Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
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 | Accelerated Filer | ||
ICFR Auditor Attestation Flag | true | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 285 | ||
Auditor Name | KPMG LLP | ||
Auditor Firm ID | 185 | ||
Auditor Location | Denver, CO | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
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 | ||
Trading Symbol | LTRPA | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 72,447,462 | ||
Series B | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Series B common stock | ||
Trading Symbol | LTRPB | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 3,216,047 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 760 | $ 423 |
Accounts receivable and contract assets, net of allowance for credit losses of $28 million and $33 million, respectively | 142 | 83 |
Income taxes receivable (note 9) | 48 | 50 |
Other current assets | 26 | 23 |
Total current assets | 976 | 579 |
Property and equipment, at cost | 259 | 255 |
Accumulated depreciation | (141) | (123) |
Property and equipment, net | 118 | 132 |
Intangible assets not subject to amortization (note 6): | ||
Goodwill | 2,220 | 2,240 |
Trademarks | 730 | 732 |
Intangible assets not subject to amortization | 2,950 | 2,972 |
Intangible assets subject to amortization, net (note 6) | 133 | 202 |
Other assets, at cost, net of accumulated amortization | 199 | 201 |
Total assets | 4,376 | 4,086 |
Current liabilities: | ||
Deferred merchant and other payables | 140 | 54 |
Deferred revenue | 36 | 28 |
Accrued liabilities and other current liabilities | 180 | 160 |
Total current liabilities | 356 | 242 |
Long-term debt, including $268 million measured at fair value as of December 31, 2021 (note 7) | 1,143 | 532 |
Deferred income tax liabilities (note 9) | 144 | 180 |
Financial instrument liabilities (note 5) | 85 | 14 |
Series A Preferred Stock liability (note 10) | 212 | |
Other liabilities | 309 | 339 |
Total liabilities | 2,249 | 1,307 |
Redeemable preferred stock, $.01 par value. Authorized shares 50,000,000; issued and outstanding 187,414 shares at December 31, 2021 and 325,000 at December 31, 2020 (note 10) | 472 | |
Equity | ||
Additional paid-in capital | 288 | 257 |
Accumulated other comprehensive earnings (loss), net of taxes | (21) | (23) |
Retained earnings (deficit) | (469) | (278) |
Total stockholders' equity | (201) | (43) |
Noncontrolling interests in equity of subsidiaries | 2,328 | 2,350 |
Total equity | 2,127 | 2,307 |
Commitments and contingencies (note 14) | ||
Total liabilities and equity | 4,376 | 4,086 |
Series A | ||
Equity | ||
Common stock value | 1 | 1 |
Series B | ||
Equity | ||
Common stock value | ||
Series C | ||
Equity | ||
Common stock value |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts receivables and contract assets, allowance for credit losses | $ 28,000,000 | $ 33,000,000 |
Long-term Debt, Fair Value | 268,000,000 | |
Redeemable preferred stock, par value | $ 0.01 | $ 0.01 |
Redeemable preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Redeemable preferred stock, shares issued | 187,414 | 325,000 |
Redeemable preferred stock, shares outstanding | 187,414 | 325,000 |
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 | 72,447,462 | 72,227,256 |
Common stock, shares outstanding | 72,447,462 | 72,227,256 |
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 | 3,216,047 | 2,973,665 |
Common stock, shares outstanding | 3,216,047 | 2,973,665 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Statements of Operations | |||
Revenue, Product and Service [Extensible List] | us-gaap:ServiceMember | us-gaap:ServiceMember | us-gaap:ServiceMember |
Total revenue, net | $ 902 | $ 604 | $ 1,560 |
Operating costs and expenses: | |||
Operating expense, including stock-based compensation (note 2 and 12) | 286 | 275 | 387 |
Selling, general and administrative, including stock-based compensation (note 2 and 12) | 651 | 502 | 874 |
Depreciation and amortization | 150 | 168 | 169 |
Restructuring and other related reorganization costs | 41 | 1 | |
Impairment of goodwill and intangible assets (note 6) | 550 | 288 | |
Total operating costs and expenses | 1,087 | 1,536 | 1,719 |
Operating income (loss) | (185) | (932) | (159) |
Other income (expense): | |||
Interest expense | (60) | (41) | (22) |
Realized and unrealized gains (losses) on financial instruments, net | 251 | (19) | 36 |
Other, net | (11) | (22) | 13 |
Total other income (expense) | 180 | (82) | 27 |
Earnings (loss) before income taxes | (5) | (1,014) | (132) |
Income tax (expense) benefit (note 9) | 43 | 152 | 16 |
Net earnings (loss) | 38 | (862) | (116) |
Less net earnings (loss) attributable to the noncontrolling interests | (141) | (624) | (94) |
Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders | 179 | (238) | (22) |
Net earnings (loss) available to common shareholders (note 2) | $ (191) | $ (388) | $ (22) |
Basic net earnings (loss) attributable to Series A and Series B Liberty TripAdvisor Holdings, Inc. shareholders per common share (note 2): | $ (2.55) | $ (5.17) | $ (0.29) |
Diluted net earnings (loss) attributable to Series A and Series B Liberty TripAdvisor Holdings, Inc. shareholders per common share (note 2): | $ (2.55) | $ (5.17) | $ (0.29) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Earnings (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Statements of Comprehensive Earnings (Loss) | |||
Net earnings (loss) | $ 38 | $ (862) | $ (116) |
Other comprehensive earnings (loss), net of taxes: | |||
Foreign currency translation adjustments | (25) | 27 | 5 |
Credit risk on fair value debt instruments gains (losses) | 7 | ||
Reclassification adjustments included in net income (loss) | 2 | 1 | (2) |
Other comprehensive earnings (loss) | (16) | 28 | 3 |
Comprehensive earnings (loss) | 22 | (834) | (113) |
Less comprehensive earnings (loss) attributable to the noncontrolling interests | (159) | (602) | (91) |
Comprehensive earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders | $ 181 | $ (232) | $ (22) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net earnings (loss) | $ 38 | $ (862) | $ (116) |
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 150 | 168 | 169 |
Stock-based compensation | 125 | 112 | 131 |
Realized and unrealized (gains) losses on financial instruments, net | (251) | 19 | (36) |
Impairment of goodwill and intangible assets (note 6) | 550 | 288 | |
Deferred income tax expense (benefit) | (49) | (73) | (79) |
Other charges (credits), net | 28 | 21 | (18) |
Changes in operating assets and liabilities | |||
Current and other assets | (30) | 74 | 52 |
Payables and other liabilities | 86 | (224) | |
Net cash provided (used) by operating activities | 97 | (215) | 391 |
Cash flows from investing activities: | |||
Capital expended for property and equipment, including capitalized website development | (54) | (55) | (83) |
Acquisitions, net of cash acquired (note 3) | (4) | (108) | |
Purchases of short term investments and other marketable securities | (133) | ||
Sales and maturities of short term investments and other marketable securities | 150 | ||
Other investing activities, net | 3 | (2) | |
Net cash provided (used) by investing activities | (54) | (56) | (176) |
Cash flows from financing activities: | |||
Borrowings of debt | 675 | 1,240 | 235 |
Repayments of debt | (1,052) | (359) | |
Repurchase of Series A Preferred Stock | (281) | ||
Cash dividend paid by Tripadvisor to noncontrolling interests (note 11) | (380) | ||
Shares repurchased by subsidiary (note 11) | (115) | (60) | |
Payment of withholding taxes on net share settlements of equity awards | (44) | (21) | (29) |
Derivative proceeds from counterparties | 71 | ||
Issuance of Series A Preferred Stock (note 10) | 325 | ||
Subsidiary purchase of capped calls | (35) | ||
Other financing activities, net | (9) | (32) | (20) |
Net cash provided (used) by financing activities | 306 | 345 | (542) |
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | (12) | 8 | (4) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 337 | 82 | (331) |
Cash, cash equivalents and restricted cash at beginning of period | 423 | 341 | 672 |
Cash, cash equivalents and restricted cash at end of period | $ 760 | $ 423 | $ 341 |
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 (Deficit) | Noncontrolling Interest in Equity of Subsidiaries | Total |
Balance at beginning 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 dividends paid by Tripadvisor to noncontrolling interests (note 11) | (380) | (380) | ||||
Shares repurchased by subsidiary | 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 |
Net earnings (loss) | (238) | (624) | (862) | |||
Other comprehensive earnings (loss) | 6 | 22 | 28 | |||
Stock-based compensation | 33 | 96 | 129 | |||
Withholding taxes on net share settlements of stock-based compensation | (21) | (21) | ||||
Shares repurchased by subsidiary | 17 | (132) | (115) | |||
Series A Preferred Stock adjustment (note 6) | (150) | (150) | ||||
Other, net | (9) | (1) | 7 | (3) | ||
Balance at end of the period at Dec. 31, 2020 | 1 | 257 | (23) | (278) | 2,350 | 2,307 |
Net earnings (loss) | 179 | (141) | 38 | |||
Other comprehensive earnings (loss) | 2 | (18) | (16) | |||
Stock-based compensation | 33 | 105 | 138 | |||
Withholding taxes on net share settlements of stock-based compensation | (44) | (44) | ||||
Shares issued by subsidiary | (10) | 18 | 8 | |||
Series A Preferred Stock adjustment (note 6) | (370) | (370) | ||||
Subsidiary purchase of capped calls, net of tax (note 7) | (6) | (20) | (26) | |||
Series A Preferred Stock repurchased with subsidiary shares (note 10) | 58 | 34 | 92 | |||
Balance at end of the period at Dec. 31, 2021 | $ 1 | $ 288 | $ (21) | $ (469) | $ 2,328 | $ 2,127 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentatio 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”). Tripadvisor operates as a stand-alone operating entity. 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. These financial statements refer to the consolidation of Tripadvisor 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 operates a leading travel guidance platform, connecting a global audience of prospective travelers with travel partners through rich content, price comparison tools and online reservations and related services for destinations, accommodations, travel activities and experiences, and restaurants. Tripadvisor’s mission is to help people around the world plan, book and experience the perfect trip. In 2000, under its flagship brand Tripadvisor, it launched www.Tripadvisor.com in the United States. Since then, Tripadvisor has built a portfolio of travel guidance brands and businesses, seamlessly connecting travelers to destinations, accommodations, travel activities and experiences, and restaurants in over 40 markets and over 20 languages worldwide. In addition to the flagship Tripadvisor brand, Tripadvisor owns and operates a portfolio of online travel 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. Risks and Uncertainties In December 2019, a novel coronavirus (“COVID-19”) was reported in Wuhan, China, and on March 11, 2020 was declared a global pandemic. COVID-19 has caused material and adverse declines in consumer demand within the travel, hospitality, restaurant, and leisure industry. The pandemic’s proliferation, concurrent with travel bans, varying levels of governmental restrictions and mandates globally to limit the spread of the virus, has dampened consumer demand for Tripadvisor’s products and services, and impacted consumer sentiment and discretionary spending patterns, all of which have adversely and materially impacted Tripadvisor’s results of operations, liquidity and financial condition during the year ended December 31, 2020, and to a lesser degree during the year ended December 31, 2021 as the travel industry experienced, albeit uneven, ongoing recovery. In response to the COVID-19 pandemic, Tripadvisor took several steps to further strengthen its financial position and balance sheet including but not limited to, restructuring activities, primarily by significantly reducing its ongoing operating expenses and headcount. During the year ended December 31, 2020, Tripadvisor incurred total restructuring and other related reorganization costs of $41 million which consisted of employee severance and related benefits. These costs were fully paid by Tripadvisor as of December 31, 2020. In addition, in order to maintain financial liquidity and flexibility during this time period, Tripadvisor (i) borrowed $700 million from its Credit Facility (as defined in note 7) in the first quarter of 2020 (subsequently repaid during the third quarter of 2020); (ii) amended its Credit Agreement, which included short-term financial covenant relief and the extension of the maturity date from May 12, 2022 to May 12, 2024; and (iii) raised additional financing through the issuance of $500 million in 2025 Senior Notes (as defined in note 7) in July 2020, all of which are described in more detail in note 7. On March 26, 2020, TripCo issued and sold 325,000 shares of TripCo’s newly-created 8% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), for a purchase price of $1,000 per share. On March 29, 2021 and April 6, 2021, TripCo repurchased a portion of the Series A Preferred Stock. In the fourth quarter of 2020, multiple COVID-19 vaccines were approved for widespread distribution throughout various parts of the world, including the United States and Europe, and in the first quarter of 2021, vaccination distribution programs were initiated around the world. Vaccine programs in Tripadvisor’s largest markets, the U.S. and Europe, appear to be progressing well, and Tripadvisor expects the same for much of the rest of the world. Tripadvisor is encouraged by these developments; however, while it has seen varying degrees of containment of the virus (including variants) in various countries and positive signs of growing travel demand recovery during 2021, the degree of containment and the recovery in travel has varied both region-to-region on a global basis, as well as state-to-state in the U.S. For example, as COVID-19 cases resurged or as new variants were identified, government restrictions and mandates were reinstated in certain geographies globally during 2021. Therefore, Tripadvisor continues to be subject to risks and uncertainties as a result of the COVID-19 pandemic. The timing of widespread vaccine distributions, efficacy against any future or recent variants (e.g., Delta and Omicron) of COVID-19, whether there will be resurgences of the virus and subsequent government restrictions, the extent and effectiveness of containment actions taken, and whether consumers demand for travel and hospitality services will continue to be negatively impacted remain uncertain. Tripadvisor does not know the future path or rate of global or regional COVID-19 transmission, including existing COVID-19 variants (e.g., Delta and Omicron) or future variants, if any, nor does it have visibility into when remaining or reinstated restrictions will be lifted, and where additional restrictions may be implemented or reinstated in the future due to resurgence of the virus. Correspondingly, Tripadvisor still does not have forward-looking visibility into the long-term impacts related to consumer demand for travel, usage patterns on its platform, and travel behavior patterns when all travel bans and other government restrictions and mandates are fully lifted. Therefore, the continuing extent of the impact of the COVID-19 pandemic on Tripadvisor’s business, results of operations, liquidity and financial condition remains uncertain, and is dependent on future developments that cannot be accurately predicted at this time. Tripadvisor continues to believe the travel, leisure, hospitality, and restaurant industries (collectively, the “travel industry”), and its financial results, will continue to be adversely and materially affected while the pandemic continues, new variants emerge, and lingering travel bans and other government restrictions and mandates continue to remain in place or be reinstated, all of which negatively impact consumer demand, sentiment and discretionary spending patterns. Seasonality Consumers’ travel expenditures have historically followed a seasonal pattern. Correspondingly, travel partners’ advertising investments, and therefore Tripadvisor’s revenue and operating profits, have also historically followed a seasonal pattern. 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 Other factors may also impact typical seasonal fluctuations, which include further significant shifts in Tripadvisor’s business mix or adverse economic conditions that could result in future seasonal patterns that are different from historical trends. For example, due to the impact of COVID-19 on its business, Tripadvisor did not experience its typical seasonal pattern for revenue and operating profits during the year ended December 31, 2020. COVID-19 contributed significantly to unfavorable working capital trends and material negative operating cash flow during the year ended December 31, 2020, most notably occurring during the first half of 2020, when Tripadvisor typically generates significant positive cash flow. Although consumer travel demand, traveler hotel and rental stays, and travel activities and experiences taken generally these trends . 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 would either be paid directly to him by each of TripCo, Liberty Broadband Corporation, 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. This allocation percentage will be determined based on a combination of (1) relative market capitalizations, weighted 50% , and (2) a blended average of historical time allocation on a Liberty Media-wide and CEO basis, weighted 50% , in each case, absent agreement to the contrary by Liberty Media and the Service Companies in consultation with the CEO. The allocation percentage will then be adjusted annually and following certain events. Under the facilities sharing agreement, TripCo shares office space with Liberty Media and related amenities at Liberty Media’s corporate headquarters in Englewood, Colorado. Under these agreements, approximately $4 million was reimbursable to Liberty Media for each of the years ended December 31, 2021, 2020, and 2019. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
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, generally including money market funds, term deposits and marketable securities, with maturities of three months or less at the time of acquisition. Accounts Receivable and Allowance for Credit Losses Accounts receivable are recognized when the right to consideration becomes unconditional and are recorded net of an allowance for credit losses. Such allowance aggregated $28 million and $33 million at December 31, 2021 and 2020, respectively. Tripadvisor records accounts receivable at the invoiced amount, and its customer invoices are generally due 30 days from the time of invoicing. Tripadvisor historically recorded an allowance for doubtful accounts using the incurred loss model. Upon adoption of Accounting Standards Codification Topic 326 – Financial Instruments – Credit Losses Tripadvisor applies the “expected credit loss” methodology by first assessing its historical losses based on credit sales and then adding in an assessment of expected changes in the foreseeable future, whether positive or negative, to Tripadvisor’s ability to collect its outstanding accounts receivables, or the expectation for future losses. Tripadvisor develops its expectation for future losses by assessing the profiles of its customers using their historical payment patterns, any known changes to those customers’ ability to fulfill their payment obligations, and assessing broader economic conditions that may impact its customers’ ability to pay their obligations. Where appropriate, Tripadvisor performs this analysis using a portfolio approach. Portfolios comprise customers with similar characteristics and payment history, and Tripadvisor has concluded that the aggregation of these customers into various portfolios does not produce a result that is materially different from considering the affected customers individually. Customers are assigned internal credit ratings, as determined by Tripadvisor, based on its collection profiles. Customers whose outstanding obligations are less likely to experience a credit loss are assigned a higher internal credit rating, and those customers whose outstanding obligations are more likely to experience a credit loss are assigned a lower credit rating. Tripadvisor recognizes a greater credit loss allowance on the accounts receivable due from those customers in the lower credit tranche, as determined by Tripadvisor. When Tripadvisor becomes aware of facts and circumstances affecting an individual customer, it also takes that specific customer information into account as part of its calculation of expected credit losses. Tripadvisor's exposure to credit losses may increase if its customers are adversely affected by changes in macroeconomic pressures or uncertainty associated with local or global economic recessions, including the economic impact to customers associated with COVID-19, or other customer-specific factors. Investments All marketable 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 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 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 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, at cost consists of the following (amounts in millions): December 31, 2021 2020 Finance lease right-of-use asset $ 114 114 Leasehold improvements 48 49 Computer equipment and purchased software 77 71 Furniture, office equipment and other 20 21 Total property and equipment, at cost $ 259 255 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. Website Development Costs Certain costs incurred during the application development stage related to the development of websites 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 $6 million, gains of $4 million and losses of $3 million for the years ended December 31, 2021, 2020, and 2019, 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) Identification of the contract, or contracts, with a customer (2) Identification of the performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, Tripadvisor satisfies a performance obligation 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, 2021, 2020 and 2019 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. As of both December 31, 2021 and 2020, there were $4 million of unamortized contract costs in other assets, at cost, net of accumulated amortization in the consolidated balance sheet. 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 each of the years ended December 31, 2021, 2020 and 2019 were $1 million. Tripadvisor assesses such assets for impairment when events or circumstances indicate that the carrying amount may not be recoverable. No impairments were recognized during the years ended December 31, 2021, 2020 and 2019. 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 and current trends. 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. 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 Tripadvisor also generates revenue from its cost-per-action, or “CPA” model, which consists of contextually-relevant booking links to its travel partners’ websites which are advertised on its platform. Tripadvisor earns a commission from its travel partners, based on a pre-determined contractual commission rate, for each traveler who clicks to and books a hotel reservation on the travel partners’ website, which results in a traveler stay. CPA revenue is billable only upon the completion of each traveler’s stay resulting from a hotel reservation. The travel partners provide the service to the travelers and Tripadvisor acts as an agent under ASC 606 – Revenue from Contracts with Customers In addition, Tripadvisor offers hotel business to business solutions, including subscription-based advertising to hotels, 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. To a lesser extent, Tripadvisor also offers travel partners the opportunity to advertise and promote their business through hotel sponsored placements on Tripadvisor’s platform. This service is generally priced on a 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. CPC rates for hotel sponsored placements that its travel partners pay are generally based on bids submitted as part of an auction by Tripadvisor’s travel partners. When a CPC bid is submitted, the travel partner agrees to pay Tripadvisor the bid amount each time a traveler clicks on a link to its travel partner’s websites. Bids may be submitted periodically – as often as daily – on a property-by-property basis. Tripadvisor records this click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner as its performance obligation is fulfilled at that time. Hotel sponsored placements revenue is generally billed to Tripadvisor’s travel partners on a monthly basis consistent with the timing of the service. Tripadvisor-branded Display and Platform Revenue Experiences & Dining Segment Tripadvisor provides information and services that allow travelers to research and book tours, activities and attractions in popular travel destinations in its Viator online marketplace. 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 restaurant reservations in popular travel destinations through its dedicated online restaurant reservations offering, TheFork, and on Tripadvisor-branded websites and mobile applications (“apps”). Tripadvisor primarily generates transaction fees (or per seated diner fees) that are paid by Tripadvisor’s restaurant customers 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 primarily generates revenue by offering individual property owners and managers the ability to list their properties on Tripadvisor’s platform, thereby connecting with travelers through a free-to-list, commission-based option. 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, Other also includes revenue generated from flights, cruises, and car offerings on Tripadvisor-branded websites and mobile apps and Tripadvisor’s portfolio of travel media brands, 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 year or less. Tripadvisor does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. Disaggregation of Revenue Years ended December 31, 2021 2020 2019 amounts in millions Hotels, Media & Platform Tripadvisor-branded hotels $ 452 292 779 Tripadvisor-branded display and platform 97 69 160 Total Hotels, Media & Platform 549 361 939 Experiences & Dining 307 186 456 Corporate and other 46 57 165 Total Revenue $ 902 604 1,560 December 31, 2021 2020 Accounts receivable $ 105 70 Contract assets 37 13 Total $ 142 83 Accounts receivable are recognized when the right to consideration becomes unconditional. Contract assets are rights to consideration in exchange for services that Tripadvisor has transferred to a customer when that right is conditional on something other than the passage of time, such as commission payments that are contingent upon the completion of the service by the principal in the transaction. The difference between the opening and closing balances of Tripadvisor’s contract assets primarily results from the timing difference between when Tripadvisor satisfies its performance obligations and the time when the principal completes the service in the transaction. Tripadvisor’s contract assets increased during 2021 as a result of the ongoing recovery of consumer travel demand, and increased utilization of its CPA model by travel partners. During the year ended December 31, 2021, bad debt expense recorded to Tripadvisor’s allowance for expected credit losses on accounts receivable and contract assets decreased by $14 million, when compared to the same period in 2020, primarily due to improved collection trends with its customers as the travel industry recovers. Actual future bad debt could differ materially from this estimate resulting from changes in Tripadvisor’s assumptions of the duration and ultimate severity of the impact of COVID-19, including existing variants (i.e. Delta and Omicron) and/or new variants, if any. incur additional significant and unanticipated cancellations by consumers related to future travel, accommodations and experience bookings, which have been reserved by travelers and recorded as deferred revenue on our consolidated balance sheet as of December 31, 2021. 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 platform. 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 online advertising expense, primarily SEM and other online traffic costs, and offline advertising costs, including television, 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. Advertising expense was $282 million, $118 million and $423 million for the years ended December 31, 2021, 2020 and 2019, respectively. Stock-Based Compensation As more fully described in note 12, 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, 2021, 2020 and 2019 (amounts in millions): December 31, 2021 2020 2019 Operating expense $ 47 45 56 Selling, general and administrative 78 67 75 $ 125 112 131 During the years ended December 31, 2021, 2020 and 2019, Tripadvisor capitalized $13 million, $15 million and $19 million, respectively, of stock-based compensation expense as 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 operat |
Supplemental Disclosures to Con
Supplemental Disclosures to Consolidated Statements of Cash Flows | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Disclosures to Consolidated Statements of Cash Flows | |
Supplemental Disclosures to Consolidated Statements of Cash Flows | (3) Supplemental Disclosures to Consolidated Statements of Cash Flows Years ended December 31, 2021 2020 2019 amounts in millions Acquisitions, net of cash acquired: Intangibles not subject to amortization $ — 8 85 Intangibles subject to amortization — — 26 Fair value of other assets acquired — (3) 5 Net liabilities assumed — — (8) Deferred tax assets (liabilities) — (1) — Acquisitions, net of cash acquired $ — 4 108 Equity method investment acquired for non-cash consideration $ — — 41 Cash paid for interest $ 44 24 28 Cash paid for income taxes $ 4 3 47 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Acquisitions | |
Acquisitions | (4) Acquisitions Acquisitions Tripadvisor had no material acquisitions during the years ended December 31, 2021 and 2020. During the year ended December 31, 2019, Tripadvisor completed three acquisitions of businesses aggregating total purchase price consideration of $109 million. Tripadvisor acquired 100% ownership of the following: SinglePlatform, an 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 $107 million, net of $2 million of cash acquired. The following table presents the final purchase price allocation for the 2019 acquisitions as recorded on our consolidated balance sheet: Year ended December 31, 2019 amounts in millions Goodwill (1) $ 88 Intangible assets 26 Net tangible assets (liabilities) (5) Total purchase price consideration $ 109 (1) Goodwill of $53 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 , and are being amortized on a straight-line basis over the estimated useful lives from acquisition date. |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 12 Months Ended |
Dec. 31, 2021 | |
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 material 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, 2021 December 31, 2020 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 $ 35 35 — 4 4 — TripCo Exchangeable Senior Debentures due 2051 $ 268 — 268 NA NA NA Financial instrument liabilities $ 85 — 85 14 — 14 On March 9, 2020, a wholly owned subsidiary of the Company (“TripSPV”), entered into a variable prepaid forward transaction (the “VPF”) with a financial institution with respect to 2.4 million shares of Tripadvisor (“TRIP”) common stock held by the Company with a forward floor price of $17.25 per share and a forward cap price of $26.84 per share. Pursuant to the terms of the VPF, TripSPV received a prepayment of $34 million on March 17, 2020 (see note 7). As a result of the Repurchase Agreement, as described in note 10, TripCo determined the Series A Preferred Stock required liability treatment and needed to be bifurcated between a debt host and derivative (the “Preferred Stock Derivative”). The Preferred Stock Derivative was recorded at fair value upon the reclassification from temporary equity. Changes in the fair values of the VPF and Preferred Stock Derivative are recognized in realized and unrealized gains (losses) on financial instruments, net in the consolidated statements of operations. The fair value of TripCo’s 0.50% Exchangeable Senior Debentures due 2051 (the “Debentures”) is based on quoted market prices but the Debentures are not considered to be traded on “active markets.” Accordingly, they are reported in the foregoing table as Level 2 fair value. The fair value of the VPF and Preferred Stock Derivative 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 and long-term debt (excluding the Debentures). 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. See note 7 for a description of the fair value of the Company’s fixed rate debt. Realized and Unrealized Gains (Losses) on Financial Instruments Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following: Years ended December 31, 2021 2020 2019 amounts in millions TripCo Exchangeable Senior Debentures due 2051 $ 50 — — Financial instruments 199 (20) 35 Tripadvisor foreign currency forward contracts 2 1 1 $ 251 (19) 36 The Company has elected to account for the Debentures using the fair value option. Changes in the fair value of the Debentures and financial instruments recognized in the consolidated statement of operations are primarily due to market factors primarily driven by changes in the fair value of the underlying shares of the financial instruments. During the year ended December 31, 2021, the fair value adjustment recognized in the consolidated statement of operations included approximately $5 million of debt issuance costs related to the Debentures. The Company isolates the portion of the unrealized gain (loss) attributable to the change in the instrument specific credit risk and recognizes such amount in other comprehensive earnings (loss). The change in the fair value of the Debentures attributable to changes in the instrument specific credit risk was a gain of $7 million for the year ended December 31, 2021. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
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: Hotels, Media & Platform Experiences & Dining Corporate and other Total amounts in millions Balance at January 1, 2020 $ 1,923 333 271 2,527 Allocation to new segments (1) 6 - (6) - Impairments (2) (279) - (21) (300) Dispositions (3) - - (18) (18) Other (4) - 29 2 31 Balance at December 31, 2020 1,650 362 228 2,240 Other (4) - (18) (2) (20) Balance at December 31, 2021 $ 1,650 344 226 2,220 (1) Re-allocation of goodwill as a result of changes to reporting units related to Tripadvisor internal restructuring. (2) TripCo recorded an $18 million goodwill impairment related to a business that was sold in June 2020, and an additional $3 million goodwill impairment during the third quarter of 2020 as a result of strategic decisions made regarding Tripadvisor’s China business. See discussion of the Hotels, Media & Platform reporting unit impairment below. (3) Dispositions relates to the sale of the aforementioned Tripadvisor business. (4) Other changes primarily relate to immaterial acquisitions and foreign currency translation on goodwill. 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 2020 and 2019 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, 2021 December 31, 2020 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 1 $ 1,046 (1,030) 16 1,059 (992) 67 Other 3 616 (499) 117 589 (454) 135 Total $ 1,662 (1,529) 133 1,648 (1,446) 202 Amortization expense was $122 million, $136 million and $139 million for the years ended December 31, 2021, 2020 and 2019, respectively. Intangible assets are generally amortized on a straight-line basis. The estimated future amortization expense for the next five years related to intangible assets with definite lives as of December 31, 2021 is as follows (amounts in millions): 2022 $ 32 2023 $ 29 2024 $ 26 2025 $ 23 2026 $ 21 Impairments Due to the impact of COVID-19 on Tripadvisor’s operating results, and a sustained decline in Tripadvisor’s stock price, impairments of $250 million of trademarks and $279 million of goodwill were recorded during the year ended December 31, 2020, respectively, related to the Hotels, Media & Platform reporting unit. The fair value of the trademarks was determined using the relief from royalty method. The fair value of the reporting unit was determined using a combination of market multiples (market approach) and discounted cash flow (income approach) calculations (Level 3). Due to deteriorations in revenue, impairment losses of $288 million were recorded during the year ended December 31, 2019 related to trademarks. The trademarks were related to the hotels, media & platform reporting unit in 2019. The fair value of the trademarks was determined using the relief from royalty method. As of December 31, 2021, accumulated goodwill impairment losses for Tripadvisor totaled $1,571 million. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt | |
Debt | (7) Debt Outstanding debt at December 31, 2021 and 2020 is summarized as follows: December 31, 2021 2020 amounts in millions TripCo Exchangeable Senior Debentures due 2051 $ 268 — TripCo variable prepaid forward 41 41 Tripadvisor Credit Facilities — — Tripadvisor Senior Notes due 2025 500 500 Tripadvisor Convertible Senior Notes due 2026 345 — Deferred financing costs (11) (9) Total consolidated TripCo debt $ 1,143 532 Less debt classified as current — — Total long-term debt $ 1,143 532 TripCo Debt to the November 19, 2019 amendment, on December 20, 2019, TripSPV borrowed an additional $33 million under the term loan. In March 2020, the closing share price of Tripadvisor common stock price fell below the minimum value and triggered the mandatory prepayment of all amounts outstanding under the Margin Loan. In connection with the VPF, as described in note 5, TripCo received a prepayment of $34 million in March 2020. The term of the VPF is three years . At maturity, the accreted loan amount due will be approximately $42 million. As of December 31, 2021, 2.4 million shares of Tripadvisor common stock, with a value of approximately $65 million, were pledged as collateral pursuant to the VPF contract. In March 2020, the proceeds from the VPF, proceeds from the Series A Preferred Stock (described and defined in note 10) issuance, and cash on hand were used to pay all amounts outstanding under the Margin Loan, which aggregated $363 million, including accrued interest. The Margin Loan was subsequently terminated. On March 25, 2021, TripCo issued $300 million aggregate original principal amount of its Debentures. Pursuant to the terms of the offering, on March 31, 2021, the initial purchasers notified the Company of their intention to exercise the option to purchase $30 million aggregate original principal amount of additional Debentures. The additional Debentures were issued on April 5, 2021. Upon an exchange of Debentures, TripCo, at its option, may deliver shares of TRIP common stock or the value thereof in cash or a combination of shares of TRIP common stock and cash. Initially, 14.3299 shares of TRIP common stock are attributable to each $1,000 original principal amount of Debentures, representing an initial exchange price of approximately $69.78 for each share of TRIP common stock. A total of approximately 4.7 million shares of TRIP common stock are attributable to the Debentures. Interest is payable quarterly on March 31, June 30, September 30 and December 31 of each year, commencing June 30, 2021. The Debentures may be redeemed by TripCo, in whole or in part, on or after March 27, 2025. Holders of Debentures also have the right to require TripCo to purchase their Debentures on March 27, 2025. The redemption and purchase price will generally equal 100% of the adjusted principal amount of the Debentures plus accrued and unpaid interest to the redemption date, plus any final period distribution. As of December 31, 2021, a holder of the Debentures does not have the ability to exchange and, accordingly, the Debentures are classified as long-term debt in the consolidated balance sheets. TripCo used a portion of the net proceeds from the sale of the Debentures to fund the cash portion of the purchase price for the repurchase of a portion of the Series A Preferred Stock (see note 10 below). Tripadvisor Credit Facility Tripadvisor is party to a credit agreement with a group of lenders initially entered into in June 2015 (as amended, the “Credit Agreement”), which, among other things, provides for a $500 million unsecured revolving credit facility (the “Credit Facility”) with a maturity date of May 12, 2024. The Credit Facility, among other things, requires Tripadvisor to maintain a maximum leverage ratio and contains certain customary affirmative covenants and events of default, including a change of control. Tripadvisor amended the Credit Facility in May 2020 and December 2020 to, among other things: ● suspend the leverage ratio covenant for quarterly testing of compliance beginning in the second quarter of 2020, replacing it with a minimum liquidity covenant through June 30, 2021 (requiring Tripadvisor to maintain $150 million of unrestricted cash, cash equivalents and short-term investments less deferred merchant payables plus available revolver capacity), until the earlier of (a) the first day after June 30, 2021 through maturity on which borrowings and other revolving credit utilizations under the revolving commitments exceed $200 million, and (b) the election of Tripadvisor, at which time the leverage ratio covenant will be reinstated (the “Leverage Covenant Holiday”); ● decrease the aggregate amount of revolving loan commitments available to $500 million from $1.2 billion; ● extend the maturity date of the Credit Facility from May 12, 2022 to May 12, 2024; and ● secure the obligations under the agreement. Tripadvisor remained in the Leverage Covenant Holiday as of December 31, 2021. During the Leverage Covenant Holiday, any outstanding or future borrowings under the Credit Facility bear interest at LIBOR plus a 2.25% margin with a LIBOR floor of 1% per annum. Tripadvisor is required to pay a quarterly commitment fee, at an applicable rate of 0.5%, on the daily unused portion of the Credit Facility for each fiscal quarter during the Leverage Covenant Holiday and also additional fees in connection with the issuance of letters of credit. Tripadvisor may borrow from the Credit Facility in U.S. dollars and Euros. In addition, the Credit Facility includes $15 million of borrowing capacity available for letters of credit and $40 million for Swing Line borrowings on same-day notice. As of , 2021, Tripadvisor had issued $3 million of outstanding letters of credit under the Credit Facility. As of both December 31, 2021 and 2020, Tripadvisor had no outstanding borrowings under the Credit Facility. During the first quarter of 2020, Tripadvisor borrowed $700 million under the Credit Facility. These funds were drawn down as a precautionary measure to reinforce Tripadvisor’s liquidity position and preserve financial flexibility in light of uncertainty in the global markets resulting from COVID-19. Tripadvisor repaid these borrowings in full in July 2020. Tripadvisor recorded interest and commitment fees on its Credit Facility of $3 million, $10 million and $2 million for the years ended December 31, 2021, 2020 and 2019, respectively, to interest expense on the consolidated statements of operations. In connection with the amendments to Tripadvisor’s Credit Facility in 2020, Tripadvisor incurred additional lender fees and debt financing costs totaling $7 million, which were capitalized as deferred financing costs and recorded to other long-term assets on the consolidated balance sheet, while $2 million of previously deferred financing costs related to the Credit Facility were immediately recognized to interest expense on the consolidated statement of operations for the year ended December 31, 2020. As of December 31, 2021, Tripadvisor had $4 million remaining in deferred financing costs in connection with the Credit Facility. These costs will be amortized over the remaining term of the Credit Facility, using the effective interest rate method, and recorded to interest expense on the consolidated statements of operations. There is no specific repayment date prior to the maturity date for any borrowings under the Credit Agreement. Tripadvisor may voluntarily repay any outstanding borrowing under the 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 Credit Agreement 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 Credit Agreement also limits Tripadvisor from repurchasing shares of its common stock, and paying dividends, among other restrictions, during the Leverage Covenant Holiday. In addition, to secure the obligations under the Credit Agreement, Tripadvisor and certain subsidiaries have granted security interests and liens in and on, substantially all of their assets, as well as pledged shares of certain of Tripadvisor’s subsidiaries. The Credit Agreement also Tripadvisor 2025 Senior Notes On July 9, 2020, Tripadvisor completed the sale of $500 million aggregate principal amount of 7.0% senior notes due 2025 (the "2025 Senior Notes") pursuant to a purchase agreement, dated July 7, 2020, among Tripadvisor, the guarantors party thereto and the initial purchasers party thereto in a private offering to qualified institutional buyers. The 2025 Senior Notes were issued pursuant to an indenture, dated July 9, 2020 (the “2025 Indenture”), among Tripadvisor, the guarantors and the trustee. The 2025 Indenture provides, among other things, that interest will be payable on the 2025 Senior Notes semiannually on January 15 and July 15 of each year, which began on January 15, 2021, and continue until their maturity date of July 15, 2025. The 2025 Senior Notes are senior unsecured obligations of Tripadvisor and are guaranteed by certain domestic subsidiaries. Tripadvisor has the option to redeem all or a portion of the 2025 Senior Notes at any time on or after July 15, 2022 at the redemption prices set forth in the 2025 Indenture, plus accrued and unpaid interest, if any. Tripadvisor may also redeem all or any portion of the 2025 Senior Notes at any time prior to July 15, 2022, at a price equal to 100% of the aggregate principal amount thereof plus a make-whole premium and accrued and unpaid interest, if any. In addition, before July 15, 2022, Tripadvisor may redeem up to 40% of the aggregate principal amount of the 2025 Senior Notes with the net proceeds of certain equity offerings at the redemption price set forth in the 2025 Indenture, provided that certain conditions are met. Subject to certain limitations, in the event of a Change of Control Triggering Event (as defined in the 2025 Indenture), Tripadvisor will be required to make an offer to purchase the 2025 Senior Notes at a price equal to 101% of the aggregate principal amount of the 2025 Senior Notes repurchased, plus accrued and unpaid interest, if any, to the date of repurchase. These features have been evaluated as embedded derivatives under GAAP; however, Tripadvisor has concluded they do not meet the requirements to be accounted for separately. As of December 31, 2021 and 2020, unpaid interest on the 2025 Senior Notes totaled approximately $16 million and $17 million, respectively, and was included in accrued liabilities and other current liabilities on the consolidated balance sheets, and $35 million and $17 million was recorded as interest expense in the consolidated statements of operations for the years ended December 31, 2021 and 2020, respectively. In the third quarter of 2020, Tripadvisor used all proceeds from the 2025 Senior Notes to repay a portion of its Credit Facility outstanding borrowings. The 2025 Indenture contains covenants that, among other things and subject to certain exceptions and qualifications, restrict the ability of Tripadvisor and the ability of certain of its subsidiaries to incur or guarantee additional indebtedness or issue disqualified stock or certain preferred stock; pay dividends and make other distributions or repurchase stock; make certain investments; create or incur liens; sell assets; create restrictions affecting the ability of restricted subsidiaries to make distributions, loans or advances or transfer assets to Tripadvisor or the restricted subsidiaries; enter into certain transactions with Tripadvisor’s affiliates; designate restricted subsidiaries as unrestricted subsidiaries; and merge, consolidate or transfer or sell all or substantially all of Tripadvisor’s assets. 2026 Convertible Senior Notes On March 25, 2021, Tripadvisor entered into a purchase agreement for the sale of $300 million aggregate principal amount of 0.25% Convertible Senior Notes due 2026 (the “2026 Convertible Senior Notes”) in a private offering to qualified institutional buyers. The 2026 Convertible Senior Notes included an over-allotment option that provided the initial purchasers of the 2026 Convertible Senior Notes with the option to purchase an additional $45 million aggregate principal amount of the 2026 Convertible Senior Notes; such over-allotment option was fully exercised. In connection with the issuance of the 2026 Convertible Senior Notes, Tripadvisor entered into an Indenture, dated March 25, 2021 (the “2026 Indenture”), among Tripadvisor, the guarantors party thereto and the trustee. The terms of the 2026 Convertible Senior Notes are governed by the 2026 Indenture. The 2026 Convertible Senior Notes mature on April 1, 2026, unless earlier converted, redeemed or repurchased. The 2026 Convertible Senior Notes are senior unsecured obligations of Tripadvisor, although guaranteed by certain of Tripadvisor’s domestic subsidiaries, with interest payable semiannually in arrears on April 1 and October 1 of each year, which began on October 1, 2021. As of December 31, 2021, unpaid interest on the 2026 Convertible Senior Notes was not material. The 2026 Convertible Senior Notes will be redeemable, in whole or in part, at Tripadvisor’s option at any time, and from time to time, on or after April 1, 2024 and on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2026 Convertible Senior Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of Tripadvisor’s common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date Tripadvisor sends the related redemption notice; and (2) the trading day immediately before the date Tripadvisor sends such notice. In addition, calling any such note for redemption will constitute a make-whole fundamental change with respect to that note, in which case the conversion rate applicable to the conversion of that note will be increased in certain circumstances if it is converted after it is called for redemption. The 2026 Convertible Senior Notes are unconditionally guaranteed, on a joint and several basis, by the guarantors on a senior, unsecured basis. The 2026 Convertible Senior Notes are Tripadvisor’s general senior unsecured obligations and rank equally in right of payment with all of its existing and future senior indebtedness, and senior in right of payment to all of its future subordinated indebtedness. The 2026 Convertible Senior Notes will be effectively subordinated to any of Tripadvisor’s existing and future secured indebtedness, including borrowings under its Credit Facility, to the extent of the value of the assets securing such indebtedness. Holders may convert their 2026 Convertible Senior Notes at any time prior to the close of business on the business day immediately preceding January 1, 2026 in multiples of $1,000 principal amount, only under the following conditions and circumstances: ● during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of TRIP common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; ● during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2026 Convertible Senior Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of TRIP common stock and the conversion rate on each such trading day; or ● upon the occurrence of specified corporate events as described in the 2026 Indenture. In addition, holders may convert their 2026 Convertible Senior Notes, in multiples of $1,000 principal amount, at their option at any time beginning on or after January 1, 2026, and prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date of the 2026 Convertible Senior Notes, without regard to the foregoing circumstances. The initial conversion rate for the 2026 Convertible Senior Notes is 13.5483 shares of TRIP common stock per $1,000 principal amount of 2026 Convertible Senior Notes, which is equivalent to an initial conversion price of approximately $73.81 per share of common stock, or approximately 4.7 million shares of TRIP common stock, subject to adjustment upon the occurrence of certain specified events as set forth in the 2026 Indenture. Upon conversion, Tripadvisor may choose to pay or deliver, as the case may be, cash, shares of TRIP common stock or a combination of cash and shares of TRIP common stock. Tripadvisor accounts for the 2026 Convertible Senior Notes as a liability measured at its amortized cost, and no other features of the 2026 Convertible Senior Notes are bifurcated and recognized as a derivative . The proceeds from the issuance of the 2026 Convertible Senior Notes were approximately $340 million, net of debt issuance costs of $5 million comprised primarily of the initial purchasers’ discount, and Tripadvisor used a portion of the proceeds from the 2026 Convertible Senior Notes to enter into capped call transactions (discussed below). Tripadvisor intends to use the remainder of the proceeds from this offering for general corporate purposes, which may include repayment of debt, including the partial redemption and/or purchase of its 2025 Senior Notes prior to maturity. The debt issuance costs will be amortized over the remaining term of the 2026 Convertible Senior Notes, using the effective interest rate method, and recorded to interest expense in the consolidated statements of operations. During the year ended December 31, 2021, the effective interest rate on the 2026 Convertible Senior Notes, including debt issuance costs, was approximately 0.53% and $1 million was recorded as interest expense on the consolidated statement of operations for the year ended December 31, 2021. The 2026 Convertible Senior Notes are unsecured and do not contain any financial covenants, restrictions on dividends, incurrence of senior debt or other indebtedness, or restrictions on the issuance or repurchase of securities by the Company. Capped Call Transactions In connection with the issuance of the 2026 Convertible Senior Notes, Tripadvisor entered into privately negotiated capped call transactions (the “Capped Calls”) with certain of the initial purchasers of the 2026 Convertible Senior Notes and/or their respective affiliates and/or other financial institutions (the “Option Counterparties”) at a cost of approximately $35 million. The Capped Calls are separate transactions entered into by Tripadvisor with each of the Option Counterparties, and are not part of the terms of the 2026 Convertible Senior Notes and therefore will not affect any noteholder’s rights under the 2026 Convertible Senior Notes. Noteholders will not have any rights with respect to the Capped Calls. The Capped Calls cover, subject to anti-dilution adjustments, substantially similar to those applicable to the conversion rate of the 2026 Convertible Senior Notes, the number of shares of TRIP common stock initially underlying the 2026 Convertible Senior Notes, or up to approximately 4.7 million shares of TRIP common stock. The Capped Calls are expected generally to reduce potential dilution to the common stock upon any conversion of 2026 Convertible Senior Notes and/or offset any potential cash payments Tripadvisor is required to make in excess of the principal amount of such converted 2026 Convertible Senior Notes, as the case may be, with such reduction and/or offset subject to a cap. The strike price of the Capped Calls is $73.81 , while the cap price of the Capped Calls will initially be $107.36 per share of TRIP common stock, which represents a premium of 100% over the close price of TRIP common stock of $53.68 per share on March 22, 2021 and is subject to certain customary adjustments under the terms of the Capped Calls. The Capped Calls are considered indexed to Tripadvisor’s own stock and are considered equity classified under GAAP and included as a reduction to additional paid-in-capital and noncontrolling interest in equity of subsidiaries within stockholders’ equity as of December 31, 2021. The Capped Calls are not accounted for as derivatives and their fair value is not remeasured each reporting period. In addition, Tripadvisor recorded a deferred tax asset of $9 million associated with the Capped Calls on its consolidated balance sheet as of December 31, 2021, as it made an income tax election allowable under Internal Revenue Service (“IRS”) regulations in order to recover the cost of the Capped Calls as interest expense for income tax purposes only over the term of the 2026 Convertible Senior Notes. Fair Value The estimated fair values, based on recently reported market transactions and prices for identical or similar financial instruments obtained from a third-party pricing source (Level 2) of Tripadvisor’s debt securities, not reported at fair value are as follows (amounts in millions): December 31, 2021 Tripadvisor Senior Notes due 2025 $ 531 Tripadvisor Convertible Senior Notes due 2026 $ 305 Debt Covenants |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | (8) Leases Tripadvisor’s lease contracts contain both lease and non-lease components which Tripadvisor combines as a single component under its accounting policy by asset class, except for office space leases and certain other leases, such as colocation data center leases, which it accounts separately for the lease and non-lease components. Additionally, for certain equipment leases that have similar characteristics, Tripadvisor applies a portfolio approach to effectively account for operating lease right-of-use (“ROU”) assets and lease liabilities. Operating Leases Tripadvisor leases office space in a number of countries around the world generally 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 the lease term for up to 6 years and/or terminate the leases within 1 year, which Tripadvisor includes in the lease terms if it is reasonably certain to exercise these options. Tripadvisor also establishes assets and liabilities at the present value of estimated future costs to return certain of its leased facilities to their original condition to satisfy any asset retirement obligations. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs and are included in other liabilities on the consolidated balance sheet. Tripadvisor’s asset retirement obligations were not material as of both December 31, 2021 and 2020. Finance Lease Finance lease ROU assets and finance lease liabilities are recognized 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 years ended December 31, 2021, 2020 and 2019 were as follows: Years ended December 31, 2021 2020 2019 amounts in millions Operating lease cost (1) $ 21 28 24 Finance lease cost: Amortization of right-of-use assets (2) $ 10 10 9 Interest on lease liabilities (3) 4 4 4 Total finance lease cost $ 14 14 13 Sublease income on operating leases (1) (5) (3) (3) Total lease cost, net $ 30 39 34 (1) Operating lease costs, net of sublease income, are included in operating expense, including stock-based compensation in the consolidated statements of operations. (2) Amount is included in depreciation expense in the consolidated statements of operations. (3) Amount is included in interest expense in the consolidated statements of operations. Supplemental balance sheet information related to leases is as follows: December 31, 2021 2020 amounts in millions Operating leases: Operating lease right-of-use assets (1) $ 42 54 Current operating lease liabilities (2) $ 20 21 Operating lease liabilities (3) 29 46 Total operating lease liabilities $ 49 67 Finance Lease: Finance lease right-of-use assets (4) $ 86 95 Current finance lease liabilities (2) $ 6 5 Finance lease liabilities (3) 65 71 Total finance lease liabilities $ 71 76 (1) Included in other assets, at cost, net of accumulated amortization in the consolidated balance sheets. (2) Included in accrued liabilities and other current liabilities in the consolidated balance sheets. (3) Included in other liabilities in the consolidated balance sheets. (4) Included in property and equipment, net in the consolidated balance sheets . Additional information related to leases is as follows for the periods presented: Years ended December 31, 2021 2020 2019 amounts in millions Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 25 26 26 Operating cash outflows from finance lease $ 3 4 4 Financing cash outflows from finance lease $ 6 6 5 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 6 4 106 Finance lease $ — — 88 Years ended December 31, 2021 2020 Weighted-average remaining lease term Operating leases 3.0 years 3.7 years Finance lease 9.0 years 10.0 years Weighted-average discount rate Operating leases 3.71% 3.99% Finance lease 4.49% 4.49% Future lease payments under non-cancellable leases as of December 31, 2021 were as follows: Operating Leases Finance Lease amounts in millions 2022 $ 23 9 2023 15 9 2024 9 9 2025 3 10 2026 2 10 Thereafter - 39 Total future lease payments $ 52 86 Less: imputed interest (3) (15) Total $ 49 71 As of December 31, 2021, 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, 2021 | |
Income Taxes | |
Income Taxes | (9) Income Taxes Income tax benefit (expense) consists of: Years ended December 31, 2021 2020 2019 amounts in millions Current: Federal $ (6) 73 (31) State and local 2 3 (6) Foreign (2) 3 (26) $ (6) 79 (63) Deferred: Federal $ 23 37 27 State and local 7 28 20 Foreign 19 8 32 49 73 79 Income tax benefit (expense) $ 43 152 16 The following table presents a summary of our domestic and foreign earnings (losses) from continuing operations before income taxes: Years ended December 31, 2021 2020 2019 amounts in millions Domestic $ 75 (855) (178) Foreign (80) (159) 46 Total $ (5) (1,014) (132) Income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 21% as a result of the following: Years ended December 31, 2021 2020 2019 amounts in millions Computed expected tax benefits (expense) $ 1 213 28 State and local taxes, net of federal income taxes 4 26 2 Foreign taxes, net of foreign tax credits 7 3 13 Taxable dividend net of dividends received deduction — — (13) Basis difference in consolidated subsidiary 14 (1) 22 Change in valuation allowance (18) (40) (11) Change in unrecognized tax benefits (6) (4) (25) Preferred Stock Derivative 41 — — Federal tax credits 7 9 11 Stock-based compensation 2 (14) (4) Impairment of nondeductible goodwill — (65) — Rate differential on U.S. net operating loss carryback — 23 — Other (9) 2 (7) Income tax (expense) benefit $ 43 152 16 During 2021, the Company recognized additional tax benefit related to unrealized gains attributable to the Company’s own stock which is not recognized for tax purposes and the recognition of deferred tax assets for basis differences in the stock of a consolidated subsidiary, partially offset by tax expense related to an increase in the valuation allowance against certain deferred tax assets. During 2020, the Company recognized additional tax expense related to the impairment of goodwill that is not deductible for tax purposes and an increase in the valuation allowance against certain deferred tax assets. 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. The CARES Act made tax law changes to provide financial relief to companies as a result of the business impacts of COVID-19. Key income tax provisions of the CARES Act include changes in net operating loss (“NOL”) carryback and carryforward rules, increase of the net interest expense deduction limit, and immediate write-off of qualified improvement property. The CARES Act allowed us to carryback Tripadvisor’s U.S. federal NOLs incurred in 2020, generating an expected U.S. federal tax benefit of $76 million, of which $48 million will be refunded. This refund is recorded in income taxes receivable on our consolidated balance sheet as of December 31, 2021 and is expected to be received during 2022. Tripadvisor also reduced its long-term transition tax payable related to the 2017 Tax Cuts and Jobs Act by $28 million as a result of the U.S. federal NOL carryback. In addition, during the years ended December 31, 2021 and 2020, Tripadvisor recognized government grants and other assistance benefits of $9 million and $12 million, respectively. These amounts are not income tax related and were recorded as a reduction of personnel and overhead costs in the consolidated statements of operations. 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, 2021 2020 amounts in millions Deferred tax assets: Tax loss and credit carryforwards $ 218 141 Stock-based compensation 39 38 Lease financing obligation 20 23 Other 17 (16) Total deferred tax assets 294 186 Less: valuation allowance (146) (122) Net deferred tax assets 148 64 Deferred tax liabilities: Debt (19) — Intangible assets (221) (231) Investments — (13) Other (25) 4 Total deferred tax liabilities (265) (240) Net deferred tax liability $ (117) (176) During the year ended December 31, 2021, there was a $18 million increase in the Company’s valuation allowance that affected tax expense and a $6 million increase related to the impact of foreign exchange rates. Due to the one-time transition tax on the deemed repatriation of undistributed foreign subsidiary earnings and profits in 2017, as a result of the 2017 Tax Act, the majority of previously unremitted earnings have been subjected to U.S. federal income tax. To the extent future distributions from these subsidiaries will be taxable, a deferred tax liability has been accrued which was not material as of December 31, 2021. As of December 31, 2021, $427 million of Tripadvisor’s cumulative undistributed foreign earnings were no longer considered to be indefinitely reinvested. At December 31, 2021, the Company has a deferred tax asset of $218 million for federal, state, and foreign NOLs, interest expense carryforwards and tax credit carryforwards. Of this amount, $185 million is recorded at Tripadvisor. If not utilized to reduce income tax liabilities at Tripadvisor in future periods, $21 million of these loss carryforwards and tax credits will begin to expire in 2022. The remaining $164 million of NOLs, interest expense carryforwards and tax credits recorded at Tripadvisor may be carried forward indefinitely. The remaining deferred tax asset of $33 million relates to federal and state NOL carryforwards and interest expense carryforwards recorded at TripCo. If not utilized to reduce income tax liabilities at TripCo in future periods, $17 million of these NOL carryforwards will expire at various times between 2023 and 2037. The remaining $16 million of NOLs and interest expense carryforwards may be carried forward indefinitely. A portion of TripCo’s net operating loss carryforwards are subject to certain limitations and may not be currently utilized. These carryforwards recorded at Tripadvisor and TripCo are expected to be utilized prior to expiration, except for $146 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, 2021 2020 2019 Balance at beginning of year $ 144 140 136 Additions based on tax positions related to the current year 5 3 11 Additions for tax positions of prior years 1 1 1 Reductions for tax positions of prior years — — (8) Settlements with tax authorities (6) — — Balance at end of year $ 144 144 140 As of December 31, 2021, 2020 and 2019, the Company had recorded tax reserves of $144 million, $144 million and $140 million, respectively, related to unrecognized tax benefits for uncertain tax positions, which are classified as long-term and included in other long-term liabilities on the consolidated balance sheets. If the unrecognized tax benefits were to be recognized for financial statement purposes, approximately $72 million, $74 million and $82 million for the years ended December 31, 2021, 2020 and 2019, 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 does not anticipate any material changes in the next year. As of December 31, 2021 and 2020, the Company had recorded approximately $39 million and $35 million, respectively, of accrued interest and penalties related to uncertain tax positions. As of December 31, 2021, TripCo’s tax years prior to 2018 are closed for federal income tax purposes, and the IRS has completed its examination of TripCo’s 2017 and 2018 tax years. 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, and 2018 tax years. Various states are currently examining Tripadvisor’s prior years’ state income tax returns. Tripadvisor is no longer subject to tax examinations by tax authorities for years prior to 2009. As of December 31, 2021, 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, and in August 2020, Tripadvisor received Notices of Proposed Adjustment from the IRS for the 2014, 2015 and 2016 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 $95 million to $105 million at the close of the audit if the IRS prevails, which includes $20 million to $30 million related to the 2009 through 2011 pre Expedia spin-off tax years. The estimated range takes in consideration competent authority relief and transition tax regulations, and is exclusive of deferred tax consequences and interest expense, which would be significant. 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 2016 years, Tripadvisor would be subject to significant additional tax liabilities. Tripadvisor has requested competent authority assistance under Mutual Agreement Procedure for tax years 2009 through 2016. Tripadvisor expects the competent authorities to present a resolution for the 2009 through 2011 tax years in the near future. Upon receipt, Tripadvisor will assess the resolution provided by the competent authorities as well as its impact on its existing income tax reserves for all open subsequent years. In January 2021, Tripadvisor received an issue closure notice relating to adjustments for 2012 through 2016 tax years from HM Revenue & Customs (“HMRC”) in the U.K. These proposed adjustments are related to certain transfer pricing arrangements with Tripadvisor’s foreign subsidiaries and would result in an increase to its worldwide income tax expense in an estimated range of $45 million to $55 million, exclusive of interest expense, at the close of the audit if HMRC prevails. 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 its interpretation of the regulations and available case law, Tripadvisor believes the position it has taken with regard to transfer pricing with its foreign subsidiaries is sustainable. |
Redeemable Preferred Stock
Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2021 | |
Redeemable Preferred Stock | |
Redeemable preferred stock | (10) Redeemable Preferred Stock On March 15, 2020, TripCo and Gregory B. Maffei entered into an Investment Agreement (the “Investment Agreement”) with Certares Holdings LLC, Certares Holdings (Blockable) LLC and Certares Holdings (Optional) LLC with respect to an investment in TripCo’s Series A Preferred Stock, which was later assigned to Certares LTRIP LLC (“Certares” or the “Purchaser”). Pursuant to the assigned Investment Agreement, on March 26, 2020, TripCo issued 325,000 shares of Series A Preferred Stock to Certares for a purchase price of $1,000 per share. On March 22, 2021, TripCo and Certares entered into a stock repurchase agreement (the “Repurchase Agreement”). Pursuant to the Repurchase Agreement, on March 29, 2021, TripCo repurchased 126,921 shares of Series A Preferred Stock, and on April 6, 2021, TripCo purchased an additional 10,665 shares of Series A Preferred Stock from Certares. The aggregate consideration for the Series A Preferred Stock consisted of a combination of (i) approximately $281 million in cash from a portion of the net proceeds of the Debentures (as discussed in note 7), $252 million of which was paid on March 29, 2021 and $29 million of which was paid on April 6, 2021, and (ii) approximately $92 million aggregate value of TRIP common stock, owned by TripCo, consisting of 1,713,859 shares (a non-cash transaction). The price per share of Series A Preferred Stock was determined by multiplying (a) $1,000 by (b) an accretion factor with respect to the TRIP common stock (determined based on the Accretion Factor formula set forth in the Certificate of Designations of the Series A Preferred Stock as modified to use the closing price of a share of TRIP common stock on the date of the pricing of the Debentures instead of using the Reference Stock VWAP (as defined in the Certificate of Designations of the Series A Preferred Stock (the “Certificate of Designations”))). Following both closings under the Repurchase Agreement, TripCo repurchased a total of 137,586 shares of Series A Preferred Stock from Certares, representing 42% of the Series A Preferred Stock originally held by Certares, for an aggregate value of approximately $373 million. Priority The Series A Preferred Stock ranks senior to the shares of common stock of TripCo, with respect to dividend rights, rights of redemption and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of TripCo. The Series A Preferred Stock has a liquidation value equal to the sum of (i) $1,000, plus (ii) all unpaid dividends (whether or not declared) accrued with respect to such share. Voting and Convertibility Dividends Redemption The Company is required to redeem for cash shares of Series A Preferred Stock on the earlier of (i) the first business day after the fifth anniversary of March 26, 2020, or (ii) subject to certain exceptions, a change in control of TripCo. The “Redemption Price” in a mandatory redemption will equal the greater of (i) the sum of the liquidation value on the redemption date, plus all unpaid dividends accrued since the last dividend date, and (ii) the product of the (x) initial liquidation value, multiplied by (y) an accretion factor (determined based on a formula set forth in the Certificate of Designations for the Series A Preferred Stock) with respect to the TRIP common stock, less (z) the aggregate amount of all dividends paid in cash or shares of Eligible Common Stock from March 26, 2020 through the applicable redemption date. Put Right Following March 26, 2021, during certain periods, the Purchaser had the right to cause TripCo to redeem all of the outstanding shares of Series A Preferred Stock at the Redemption Price for, at the election of TripCo, cash, shares of Eligible Common Stock, shares of TRIP common stock or any combination of the foregoing, subject to certain limitations (the “Put Option”). The Company evaluated the Put Option as an embedded derivative and determined it was not required to be bifurcated. As a result of the Repurchase Agreement, Certares has permanently waived the Put Option. TripCo Call Right Pursuant to the Repurchase Agreement, beginning March 27, 2024, TripCo has the option, from time to time, to call and repurchase any and all of the outstanding shares of the Series A Preferred Stock at the optional repurchase price (the "Call Right"), which is the greater of (x) the sum of the liquidation value of a share of Series A Preferred Stock as of the optional repurchase date plus all unpaid dividends accrued on such share from the most recent dividend payment date through such optional repurchase date and (y) (i) the initial liquidation value of such share of Series A Preferred Stock as of the original issue date multiplied by an accretion factor with respect to the TRIP common stock (determined based on the Accretion Factor formula set forth in the Certificate of Designations as modified such that the Reference Stock VWAP is determined as of the date that is two business days prior to the date of TripCo’s notice of repurchase) minus (ii) all dividends paid in cash or shares of Eligible Common Stock on such share through the optional repurchase date. Restriction on transfer of Series A Preferred Stock Subject to exceptions contained in the Investment Agreement and the Repurchase Agreement, the shares of Series A Preferred Stock generally are non-transferable; provided that TripCo has agreed not to unreasonably withhold its consent to certain transfers of up to 49% of the remaining Series A Preferred Shares outstanding following the repurchases from Certares under the Repurchase Agreement (so long as there are no more than six holders of the Series A Preferred Stock at any one time). Any transferee of shares of Series A Preferred Stock must agree to the permanent waiver of the Put Option, to the permanent waiver of the right to appoint the Series A Preferred Threshold Director (as such term is defined in the Certificate of Designations and described in the Repurchase Agreement) and to the Call Right. Recognition Prior to the partial redemption, as the Series A Preferred Stock was redeemable and the redemption triggers were outside of TripCo’s control, the Company was required to classify the shares outside of permanent equity. The Company calculated the carrying value of the Series A Preferred Stock pursuant to the Redemption Price calculation, and any changes in the carrying value of the Series A Preferred Stock were recorded directly to retained earnings. Immediately prior to the partial redemption, the Company recognized a $410 million decrease to retained earnings related to the value of the Series A Preferred Stock. As a result of the Repurchase Agreement, the Series A Preferred Stock may no longer be settled in shares of TripCo or TRIP common stock and the Purchaser no longer has the ability to participate on the TripCo board purely through ownership of Series A Preferred Stock. Following an evaluation of the accounting impact of these changes, we concluded the Series A Preferred Stock is a debt host with an equity-indexed derivative that is required to be bifurcated. Accordingly, the Series A Preferred Stock was required to be measured at fair value, through retained earnings, in connection with the reclassification from temporary equity to a liability. The fair value of the Series A Preferred Stock was estimated to be $40 million lower than its redemption value and such amount was recorded as an increase to retained earnings. The debt host component is included in the preferred stock liability on the consolidated balance sheet and will be accreted through interest expense to the amount to be paid upon settlement. The Preferred Stock Derivative is included in financial instrument liabilities at fair value in the consolidated balance sheet. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | (11) Stockholders’ Equity Preferred Stock Common Stock Subsidiary Purchases of Common Stock During the years ended December 31, 2020 and 2019, Tripadvisor repurchased 4,707,450 and 2,059,846 shares, respectively, of its outstanding common stock for $115 million and $60 million in the aggregate, respectively. There were no repurchases during 2021. As of December 31, 2021, Tripadvisor had approximately $75 million remaining available to repurchase shares of its common stock under its share repurchase program, which does not have an expiration date but may be suspended or terminated by Tripadvisor’s Board of Directors at any time. The terms of the Credit Agreement currently limit Tripadvisor from engaging in share repurchases during the Leverage Covenant Holiday and the terms of its Indenture impose certain limitations and restrictions on share repurchases. Refer to note 7 for further information about the Credit Agreement and the Indenture. 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, 2021 and 2020, 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 Credit Agreement during the Leverage Covenant Holiday and the 2025 Indenture. In connection with the declaration of such dividends, Tripadvisor’s non-vested restricted stock units were entitled to dividend equivalents, which will be payable to the holder subject to, and only upon vesting of, the underlying awards. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | (12) Stock-Based Compensation TripCo Incentive Plans TripCo has granted to certain of its directors and employees restricted stock units (“RSUs”) and stock options to purchase shares of TripCo common stock (collectively, “Awards”). TripCo measures the cost of employee services received in exchange for an equity classified Award based on the grant-date fair value (“GDFV”) 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). The Company measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and re-measures the fair value of the Award at each reporting date. Pursuant to the Liberty TripAdvisor Holdings, Inc. 2019 Omnibus Incentive 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 years ended December 31, 2020 and 2019, TripCo granted 573 thousand and 27 thousand options, respectively, to purchase shares of Series B TripCo common stock to our CEO. Such options had a GDFV of $2.41 per share and $6.41 per share, respectively, at the time they were granted. The 2020 options vested immediately upon grant, and the 2019 options vested on December 31, 2019. During the years ended December 31, 2021, 2020 and 2019, TripCo granted 154 thousand, 242 thousand and 35 thousand performance-based RSUs, respectively, of Series B TripCo common stock to our CEO. The performance-based RSUs had a GDFV of $7.07, $3.08 and $14.17 per share, respectively, at the time they were granted. 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. During the year ended December 31, 2020, TripCo granted 30 thousand time-based RSUs of Series B TripCo common stock to our CEO which had a GDFV of $4.76 per share and cliff vested on December 10, 2020. This RSU grant was issued in lieu of our CEO receiving 50% of his remaining base salary for the last three quarters of calendar year 2020, and he waived his right to receive the other 50%, in each case, in light of the ongoing financial impact of COVID-19. In addition, during the years ended December 31, 2020 and 2019, TripCo granted 1 million and 320 thousand time-based RSUs, respectively, of Series B TripCo common stock to our CEO. These time-based RSUs had a GDFV of $4.53 per share and $7.23 per share, respectively, at the time they were granted. These time-based RSUs cliff vest on December 7, 2024 and December 15, 2023, respectively, and represent two upfront grants related to the CEO’s employment agreement. See discussion in note 1 regarding the compensation agreement with TripCo’s CEO. During the years ended December 31, 2021, 2020 and 2019, TripCo granted to its employees 47 thousand, 499 thousand and 73 thousand options, respectively, to purchase shares of Series A TripCo common stock. Such options had a weighted average GDFV of $3.25, $2.58 and $3.53 per share, respectively, and vest between two During the years ended December 31, 2021, 2020 and 2019, TripCo granted 26 thousand, 148 thousand and 79 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 $2.90, $2.76 and $3.42 per share, respectively, and generally cliff vest over a one year vesting period. Also during the years ended December 31, 2021, 2020 and 2019, TripCo granted 154 thousand, 196 thousand and 22 thousand time-based RSUs, respectively, of Series A TripCo common stock to its non-employee directors which had a weighted average GDFV of $2.53, $3.92 and $7.26 per share, respectively, and generally cliff vest over a one year vesting period. There were no exercises, forfeitures The Company has calculated the GDFV for all of its equity classified awards and any subsequent re-measurement 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 2021, 2020 and 2019, 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 2021, 2020 and 2019, the range of volatilities was 49.5% to 86.8%. 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. 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, 2021 1,086 $ 7.78 Granted 72 $ 4.82 Exercised — $ — Forfeited/Cancelled (29) $ 23.22 Outstanding at December 31, 2021 1,129 $ 7.20 5.1 $ — Exercisable at December 31, 2021 512 $ 10.47 4.2 $ — Weighted average remaining Aggregate contractual intrinsic Series B WAEP life value in thousands in years in millions Outstanding at January 1, 2021 2,397 $ 21.93 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding at December 31, 2021 2,397 $ 21.93 3.7 $ 8 Exercisable at December 31, 2021 2,397 $ 21.93 3.7 $ 8 As of December 31, 2021, the total unrecognized compensation cost related to unvested equity Awards was $5.9 million. 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, 2021, TripCo reserved 3.5 million shares of Series A and Series B TripCo common stock for issuance under exercise privileges of outstanding stock Awards. TripCo - Exercises No TripCo options were exercised in 2021, 2020 or 2019. TripCo — Restricted Stock and Restricted Stock Units The aggregate fair value of all restricted stock and restricted stock units of TripCo common stock that vested during the years ended December 31, 2021, 2020 and 2019 was $2.8 million, $554 thousand and $159 thousand, respectively. As of December 31, 2021, TripCo had approximately 1.7 million unvested restricted stock and RSUs 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 $5.21 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. On June 8, 2021, Tripadvisor stockholders approved an amendment to the 2018 Plan to, among other things, increase the aggregate number of shares reserved and available for issuance under the 2018 Plan by 10,000,000 shares. The purpose of this amendment was to provide sufficient reserves of shares of Tripadvisor common stock to ensure its ability to continue to provide new hires, employees and management with equity incentives. Grants were valued using a volatility of 49.6% and the applicable risk free rate for an expected term of 5.5 years for the year ended December 31, 2021, volatility of 43.4% and the applicable risk free rate for an expected term of 5.3 years for the year ended December 31, 2020 and 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. 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, 2021 5,615 $ 46.31 Granted 1,002 $ 41.12 Exercised (705) $ 33.97 Cancelled or expired (241) $ 43.97 Outstanding at December 31, 2021 5,671 $ 47.03 4.8 $ 1 Exercisable at December 31, 2021 3,878 $ 51.06 3.6 $ 1 The weighted average GDFV of service based stock options under their 2011 Plan and 2018 Plan was $18.40 for the year ended December 31, 2021. 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, 2021, the total number of shares reserved for future stock-based awards under the 2018 Plan was approximately 17 million shares. Tripadvisor related stock-based compensation for the year ended December 31, 2021 was approximately $120 million. As of December 31, 2021, the total unrecognized compensation cost related to unvested Tripadvisor stock options was approximately $17 million and will be recognized over a weighted average period of approximately 2.3 years. On May 27, 2020 and July 15, 2020, Tripadvisor’s Compensation Committee of its Board of Directors, approved modifications to the Company’s annual RSU and stock option grants, respectively, issued to its employees in the first quarter of 2020. Such modifications reduced the original grant-date vesting period from four years to two years. Tripadvisor estimates these modifications resulted in the acceleration and recognition of an additional $17 million of stock-based compensation expense during the year ended December 31, 2020, given the modified vesting term. There was no change to the original fair value of the impacted RSUs or stock options as a result of this modification. 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, 2021, Tripadvisor granted approximately 4 million units, vested and released approximately 5 million units, and had cancellations of approximately 1 million units, which included 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. The weighted average GDFV for RSUs and MSUs granted, vested and released, and cancelled during 2021 was $40.17 per share, $31.26 per share, and $38.32 per share, respectively. As of December 31, 2021, the total unrecognized compensation cost related to 6 million unvested Tripadvisor RSUs and MSUs outstanding was approximately $141 million which will be recognized over the remaining vesting term of approximately 2.6 years. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Employee Benefit Plans | |
Employee Benefit Plans | (13) 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 $10 million, $11 million and $14 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | (14) 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 privacy, 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, 2021 | |
Segment Information | |
Segment Information | (15) 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. ● Hotels, Media & Platform – includes the following revenue sources: (1) Tripadvisor-branded hotels revenue – primarily consisting of hotel auction revenue, CPA revenue, subscription-based advertising and hotel sponsored placements revenue; and (2) Tripadvisor-branded display and platform revenue – consisting of display-based advertising 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), technical infrastructure and other costs supporting the Tripadvisor platform. ● Experiences & Dining – Tripadvisor provides information and services that allow travelers to research and book tours, activities and attractions in popular travel destinations in its Viator online marketplace. 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 restaurant reservations in popular travel destinations through its dedicated online restaurant reservations offering, 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), adjusted for 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, equity settled liabilities (including 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, 2021 2020 2019 Adjusted Adjusted Adjusted Revenue OIBDA Revenue OIBDA Revenue OIBDA amounts in millions Hotels, Media & Platform $ 549 111 361 13 939 378 Experiences & Dining 307 (36) 186 (79) 456 5 Corporate and other 46 15 57 5 165 47 Consolidated TripCo $ 902 90 604 (61) 1,560 430 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 based on 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, 2021 2020 2019 amounts in millions United States $ 526 302 821 United Kingdom 259 169 466 Other countries 117 133 273 Consolidated TripCo $ 902 604 1,560 Long-lived Assets by Geographic Area December 31, 2021 2020 amounts in millions United States $ 108 118 Other countries 10 14 Consolidated TripCo $ 118 132 The following table provides a reconciliation of Adjusted OIBDA to operating income and earnings (loss) before income taxes: Years ended December 31, 2021 2020 2019 amounts in millions Adjusted OIBDA $ 90 (61) 430 Stock-based compensation (125) (112) (131) Depreciation and amortization (150) (168) (169) Impairment of goodwill and intangible assets — (550) (288) Restructuring and related reorganization costs — (41) (1) Operating income (loss) (185) (932) (159) Interest expense (60) (41) (22) Realized and unrealized gains (losses) on financial instruments, net 251 (19) 36 Other, net (11) (22) 13 Earnings (loss) before income taxes $ (5) (1,014) (132) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments, generally including money market funds, term deposits and marketable securities, with maturities of three months or less at the time of acquisition. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable are recognized when the right to consideration becomes unconditional and are recorded net of an allowance for credit losses. Such allowance aggregated $28 million and $33 million at December 31, 2021 and 2020, respectively. Tripadvisor records accounts receivable at the invoiced amount, and its customer invoices are generally due 30 days from the time of invoicing. Tripadvisor historically recorded an allowance for doubtful accounts using the incurred loss model. Upon adoption of Accounting Standards Codification Topic 326 – Financial Instruments – Credit Losses Tripadvisor applies the “expected credit loss” methodology by first assessing its historical losses based on credit sales and then adding in an assessment of expected changes in the foreseeable future, whether positive or negative, to Tripadvisor’s ability to collect its outstanding accounts receivables, or the expectation for future losses. Tripadvisor develops its expectation for future losses by assessing the profiles of its customers using their historical payment patterns, any known changes to those customers’ ability to fulfill their payment obligations, and assessing broader economic conditions that may impact its customers’ ability to pay their obligations. Where appropriate, Tripadvisor performs this analysis using a portfolio approach. Portfolios comprise customers with similar characteristics and payment history, and Tripadvisor has concluded that the aggregation of these customers into various portfolios does not produce a result that is materially different from considering the affected customers individually. Customers are assigned internal credit ratings, as determined by Tripadvisor, based on its collection profiles. Customers whose outstanding obligations are less likely to experience a credit loss are assigned a higher internal credit rating, and those customers whose outstanding obligations are more likely to experience a credit loss are assigned a lower credit rating. Tripadvisor recognizes a greater credit loss allowance on the accounts receivable due from those customers in the lower credit tranche, as determined by Tripadvisor. When Tripadvisor becomes aware of facts and circumstances affecting an individual customer, it also takes that specific customer information into account as part of its calculation of expected credit losses. Tripadvisor's exposure to credit losses may increase if its customers are adversely affected by changes in macroeconomic pressures or uncertainty associated with local or global economic recessions, including the economic impact to customers associated with COVID-19, or other customer-specific factors. |
Investments | Investments All marketable 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 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 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 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, at cost consists of the following (amounts in millions): December 31, 2021 2020 Finance lease right-of-use asset $ 114 114 Leasehold improvements 48 49 Computer equipment and purchased software 77 71 Furniture, office equipment and other 20 21 Total property and equipment, at cost $ 259 255 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. |
Website Development Costs | Website Development Costs Certain costs incurred during the application development stage related to the development of websites 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 $6 million, gains of $4 million and losses of $3 million for the years ended December 31, 2021, 2020, and 2019, 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) Identification of the contract, or contracts, with a customer (2) Identification of the performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, Tripadvisor satisfies a performance obligation 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, 2021, 2020 and 2019 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. As of both December 31, 2021 and 2020, there were $4 million of unamortized contract costs in other assets, at cost, net of accumulated amortization in the consolidated balance sheet. 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 each of the years ended December 31, 2021, 2020 and 2019 were $1 million. Tripadvisor assesses such assets for impairment when events or circumstances indicate that the carrying amount may not be recoverable. No impairments were recognized during the years ended December 31, 2021, 2020 and 2019. 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 and current trends. 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. 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 Tripadvisor also generates revenue from its cost-per-action, or “CPA” model, which consists of contextually-relevant booking links to its travel partners’ websites which are advertised on its platform. Tripadvisor earns a commission from its travel partners, based on a pre-determined contractual commission rate, for each traveler who clicks to and books a hotel reservation on the travel partners’ website, which results in a traveler stay. CPA revenue is billable only upon the completion of each traveler’s stay resulting from a hotel reservation. The travel partners provide the service to the travelers and Tripadvisor acts as an agent under ASC 606 – Revenue from Contracts with Customers In addition, Tripadvisor offers hotel business to business solutions, including subscription-based advertising to hotels, 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. To a lesser extent, Tripadvisor also offers travel partners the opportunity to advertise and promote their business through hotel sponsored placements on Tripadvisor’s platform. This service is generally priced on a 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. CPC rates for hotel sponsored placements that its travel partners pay are generally based on bids submitted as part of an auction by Tripadvisor’s travel partners. When a CPC bid is submitted, the travel partner agrees to pay Tripadvisor the bid amount each time a traveler clicks on a link to its travel partner’s websites. Bids may be submitted periodically – as often as daily – on a property-by-property basis. Tripadvisor records this click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner as its performance obligation is fulfilled at that time. Hotel sponsored placements revenue is generally billed to Tripadvisor’s travel partners on a monthly basis consistent with the timing of the service. Tripadvisor-branded Display and Platform Revenue Experiences & Dining Segment Tripadvisor provides information and services that allow travelers to research and book tours, activities and attractions in popular travel destinations in its Viator online marketplace. 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 restaurant reservations in popular travel destinations through its dedicated online restaurant reservations offering, TheFork, and on Tripadvisor-branded websites and mobile applications (“apps”). Tripadvisor primarily generates transaction fees (or per seated diner fees) that are paid by Tripadvisor’s restaurant customers 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 primarily generates revenue by offering individual property owners and managers the ability to list their properties on Tripadvisor’s platform, thereby connecting with travelers through a free-to-list, commission-based option. 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, Other also includes revenue generated from flights, cruises, and car offerings on Tripadvisor-branded websites and mobile apps and Tripadvisor’s portfolio of travel media brands, 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 year or less. Tripadvisor does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. Disaggregation of Revenue Years ended December 31, 2021 2020 2019 amounts in millions Hotels, Media & Platform Tripadvisor-branded hotels $ 452 292 779 Tripadvisor-branded display and platform 97 69 160 Total Hotels, Media & Platform 549 361 939 Experiences & Dining 307 186 456 Corporate and other 46 57 165 Total Revenue $ 902 604 1,560 December 31, 2021 2020 Accounts receivable $ 105 70 Contract assets 37 13 Total $ 142 83 Accounts receivable are recognized when the right to consideration becomes unconditional. Contract assets are rights to consideration in exchange for services that Tripadvisor has transferred to a customer when that right is conditional on something other than the passage of time, such as commission payments that are contingent upon the completion of the service by the principal in the transaction. The difference between the opening and closing balances of Tripadvisor’s contract assets primarily results from the timing difference between when Tripadvisor satisfies its performance obligations and the time when the principal completes the service in the transaction. Tripadvisor’s contract assets increased during 2021 as a result of the ongoing recovery of consumer travel demand, and increased utilization of its CPA model by travel partners. During the year ended December 31, 2021, bad debt expense recorded to Tripadvisor’s allowance for expected credit losses on accounts receivable and contract assets decreased by $14 million, when compared to the same period in 2020, primarily due to improved collection trends with its customers as the travel industry recovers. Actual future bad debt could differ materially from this estimate resulting from changes in Tripadvisor’s assumptions of the duration and ultimate severity of the impact of COVID-19, including existing variants (i.e. Delta and Omicron) and/or new variants, if any. incur additional significant and unanticipated cancellations by consumers related to future travel, accommodations and experience bookings, which have been reserved by travelers and recorded as deferred revenue on our consolidated balance sheet as of December 31, 2021. |
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 platform. 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 online advertising expense, primarily SEM and other online traffic costs, and offline advertising costs, including television, 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. Advertising expense was $282 million, $118 million and $423 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Stock-Based Compensation | Stock-Based Compensation As more fully described in note 12, 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, 2021, 2020 and 2019 (amounts in millions): December 31, 2021 2020 2019 Operating expense $ 47 45 56 Selling, general and administrative 78 67 75 $ 125 112 131 During the years ended December 31, 2021, 2020 and 2019, Tripadvisor capitalized $13 million, $15 million and $19 million, respectively, of stock-based compensation expense as 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 Experiences and Rentals free-to-list offerings, Tripadvisor generally receives cash from travelers at the time of booking or prior to the experience date and records these amounts, net of Tripadvisor’s commissions, on its consolidated balance sheet as deferred merchant payables. Tripadvisor pays the operators, generally the third-party experience providers and vacation rental owners, after the travelers’ use. Therefore, it receives payment from the traveler prior to paying the operator and this operating cycle represents a working capital source or use of cash to Tripadvisor. Tripadvisor’s deferred merchant payables balance was $113 million and $36 million for the years ended December 31, 2021 and 2020, respectively. |
Certain Risks and Concentrations | Certain Risks and Concentrations In addition to the impact of COVID-19 outlined in note 1, the Tripadvisor business is subject to certain risks and concentrations, including a concentration related to dependence on relationships with its customers. For the years ended December 31, 2021, 2020 and 2019, Tripadvisor’s two most significant travel partners, Expedia Group Inc. (“Expedia”) and Booking Holdings Inc., each of which accounted for 10% or more of Tripadvisor’s consolidated revenue and combined accounted for approximately 34%, 25% and 33%, respectively, of its total revenue. Additionally, Tripadvisor’s business is dependent on relationships with third-party service operators it relies on to fulfill service obligations to Tripadvisor’s customers where Tripadvisor is the merchant of record, such as providing experiences and vacation rentals. However, no one operator’s inventory resulted in more than 10% of Tripadvisor’s revenue on a consolidated basis in any period presented. |
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 and is material, 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, comprehensive earnings (loss) attributable to debt credit risk 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) available to common shareholders 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 the years ended December 31, 2021, 2020 and 2019 are 3 million, 1 million and 2 million potential common shares, respectively, because their inclusion would be antidilutive. Also excluded from EPS for the years ended December 31, 2021 and 2020, because their inclusion would be antidilutive, were million and 13 million shares, respectively, that were contingently issuable at the Company’s election pursuant to an exercise of the Put Option (defined and described in note 10), as calculated in accordance with the terms of the Certificate of Designations for the Series A Preferred Stock. On March 29, 2021, pursuant to the Repurchase Agreement (described and defined in note 10), the Put Option no longer exists. The contingently issuable shares pursuant to the Put Option were calculated for the period that the Put Option was outstanding. Years ended December 31, 2021 (a) 2020 (a) 2019 in millions Numerator Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders $ 179 (238) (22) Less: Series A Preferred Stock carrying value adjustment and transaction costs 370 150 NA Net earnings (loss) available to common shareholders $ (191) (388) (22) Denominator Basic EPS 75 75 75 Potentially dilutive shares 2 1 — Diluted EPS 77 76 75 (a) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive. |
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. The COVID-19 pandemic has created significant uncertainty in macroeconomic conditions, which may cause further business disruptions and continue to adversely and materially impact our results of operations. As a result, some of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of property and equipment | Property and equipment, at cost consists of the following (amounts in millions): December 31, 2021 2020 Finance lease right-of-use asset $ 114 114 Leasehold improvements 48 49 Computer equipment and purchased software 77 71 Furniture, office equipment and other 20 21 Total property and equipment, at cost $ 259 255 |
Schedule of disaggregation of revenue | Years ended December 31, 2021 2020 2019 amounts in millions Hotels, Media & Platform Tripadvisor-branded hotels $ 452 292 779 Tripadvisor-branded display and platform 97 69 160 Total Hotels, Media & Platform 549 361 939 Experiences & Dining 307 186 456 Corporate and other 46 57 165 Total Revenue $ 902 604 1,560 |
Schedule of contract balances | The following table provides information about the opening and closing balances of accounts receivable and contract assets from contracts with customers (in millions): December 31, 2021 2020 Accounts receivable $ 105 70 Contract assets 37 13 Total $ 142 83 |
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, 2021, 2020 and 2019 (amounts in millions): December 31, 2021 2020 2019 Operating expense $ 47 45 56 Selling, general and administrative 78 67 75 $ 125 112 131 |
Reconciliation of Basic and Diluted Weighted Average Shares | Years ended December 31, 2021 (a) 2020 (a) 2019 in millions Numerator Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders $ 179 (238) (22) Less: Series A Preferred Stock carrying value adjustment and transaction costs 370 150 NA Net earnings (loss) available to common shareholders $ (191) (388) (22) Denominator Basic EPS 75 75 75 Potentially dilutive shares 2 1 — Diluted EPS 77 76 75 (a) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive. |
Supplemental Disclosures to C_2
Supplemental Disclosures to Consolidated Statements of Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Disclosures to Consolidated Statements of Cash Flows | |
Schedule of supplemental cash flow | Years ended December 31, 2021 2020 2019 amounts in millions Acquisitions, net of cash acquired: Intangibles not subject to amortization $ — 8 85 Intangibles subject to amortization — — 26 Fair value of other assets acquired — (3) 5 Net liabilities assumed — — (8) Deferred tax assets (liabilities) — (1) — Acquisitions, net of cash acquired $ — 4 108 Equity method investment acquired for non-cash consideration $ — — 41 Cash paid for interest $ 44 24 28 Cash paid for income taxes $ 4 3 47 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Acquisitions | |
Schedule of purchase price allocations | Year ended December 31, 2019 amounts in millions Goodwill (1) $ 88 Intangible assets 26 Net tangible assets (liabilities) (5) Total purchase price consideration $ 109 (1) Goodwill of $53 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, 2021 | |
Assets and Liabilities Measured at Fair Value | |
Schedule of assets and liabilities measured at fair value | December 31, 2021 December 31, 2020 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 $ 35 35 — 4 4 — TripCo Exchangeable Senior Debentures due 2051 $ 268 — 268 NA NA NA Financial instrument liabilities $ 85 — 85 14 — 14 |
Schedule of realized and unrealized gains (losses) | Years ended December 31, 2021 2020 2019 amounts in millions TripCo Exchangeable Senior Debentures due 2051 $ 50 — — Financial instruments 199 (20) 35 Tripadvisor foreign currency forward contracts 2 1 1 $ 251 (19) 36 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Other Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | Hotels, Media & Platform Experiences & Dining Corporate and other Total amounts in millions Balance at January 1, 2020 $ 1,923 333 271 2,527 Allocation to new segments (1) 6 - (6) - Impairments (2) (279) - (21) (300) Dispositions (3) - - (18) (18) Other (4) - 29 2 31 Balance at December 31, 2020 1,650 362 228 2,240 Other (4) - (18) (2) (20) Balance at December 31, 2021 $ 1,650 344 226 2,220 (1) Re-allocation of goodwill as a result of changes to reporting units related to Tripadvisor internal restructuring. (2) TripCo recorded an $18 million goodwill impairment related to a business that was sold in June 2020, and an additional $3 million goodwill impairment during the third quarter of 2020 as a result of strategic decisions made regarding Tripadvisor’s China business. See discussion of the Hotels, Media & Platform reporting unit impairment below. (3) Dispositions relates to the sale of the aforementioned Tripadvisor business. (4) Other changes primarily relate to immaterial acquisitions and foreign currency translation on goodwill. |
Schedule of intangible assets subject to amortization | December 31, 2021 December 31, 2020 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 1 $ 1,046 (1,030) 16 1,059 (992) 67 Other 3 616 (499) 117 589 (454) 135 Total $ 1,662 (1,529) 133 1,648 (1,446) 202 |
Schedule of future amortization expense | Intangible assets are generally amortized on a straight-line basis. The estimated future amortization expense for the next five years related to intangible assets with definite lives as of December 31, 2021 is as follows (amounts in millions): 2022 $ 32 2023 $ 29 2024 $ 26 2025 $ 23 2026 $ 21 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt | |
Schedule of outstanding debt | December 31, 2021 2020 amounts in millions TripCo Exchangeable Senior Debentures due 2051 $ 268 — TripCo variable prepaid forward 41 41 Tripadvisor Credit Facilities — — Tripadvisor Senior Notes due 2025 500 500 Tripadvisor Convertible Senior Notes due 2026 345 — Deferred financing costs (11) (9) Total consolidated TripCo debt $ 1,143 532 Less debt classified as current — — Total long-term debt $ 1,143 532 |
Schedule of fair value | The estimated fair values, based on recently reported market transactions and prices for identical or similar financial instruments obtained from a third-party pricing source (Level 2) of Tripadvisor’s debt securities, not reported at fair value are as follows (amounts in millions): December 31, 2021 Tripadvisor Senior Notes due 2025 $ 531 Tripadvisor Convertible Senior Notes due 2026 $ 305 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Components of lease expense | Years ended December 31, 2021 2020 2019 amounts in millions Operating lease cost (1) $ 21 28 24 Finance lease cost: Amortization of right-of-use assets (2) $ 10 10 9 Interest on lease liabilities (3) 4 4 4 Total finance lease cost $ 14 14 13 Sublease income on operating leases (1) (5) (3) (3) Total lease cost, net $ 30 39 34 (1) Operating lease costs, net of sublease income, are included in operating expense, including stock-based compensation in the consolidated statements of operations. (2) Amount is included in depreciation expense in the consolidated statements of operations. (3) Amount is included in interest expense in the consolidated statements of operations. |
Schedule of balance sheet information | December 31, 2021 2020 amounts in millions Operating leases: Operating lease right-of-use assets (1) $ 42 54 Current operating lease liabilities (2) $ 20 21 Operating lease liabilities (3) 29 46 Total operating lease liabilities $ 49 67 Finance Lease: Finance lease right-of-use assets (4) $ 86 95 Current finance lease liabilities (2) $ 6 5 Finance lease liabilities (3) 65 71 Total finance lease liabilities $ 71 76 (1) Included in other assets, at cost, net of accumulated amortization in the consolidated balance sheets. (2) Included in accrued liabilities and other current liabilities in the consolidated balance sheets. (3) Included in other liabilities in the consolidated balance sheets. (4) Included in property and equipment, net in the consolidated balance sheets . |
Schedule of cash flow information related to leases | Years ended December 31, 2021 2020 2019 amounts in millions Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 25 26 26 Operating cash outflows from finance lease $ 3 4 4 Financing cash outflows from finance lease $ 6 6 5 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 6 4 106 Finance lease $ — — 88 |
Schedule of weighted-average lease term and discount rate | Years ended December 31, 2021 2020 Weighted-average remaining lease term Operating leases 3.0 years 3.7 years Finance lease 9.0 years 10.0 years Weighted-average discount rate Operating leases 3.71% 3.99% Finance lease 4.49% 4.49% |
Schedule of operating lease maturities | Operating Leases Finance Lease amounts in millions 2022 $ 23 9 2023 15 9 2024 9 9 2025 3 10 2026 2 10 Thereafter - 39 Total future lease payments $ 52 86 Less: imputed interest (3) (15) Total $ 49 71 |
Schedule of finance lease maturities | Operating Leases Finance Lease amounts in millions 2022 $ 23 9 2023 15 9 2024 9 9 2025 3 10 2026 2 10 Thereafter - 39 Total future lease payments $ 52 86 Less: imputed interest (3) (15) Total $ 49 71 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of income tax benefit (expense) | Years ended December 31, 2021 2020 2019 amounts in millions Current: Federal $ (6) 73 (31) State and local 2 3 (6) Foreign (2) 3 (26) $ (6) 79 (63) Deferred: Federal $ 23 37 27 State and local 7 28 20 Foreign 19 8 32 49 73 79 Income tax benefit (expense) $ 43 152 16 |
Schedule of income before income taxes | Years ended December 31, 2021 2020 2019 amounts in millions Domestic $ 75 (855) (178) Foreign (80) (159) 46 Total $ (5) (1,014) (132) |
Schedule of income tax benefit (expense) reconciliation to the effective tax rate | Years ended December 31, 2021 2020 2019 amounts in millions Computed expected tax benefits (expense) $ 1 213 28 State and local taxes, net of federal income taxes 4 26 2 Foreign taxes, net of foreign tax credits 7 3 13 Taxable dividend net of dividends received deduction — — (13) Basis difference in consolidated subsidiary 14 (1) 22 Change in valuation allowance (18) (40) (11) Change in unrecognized tax benefits (6) (4) (25) Preferred Stock Derivative 41 — — Federal tax credits 7 9 11 Stock-based compensation 2 (14) (4) Impairment of nondeductible goodwill — (65) — Rate differential on U.S. net operating loss carryback — 23 — Other (9) 2 (7) Income tax (expense) benefit $ 43 152 16 |
Schedule of deferred income tax assets and liabilities | December 31, 2021 2020 amounts in millions Deferred tax assets: Tax loss and credit carryforwards $ 218 141 Stock-based compensation 39 38 Lease financing obligation 20 23 Other 17 (16) Total deferred tax assets 294 186 Less: valuation allowance (146) (122) Net deferred tax assets 148 64 Deferred tax liabilities: Debt (19) — Intangible assets (221) (231) Investments — (13) Other (25) 4 Total deferred tax liabilities (265) (240) Net deferred tax liability $ (117) (176) |
Schedule of reconciliation of unrecognized tax benefits | A reconciliation of unrecognized tax benefits is as follows (amounts in millions): Years ended December 31, 2021 2020 2019 Balance at beginning of year $ 144 140 136 Additions based on tax positions related to the current year 5 3 11 Additions for tax positions of prior years 1 1 1 Reductions for tax positions of prior years — — (8) Settlements with tax authorities (6) — — Balance at end of year $ 144 144 140 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021, 2020 and 2019 (amounts in millions): December 31, 2021 2020 2019 Operating expense $ 47 45 56 Selling, general and administrative 78 67 75 $ 125 112 131 |
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, 2021 1,086 $ 7.78 Granted 72 $ 4.82 Exercised — $ — Forfeited/Cancelled (29) $ 23.22 Outstanding at December 31, 2021 1,129 $ 7.20 5.1 $ — Exercisable at December 31, 2021 512 $ 10.47 4.2 $ — |
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, 2021 2,397 $ 21.93 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding at December 31, 2021 2,397 $ 21.93 3.7 $ 8 Exercisable at December 31, 2021 2,397 $ 21.93 3.7 $ 8 |
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, 2021 5,615 $ 46.31 Granted 1,002 $ 41.12 Exercised (705) $ 33.97 Cancelled or expired (241) $ 43.97 Outstanding at December 31, 2021 5,671 $ 47.03 4.8 $ 1 Exercisable at December 31, 2021 3,878 $ 51.06 3.6 $ 1 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Information | |
Schedule of performance measures | Years ended December 31, 2021 2020 2019 Adjusted Adjusted Adjusted Revenue OIBDA Revenue OIBDA Revenue OIBDA amounts in millions Hotels, Media & Platform $ 549 111 361 13 939 378 Experiences & Dining 307 (36) 186 (79) 456 5 Corporate and other 46 15 57 5 165 47 Consolidated TripCo $ 902 90 604 (61) 1,560 430 |
Schedule of revenue by geographic area | December 31, 2021 2020 2019 amounts in millions United States $ 526 302 821 United Kingdom 259 169 466 Other countries 117 133 273 Consolidated TripCo $ 902 604 1,560 |
Schedule of long-lived assets by geographic area | December 31, 2021 2020 amounts in millions United States $ 108 118 Other countries 10 14 Consolidated TripCo $ 118 132 |
Reconciliation of consolidated Adjusted OIBDA to operating income and earnings (loss) before income taxes | Years ended December 31, 2021 2020 2019 amounts in millions Adjusted OIBDA $ 90 (61) 430 Stock-based compensation (125) (112) (131) Depreciation and amortization (150) (168) (169) Impairment of goodwill and intangible assets — (550) (288) Restructuring and related reorganization costs — (41) (1) Operating income (loss) (185) (932) (159) Interest expense (60) (41) (22) Realized and unrealized gains (losses) on financial instruments, net 251 (19) 36 Other, net (11) (22) 13 Earnings (loss) before income taxes $ (5) (1,014) (132) |
Basis of Presentation - Descrip
Basis of Presentation - Description of Business (Details) $ / shares in Units, $ in Millions | Mar. 26, 2020$ / sharesshares | Dec. 31, 2019USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($)itemshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Jul. 31, 2020USD ($) | Jul. 09, 2020USD ($) |
Redeemable preferred stock, shares issued | shares | 325,000 | 187,414 | 325,000 | |||||
Dividend rate percentage | 8.00% | |||||||
Redeemable preferred stock, par value | $ / shares | $ 0.01 | |||||||
Shares issued price per share | $ / shares | $ 1,000 | |||||||
Number of languages worldwide | item | 20 | |||||||
Minimum | ||||||||
Number of markets with localized websites | item | 40 | |||||||
Liberty Media | ||||||||
Related Party Transaction, Amounts of Transaction | $ 4 | $ 4 | $ 4 | |||||
Liberty Media | CEO | ||||||||
Relative market capitalization percentage | 50.00% | |||||||
Blended average of historical time allocation on a Liberty Media-wide and CEO basis weighted average | 50.00% | |||||||
CEO compensation allocation percentage | 5.00% | 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 | 18 | |||||||
Upfront awards | $ 90 | |||||||
TripAdvisor | ||||||||
Restructuring and other related reorganization costs | $ 41 | |||||||
TripAdvisor | Tripadvisor Credit Facilities | ||||||||
Borrowing on line of credit | $ 700 | |||||||
TripAdvisor | Tripadvisor Senior Notes due 2025 | ||||||||
Debt Instrument, Face Amount | $ 500 | $ 500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for credit losses | $ 28 | $ 33 | |
Customer invoices period | 30 days | ||
Maximum invested cash maturity period | 18 months | ||
Maximum security maturity period | 3 years | ||
Total property and equipment, at cost | $ 259 | 255 | |
Foreign currency exchange gain (loss) | (6) | 4 | $ (3) |
Advertising expense | $ 282 | 118 | $ 423 |
Minimum | |||
Short-term investments term | 90 days | ||
Long-term investments term | 12 months | ||
Maximum | |||
Short-term investments term | 12 months | ||
Finance lease right-of-use assets | |||
Total property and equipment, at cost | $ 114 | 114 | |
Leasehold improvements | |||
Total property and equipment, at cost | 48 | 49 | |
Computer equipment and purchased software | |||
Total property and equipment, at cost | 77 | 71 | |
Furniture, office equipment and other | |||
Total property and equipment, at cost | $ 20 | $ 21 | |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Customer invoices period | 30 days | ||
TripAdvisor | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Maximum subscription advertising service contact period | 1 year | ||
Capitalized contract costs | $ 4 | $ 4 | |
Contract cost amortization | 1 | 1 | $ 1 |
Capitalized contract costs impairment | $ 0 | $ 0 | $ 0 |
Customer invoices period | 30 days | ||
Practical expedient, incremental costs | true | ||
Practical expedient, remaining performance obligation | true |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 902 | $ 604 | $ 1,560 |
Corporate and other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 46 | 57 | 165 |
TripAdvisor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 902 | 604 | 1,560 |
TripAdvisor | Corporate and other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 46 | 57 | 165 |
Hotel, Media & Platform | TripAdvisor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 549 | 361 | 939 |
Hotel, Media & Platform | Tripadvisor-branded hotels | TripAdvisor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 452 | 292 | 779 |
Hotel, Media & Platform | Tripadvisor-branded display and platform | TripAdvisor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 97 | 69 | 160 |
Experiences & Dining | TripAdvisor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 307 | $ 186 | $ 456 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Millions | Jan. 01, 2021 | Jan. 01, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts receivable | $ 105 | $ 70 | ||
Contract assets | 37 | 13 | ||
Total | 142 | 83 | ||
Contract with Customer, Liability, Current | 36 | 28 | ||
TripAdvisor | ||||
Accounts receivable and contract assets | (14) | |||
Contract with Customer, Liability, Current | $ 28 | $ 62 | ||
Contract with customer revenue recognized | $ 23 | $ 51 | ||
Refund liability | $ 4 | $ 11 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | $ 125 | $ 112 | $ 131 |
Operating expense | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | 47 | 45 | 56 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | 78 | 67 | 75 |
TripAdvisor | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | 120 | ||
Capitalized Stock Based Compensation | $ 13 | $ 15 | $ 19 |
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, 2021USD ($)itemshares | Dec. 31, 2020USD ($)itemshares | Dec. 31, 2019USD ($)itemshares | |
Numerator | |||
Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders | $ | $ 179 | $ (238) | $ (22) |
Less: Series A Preferred Stock carrying value adjustment and transaction costs | $ | 370 | 150 | |
Net earnings (loss) available to common shareholders | $ | $ (191) | $ (388) | $ (22) |
Denominator | |||
Basic WASO (in shares) | 75 | 75 | 75 |
Potentially dilutive shares (in shares) | 2 | 1 | |
Diluted WASO (in shares) | 77 | 76 | 75 |
TripAdvisor | |||
Product Information [Line Items] | |||
Deferred merchant payable | $ | $ 113 | $ 36 | |
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) | 34.00% | 25.00% | 33.00% |
Stock Options | |||
Earnings (Loss) Per Common Share (EPS) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3 | 1 | 2 |
Preferred Stock Put Option | |||
Earnings (Loss) Per Common Share (EPS) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3 | 13 |
Supplemental Disclosures to C_3
Supplemental Disclosures to Consolidated Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Acquisitions, net of cash acquired: | |||
Intangibles not subject to amortization | $ 8 | $ 85 | |
Intangibles subject to amortization | 26 | ||
Fair value of other assets acquired | (3) | 5 | |
Net liabilities assumed | (8) | ||
Deferred tax assets (liabilities) | (1) | ||
Acquisitions, net of cash acquired | 4 | 108 | |
Equity method investment acquired for non-cash consideration | 41 | ||
Cash paid for interest | $ 44 | 24 | 28 |
Cash paid for income taxes | $ 4 | $ 3 | $ 47 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Acquisitions | |||
Goodwill | $ 2,527 | $ 2,220 | $ 2,240 |
TripAdvisor | 2019 Acquisitions | |||
Tripadvisor, Inc. transactions | |||
Number of businesses acquired | item | 3 | ||
Acquisition purchase price | $ 109 | ||
Cash consideration for acquisition | 107 | ||
Cash Acquired from Acquisition | $ 2 | ||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||
Acquisitions | |||
Goodwill | $ 88 | ||
Intangible assets subject to amortization | 26 | ||
Net tangible assets (liabilities) | (5) | ||
Total purchase price consideration | 109 | ||
Goodwill not expected to be tax deductible | $ 53 | ||
Definite-lived intangible assets weighted-average life | 6 years | ||
TripAdvisor | 2019 Acquisitions | Trademarks | |||
Acquisitions | |||
Intangible assets subject to amortization | $ 2 | ||
TripAdvisor | 2019 Acquisitions | Customer Lists and Supplier Relationships | |||
Acquisitions | |||
Intangible assets subject to amortization | 10 | ||
TripAdvisor | 2019 Acquisitions | Subscriber Relationships | |||
Acquisitions | |||
Intangible assets subject to amortization | 6 | ||
TripAdvisor | 2019 Acquisitions | Technology and other | |||
Acquisitions | |||
Intangible assets subject to amortization | $ 8 |
Assets and Liabilities Measur_3
Assets and Liabilities Measured at Fair Value (Details) shares in Millions, $ in Millions | Mar. 09, 2020USD ($)$ / itemshares | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Repayments of long term debt | $ 1,052 | $ 359 | |||
Exchangeable Senior Debentures due 2051 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Margin | 0.50% | ||||
Forward Contracts | variable prepaid forward | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Forward contract shares indexed | shares | 2.4 | ||||
Forward floor price | $ / item | 17.25 | ||||
Forward cap price | $ / item | 26.84 | ||||
Variable prepaid forward prepayment received | $ 34 | $ 34 | |||
Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash equivalents | $ 35 | 4 | |||
Recurring | Exchangeable Senior Debentures due 2051 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset | 268 | ||||
Recurring | Financial instrument liabilities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset | 85 | 14 | |||
Recurring | Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash equivalents | 35 | 4 | |||
Recurring | Level 2 | Exchangeable Senior Debentures due 2051 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset | 268 | ||||
Recurring | Level 2 | Financial instrument liabilities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset | $ 85 | $ 14 |
Assets and Liabilities Measur_4
Assets and Liabilities Measured at Fair Value - Realized and Unrealized Gains (Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Realized and unrealized gains (losses) on financial instruments, net | $ 251 | $ (19) | $ 36 |
Exchangeable Senior Debentures due 2051 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Credit risk on fair value debt instruments gains (losses) | 7 | ||
Debt issuance costs | 5 | ||
Exchangeable Senior Debentures due 2051 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Realized and unrealized gains (losses) on financial instruments, net | 50 | ||
Financial instrument liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Realized and unrealized gains (losses) on financial instruments, net | 199 | (20) | 35 |
Tripadvisor Foreign Currency Forward Contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Realized and unrealized gains (losses) on financial instruments, net | $ 2 | $ 1 | $ 1 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill | ||||
Goodwill, beginning balance | $ 2,240 | $ 2,527 | ||
Goodwill impairment | $ (18) | $ (3) | (300) | |
Dispositions | (18) | |||
Other | (20) | 31 | ||
Goodwill, ending balance | 2,220 | 2,240 | ||
Hotel, Media & Platform | ||||
Goodwill | ||||
Goodwill, beginning balance | 1,650 | 1,923 | ||
Allocation to new segments | 6 | |||
Goodwill impairment | (279) | |||
Goodwill, ending balance | 1,650 | 1,650 | ||
Experiences & Dining | ||||
Goodwill | ||||
Goodwill, beginning balance | 362 | 333 | ||
Other | (18) | 29 | ||
Goodwill, ending balance | 344 | 362 | ||
Corporate and other | ||||
Goodwill | ||||
Goodwill, beginning balance | 228 | 271 | ||
Allocation to new segments | (6) | |||
Goodwill impairment | (21) | |||
Dispositions | (18) | |||
Other | (2) | 2 | ||
Goodwill, ending balance | $ 226 | $ 228 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible Assets subject to amortization | |||
Gross carrying amount | $ 1,662 | $ 1,648 | |
Accumulated amortization | (1,529) | (1,446) | |
Net carrying amount | 133 | 202 | |
Amortization expense | $ 122 | 136 | $ 139 |
Customer relationships | |||
Intangible Assets subject to amortization | |||
Weighted Average Remaining Useful Life | 1 year | ||
Gross carrying amount | $ 1,046 | 1,059 | |
Accumulated amortization | (1,030) | (992) | |
Net carrying amount | $ 16 | 67 | |
Other | |||
Intangible Assets subject to amortization | |||
Weighted Average Remaining Useful Life | 3 years | ||
Gross carrying amount | $ 616 | 589 | |
Accumulated amortization | (499) | (454) | |
Net carrying amount | $ 117 | $ 135 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Future Amortization (Details) $ in Millions | Dec. 31, 2021USD ($) |
Future amortization expense | |
2022 | $ 32 |
2023 | 29 |
2024 | 26 |
2025 | 23 |
2026 | $ 21 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Impairments (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | |
Impairments | |||||
Goodwill impairments | $ 18 | $ 3 | $ 300 | ||
Hotel, Media & Platform | |||||
Impairments | |||||
Goodwill impairments | 279 | ||||
TripAdvisor | |||||
Impairments | |||||
Accumulated goodwill impairment | $ 1,571 | ||||
TripAdvisor | Hotel, Media & Platform | Goodwill | |||||
Impairments | |||||
Goodwill impairments | 279 | ||||
TripAdvisor | Hotel, Media & Platform | Trademarks | |||||
Impairments | |||||
Impairment of intangible assets | $ 250 | $ 288 |
Debt - Outstanding debt (Detail
Debt - Outstanding debt (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 17, 2020 |
Debt Financing | |||
Deferred financing costs | $ (11) | $ (9) | |
Total consolidated TripCo debt | 1,143 | 532 | |
Total long-term debt | 1,143 | 532 | |
Exchangeable Senior Debentures due 2051 | |||
Debt Financing | |||
Carrying amount of debt | 268 | ||
variable prepaid forward | |||
Debt Financing | |||
Carrying amount of debt | 41 | 41 | |
TripAdvisor | Tripadvisor Credit Facilities | |||
Debt Financing | |||
Deferred financing costs | (4) | $ (7) | |
TripAdvisor | Tripadvisor Senior Notes due 2025 | |||
Debt Financing | |||
Carrying amount of debt | 500 | $ 500 | |
TripAdvisor | Tripadvisor Convertible Senior Notes due 2026 | |||
Debt Financing | |||
Carrying amount of debt | $ 345 |
Debt - TripCo Debt (Details)
Debt - TripCo Debt (Details) - USD ($) shares in Millions, $ in Millions | Mar. 09, 2020 | Dec. 20, 2019 | Nov. 19, 2019 | Nov. 13, 2019 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Jun. 10, 2019 |
Debt Financing | |||||||||
Repayments of long term debt | $ 1,052 | $ 359 | |||||||
Term Loan 2019 | |||||||||
Debt Financing | |||||||||
Carrying amount of debt | $ 225 | ||||||||
Borrowed amount | $ 33 | $ 75 | |||||||
Delayed Draw Term Loan | |||||||||
Debt Financing | |||||||||
Borrowed amount | $ 15 | ||||||||
Maximum borrowing capacity | $ 15 | $ 25 | |||||||
variable prepaid forward | |||||||||
Debt Financing | |||||||||
Carrying amount of debt | $ 41 | $ 41 | |||||||
variable prepaid forward | Forward Contracts | |||||||||
Debt Financing | |||||||||
Variable prepaid forward prepayment received | $ 34 | $ 34 | |||||||
Derivative contract term | 3 years | ||||||||
Accreted loan total at maturity | $ 42 | ||||||||
Common stock pledged as collateral | 2.4 | ||||||||
Value of common stock pledged as collateral. | $ 65 | ||||||||
Margin loan | |||||||||
Debt Financing | |||||||||
Repayments of debt | $ 363 |
Debt - TripCo Exchangeable Seni
Debt - TripCo Exchangeable Senior Debentures due 2051 (Details) - Exchangeable Senior Debentures due 2051 $ / shares in Units, shares in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)$ / sharesshares | Apr. 05, 2021USD ($) | Mar. 25, 2021USD ($) | |
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 30,000,000 | $ 300,000,000 | |
Debt Instrument, convertible, conversion ratio | 14.3299 | ||
Conversion to common Stock | $ 1,000 | ||
Debt instrument, convertible, principal amount | shares | 4.7 | ||
Debt Instrument, convertible, conversion price | $ / shares | $ 69.78 | ||
Debt Instrument, redemption price, percentage | 100.00% |
Debt - TripAdvisor Credit Facil
Debt - TripAdvisor Credit Facilities (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 17, 2020 | Dec. 16, 2020 | Jun. 30, 2015 | |
Debt Financing | |||||||
Interest expense | $ 60 | $ 41 | $ 22 | ||||
Debt Issuance Costs, Net | 11 | 9 | |||||
TripAdvisor | Tripadvisor Credit Facilities | |||||||
Debt Financing | |||||||
Maximum borrowing capacity | $ 500 | $ 1,200 | $ 500 | ||||
Leverage ratio compliance testing | 200 | ||||||
Minimum liquidity covenant amount | 150 | ||||||
Borrowings outstanding on line of credit | 0 | 0 | |||||
Borrowing on line of credit | $ 700 | ||||||
Interest expense | 3 | $ 10 | $ 2 | ||||
Amortization of Debt Issuance Costs | 2 | ||||||
Debt Issuance Costs, Net | $ 4 | $ 7 | |||||
TripAdvisor | Tripadvisor Credit Facilities | Minimum | |||||||
Debt Financing | |||||||
Commitment fee | 0.50% | ||||||
TripAdvisor | Tripadvisor Credit Facilities | LIBOR | |||||||
Debt Financing | |||||||
Variable rate basis | LIBOR | ||||||
Margin | 2.25% | ||||||
Floor rate (as a percent) | 1.00% | ||||||
TripAdvisor | Letter of Credit | |||||||
Debt Financing | |||||||
Maximum borrowing capacity | $ 15 | ||||||
Borrowings outstanding on line of credit | 3 | ||||||
TripAdvisor | Same-day notice borrowings | |||||||
Debt Financing | |||||||
Maximum borrowing capacity | $ 40 |
Debt - TripAdvisor Senior Notes
Debt - TripAdvisor Senior Notes (Details) | 12 Months Ended | |||||
Dec. 31, 2021USD ($)item$ / shares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 25, 2021USD ($) | Jul. 31, 2020USD ($) | Jul. 09, 2020USD ($) | |
Debt Instrument [Line Items] | ||||||
Borrowings of debt | $ 675,000,000 | $ 1,240,000,000 | $ 235,000,000 | |||
Interest expense | 60,000,000 | 41,000,000 | $ 22,000,000 | |||
Long-term debt fair value | 268,000,000 | |||||
Tripadvisor Senior Notes due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Unpaid interest expense | 16,000,000 | 17,000,000 | ||||
Tripadvisor Senior Notes due 2025 | Accrued Liabilities and Other Current Liabilities | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense | $ 35,000,000 | $ 17,000,000 | ||||
TripAdvisor | Tripadvisor Senior Notes due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 500,000,000 | $ 500,000,000 | ||||
Interest rate | 7.00% | |||||
Unpaid interest price | 100.00% | |||||
Redemption percentage with certain equity offerings maximum | 40.00% | |||||
Aggregate redemption price in the event of a Change of Control Triggering Event | 101.00% | |||||
TripAdvisor | Tripadvisor Convertible Senior Notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 300,000,000 | |||||
Interest rate | 0.25% | |||||
Conversion to common Stock | $ 1,000 | |||||
Debt Instrument, convertible, threshold trading days | item | 20 | |||||
Debt Instrument, convertible, threshold consecutive trading days | item | 30 | |||||
Debt Instrument, convertible, threshold percentage of stock price trigger | 130.00% | |||||
Debt Instrument, convertible, conversion ratio | 13.5483 | |||||
Debt Instrument, convertible, conversion price | $ / shares | $ 73.81 | |||||
Debt Instrument, convertible, number of equity instruments | 4,700,000 | |||||
Borrowings of debt | $ 340,000,000 | |||||
Payments of debt issuance costs | $ 5,000,000 | |||||
Interest rate | 0.53% | |||||
Recorded interest expense | $ 1,000,000 | |||||
TripAdvisor | Tripadvisor Convertible Senior Notes due 2026 | Quarterly Period | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, convertible, threshold trading days | item | 20 | |||||
Debt Instrument, convertible, threshold consecutive trading days | item | 30 | |||||
Debt Instrument, convertible, threshold percentage of stock price trigger | 130.00% | |||||
TripAdvisor | Tripadvisor Convertible Senior Notes due 2026 | Measurement Period | ||||||
Debt Instrument [Line Items] | ||||||
Conversion to common Stock | $ 1,000 | |||||
Debt Instrument, convertible, threshold percentage of stock price trigger | 98.00% | |||||
Debt Instrument, Convertible, threshold consecutive trading day period | 5 days | |||||
Debt instrument, convertible, consecutive business days immediately following threshold consecutive trading days | 5 days | |||||
TripAdvisor | Tripadvisor Convertible Senior Notes due 2026 | Convertible Senior Notes Over Allotment Option | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 45,000,000 |
Debt - Capped Call Transactions
Debt - Capped Call Transactions (Details) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)$ / shares$ / itemshares | Mar. 22, 2021$ / shares | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |||
Deferred tax asset | $ 148 | $ 64 | |
TripAdvisor | Capped Call Transactions | |||
Debt Instrument [Line Items] | |||
Capped call transaction cost | $ 35 | ||
Debt instrument, convertible, principal amount | shares | 4.7 | ||
Strike price per share | $ / shares | $ 73.81 | ||
Cap price for convertible debt instrument | $ / item | 107.36 | ||
Debt instrument, convertible, capped call transactions, percentage of common stock sale price | 100.00% | ||
Share Price | $ / shares | $ 53.68 | ||
Deferred tax asset | $ 9 |
Debt - Fair Value (Details)
Debt - Fair Value (Details) - TripAdvisor - Level 2 $ in Millions | Dec. 31, 2021USD ($) |
Tripadvisor Senior Notes due 2025 | |
Debt Instrument [Line Items] | |
Fair value | $ 531 |
Tripadvisor Convertible Senior Notes due 2026 | |
Debt Instrument [Line Items] | |
Fair value | $ 305 |
Leases - Operating and Finance
Leases - Operating and Finance Leases (Details) - TripAdvisor | 1 Months Ended | 12 Months Ended |
Jun. 30, 2013ft²item | Dec. 31, 2021 | |
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 | |
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 | |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | |||
Operating lease cost (1) | $ 21 | $ 28 | $ 24 |
Amortization of right-of-use assets (2) | 10 | 10 | 9 |
Interest on lease liabilities (3) | 4 | 4 | 4 |
Total finance lease cost | 14 | 14 | 13 |
Sublease income (1) | (5) | (3) | (3) |
Total lease cost, net | $ 30 | $ 39 | $ 34 |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases | ||
Operating lease right-of-use assets (1) | $ 42 | $ 54 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Current operating lease liabilities (2) | $ 20 | $ 21 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities And Other Liabilities Current | Accrued Liabilities And Other Liabilities Current |
Operating lease liabilities (3) | $ 29 | $ 46 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total operating lease liabilities | $ 49 | $ 67 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent, Accrued Liabilities And Other Liabilities Current | Other Liabilities, Noncurrent, Accrued Liabilities And Other Liabilities Current |
Finance lease right-of-use assets (4) | $ 86 | $ 95 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Gross | Property, Plant and Equipment, Gross |
Current finance lease liability (2) | $ 6 | $ 5 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities And Other Liabilities Current | Accrued Liabilities And Other Liabilities Current |
Finance lease liabilities (3) | $ 65 | $ 71 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total finance lease liabilities | $ 71 | $ 76 |
Finance Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent, Accrued Liabilities And Other Liabilities Current | Other Liabilities, Noncurrent, Accrued Liabilities And Other Liabilities Current |
Leases - Supplemental Informati
Leases - Supplemental Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash outflows from operating leases | $ 25 | $ 26 | $ 26 |
Operating cash outflows from finance lease | 3 | 4 | 4 |
Financing cash outflows from finance lease | 6 | 6 | 5 |
Right-of-use assets obtained in exchange for lease liabilities: | |||
Operating leases | $ 6 | $ 4 | 106 |
Finance lease | $ 88 | ||
Weighted-average remaining lease term | |||
Operating leases weighted average remaining lease term (in years) | 3 years | 3 years 8 months 12 days | |
Finance lease weighted average remaining lease term (in years) | 9 years | 10 years | |
Weighted-average discount rate | |||
Operating leases weighted average discount rate | 3.71% | 3.99% | |
Finance lease weighted average discount rate | 4.49% | 4.49% |
Leases - Maturities (Details)
Leases - Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Leases | ||
2022 | $ 23 | |
2023 | 15 | |
2024 | 9 | |
2025 | 3 | |
2026 | 2 | |
Total future lease payments | 52 | |
Less: imputed interest | (3) | |
Total operating lease liabilities | 49 | $ 67 |
Finance Lease | ||
2022 | 9 | |
2023 | 9 | |
2024 | 9 | |
2025 | 10 | |
2026 | 10 | |
Thereafter | 39 | |
Total future lease payments | 86 | |
Less: imputed interest | (15) | |
Total finance lease liabilities | $ 71 | $ 76 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ (6) | $ 73 | $ (31) |
State and local | 2 | 3 | (6) |
Foreign | (2) | 3 | (26) |
Total current income tax expense | (6) | 79 | (63) |
Deferred: | |||
Federal | 23 | 37 | 27 |
State and local | 7 | 28 | 20 |
Foreign | 19 | 8 | 32 |
Total deferred income tax expense | 49 | 73 | 79 |
Income tax (expense) benefit | 43 | 152 | 16 |
Income before income taxes | |||
Domestic | 75 | (855) | (178) |
Foreign | (80) | (159) | 46 |
Earnings (loss) before income taxes | (5) | (1,014) | (132) |
Differences between provision for income taxes and income tax expense computed by applying federal rates | |||
Computed expected tax benefits (expense) | 1 | 213 | 28 |
State and local taxes, net of federal income taxes | 4 | 26 | 2 |
Foreign taxes, net of foreign tax credits | 7 | 3 | 13 |
Taxable dividend net of dividends received deduction | (13) | ||
Basis difference in consolidated subsidiary | 14 | (1) | 22 |
Change in valuation allowance | (18) | (40) | (11) |
Change in unrecognized tax benefits | (6) | (4) | (25) |
Preferred Stock Derivative | 41 | ||
Federal tax credits | 7 | 9 | 11 |
Stock-based compensation | 2 | (14) | (4) |
Impairment of nondeductible goodwill | (65) | ||
Rate differential on U.S. net operating loss carryback | 23 | ||
Other | (9) | 2 | (7) |
Income tax (expense) benefit | $ 43 | $ 152 | $ 16 |
US federal income tax rate | 21.00% | 21.00% | 21.00% |
Income taxes receivable (note 9) | $ 48 | $ 50 | |
Deferred tax assets: | |||
Tax loss and credit carryforwards | 218 | 141 | |
Stock-based compensation | 39 | 38 | |
Lease financing obligation | 20 | 23 | |
Other | 17 | (16) | |
Total deferred tax assets | 294 | 186 | |
Less: valuation allowance | (146) | (122) | |
Net deferred tax assets | 148 | 64 | |
Deferred tax liabilities: | |||
Debt | (19) | ||
Intangible assets | (221) | (231) | |
Investments | (13) | ||
Other | (25) | 4 | |
Total deferred tax liabilities | (265) | (240) | |
Net deferred tax liability | (117) | (176) | |
Noncurrent deferred tax liability | (144) | (180) | |
Net deferred tax liability | 117 | 176 | |
Valuation allowance income tax expense affect | 18 | ||
Valuation allowance increase related to impact of foreign exchange rates | 6 | ||
TripAdvisor | |||
Differences between provision for income taxes and income tax expense computed by applying federal rates | |||
Tax benefit generated from U.S. Federal NOLs | 76 | ||
Income taxes receivable (note 9) | 48 | ||
Government Grants And Other Assistance Benefits Recognized | 9 | 12 | |
Decrease in long-term transition tax payable | $ 28 | ||
Deferred tax assets: | |||
Tax loss and credit carryforwards | 185 | ||
Deferred tax liabilities: | |||
Undistributed foreign earnings no longer considered indefinitely reinvested | $ 427 |
Income Taxes (Details)_2
Income Taxes (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating loss carryforwards | ||||
Tax loss and credit carryforwards | $ 218 | $ 141 | ||
Operating loss carryforwards not expected to be utilized | 146 | |||
Unrecognized tax benefits | ||||
Balance at beginning of year | $ 144 | 144 | 140 | $ 136 |
Additions based on tax positions related to the current year | 5 | 3 | 11 | |
Additions for tax positions of prior years | 1 | 1 | 1 | |
Reductions for tax positions of prior years | (8) | |||
Settlements with tax authorities | (6) | |||
Balance at end of year | 144 | 144 | 140 | |
Unrecognized tax benefit that would impact effective rate | 72 | 74 | $ 82 | |
Accrued interest and penalties related to uncertain tax positions | 39 | $ 35 | ||
Minimum | ||||
Unrecognized tax benefits | ||||
Estimated potential income tax increase | 45 | |||
Maximum | ||||
Unrecognized tax benefits | ||||
Estimated potential income tax increase | $ 55 | |||
2009 Through 2011 pre Spin-Off Tax Years | Minimum | ||||
Unrecognized tax benefits | ||||
Income Tax Examination, Estimate of Possible Loss | 20 | |||
2009 Through 2011 pre Spin-Off Tax Years | Maximum | ||||
Unrecognized tax benefits | ||||
Income Tax Examination, Estimate of Possible Loss | 30 | |||
TripAdvisor | ||||
Operating loss carryforwards | ||||
Tax loss and credit carryforwards | 185 | |||
NOL carryforwards subject to expiration | 21 | |||
NOL carryforwards not subject to expiration | 164 | |||
TripAdvisor | Minimum | ||||
Unrecognized tax benefits | ||||
Income Tax Examination, Estimate of Possible Loss | 95 | |||
TripAdvisor | Maximum | ||||
Unrecognized tax benefits | ||||
Income Tax Examination, Estimate of Possible Loss | 105 | |||
TripCo | ||||
Operating loss carryforwards | ||||
Tax loss and credit carryforwards | 33 | |||
NOL carryforwards subject to expiration | 17 | |||
NOL carryforwards not subject to expiration | $ 16 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details) | Apr. 06, 2021USD ($)shares | Mar. 29, 2021USD ($)shares | Mar. 26, 2020$ / sharesshares | Dec. 31, 2021USD ($)itemshares | Dec. 31, 2020shares |
Redeemable preferred stock, shares issued | shares | 325,000 | 187,414 | 325,000 | ||
Shares issued price per share | $ / shares | $ 1,000 | ||||
Call right, reference stock V W A P | item | 2 | ||||
Threshold percentage of redeemable preferred shares | 49.00% | ||||
Maximum number of holders of redeemable preferred stock | item | 6 | ||||
Redemption price per share | $ / shares | $ 1,000 | ||||
Dividend rate percentage | 8.00% | ||||
Series A Preferred Stock | |||||
Redeemable preferred stock shares repurchased | shares | 10,665 | 126,921 | 137,586 | ||
Proceeds from issuance of debt | $ 281,000,000 | ||||
Redeemable preferred stock, net proceeds of debentures | $ 29,000,000 | $ 252,000,000 | |||
Common stock used for repurchase | $ 92,000,000 | ||||
Shares issued during period, shares | shares | 1,713,859 | ||||
Repurchase price, multiplier | $ 1,000 | ||||
Percentage of redeemable preferred stock repurchased during the period. | 42.00% | ||||
Payments for repurchase of Redeemable preferred stock | $ 373,000,000 | ||||
Series A Preferred Stock | Retained Earnings (Deficit) | |||||
Preferred stock change in carrying value | $ 410,000,000 | ||||
Preferred stock fair value adjustment | $ 40,000,000 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) | 12 Months Ended | |
Dec. 31, 2021Voteshares | Dec. 31, 2020shares | |
Series A | ||
Class of Stock [Line Items] | ||
Number of votes | Vote | 1 | |
Common stock shares issued | shares | 72,447,462 | 72,227,256 |
Series B | ||
Class of Stock [Line Items] | ||
Number of votes | Vote | 10 | |
Common stock shares issued | shares | 3,216,047 | 2,973,665 |
Series C | ||
Class of Stock [Line Items] | ||
Number of votes | Vote | 0 | |
Common stock shares issued | shares | 0 | 0 |
Stockholders' Equity - Subsidia
Stockholders' Equity - Subsidiary Purchases of Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 01, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Equity, Class of Treasury Stock [Line Items] | ||||
Dividends received | $ 108 | |||
TripAdvisor | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Dividends | $ 488 | |||
Dividend declared per share | $ 3.50 | |||
TripAdvisor | 2018 Stock Repurchase Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Treasury shares acquired | 0 | 4,707,450 | 2,059,846 | |
Payment for shares repurchased | $ 115 | $ 60 | ||
Stock repurchase remaining amount authorized | $ 75 |
Stock-Based Compensation - Trip
Stock-Based Compensation - TripCo Grants (Details) | 12 Months Ended | ||
Dec. 31, 2021$ / sharesshares | Dec. 31, 2020item$ / sharesshares | Dec. 31, 2019$ / sharesshares | |
CEO | |||
Stock-Based Compensation | |||
Upfront Grants Related To New Employment Agreement | item | 2 | ||
2019 Plan | |||
Stock-Based Compensation | |||
Maximum number of shares | 5,000,000 | ||
Fair value assumptions | |||
Volatility rate, minimum (as a percent) | 49.50% | 49.50% | 49.50% |
Volatility rate, maximum (as a percent) | 86.80% | 86.80% | 86.80% |
Dividend rate | 0.00% | 0.00% | 0.00% |
2019 Plan | 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 |
2019 Plan | 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 |
2019 Plan | Stock Options | |||
Stock-Based Compensation | |||
Exercised | 0 | 0 | 0 |
2019 Plan | Series A | Stock Options | |||
Stock-Based Compensation | |||
Granted | 72,000 | ||
Cancelled or expired | (29,000) | ||
2019 Plan | Series A | Stock Options | Employee | |||
Stock-Based Compensation | |||
Granted | 47,000 | 499,000 | 73,000 |
Weighted average grant date fair value, options (in dollars per share) | $ / shares | $ 3.25 | $ 2.58 | $ 3.53 |
2019 Plan | Series A | Stock Options | Employee | Minimum | |||
Stock-Based Compensation | |||
Vesting period | 2 years | ||
2019 Plan | Series A | Stock Options | Employee | Maximum | |||
Stock-Based Compensation | |||
Vesting period | 5 years | ||
2019 Plan | Series A | Stock Options | Nonemployee | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
Granted | 26,000 | 148,000 | 79,000 |
Weighted average grant date fair value, options (in dollars per share) | $ / shares | $ 2.90 | $ 2.76 | $ 3.42 |
2019 Plan | Series A | Time Based RSU's | Nonemployee | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
RSUs granted | 154,000 | 196,000 | 22,000 |
Weighted average grant date fair value, RSUs and MSUs granted (in dollars per share) | $ / shares | $ 2.53 | $ 3.92 | $ 7.26 |
2019 Plan | Series B | Stock Options | Nonemployee | |||
Stock-Based Compensation | |||
Cancelled or expired | 0 | ||
Exercised | 0 | ||
2019 Plan | Series B | Stock Options | CEO | |||
Stock-Based Compensation | |||
Granted | 573,000 | 27,000 | |
Weighted average grant date fair value, options (in dollars per share) | $ / shares | $ 2.41 | $ 6.41 | |
2019 Plan | Series B | Performance Based RSU's | CEO | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
RSUs granted | 154,000 | 242,000 | 35,000 |
Weighted average grant date fair value, RSUs and MSUs granted (in dollars per share) | $ / shares | $ 7.07 | $ 3.08 | $ 14.17 |
2019 Plan | Series B | Time Based RSU's | Tranche One | CEO | |||
Stock-Based Compensation | |||
RSUs granted | 30,000 | ||
Percentage of base salary | 50.00% | ||
Number of quarters | item | 3 | ||
Percentage of base salary to be waived | 50.00% | ||
Weighted average grant date fair value, RSUs and MSUs granted (in dollars per share) | $ / shares | $ 4.76 | ||
2019 Plan | Series B | Time Based RSU's | Tranche Two | CEO | |||
Stock-Based Compensation | |||
RSUs granted | 1,000,000 | 320,000 | |
Weighted average grant date fair value, RSUs and MSUs granted (in dollars per share) | $ / shares | $ 4.53 | $ 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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Additional disclosures | |||
Unvested value not yet recognized | $ 5,900 | ||
Weighted average period the unrecognized compensation cost will be recognized | 2 years | ||
Series A and B | |||
Additional disclosures | |||
Amount of share reserve | 3,500 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Exercised | 0 | 0 | 0 |
Stock Options | Series A | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding beginning balance | 1,086 | ||
Granted | 72 | ||
Forfeited/Cancelled | (29) | ||
Outstanding ending balance | 1,129 | 1,086 | |
Options exercisable | 512 | ||
WAEP | |||
Weighted average exercise price, options outstanding (in dollars per share) | $ 7.78 | ||
Weighted average exercise price, options granted (in dollars per share) | 4.82 | ||
Weighted average exercise price, options forfeited/cancelled (in dollars per share) | 23.22 | ||
Weighted average exercise price, options outstanding (in dollars per share) | 7.20 | $ 7.78 | |
Weighted average exercise price, options exercisable (in dollars per share) | $ 10.47 | ||
Weighted average remaining contractual term outstanding | 5 years 1 month 6 days | ||
Weighted average remaining contractual term exercisable | 4 years 2 months 12 days | ||
Stock Options | Series B | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding beginning balance | 2,397 | ||
Outstanding ending balance | 2,397 | 2,397 | |
Options exercisable | 2,397 | ||
WAEP | |||
Weighted average exercise price, options outstanding (in dollars per share) | $ 21.93 | ||
Weighted average exercise price, options outstanding (in dollars per share) | 21.93 | $ 21.93 | |
Weighted average exercise price, options exercisable (in dollars per share) | $ 21.93 | ||
Weighted average remaining contractual term outstanding | 3 years 8 months 12 days | ||
Weighted average remaining contractual term exercisable | 3 years 8 months 12 days | ||
Outstanding, aggregate intrinsic value | $ 8,000 | ||
Exercisable, aggregate intrinsic value | 8,000 | ||
Stock Options | Series B | CEO | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Granted | 573 | 27 | |
Restricted Stock and Restricted Stock Units | |||
Additional disclosures | |||
Aggregate fair value | $ 2,800 | $ 554 | $ 159 |
Restricted Stock and Restricted Stock Units | Series A and B | |||
Additional disclosures | |||
Unvested RSUs and MSUs (in shares) | 1,700 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 5.21 |
Stock-Based Compensation - Tr_3
Stock-Based Compensation - TripAdvisor Awards (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 08, 2021 | May 27, 2020 | May 26, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 21, 2018 |
Additional disclosures | |||||||
Stock-based compensation | $ 125 | $ 112 | $ 131 | ||||
2019 Plan | |||||||
Additional disclosures | |||||||
Weighted average period the unrecognized compensation cost will be recognized | 2 years | ||||||
2019 Plan | Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||||
Exercised | 0 | 0 | 0 | ||||
TripAdvisor | |||||||
Additional disclosures | |||||||
Stock-based compensation | $ 120 | ||||||
TripAdvisor | Restricted Stock Units (RSUs) | |||||||
Additional disclosures | |||||||
Vesting period | 2 years | 4 years | |||||
Stock-based compensation | $ 17 | ||||||
TripAdvisor | 2018 Plan | |||||||
Stock-Based Compensation | |||||||
Number of shares available for grant | 17,000,000 | 6,000,000 | |||||
Number of additional shares available for grant | 10,000,000 | ||||||
TripAdvisor | 2018 Plan | RSUs and MSUs | |||||||
Additional disclosures | |||||||
Weighted average period the unrecognized compensation cost will be recognized | 2 years 7 months 6 days | ||||||
RSUs and MSUs granted (in shares) | 4,000,000 | ||||||
RSUs and MSUs vested (in shares) | 5,000,000 | ||||||
RSUs and MSUs cancelled | 1,000,000 | ||||||
Weighted average grant date fair value, RSUs and MSUs granted (in dollars per share) | $ 40.17 | ||||||
Weighted average grant date fair value, RSUs and MSUs vested (in dollars per share) | 31.26 | ||||||
Weighted average grant date fair value, RSUs and MSUs cancelled (in dollars per share) | $ 38.32 | ||||||
Unvested RSUs and MSUs (in shares) | 6,000,000 | ||||||
Unrecognized compensation cost, unvested RSUs and MSUs | $ 141 | ||||||
TripAdvisor | 2011 and 2018 Plans | |||||||
Stock-Based Compensation | |||||||
Volatility rate (as a percent) | 49.60% | 43.40% | 42.10% | ||||
Expected term | 5 years 6 months | 5 years 3 months 18 days | 5 years 2 months 12 days | ||||
TripAdvisor | 2011 and 2018 Plans | Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||||
Outstanding beginning balance | 5,615,000 | ||||||
Granted | 1,002,000 | ||||||
Exercised | (705,000) | ||||||
Cancelled or expired | (241,000) | ||||||
Outstanding ending balance | 5,671,000 | 5,615,000 | |||||
Options exercisable | 3,878,000 | ||||||
WAEP | |||||||
Weighted average exercise price, options outstanding (in dollars per share) | $ 46.31 | ||||||
Weighted average exercise price, options granted (in dollars per share) | 41.12 | ||||||
Weighted average exercise price, options exercised (in dollars per share) | 33.97 | ||||||
Weighted average exercise price, options cancelled or expired (in dollars per share) | 43.97 | ||||||
Weighted average exercise price, options outstanding (in dollars per share) | 47.03 | $ 46.31 | |||||
Weighted average exercise price, options exercisable (in dollars per share) | $ 51.06 | ||||||
Weighted average remaining contractual term outstanding | 4 years 9 months 18 days | ||||||
Weighted average remaining contractual term exercisable | 3 years 7 months 6 days | ||||||
Outstanding, aggregate intrinsic value | $ 1 | ||||||
Exercisable, aggregate intrinsic value | $ 1 | ||||||
Additional disclosures | |||||||
Weighted average grant date fair value, options (in dollars per share) | $ 18.40 | ||||||
Term of awards | 10 years | ||||||
Vesting period | 4 years | ||||||
Unrecognized compensation cost, unvested options (in dollars) | $ 17 | ||||||
Weighted average period the unrecognized compensation cost will be recognized | 2 years 3 months 18 days |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Benefit Plans | |||
Employer cash contributions | $ 10 | $ 11 | $ 14 |
Segment Information - Performan
Segment Information - Performance Measures and Other Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segments | |||
Revenue | $ 902 | $ 604 | $ 1,560 |
Adjusted OIBDA | 90 | (61) | 430 |
Long-lived assets | 118 | 132 | |
United States | |||
Segments | |||
Revenue | 526 | 302 | 821 |
Long-lived assets | 108 | 118 | |
United Kingdom | |||
Segments | |||
Revenue | 259 | 169 | 466 |
Other Countries | |||
Segments | |||
Revenue | 117 | 133 | 273 |
Long-lived assets | 10 | 14 | |
Operating Segments | Hotel, Media & Platform | |||
Segments | |||
Revenue | 549 | 361 | 939 |
Adjusted OIBDA | 111 | 13 | 378 |
Operating Segments | Experiences & Dining | |||
Segments | |||
Revenue | 307 | 186 | 456 |
Adjusted OIBDA | (36) | (79) | 5 |
Corporate and other | |||
Segments | |||
Revenue | 46 | 57 | 165 |
Adjusted OIBDA | $ 15 | $ 5 | $ 47 |
Segment Information - Adjusted
Segment Information - Adjusted OIBDA (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Information | |||
Adjusted OIBDA | $ 90 | $ (61) | $ 430 |
Stock-based compensation | (125) | (112) | (131) |
Depreciation and amortization | (150) | (168) | (169) |
Impairment of goodwill and intangible assets | (550) | (288) | |
Restructuring and related reorganization costs | (41) | (1) | |
Operating income (loss) | (185) | (932) | (159) |
Interest expense | (60) | (41) | (22) |
Realized and unrealized (gains) losses on financial instruments, net | 251 | (19) | 36 |
Other, net | (11) | (22) | 13 |
Earnings (loss) before income taxes | $ (5) | $ (1,014) | $ (132) |