ 33 | $ 75 | ||||||||
Carrying amount of debt | $ 225 | |||||||||
Delayed Draw Term Loan | ||||||||||
Debt Financing | ||||||||||
Borrowed amount | $ 15 | |||||||||
Maximum borrowing capacity | $ 15 | 25 | ||||||||
Variable postpaid forward | ||||||||||
Debt Financing | ||||||||||
Carrying amount of debt | 267 | |||||||||
Variable postpaid forward | Forward Contracts | ||||||||||
Debt Financing | ||||||||||
Total borrowings | $ 259 | |||||||||
Repayments of long term debt | $ 270 | |||||||||
Margin loan member | ||||||||||
Debt Financing | ||||||||||
Repayments of long term debt | 200 | |||||||||
Carrying amount of debt | $ 355 | $ 355 | $ 220 | |||||||
Payment of paid-in-kind interest | $ 22 | |||||||||
Margin Loan Amendment 1 | ||||||||||
Debt Financing | ||||||||||
Number of margin loans amended | agreement | 2 | |||||||||
Carrying amount of debt | $ 200 | |||||||||
Margin Loan Amendment 2 | LIBOR | ||||||||||
Debt Financing | ||||||||||
Margin | 2.40% | |||||||||
Variable rate basis | LIBOR | |||||||||
Tripadvisor | Series A | Margin Loan 2019 And Variable Postpaid Forward | ||||||||||
Debt Financing | ||||||||||
Shares pledged as collateral under loan | shares | 18.2 | 18.2 | ||||||||
Share value | $ 552 | $ 552 | ||||||||
Tripadvisor | Series B | Margin Loan 2019 And Variable Postpaid Forward | ||||||||||
Debt Financing | ||||||||||
Shares pledged as collateral under loan | shares | 12.8 | 12.8 | ||||||||
Share value | $ 389 | $ 389 |
Debt - TripAdvisor Credit Facil
Debt - TripAdvisor Credit Facilities (Details) - Tripadvisor - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
2015 Credit Facilities | |||
Debt Financing | |||
Maximum borrowing capacity | $ 1,200 | $ 1,200 | |
Repayment of line of credit | 230 | ||
Foreign Earnings Repatriated | $ 325 | ||
Borrowings outstanding on line of credit | $ 0 | $ 0 | |
Commitment fee | 0.15% | ||
2015 Credit Facilities | Minimum | |||
Debt Financing | |||
Commitment fee | 0.15% | ||
2015 Credit Facilities | Maximum | |||
Debt Financing | |||
Commitment fee | 0.30% | ||
2015 Credit Facilities | Eurocurrency Spread | |||
Debt Financing | |||
Variable rate basis | Eurocurrency Borrowing rate | ||
2015 Credit Facilities | Eurocurrency Spread | Minimum | |||
Debt Financing | |||
Margin | 1.25% | ||
2015 Credit Facilities | Eurocurrency Spread | Maximum | |||
Debt Financing | |||
Margin | 2.00% | ||
2015 Credit Facilities | ABR | |||
Debt Financing | |||
Variable rate basis | Alternate Base Rate | ||
2015 Credit Facilities | ABR | Minimum | |||
Debt Financing | |||
Margin | 0.25% | ||
2015 Credit Facilities | ABR | Maximum | |||
Debt Financing | |||
Margin | 1.00% | ||
2015 Credit Facilities | Prime Rate | |||
Debt Financing | |||
Variable rate basis | Prime Rate | ||
2015 Credit Facilities | New York Fed Bank Rate | |||
Debt Financing | |||
Variable rate basis | New York Fed Bank Rate | ||
Margin | 0.50% | ||
2015 Credit Facilities | Adjusted LIBOR | |||
Debt Financing | |||
Variable rate basis | Adjusted LIBOR | ||
Margin | 1.00% | ||
Interest period | 1 month | ||
Letter of Credit | |||
Debt Financing | |||
Maximum borrowing capacity | $ 15 | ||
Borrowings outstanding on line of credit | 3 | ||
Same-day notice borrowings | |||
Debt Financing | |||
Maximum borrowing capacity | $ 40 |
Debt - TripAdvisor Chinese Cred
Debt - TripAdvisor Chinese Credit Facilities (Details) - Tripadvisor's Chinese subsidiary - Chinese Credit facilities - Chinese Credit Facility-BOA - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Financing | ||
Maximum borrowing capacity | $ 30 | |
Debt Instrument Term | 1 year | |
Borrowings outstanding on line of credit | $ 0 | $ 0 |
Leases - Impact of Adoption of
Leases - Impact of Adoption of ASC 842 (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease, Practical Expedients, Package [true false] | true | ||
Lease, Practical Expedient, Lessor Single Lease Component [true false] | true | ||
Other current assets | $ 33 | $ 45 | $ 48 |
Property and equipment, net | 155 | 162 | 154 |
Other assets, at cost, net of accumulated amortization | 230 | 191 | 118 |
Accrued liabilities and other current liabilities | 205 | 172 | 151 |
Deferred income tax liabilities | 254 | 326 | 325 |
Other liabilities | 381 | 336 | 283 |
Retained earnings | 111 | 134 | 133 |
Noncontrolling interests in equity of subsidiaries | $ 2,981 | 3,402 | $ 3,400 |
ASU 2016-02 | Restatement Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | (3) | ||
Property and equipment, net | 8 | ||
Other assets, at cost, net of accumulated amortization | 73 | ||
Accrued liabilities and other current liabilities | 21 | ||
Deferred income tax liabilities | 1 | ||
Other liabilities | 53 | ||
Retained earnings | 1 | ||
Noncontrolling interests in equity of subsidiaries | $ 2 |
Leases - Operating and Finance
Leases - Operating and Finance Leases (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2013ft²item | Dec. 31, 2019USD ($) | Jan. 01, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Finance lease right-of-use assets | $ 105 | ||
Finance lease liability | $ 83 | ||
Tripadvisor | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||
Lessee, Operating Lease, Existence of Option to Terminate [true false] | true | ||
Leased area (in square feet) | ft² | 280,000 | ||
Term of lease | 15 years 7 months | ||
Lessee, Finance Lease, Existence of Option to Extend [true false] | true | ||
Number of consecutive options to extend lease | item | 2 | ||
Lease renewal term | 5 years | ||
Finance lease right-of-use assets | $ 114 | ||
Finance lease liability | 88 | ||
Prepaid Rent | $ 26 | ||
Tripadvisor | Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease renewal term | 6 years | ||
Operating lease termination term | 1 year |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases | |||
Operating lease cost (1) | $ 24 | ||
Amortization of right-of-use assets (2) | 9 | ||
Interest on lease liabilities (3) | 4 | ||
Total finance lease cost | 13 | ||
Sublease income (1) | (3) | ||
Total lease cost, net | $ 34 | ||
Rental expense | $ 17 | $ 19 |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases | |
Operating lease right-of-use assets (1) | $ 74 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent |
Current operating lease liabilities (2) | $ 20 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities And Other Liabilities Current |
Operating lease liabilities (3) | $ 64 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent |
Total operating lease liabilities | $ 84 |
Finance lease right-of-use assets (4) | $ 105 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net |
Current finance lease liability (2) | $ 5 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities And Other Liabilities Current |
Finance lease liabilities (3) | $ 78 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent |
Total finance lease liabilities | $ 83 |
Leases - Supplemental Informati
Leases - Supplemental Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash outflows from operating leases | $ 26 |
Operating cash outflows from finance lease | 4 |
Financing cash outflows from finance lease | 5 |
Right-of-use assets obtained in exchange for lease liabilities: | |
Operating leases | 106 |
Finance lease | $ 88 |
Weighted-average remaining lease term | |
Operating leases weighted average remaining lease term (in years) | 4 years 4 months 24 days |
Finance lease weighted average remaining lease term (in years) | 11 years |
Weighted-average discount rate | |
Operating leases weighted average discount rate | 4.11% |
Finance lease weighted average discount rate | 4.49% |
Leases - Maturities (Details)
Leases - Maturities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Operating Leases | |
2020 | $ 23 |
2021 | 23 |
2022 | 19 |
2023 | 13 |
2024 | 8 |
Thereafter | 6 |
Total future lease payments | 92 |
Less: imputed interest | (8) |
Total operating lease liabilities | 84 |
Finance Lease | |
2020 | 9 |
2021 | 10 |
2022 | 10 |
2023 | 10 |
2024 | 10 |
Thereafter | 57 |
Total future lease payments | 106 |
Less: imputed interest | (23) |
Total finance lease liabilities | $ 83 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Effect of Tax Cuts and Jobs Act of 2017 Accounting Incomplete, Provisional [Abstract] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 35.00% | |
Current: | ||||
Federal | $ (31) | $ (39) | $ (92) | |
State and local | (6) | (12) | (2) | |
Foreign | (26) | (14) | (6) | |
Total current income tax expense | (63) | (65) | (100) | |
Deferred: | ||||
Federal | 27 | 14 | 288 | |
State and local | 20 | (5) | 30 | |
Foreign | 32 | (1) | 11 | |
Total deferred income tax expense | 79 | 8 | 329 | |
Income tax (expense) benefit (note 8) | 16 | (57) | 229 | |
Income before income taxes | ||||
Domestic | (178) | 3 | (1,720) | |
Foreign | 46 | 45 | (90) | |
Earnings (loss) before income taxes | (132) | 48 | (1,810) | |
Differences between provision for income taxes and income tax expense computed by applying federal rates | ||||
Computed expected tax benefits (expense) | 28 | (10) | 634 | |
State and local taxes, net of federal income taxes | 2 | (14) | 17 | |
Foreign taxes, net of foreign tax credits | 13 | 11 | 2 | |
Transition tax | (67) | |||
Change in tax rate due to Tax Act | 139 | |||
Taxable dividend net of dividends received deduction | (13) | |||
Basis difference in consolidated subsidiary | 22 | (17) | (8) | |
Change in valuation allowance | (11) | (4) | (27) | |
Change in unrecognized tax benefits | (25) | (12) | (11) | |
Federal tax credits | 11 | 9 | 8 | |
Stock-based compensation | (4) | (8) | (12) | |
Impairment of nondeductible goodwill | (445) | |||
Other | (7) | (12) | (1) | |
Income tax (expense) benefit (note 8) | 16 | (57) | 229 | |
One-time transition tax for accumulated foreign earnings | 67 | |||
Net tax benefit due to corporate rate reduction | $ (139) | |||
Deferred tax assets: | ||||
Tax loss and credit carryforwards | 89 | 77 | ||
Stock-based compensation | 53 | 48 | ||
Lease financing obligation | 24 | 22 | ||
Other | (23) | 78 | ||
Total deferred tax assets | 143 | 225 | ||
Less: valuation allowance | (80) | (60) | ||
Net deferred tax assets | 63 | 165 | ||
Deferred tax liabilities: | ||||
Intangible assets | (297) | (387) | ||
Investments | (17) | (41) | ||
Other | 3 | (62) | ||
Total deferred tax liabilities | (311) | (490) | ||
Net deferred tax liability | (248) | (325) | ||
Noncurrent deferred tax liability | (254) | (325) | $ (326) | |
Net deferred tax liability | 248 | $ 325 | ||
Valuation allowance income tax expense affect | 11 | |||
Valuation allowance increase related to acquisitions | 9 | |||
Tripadvisor | ||||
Deferred tax assets: | ||||
Tax loss and credit carryforwards | 72 | |||
Deferred tax liabilities: | ||||
Undistributed foreign earnings no longer considered indefinitely reinvested | 501 | |||
Deferred tax liabilities on undistributed foreign earnings | 1 | |||
Undistributed earnings of certain foreign combined companies | $ 118 |
Income Taxes (Details)_2
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating loss carryforwards | |||
Tax loss and credit carryforwards | $ 89 | $ 77 | |
Operating loss carryforwards not expected to be utilized | 80 | ||
Unrecognized tax benefits | |||
Balance at beginning of year | 136 | 123 | $ 105 |
Additions based on tax positions related to the current year | 11 | 11 | 17 |
Additions for tax positions of prior years | 1 | 2 | 1 |
Reductions for tax positions of prior years | (8) | ||
Balance at end of year | 140 | 136 | 123 |
Unrecognized tax benefit that would impact effective rate | 82 | 87 | $ 78 |
Accrued interest and penalties related to uncertain tax positions | 29 | $ 20 | |
Minimum | |||
Unrecognized tax benefits | |||
Income Tax Examination, Estimate of Possible Loss | 35 | ||
Maximum | |||
Unrecognized tax benefits | |||
Anticipated decrease in unrecognized tax benefits | 12 | ||
Income Tax Examination, Estimate of Possible Loss | 40 | ||
Tripadvisor | |||
Operating loss carryforwards | |||
Tax loss and credit carryforwards | 72 | ||
TripCo | |||
Operating loss carryforwards | |||
Tax loss and credit carryforwards | $ 17 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Aug. 27, 2014Vote | Dec. 31, 2019shares | Dec. 31, 2018shares |
Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued | shares | 0 | 0 | |
Series A | |||
Class of Stock [Line Items] | |||
Number of votes | 1 | ||
Series B | |||
Class of Stock [Line Items] | |||
Number of votes | 10 | ||
Series C | |||
Class of Stock [Line Items] | |||
Number of votes | 0 |
Stockholders' Equity - Subsidia
Stockholders' Equity - Subsidiary Purchases of Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2018 | Jan. 25, 2017 |
Equity, Class of Treasury Stock [Line Items] | ||||||
Payment for shares repurchased | $ 60 | $ 100 | $ 250 | |||
Dividends received | $ 108 | |||||
Tripadvisor | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Dividend declared per share | $ 3.50 | |||||
Dividends | $ 488 | |||||
Tripadvisor | 2017 Stock Repurchase Program | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase program authorized amount | $ 250 | |||||
Treasury shares acquired | 6,079,003 | |||||
Payment for shares repurchased | $ 250 | |||||
Tripadvisor | 2018 Stock Repurchase Program | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase program authorized amount | $ 250 | |||||
Treasury shares acquired | 2,059,846 | 2,582,198 | ||||
Payment for shares repurchased | $ 60 | $ 100 | ||||
Additional amount authorized | 100 | |||||
Stock repurchase remaining amount authorized | $ 250 | $ 190 |
Stock-Based Compensation - Trip
Stock-Based Compensation - TripCo Grants (Details) - 2019 Plan - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | |||
Maximum number of shares | 5,000,000 | ||
Fair value assumptions | |||
Volatility rate, minimum (as a percent) | 49.10% | 49.10% | 49.10% |
Volatility rate, maximum (as a percent) | 54.20% | 54.20% | 54.20% |
Dividend rate | 0.00% | ||
Minimum | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
Term of awards | 7 years | ||
Fair value assumptions | |||
Expected term | 4 years 9 months 18 days | 4 years 9 months 18 days | 4 years 9 months 18 days |
Maximum | |||
Stock-Based Compensation | |||
Vesting period | 5 years | ||
Term of awards | 10 years | ||
Fair value assumptions | |||
Expected term | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 3 months 18 days |
Series A | Stock Options | |||
Stock-Based Compensation | |||
Granted | 151,000 | ||
Cancelled or expired | 4,000 | ||
Series A | Stock Options | Employee | |||
Stock-Based Compensation | |||
Granted | 73,000 | ||
Weighted average grant date fair value, options (in dollars per share) | $ 3.53 | ||
Series A | Stock Options | Employee | Minimum | |||
Stock-Based Compensation | |||
Vesting period | 3 years | ||
Series A | Stock Options | Employee | Maximum | |||
Stock-Based Compensation | |||
Vesting period | 5 years | ||
Series A | Stock Options | Nonemployee | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
Granted | 79,000 | 59,000 | 105,000 |
Weighted average grant date fair value, options (in dollars per share) | $ 3.42 | $ 8.83 | $ 4.11 |
Series B | Stock Options | |||
Stock-Based Compensation | |||
Granted | 27,000 | ||
Series B | Stock Options | Nonemployee | |||
Stock-Based Compensation | |||
Exercised | 0 | ||
Cancelled or expired | 0 | ||
Series B | Stock Options | CEO | |||
Stock-Based Compensation | |||
Granted | 27,000 | ||
Weighted average grant date fair value, options (in dollars per share) | $ 6.41 | ||
Series B | Performance Based RSU's | CEO | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
RSUs granted | 35,000 | ||
Weighted average grant date fair value, RSUs (in dollars per share) | $ 14.17 | ||
Series B | Time Based RSU's | CEO | |||
Stock-Based Compensation | |||
Granted | 320,000 | ||
Weighted average grant date fair value, RSUs (in dollars per share) | $ 7.23 |
Stock-Based Compensation - Tr_2
Stock-Based Compensation - TripCo Outstanding Awards (Details) - 2019 Plan - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Additional disclosures | |||
Unvested value not yet recognized | $ 485 | ||
Weighted average period the unrecognized compensation cost will be recognized | 2 years | ||
Common Stock, Capital Shares Reserved for Future Issuance | 2,500 | ||
Stock Options | |||
Additional disclosures | |||
Stock options exercised intrinsic value | $ 0 | $ 117 | $ 478 |
Restricted Stock | |||
Additional disclosures | |||
Aggregate fair value | $ 159 | $ 9 | $ 13 |
Series A | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding beginning balance | 570 | ||
Granted | 151 | ||
Cancelled or expired | (4) | ||
Outstanding ending balance | 717 | 570 | |
Options exercisable | 565 | ||
WAEP | |||
Weighted average exercise price, options outstanding (in dollars per share) | $ 15.40 | ||
Weighted average exercise price, options granted (in dollars per share) | 7.20 | ||
Weighted average exercise price, options forfeited/cancelled (in dollars per share) | 17.19 | ||
Weighted average exercise price, options outstanding (in dollars per share) | 13.65 | $ 15.40 | |
Weighted average exercise price, options exercisable (in dollars per share) | $ 15.38 | ||
Weighted average remaining contractual term outstanding | 3 years 3 months 18 days | ||
Weighted average remaining contractual term exercisable | 2 years 3 months 18 days | ||
Series A | Restricted Stock | |||
Additional disclosures | |||
Unvested RSUs and MSUs (in shares) | 402 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 8.26 | ||
Series B | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding beginning balance | 1,797 | ||
Granted | 27 | ||
Outstanding ending balance | 1,824 | 1,797 | |
Options exercisable | 1,824 | ||
WAEP | |||
Weighted average exercise price, options outstanding (in dollars per share) | $ 27.83 | ||
Weighted average exercise price, options granted (in dollars per share) | 14.28 | ||
Weighted average exercise price, options outstanding (in dollars per share) | 27.63 | $ 27.83 | |
Weighted average exercise price, options exercisable (in dollars per share) | $ 27.63 | ||
Weighted average remaining contractual term outstanding | 5 years | ||
Weighted average remaining contractual term exercisable | 5 years |
Stock-Based Compensation - Tr_3
Stock-Based Compensation - TripAdvisor Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 21, 2018 | |
Additional disclosures | ||||
Stock-based compensation | $ 131 | $ 123 | $ 103 | |
Tripadvisor | ||||
Additional disclosures | ||||
Stock-based compensation | $ 124 | |||
Tripadvisor | 2018 Plan | ||||
Stock-Based Compensation | ||||
Number of shares available for grant | 10,100,000 | 6,000,000 | ||
Tripadvisor | 2018 Plan | RSUs and MSUs | ||||
Additional disclosures | ||||
Weighted average period the unrecognized compensation cost will be recognized | 2 years 6 months | |||
RSUs and MSUs granted (in shares) | 5,000,000 | |||
Weighted average grant date fair value, RSUs (in dollars per share) | $ 47.61 | |||
Unvested RSUs and MSUs (in shares) | 9,000,000 | |||
Unrecognized compensation cost, unvested RSUs and MSUs | $ 248 | |||
Tripadvisor | 2011 and 2018 Plans | ||||
Stock-Based Compensation | ||||
Volatility rate (as a percent) | 42.10% | 41.90% | 42.10% | |
Expected term | 5 years 2 months 12 days | 5 years 6 months | 6 years 1 month 6 days | |
Tripadvisor | 2011 and 2018 Plans | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding beginning balance | 6,041,000 | |||
Granted | 752,000 | |||
Exercised | (195,000) | |||
Cancelled or expired | (581,000) | |||
Outstanding ending balance | 6,017,000 | 6,041,000 | ||
Options exercisable | 3,425,000 | |||
WAEP | ||||
Weighted average exercise price, options outstanding (in dollars per share) | $ 54 | |||
Weighted average exercise price, options granted (in dollars per share) | 48.30 | |||
Weighted average exercise price, options exercised (in dollars per share) | 42.17 | |||
Weighted average exercise price, options forfeited/cancelled (in dollars per share) | 56.97 | |||
Weighted average exercise price, options outstanding (in dollars per share) | 50.27 | $ 54 | ||
Weighted average exercise price, options exercisable (in dollars per share) | $ 57.27 | |||
Weighted average remaining contractual term outstanding | 5 years 10 months 24 days | |||
Weighted average remaining contractual term exercisable | 4 years 2 months 12 days | |||
Additional disclosures | ||||
Weighted average grant date fair value, options (in dollars per share) | $ 21.25 | |||
Term of awards | 10 years | |||
Vesting period | 4 years | |||
Unrecognized compensation cost, unvested options (in dollars) | $ 32 | |||
Weighted average period the unrecognized compensation cost will be recognized | 2 years 7 months 6 days |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Benefit Plans | |||
Employer cash contributions | $ 14 | $ 13 | $ 9 |
Segment Information - Performan
Segment Information - Performance Measures and Other Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segments | |||||||||||
Revenue | $ 334 | $ 428 | $ 422 | $ 376 | $ 346 | $ 458 | $ 433 | $ 378 | $ 1,560 | $ 1,615 | $ 1,569 |
Adjusted OIBDA | 430 | 416 | 322 | ||||||||
Long-lived assets | 155 | 154 | 155 | 154 | |||||||
United States | |||||||||||
Segments | |||||||||||
Revenue | 821 | 835 | 815 | ||||||||
Long-lived assets | 137 | 137 | 137 | 137 | |||||||
United Kingdom | |||||||||||
Segments | |||||||||||
Revenue | 466 | 508 | 530 | ||||||||
Other Countries | |||||||||||
Segments | |||||||||||
Revenue | 273 | 272 | 224 | ||||||||
Long-lived assets | $ 18 | $ 17 | 18 | 17 | |||||||
Corporate and other | |||||||||||
Segments | |||||||||||
Revenue | 165 | 242 | 283 | ||||||||
Adjusted OIBDA | 47 | 39 | 32 | ||||||||
Hotel, Media & Platform | Operating Segments | |||||||||||
Segments | |||||||||||
Revenue | 939 | 1,001 | 1,022 | ||||||||
Adjusted OIBDA | 378 | 329 | 267 | ||||||||
Experiences & Dining | Operating Segments | |||||||||||
Segments | |||||||||||
Revenue | 456 | 372 | 264 | ||||||||
Adjusted OIBDA | $ 5 | $ 48 | $ 23 |
Segment Information - Adjusted
Segment Information - Adjusted OIBDA (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Information | |||||||||||
Adjusted OIBDA | $ 430 | $ 416 | $ 322 | ||||||||
Restructuring and related reorganization costs | (1) | ||||||||||
Legal settlement | (5) | ||||||||||
Stock-based compensation | (131) | (123) | (103) | ||||||||
Depreciation and amortization | (169) | (160) | (213) | ||||||||
Impairment of intangible assets | (288) | (1,798) | |||||||||
Operating income (loss) | $ (281) | $ 55 | $ 51 | $ 16 | $ 9 | $ 76 | $ 34 | $ 9 | (159) | 128 | (1,792) |
Interest expense | (22) | (26) | (25) | ||||||||
Realized and unrealized gains (losses) on financial instruments, net | 36 | (59) | 24 | ||||||||
Other, net | 13 | 5 | (17) | ||||||||
Earnings (loss) before income taxes | $ (132) | $ 48 | $ (1,810) |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information (Unaudited) | |||||||||||
Revenue | $ 334 | $ 428 | $ 422 | $ 376 | $ 346 | $ 458 | $ 433 | $ 378 | $ 1,560 | $ 1,615 | $ 1,569 |
Operating income (loss) | (281) | 55 | 51 | 16 | 9 | 76 | 34 | 9 | (159) | 128 | (1,792) |
Net earnings (loss) | (198) | 48 | 23 | 11 | (9) | 57 | (22) | (35) | (116) | (9) | (1,581) |
Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders | $ (39) | $ 16 | $ 3 | $ (2) | $ (8) | $ 14 | $ (39) | $ (31) | $ (22) | $ (64) | $ (397) |
Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share | $ (0.52) | $ 0.21 | $ 0.04 | $ (0.03) | $ (0.11) | $ 0.19 | $ (0.52) | $ (0.41) | $ (0.29) | $ (0.86) | $ (5.29) |
Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share | $ (0.52) | $ 0.21 | $ 0.04 | $ (0.03) | $ (0.11) | $ 0.19 | $ (0.52) | $ (0.41) | $ (0.29) | $ (0.86) | $ (5.29) |