Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 28, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | TRIPADVISOR, INC. | |
Trading Symbol | TRIP | |
Entity Central Index Key | 0001526520 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-35362 | |
Entity Tax Identification Number | 80-0743202 | |
Entity Address, Address Line One | 400 1st Avenue | |
Entity Address, City or Town | Needham | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02494 | |
City Area Code | 781 | |
Local Phone Number | 800-5000 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common stock | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Common Stock, Unclassified | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 126,819,417 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,799,999 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Income Statement [Abstract] | |||
Revenue (Note 3) | [1] | $ 262 | $ 123 |
Costs and expenses: | |||
Cost of revenue (exclusive of depreciation and amortization as shown separately below) | 22 | 12 | |
Selling and marketing | 141 | 73 | |
Technology and content | 54 | 55 | |
General and administrative | 40 | 38 | |
Depreciation and amortization | 25 | 29 | |
Total costs and expenses | 282 | 207 | |
Operating income (loss) | (20) | (84) | |
Other income (expense): | |||
Interest expense | (12) | (11) | |
Interest income and other, net | (1) | (1) | |
Total other income (expense), net | (13) | (12) | |
Income (loss) before income taxes | (33) | (96) | |
(Provision) benefit for income taxes (Note 7) | (1) | 16 | |
Net income (loss) | $ (34) | $ (80) | |
Earnings (loss) per share attributable to common stockholders (Note 11): | |||
Basic | $ (0.24) | $ (0.59) | |
Diluted | $ (0.24) | $ (0.59) | |
Weighted average common shares outstanding (Note 11): | |||
Basic | 139,092 | 135,746 | |
Diluted | 139,092 | 135,746 | |
[1] | Our revenue is recognized primarily at a point in time for all reported segments. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock-based compensation: | ||
Stock-based compensation | $ 22 | $ 29 |
Selling and Marketing | ||
Stock-based compensation: | ||
Stock-based compensation | 3 | 4 |
Technology and Content | ||
Stock-based compensation: | ||
Stock-based compensation | 9 | 12 |
General and Administrative | ||
Stock-based compensation: | ||
Stock-based compensation | $ 10 | $ 13 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (34) | $ (80) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments, net of tax | (4) | (12) |
Total other comprehensive income (loss), net of tax | (4) | (12) |
Comprehensive income (loss) | $ (38) | $ (92) |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents (Note 4) | $ 781 | $ 723 |
Accounts receivable and contract assets, net of allowance for credit losses of $29 and $28, respectively (Note 3) | 180 | 142 |
Income taxes receivable (Note 7) | 49 | 49 |
Prepaid expenses and other current assets | 33 | 26 |
Total current assets | 1,043 | 940 |
Property and equipment, net of accumulated depreciation of $481 and $460, respectively | 209 | 215 |
Operating lease right-of-use assets | 39 | 42 |
Intangible assets, net of accumulated amortization of $204 and $202, respectively | 62 | 65 |
Goodwill | 839 | 843 |
Non-marketable investments (Note 4) | 36 | 36 |
Deferred income taxes, net | 54 | 54 |
Other long-term assets, net of allowance for credit losses of $10 and $10, respectively | 90 | 94 |
TOTAL ASSETS | 2,372 | 2,289 |
Current liabilities: | ||
Accounts payable | 12 | 27 |
Deferred merchant payables | 197 | 113 |
Deferred revenue (Note 3) | 59 | 36 |
Accrued expenses and other current liabilities (Note 5) | 199 | 181 |
Total current liabilities | 467 | 357 |
Long-term debt (Note 6) | 834 | 833 |
Finance lease obligation, net of current portion | 63 | 65 |
Operating lease liabilities, net of current portion | 25 | 29 |
Deferred income taxes, net | 1 | 1 |
Other long-term liabilities | 215 | 215 |
Total Liabilities | 1,605 | 1,500 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: (Note 10) | ||
Preferred stock, $0.001 par value Authorized shares: 100,000,000 Shares issued and outstanding: 0 and 0 | 0 | 0 |
Common stock | 0 | 0 |
Additional paid-in capital | 1,342 | 1,326 |
Retained earnings | 207 | 241 |
Accumulated other comprehensive income (loss) | (60) | (56) |
Treasury stock-common stock, at cost, 18,844,614 and 18,844,614 shares, respectively | (722) | (722) |
Total Stockholders’ Equity | 767 | 789 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 2,372 | 2,289 |
Class B Common Stock | ||
Stockholders' equity: (Note 10) | ||
Common stock | $ 0 | $ 0 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Allowance for credit losses | $ 29 | $ 28 |
Property and equipment, net, accumulated depreciation | 481 | 460 |
Intangible assets, accumulated amortization | 204 | 202 |
Other long-term assets, allowance for credit losses | $ 10 | $ 10 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,600,000,000 | 1,600,000,000 |
Common stock, shares issued | 145,636,700 | 144,656,649 |
Common stock, shares outstanding | 126,792,086 | 125,812,035 |
Treasury stock, shares | 18,844,614 | 18,844,614 |
Class B Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 12,799,999 | 12,799,999 |
Common stock, shares outstanding | 12,799,999 | 12,799,999 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Class B Common Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance at Dec. 31, 2020 | $ 886 | $ 1,253 | $ 389 | $ (34) | $ (722) | ||
Beginning balance, shares at Dec. 31, 2020 | 12,799,999 | 140,775,221 | (18,844,614) | ||||
Net income (loss) | (80) | (80) | |||||
Other comprehensive income (loss), net of tax | (12) | (12) | |||||
Issuance of common stock related to exercises of options and vesting of RSUs | 7 | 7 | |||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 2,139,630 | ||||||
Purchase of capped calls, net of tax of $9 million (Note 6) | (26) | (26) | |||||
Withholding taxes on net share settlements of equity awards | (23) | (23) | |||||
Stock-based compensation | 33 | 33 | |||||
Ending balance at Mar. 31, 2021 | 785 | 1,244 | 309 | (46) | $ (722) | ||
Ending balance, shares at Mar. 31, 2021 | 12,799,999 | 142,914,851 | (18,844,614) | ||||
Beginning balance at Dec. 31, 2021 | $ 789 | 1,326 | 241 | (56) | $ (722) | ||
Beginning balance, shares at Dec. 31, 2021 | 125,812,035 | 12,799,999 | 144,656,649 | (18,844,614) | |||
Net income (loss) | $ (34) | (34) | |||||
Other comprehensive income (loss), net of tax | (4) | (4) | |||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 980,051 | ||||||
Withholding taxes on net share settlements of equity awards | (8) | (8) | |||||
Stock-based compensation | 24 | 24 | |||||
Ending balance at Mar. 31, 2022 | $ 767 | $ 1,342 | $ 207 | $ (60) | $ (722) | ||
Ending balance, shares at Mar. 31, 2022 | 126,792,086 | 12,799,999 | 145,636,700 | (18,844,614) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Net of tax from purchase of capped calls | $ 9 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities: | ||
Net income (loss) | $ (34) | $ (80) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 25 | 29 |
Stock-based compensation expense (Note 9) | 22 | 29 |
Deferred income tax expense (benefit) | (22) | |
Provision for expected credit losses | 1 | 2 |
Other, net | 3 | 4 |
Changes in operating assets and liabilities, net: | ||
Accounts receivable and contract assets, prepaid expenses and other assets | (45) | (21) |
Accounts payable, accrued expenses and other liabilities | 3 | (11) |
Deferred merchant payables | 86 | 36 |
Income tax receivables/payables, net | 1 | 6 |
Deferred revenue | 24 | 9 |
Net cash provided by (used in) operating activities | 86 | (19) |
Investing activities: | ||
Capital expenditures, including capitalized website development | (14) | (10) |
Net cash provided by (used in) investing activities | (14) | (10) |
Financing activities: | ||
Purchase of capped calls in connection with 2026 Senior Notes (Note 6) | 0 | (35) |
Proceeds from exercise of stock options | 0 | 7 |
Payment of withholding taxes on net share settlements of equity awards | (8) | (23) |
Payments of finance lease obligation and other financing activities, net | (2) | (2) |
Net cash provided by (used in) financing activities | (10) | 287 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (4) | (2) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 58 | 256 |
Cash, cash equivalents and restricted cash at beginning of period | 723 | 418 |
Cash, cash equivalents and restricted cash at end of period | 781 | 674 |
2026 Senior Notes | ||
Financing activities: | ||
Proceeds from issuance of 2026 Senior Notes, net of financing costs (Note 6) | $ 0 | $ 340 |
Business Description and Basis
Business Description and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation | NO TE 1: BUSINESS DESCRIPTION AND BASIS OF PRESENTATION We refer to Tripadvisor, Inc. and our wholly-owned subsidiaries as “Tripadvisor”, “the Company”, “us”, “we” and “our” in these notes to the unaudited condensed consolidated financial statements. Description of Business Tripadvisor operates the world’s largest travel guidance platform, connecting a global audience of prospective travelers with travel partners through rich content, price comparison tools, and online reservation and related services for destinations, accommodations, travel activities and experiences, and restaurants . Our mission is to help people around the world plan, book and experience the perfect trip . In 2000, under our flagship brand Tripadvisor, we launched www.Tripadvisor.com in the U.S. Since then, we have 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 worldwide. Basis of Presentation The accompanying unaudited condensed consolidated financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited condensed consolidated financial statements include Tripadvisor, our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. All inter-company accounts and transactions have been eliminated in consolidation. One of our subsidiaries that operates in China has variable interests in affiliated entities in China in order to comply with Chinese laws and regulations, which restrict foreign investment in internet content provision businesses. Although we do not own the capital stock of these Chinese affiliates, we consolidate their results as we are the primary beneficiary of the cash losses or profits of these variable interest affiliates and have the power to direct the activity of these affiliates. Our variable interest entities’ financial results were not material for all periods presented. Investments in entities in which we do not have a controlling financial interest are accounted for under the equity method, the fair value option, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. We prepared the unaudited condensed consolidated financial statements following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, we condensed or omitted certain footnotes or other financial information that are normally required by GAAP for annual financial statements. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation, none of which were material to the presentation of the accompanying unaudited condensed consolidated financial statements. Our interim unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2021, previously filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures including notes required by GAAP. As of March 31, 2022, Liberty Tripadvisor Holdings, Inc. (“LTRIP”) beneficially owned approximately 16.4 million shares of our common stock and 12.8 million shares of our Class B common stock, which constitute 13.0 % of the outstanding shares of common stock and 100 % of the outstanding shares of Class B common stock. Assuming the conversion of all of LTRIP’s shares of Class B common stock into common stock, LTRIP would beneficially own 21.0 % of the outstanding common stock. Because each share of Class B common stock is entitled to ten votes per share and each share of common stock is entitled to one vote per share , LTRIP may be deemed to beneficially own equity securities representing nearly 57.0 % of our voting power. We had no related party transactions with LTRIP during the three months ended March 31, 2022 and 2021, respectively. Risks and Uncertainties We continue 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 existing 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 continue to be negatively impacted remain uncertain. We do not know the future path or potential rate of global or regional COVID-19 resurgences, including existing COVID-19 variants (e.g., Delta and Omicron) or future variants, if any, nor do we 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, we still do not have forward-looking visibility into the long-term impacts related to consumer demand for travel, usage patterns on our 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 our business, results of operations, liquidity and financial condition remains uncertain, and is dependent on future developments that cannot be accurately predicted at this time. We continue to believe the travel, leisure, hospitality, and restaurant industries (collectively, the “travel industry”), and our financial results, will continue to be adversely and materially affected if any 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. Accounting Estimates We use estimates and assumptions in the preparation of our unaudited condensed consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our unaudited condensed consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our unaudited condensed consolidated financial statements is accounting for income taxes. 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. Seasonality Consumers’ travel expenditures have historically followed a seasonal pattern. Correspondingly, travel partners’ advertising investments, and therefore our revenue and operating profits, have also historically followed a seasonal pattern. Our 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 . During the first half of the year, experience and rentals bookings typically exceed the amount of completed experiences and rental stays, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative . Other factors may also impact typical seasonal fluctuations, which include further significant shifts in our business mix or adverse economic conditions that could result in future seasonal patterns that are different from historical trends. For example, although consumer travel demand generally remained materially lower than historic levels due to the impact of COVID-19 on our business, these trends improved during 2021, resulting in increased revenues, and working capital and operating cash flow more akin to typical historical seasonality trends, which has continued during the three months ended March 31, 2022 . However, it is difficult to predict the seasonality for the upcoming quarters, given the sustained uncertainty related to the continued economic impact of the COVID-19 pandemic and/or potential resurgences, and the pace of continued recovery in our key markets. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES There have been no material changes to our accounting policies since December 31, 2021, as described under “Note 2: Significant Accounting Policies ”, in the notes to consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | NOTE 3: REVENUE RECOGNITION We generate all of our revenue from contracts with customers. We recognize revenue when we satisfy a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that we expect to receive in exchange for those services. When we act as an agent in the transaction, we recognize revenue for only our commission on the arrangement. We determine 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, we satisfy a performance obligation At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a service (or a bundle of services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. We have provided qualitative information about our performance obligations for our principal revenue streams discussed below. There was no significant revenue recognized in the three months ended March 31, 2022 and 2021, respectively, related to performance obligations satisfied in prior periods. We have applied a practical expedient and do not disclose the value of unsatisfied performance obligations that have an original expected duration of less than one year, and we do not have any material unsatisfied performance obligations over one year. The value related to our 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. Our timing of services, invoicing and payments are discussed in more detail below and do not include a significant financing component. Our customer invoices are generally due 30 days from the time of invoicing. The application of our revenue recognition policies and a description of our principal activities, organized by segment, from which we generate our revenue, are presented below. Hotels, Media & Platform Segment Tripadvisor-branded Hotels Revenue . Our largest source of Hotels, Media & Platform segment revenue is generated from click-based advertising on Tripadvisor-branded websites, or hotel auction revenue, which is primarily comprised of contextually-relevant booking links to our travel partners’ websites. Our click-based travel partners are predominantly online travel agencies ("OTAs") and hotels. Click-based advertising is generally priced on a cost-per-click (“CPC”), basis, with payments from travel partners determined by the number of travelers who click on a link multiplied by the CPC rate for each specific click. CPC rates are determined in a dynamic, competitive auction process, where our travel partner CPC bids for rates and availability to be listed on our platform are submitted. When a CPC bid is submitted, the travel partner agrees to pay us the bid amount each time a traveler clicks on the link to that travel partner’s websites. Bids can be submitted periodically – as often as daily – on a property-by-property basis. We record click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner websites as our performance obligation is fulfilled at that time. Click-based revenue is generally billed to our travel partners on a monthly basis consistent with the timing of the service. We also generate revenue from our cost-per-action (“CPA”) model, which consists of contextually-relevant booking links to our travel partners’ websites which are advertised on our platform. We earn a commission from our 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 we act as an agent under ASC 606 – Revenue from Contracts with Customers (“ASC 606”). Our performance obligation is complete at the time of the hotel reservation booking, and the commission earned is recognized upon booking, as we have no post-booking service obligations. We recognize this revenue net of an estimate of the impact of cancellations, using historical cancellation rates and current trends. Contract assets are recognized at the time of booking for commissions that are billable at the time of stay. CPA revenue is generally billed to our travel partners on a monthly basis consistent with the timing of the service. In addition, we offer hotel business to business (“B2B”) solutions, including subscription-based advertising to hotels, owners of B&Bs and other specialty lodging properties. Our performance obligation is generally to enable subscribers to advertise their businesses on our platform, as well as to manage and promote their website URL, email address, phone number, special offers and other information related to their business. 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. Subscription-based advertising services are generally billed at the inception of the service. When prepayments are received, we recognize deferred revenue initially on our unaudited condensed consolidated balance sheet for the amount of prepayment in excess of revenue recognized, until the performance obligation is satisfied. To a lesser extent, we offer travel partners the opportunity to advertise and promote their business through hotel sponsored placements on our 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 our travel partners pay are generally based on bids submitted as part of an auction by our travel partners. When a CPC bid is submitted, the travel partner agrees to pay us the bid amount each time a traveler clicks on a link to our travel partner’s websites. Bids may be submitted periodically – as often as daily – on a property-by-property basis. We record this click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner as our performance obligation is fulfilled at that time. Hotel sponsored placements revenue is generally billed to our travel partners on a monthly basis consistent with the timing of the service. Tripadvisor-branded Display and Platform Revenue . We offer travel partners the ability to promote their brands through display-based advertising placements on our platform across all of our segments and business units. Our display-based advertising clients are predominantly direct suppliers of hotels, airlines and cruises, as well as destination marketing organizations. We also sell display-based advertising to OTAs and other travel related businesses, as well as advertisers from non-travel categories. Display-based advertising is sold predominantly on a cost per thousand impressions, or CPM, basis. The performance obligation in our display-based advertising arrangements is to display a number of advertising impressions on our platform and we recognize revenue for impressions as they are delivered. Services are generally billed monthly. We have applied the practical expedient to measure progress toward completion, as we have the right to invoice the customer in an amount that directly corresponds with the value to the customer of our performance to date, which is measured based on impressions delivered. Experiences & Dining Segment We provide information and services that allow travelers to research and book tours, activities and attractions in popular travel destinations in our Viator online marketplace. We also power travel tours, activities and attractions booking capabilities to travelers on third-party distribution partner websites, including the Tripadvisor platform, and some of the world’s top airlines, hotel chains, and online and offline travel agencies. We work with local tour, activities, and attraction operators (the “operator”) to provide travelers (the “customer”) the ability to book tours, activities and attractions (the “experience”) in destinations worldwide. We generate commissions for each booking transaction we facilitate through our online reservation system, in exchange for certain activities, including the use of the Company’s booking platform, post-booking customer support (24/7) until the time of the experience and payment processing activities as merchant of record, which is the completion of the performance obligation. These activities are not distinct from each other and are not separate performance obligations. As a result, the Company’s single performance obligation is to facilitate an experience, which is complete upon the time the experience occurs, and when revenue is recognized. We do not control the experience or have inventory risk before the operator provides the experience to our customer and therefore act as agent for substantially all of these transactions under ASC 606. We collect payment from the customer prior to the experience occurring, which includes both our commission and the amount due to the operator. We record our commissions as deferred revenue on our unaudited condensed consolidated balance sheet when payment is received, including amounts which are refundable subject to cancellation, until the experience occurs when revenue is recognized. The amount due to the operator is recorded as deferred merchant payables on our unaudited condensed consolidated balance sheet until completion of the experience when payment is made to the operator. To a much lesser extent, we earn commissions from third-party merchant partners (the “customer”) who display and promote on their websites the operator experiences available on our platform to generate bookings. In these transactions, where we are not the merchant of record, and we generally invoice and receive commissions directly from the third-party merchant partners. Our performance obligation is to allow the third-party distribution partners to display and promote on their website experiences, offered by operators who utilize our platform, and we earn a commission when travelers book and complete an experience on the third-party merchant partner website. We do not control the service or have inventory risk, and therefore act as an agent for these transactions under ASC 606. We receive payment shortly after the booking in the majority of these transactions and make payments to the operators after the experience is complete. Our performance obligation is complete, and revenue is recognized at the time of the booking, as we have no post-booking obligations to the customer. We recognize this revenue net of an estimate of the impact of cancellations, which is not material, using historical cancellation rates and current trends. Contract assets are recognized for commissions that are contractually billable contingent upon completion of the experience. We also provide information and services for consumers to research and book restaurant reservations in popular travel destinations through our dedicated online restaurant reservations offering, TheFork, and on our Tripadvisor-branded websites and mobile apps. We primarily generate transaction fees (or per seated diner fees) that are paid by our restaurant customers for diners seated primarily from bookings through TheFork’s online reservation system. The transaction fee is recognized as revenue after the reservation is fulfilled, or as diners are seated by our restaurant customers. We invoice restaurants monthly for transaction fees. To a lesser extent, we also generate subscription fees for subscription-based advertising to restaurants, access to certain online reservation management services, marketing analytic tools, and menu syndication services provided by TheFork and Tripadvisor. As the performance obligation is to provide restaurants with access to these services over the subscription period, subscription fee revenue is recognized over the period of the subscription service on a straight-line basis as efforts are expended evenly throughout the contract period. Subscription fees are generally billable in advance of service. When prepayments are received, we recognize deferred revenue initially on our unaudited condensed consolidated balance sheet, for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. In addition, we also offer restaurant partners the opportunity to advertise and promote their business through restaurant media advertising placements on our platform. This service is generally priced on a CPC basis, with payments from restaurant partners determined by the number of consumers who click on the sponsored link multiplied by the CPC rate for each specific click. CPC rates for media advertising placements that our restaurant partners pay are based on a pre-determined contractual rate. We record this click-based advertising revenue as the click occurs and diner leads are sent to the restaurant partner as our performance obligation is fulfilled at that time. Click-based revenue is generally billed to our restaurant partners on a monthly basis consistent with the timing of the service. Other We provide information and services that allow travelers to research and book vacation and short-term rental properties, including full homes, condominiums, villas, beach properties, cabins and cottages. Our Rentals offering primarily generates revenue by offering individual property owners and managers the ability to list their properties on our platform thereby connecting with travelers through a free-to-list, commission-based option. These properties are listed on www.flipkey.com, www.holidaylettings.co.uk, www.housetrip.com, www.niumba.com, and www.vacationhomerentals.com, and on our Tripadvisor-branded websites and mobile apps. We earn commissions associated with rental transactions through our free-to-list model from both the traveler, and the property owner or manager. We provide post-booking service to the travelers, property owners and managers until the time the rental commences, which is the time the performance obligation is completed. Revenue from transaction fees is recognized at the time that the rental commences. We act as an agent, under ASC 606, in the transactions as we do not control any properties before the property owner provides the accommodation to the traveler and do not have inventory risk. We generally collect payment from the traveler at the time of booking, representing the amount due to the property owner or manager, as well as our commission. That portion of the payment representing our commission is recorded as deferred revenue on our unaudited condensed consolidated balance sheet until revenue is recognized, and that portion of the payment representing the amount due to the property owner is recorded as deferred merchant payables on our unaudited condensed consolidated balance sheet until payment is made to the property owner after the completion of the rental. 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. The performance obligations, timing of customer payments for these offerings, and methods of revenue recognition are generally consistent with click-based advertising and display-based advertising revenue, as described above. We disaggregate revenue from contracts with customers into major products/revenue sources. We have determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in “Note 12: Segment Information ,” our business consists of two reportable segments – (1) Hotels, Media & Platform; and (2) Experiences & Dining. Other consists of a combination of business units and does not constitute a reportable segment. A reconciliation of disaggregated revenue to segment revenue is also included below: Three months ended March 31, 2022 2021 Major products/revenue sources (1): (in millions) Hotels, Media & Platform Tripadvisor-branded hotels $ 136 $ 74 Tripadvisor-branded display and platform 24 14 Total Hotels, Media & Platform 160 88 Experiences & Dining 92 28 Other 10 7 Total Revenue $ 262 $ 123 (1) Our revenue is recognized primarily at a point in time for all reported segments. The following table provides information about the opening and closing balances of accounts receivable and contract assets, net of allowance for credit losses, from contracts with customers (in millions): March 31, 2022 December 31, 2021 Accounts receivable 132 105 Contract assets 48 37 Total $ 180 $ 142 Accounts receivable are recognized when the right to consideration becomes unconditional. Contract assets are rights to consideration in exchange for services that we have 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 our contract assets primarily results from the timing difference between when we satisfy our performance obligations and the time when the principal completes the service in the transaction. Our contract assets increased during the first quarter of 2022, as a result of the ongoing recovery of consumer travel demand, and increased utilization of our CPA model by travel partners. Contract liabilities generally include payments received in advance of performance under the contract and are realized as revenue as the performance obligation to the customer is satisfied, which we present as deferred revenue on our consolidated balance sheet. As of January 1, 2022 and 2021, we had $ 36 million and $ 28 million, respectively, recorded as deferred revenue on our unaudited condensed consolidated balance sheets, of whi ch $ 18 million and $ 11 million, respectively, was recognized in revenue and $ 2 million was refunded due to cancellations by travelers during both the three months ended March 31, 2022 and 2021, respectively. The difference between the opening and closing balances of our deferred revenue primarily results from the timing differences between when we receive customer payments and the time in which we satisfy our performance obligations. There were no significant changes in contract assets or deferred revenue during both the three months ended March 31, 2022 and 2021, respectively, related to business combinations, impairments, cumulative catch-ups or other material adjustments. However, to the extent the COVID-19 pandemic resurges, or new variants emerge, we may incur additional significant and unanticipated cancellations by consumers related to future travel, accommodations and tour bookings, which have been reserved by travelers and recorded as deferred revenue on our unaudited condensed consolidated balance sheet as of March 31, 2022. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments and Fair Value Measurements | NOTE 4: FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS 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—Valuations are based on quoted market prices for identical assets and liabilities in active markets. Level 2—Valuations are based on observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations are based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. Cash, Cash Equivalents and Marketable Securities As of March 31, 2022, we had $ 781 million of cash and cash equivalents, which consisted of available on demand cash deposits and term deposits with maturities of 90 days or less at the date of purchase , respectively, in major global financial institutions. As of December 31, 2021, we had $ 723 million of cash and cash equivalents, which consisted of available on demand cash deposits in major global financial institutions. We had no outstanding investments classified as either short-term or long-term marketable securities as of March 31, 2022 and December 31, 2021, respectively, and there were no purchases or sales of any marketable securities during and for the three months ended March 31, 2022 and 2021. The following table shows our cash equivalents that are measured at fair value on a recurring basis and were categorized using the fair value hierarchy, as well as their classification on our unaudited condensed consolidated balance sheet as of March 31, 2022 (in millions): Amortized Cost Fair Value (1) Cash Equivalents Level 2: Term deposits $ 160 $ 160 $ 160 Total $ 160 $ 160 $ 160 (1) Unrealized gains and losses related to our cash equivalents were not material. We had no material financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2021. We generally classify cash equivalents and marketable securities, if any, within Level 1 and Level 2 as we value these financial instruments using quoted market prices (Level 1) or alternative pricing sources (Level 2). The valuation technique we use to measure the fair value of money market funds is derived from quoted prices in active markets for identical assets or liabilities. Fair values for Level 2 investments are considered “Level 2” valuations because they are obtained from independent pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our independent pricing services against fair values obtained from another independent source. Derivative Financial Instruments We generally use forward contracts to reduce the effects of foreign currency exchange rate fluctuations on our cash flows primarily for the Euro versus the U.S. Dollar. For the three months ended March 31, 2022 and 2021, our forward contracts have not been designated as hedges and generally had maturities of less than 90 days . Our outstanding or unsettled forward contracts are carried at fair value on our unaudited condensed consolidated balance sheets at March 31, 2022 and December 31, 2021. We measure the fair value of our outstanding or unsettled derivatives using Level 2 fair value inputs, as we use a pricing model that takes into account the contract terms as well as current foreign currency exchange rates in active markets. We recognize any gain or loss resulting from the change in fair value of our foreign currency forward contracts in other income (expense), net on our unaudited condensed consolidated statement of operations, which was not material during both the three months ended March 31, 2022 and 2021, respectively. The following table shows the net notional principal amounts of our outstanding derivative instruments as of the periods presented: March 31, 2022 December 31, 2021 (in millions) Foreign currency exchange-forward contracts (1)(2) $ 22 $ 9 (1) Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. These outstanding derivatives are not designated as hedging instruments and have an original maturity period of 90 days or less. (2) The fair value of our outstanding derivatives as of March 31, 2022 and December 31, 2021, respectively, was not material. The notional amount of a forward contract is the contracted amount of foreign currency to be exchanged and is not recorded on the unaudited condensed consolidated balance sheet. Counterparties to our outstanding forward contracts consist of major global financial institutions. We monitor our positions and the credit ratings of the counterparties involved and, by policy limits, the amount of credit exposure to any one party. We do not use derivatives for trading or speculative purposes. We were not entered into any cash flow, fair value or net investment hedges as of March 31, 2022 or December 31, 2021. Other Financial Assets and Liabilities As of March 31, 2022 and December 31, 2021, financial instruments not measured at fair value on a recurring basis including accounts payable, accrued expenses and other current liabilities, and deferred merchant bookings, were carried at cost on our unaudited condensed consolidated balance sheets, which approximates their fair values because of the short-term nature of these items. Accounts receivable and contract assets, on our unaudited condensed consolidated balance sheets, as well as certain other financial assets, were measured at amortized cost and are carried at cost less an allowance for expected credit losses to present the net amount expected to be collected. The following table shows the aggregate principal and fair value amount of our outstanding 2025 Senior Notes and 2026 Senior Notes as of the periods presented, which are classified as long-term debt on our unaudited condensed consolidated balance sheets and considered Level 2 fair value measurements. Refer to “Note 6: Debt ” for additional information on our 2025 Senior Notes and 2026 Senior Notes. March 31, 2022 December 31, 2021 (in millions) 2025 Senior Notes Aggregate principal amount $ 500 $ 500 Carrying value amount (1) 494 493 Fair value amount (2) 516 531 2026 Senior Notes Aggregate principal amount $ 345 $ 345 Carrying value amount (3) 340 340 Fair value amount (2) 293 305 (1) Net of $ 6 million and $ 7 million of unamortized debt issuance costs as of March 31, 2022 and December 31, 2021, respectively. (2) We estimate the fair value of our outstanding 2025 Senior Notes and 2026 Senior Notes based on recently reported market transactions and/or prices for identical or similar financial instruments obtained from a third-party pricing source. (3) Net of $ 5 million in unamortized debt issuance costs as of both March 31, 2022 and December 31, 2021, respectively . Risks and Concentrations In addition to the risk we face from COVID-19, which is discussed in “Note 1: Business Description and Basis of Presentation”, our business is subject to certain financial risks and concentrations, including concentration related to dependence on our relationships with our customers. For the year ended December 31, 2021, our two most significant travel partners, Expedia Group, Inc. (and its subsidiaries) and Booking Holdings, Inc. (and its subsidiaries), each of which accounted for 10 % or more of our consolidated revenue and together accounted for approximately 34 % of our consolidated revenue, with nearly all of this revenue concentrated in our Hotels, Media & Platform segment. Financial instruments, which potentially subject us to concentration of credit risk, generally consist, at any point in time; of cash and cash equivalents, corporate debt securities, forward contracts, capped calls, and accounts receivable. We maintain some cash balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits. Our cash is generally composed of available on demand bank deposits or term deposits with major global financial institutions primarily denominated in U.S. dollars, Euros, British pounds, and Australian dollars. We invest in highly-rated corporate debt securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. Our credit risk related to corporate debt securities is also mitigated by the relatively short maturity period required by our investment policy. Forward contracts and capped calls are transacted with major international financial institutions with high credit standings. Forward contracts, which to date, have typically had maturities of less than 90 days, also mitigates risk. Our overall credit risk related to accounts receivable is mitigated by the relatively short collection period. Assets Measured at Fair Value on a Non-recurring Basis Non-Marketable Investments Equity Securities Accounted for under the Equity Method The Company owns a 40 % equity investment in Chelsea Investment Holding Company PTE Ltd, which is majority owned by Ctrip Investment Holding Ltd, a majority-owned subsidiary of Trip.com Group Limited. The Company accounts for this minority investment under the equity method, given it has the ability to exercise significant influence, but not control, over the investee. The carrying value of this minority investment was $ 34 million as of both March 31, 2022 and December 31, 2021, and is included in non-marketable investments on our unaudited condensed consolidated balance sheets. During the three months ended March 31, 2022, our share of the investee’s net loss recorded in other income (expenses), net within the unaudited condensed consolidated statement of operations, was not material. During the three months ended March 31, 2021, we recognized $ 1 million, representing our share of the investee’s net loss in other income (expenses), net within the unaudited condensed consolidated statement of operations. The Company evaluates this investment for impairment when factors indicate that a decline in the value of its investment has occurred and the carrying amount of its investment may not be recoverable. An impairment loss, based on the excess of the carrying value over the estimated fair value of the investment based on Level 3 inputs, is recognized in earnings when an impairment is deemed to be other than temporary. During both the three months ended March 31, 2022 and 2021, we did no t record any impairment loss on this equity investment. The Company maintains various commercial agreements with Chelsea Investment Holding Company PTE Ltd. and/or its subsidiaries. Transactions under these agreements are considered related-party transactions, and were not material during both the three months ended March 31, 2022 and 2021. Other Long-Term Assets The Company holds collateralized notes (the “Notes Receivable”) issued by a privately held company with a total principal amount of $ 20 million. The Company has classified the Notes Receivable as held-to-maturity, as the Company has concluded it has the positive intent and ability to hold the Notes Receivable until maturity, with 50 % due in 5 years and the remaining 50 % due in 10 years from issuance date. As of both March 31, 2022 and December 31, 2021, the carrying value of the Notes Receivable was $ 9 million, net of accumulated allowance for credit losses, and is classified in other long-term assets, net on our unaudited condensed consolidated balance sheets at amortized cost. On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether the Notes Receivable are impaired and monitor for changes to our allowance for credit losses. |
Accrued Expenses And Other Curr
Accrued Expenses And Other Current Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | NOTE 5: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following for the periods presented: March 31, 2022 December 31, 2021 (in millions) Accrued employee salary, bonus, and related benefits $ 41 $ 58 Accrued marketing costs 65 27 Interest payable (1) 8 16 Current income taxes payable 2 3 Finance lease liabilities - current portion 6 6 Operating lease liabilities - current portion 19 20 Other 58 51 Total $ 199 $ 181 (1) Amount relates primarily to unpaid interest accrued on our 2025 Senior Notes. Refer to “Note 6: Debt ” for further information. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 6: DEBT The Company’s outstanding debt consisted of the following for the periods presented: March 31, 2022 Outstanding Principal Amount Unamortized Debt Issuance Costs Carrying Value (in millions) Long-Term Debt: 2025 Senior Notes $ 500 $ ( 6 ) $ 494 2026 Senior Notes 345 ( 5 ) 340 Total Long-Term Debt $ 845 $ ( 11 ) $ 834 December 31, 2021 Outstanding Principal Amount Unamortized Debt Issuance Costs Carrying Value (in millions) Long-Term Debt: 2025 Senior Notes $ 500 $ ( 7 ) $ 493 2026 Senior Notes 345 ( 5 ) 340 Total Long-Term Debt $ 845 $ ( 12 ) $ 833 Credit Facility We are 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 Company may borrow from the Credit Facility in U.S. dollars and Euros. In addition, our Credit Facility includes $ 15 million of borrowing capacity available for letters of credit and $ 40 million for Swing Line borrowings on same-day notice. The Credit Facility, among other things, requires us to maintain a maximum leverage ratio and contains certain customary affirmative covenants and events of default, including a change of control. As of March 31, 2022 and December 31, 2021, the Company had no outstanding borrowings under the Credit Facility and had issued $ 3 million of undrawn standby letters of credit under the Credit Facility. For both the three months ended March 31, 2022 and 2021, we recorded total interest expense and commitment fees on our Credit Facility of $ 1 million to interest expense on our unaudited condensed consolidated statements of operations. We amended the Credit Facility during 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 the Company 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 the Company, at which time the leverage ratio covenant will be reinstated (the “Leverage Covenant Holiday”). The Company remained in the Leverage Covenant Holiday as of March 31, 2022. Based on the Company’s existing leverage ratio, any outstanding or future borrowings under the Credit Facility generally bear interest, at the Company’s option, at a rate per annum equal to either (i) the Eurocurrency Borrowing rate, or the adjusted LIBO rate for the interest period in effect for such borrowing; plus an applicable margin ranging from 1.25 % to 2.25 % (“Eurocurrency Spread”) with a London Inter-Bank Offered Rate (“LIBOR”) floor of 1.00 % per annum; or (ii) the Alternate Base Rate (“ABR”) Borrowing, which is the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1.00% per annum, and (c) the Adjusted LIBO Rate (or LIBO rate multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00 % ; in addition to an applicable margin ranging from 0.25 % to 1.00 % (“ABR Spread”). In addition, based on the Company’s existing leverage ratio , we are required to pay a quarterly commitment fee, at an applicable rate ranging from 0.15 % to 0.50 %, which was 0.20 % as of March 31, 2022, on the daily unused portion of the Credit Facility for each fiscal quarter during the Leverage Covenant Holiday and in connection with the issuance of letters of credit. There is no specific repayment date prior to the maturity date for any borrowings under the Credit Agreement. We 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, the Company 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, we classify any borrowings under this facility as long-term deb t. The Credit Agreement contains a number of covenants that, among other things, restrict our 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 our fiscal year. The Credit Agreement also limits the Company 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, the Company 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 the Company’s subsidiaries. The Credit Agreement also contains certain customary affirmative covenants and events of default, including a chang e of control. If an event of default occurs, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of all amounts due under the Credit Facility. As of March 31, 2022 and December 31, 2021, we were in compliance with our covenants. 2025 Senior Notes On July 9, 2020 , the Company 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 the Company, 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 the Company, the guarantors and the trustee. The 2025 Indenture provides, among other things, that interest is 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 the Company and are guaranteed by certain of the Company’s domestic subsidiaries . The Company 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. The Company 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, the Company 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), the Company 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, the Company has concluded they do not meet the requirements to be accounted for separately . As of March 31, 2022 and December 31, 2021, unpaid interest on our 2025 Senior Notes totaled approximately $ 7 million and $ 16 million, respectively, and is included in accrued expenses and other current liabilities on our unaudited condensed consolidated balance sheet, and $ 9 million and $ 8 m illion was recorded as interest expense on our unaudited condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively. The 2025 Indenture contains covenants that, among other things and subject to certain exceptions and qualifications, restrict the ability of the Company 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 the Company or the restricted subsidiaries; enter into certain transactions with the Company’s affiliates; designate restricted subsidiaries as unrestricted subsidiaries; and merge, consolidate or transfer or sell all or substantially all of the Company’s assets . 2026 Senior Notes On March 25, 2021, we entered into a purchase agreement for the sale of $ 300 million aggregate principal amount of 0.25 % Convertible 2026 Senior Notes due 2026 (the “2026 Senior Notes”) in a private offering to qualified institutional buyers. The 2026 Senior Notes included of an over-allotment option that provided the initial purchasers of the 2026 Senior Notes with the option to purchase an additional $ 45 million aggregate principal amount of the 2026 Senior Notes; such over-allotment option was fully exercised. In connection with the issuance of the 2026 Senior Notes, the Company entered into an Indenture, dated March 25, 2021 (the “2026 Indenture”), among the Company, the guarantors party thereto and the trustee. The terms of the 2026 Senior Notes are governed by the 2026 Indenture. The 2026 Senior Notes mature on April 1, 2026 , unless earlier converted, redeemed or repurchased. The 2026 Senior Notes are senior unsecured obligations of the Company, although guaranteed by certain of the Company’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 March 31, 2022 and December 31 2021, unpaid interest on our 2026 Senior Notes was not material. The 2026 Senior Notes will be redeemable, in whole or in part, at our 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 Senior Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of our 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 we send the related redemption notice; and (2) the trading day immediately before the date we send 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 Senior Notes are unconditionally guaranteed, on a joint and several basis, by the guarantors on a senior, unsecured basis. The 2026 Senior Notes are our general senior unsecured obligations and rank equally in right of payment with all of our existing and future senior indebtedness, and senior in right of payment to all of our future subordinated indebtedness. The 2026 Senior Notes will be effectively subordinated to any of our existing and future secured indebtedness, including borrowings under our Credit Facility, to the extent of the value of the assets securing such indebtedness. Holders may convert their 2026 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 our 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 Senior Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our 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 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 Senior Notes, without regard to the foregoing circumstances. The initial conversion rate for the 2026 Senior Notes is 13.5483 shares of common stock per $ 1,000 principal amount of 2026 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 common stock, subject to adjustment upon the occurrence of certain specified events as set forth in the 2026 Indenture. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock. The Company accounts for the 2026 Senior Notes as a liability measured at its amortized cost, and no other features of the 2026 Senior Notes are bifurcated and recognized as a derivative . The proceeds from the issuance of the 2026 Senior Notes were approximately $ 340 million, net of debt issuance costs of $ 5 million comprised primarily of the initial purchasers’ discount, and the Company used a portion of the proceeds from the 2026 Senior Notes to enter into capped call transactions, as discussed below. T he Company 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 our 2025 Senior Notes prior to maturity. The debt issuance costs will be amortized over the remaining term of the 2026 Senior Notes, using the effective interest rate method, and recorded to interest expense on our unaudited condensed consolidated statements of operations. During the three months ended March 31, 2022 and 2021, our effective interest rate, including the debt issuance costs, was 0.52 % and 0.60 %, respectively, and total interest expense on our 2026 Senior Notes was not material in any period . The 2026 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 Senior Notes, the Company entered into privately negotiated capped call transactions (the “Capped Calls”) with certain of the initial purchasers of the 2026 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 the Company with each of the Option Counterparties, and are not part of the terms of the 2026 Senior Notes and therefore will not affect any noteholder’s rights under the 2026 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 Senior Notes, the number of shares of common stock initially underlying the 2026 Senior Notes, or up to approximately 4.7 million shares of our common stock. The Capped Calls are expected generally to reduce potential dilution to the common stock upon any conversion of 2026 Senior Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted 2026 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 our common stock, which represents a premium of 100 % over the close price of our 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 our own stock and are considered equity classified under GAAP, and included as a reduction to additional paid-in-capital within stockholders’ equity on the unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively. The Capped Calls are not accounted for as derivatives and their fair value is not remeasured each reporting period. In addition, we recorded a deferred tax asset of $ 9 million associated with the Capped Calls on our unaudited condensed consolidated balance sheet during the three months ended March 31, 2021, as we made an income tax election allowable under Internal Revenue Service (the “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 Senior Notes. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7: INCOME TAXES Each interim period is considered an integral part of the annual period; accordingly, we measure our income tax expense using an estimated annual effective tax rate. An enterprise is required, at the end of each interim reporting period, to make its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, as adjusted for discrete taxable events that occur during the interim period. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). 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 losses (“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 the Company to carryback our U.S. federal NOLs incurred in 2020, generating an expected U.S. federal tax benefit of $ 76 million, of which we expected $ 48 million to be refunded. This refund is recorded in income taxes receivable on our unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021. In April 2022, we received the entire $48 million of this refund. In addition, certain governments have passed legislation to help businesses during the COVID-19 pandemic through loans, wage subsidies, wage tax relief or other financial aid. Some of these governments have extended or are considering extending these programs. We have participated in several of these programs, including the CARES Act in the U.S., the United Kingdom's job retention scheme, as well as programs in other jurisdictions'. In addition, in certain countries, such as within the European Union, Singapore, Australia, and other jurisdictions, we are also participating in programs where government assistance is in the form of wage subsidies and reductions in wage-related employer taxes paid by us. During the three months ended March 31, 2022, government grants and other assistance benefits recognized were not material, while we recognized $ 3 million in benefits during the three months ended March 31, 2021. These amounts are not income tax related and were recorded as a reduction of personnel and overhead costs in the unaudited condensed consolidated statements of operations. We had an income tax provision of $ 1 million and an income tax benefit of $ 16 million for the three months ended March 31, 2022 and 2021, respectively. The change in our income taxes during the three months ended March 31, 2022, when compared to the same period in 2021, was primarily due to a decrease in pretax losses recognized as of March 31, 2022. Our policy is to recognize accrued interest and penalties related to unrecognized tax benefits and income tax liabilities as part of our income tax expense. As of March 31, 2022, we had an accrued interest liability of $ 40 million and no penalties have been accrued. By virtue of consolidated income tax returns previously filed with Expedia, we are currently under an IRS audit for the 2009, 2010 and short-period 2011 tax years. We are separately under examination by the IRS for the short-period 2011, 2012 through 2016, and 2018 tax years, and have various ongoing audits for foreign and state income tax returns. These audits include questioning the timing and amount of income and deductions and the allocation of income among various tax jurisdictions. These examinations may lead to proposed or ordinary course adjustments to our taxes. We are no longer subject to tax examinations by tax authorities for years prior to 2009. As of March 31, 2022, no material assessments have resulted, except as noted below regarding our 2009, 2010, and 2011 IRS audit with Expedia, our 2012 through 2016 standalone IRS audit, and our 2012 through 2016 HM Revenue & Customs (“HMRC”) audit. In January 2017 and April 2019, as part of the IRS audit of Expedia, we received Notices of Proposed Adjustment from the IRS for the 2009, 2010, and 2011 tax years. Subsequently, in September 2019, as part of our standalone audit, we received Notices of Proposed Adjustment from the IRS for the 2012 and 2013 tax years; and in August 2020, we 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 our foreign subsidiaries, and would result in an increase to our worldwide income tax expense in an estimated range of $ 100 million to $ 110 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 Spin-Off tax years. The estimated range takes into consideration competent authority relief and transition tax regulations, and is exclusive of deferred tax consequences and interest expense, which would be significant. We disagree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies. Our policy is to review and update tax reserves as facts and circumstances change. Based on our interpretation of the regulations and available case law, we believe the position we have taken with regard to transfer pricing with our foreign subsidiaries is sustainable. In addition to the risk of additional tax for 2009 through 2016 transactions, if the IRS were to seek transfer pricing adjustments of a similar nature for transactions in subsequent years, we would be subject to significant additional tax liabilities. We have requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for tax years 2009 through 2016. We expect the competent authorities to present a resolution for the 2009 through 2011 tax years in the near future. Upon receipt, we will assess the resolution provided by the competent authorities as well as its impact on our existing income tax reserves for all open subsequent years. In January 2021, we received from HMRC an issue closure notice relating to adjustments for 2012 through 2016 tax years. These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries and would result in an increase to our 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. We disagree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies. Our policy is to review and update tax reserves as facts and circumstances change. Based on our interpretation of the regulations and available case law, we believe the position we have taken with regard to transfer pricing with our foreign subsidiaries is sustainable. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8: COMMITMENTS AND CONTINGENCIES As of March 31, 2022, there have been no material changes to our commitments and contingencies since December 31, 2021. Refer to “Note 13: Commitments and Contingencies ,” in the notes to our consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021. Legal Proceedings In the ordinary course of business, we are party to legal, regulatory and administrative matters, including threats thereof, arising out of, or in connection with our operations. These matters may involve claims involving 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 protection matters), defamation and reputational claims, personal injury claims, labor and employment matters and commercial disputes. Periodically, we review the status of all significant outstanding matters to assess any potential financial exposure. We record the estimated loss in our consolidated statements of operations 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 provide disclosures in the notes to the consolidated financial statements for loss contingencies that do not meet both of these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the consolidated financial statements. We base accruals on the best information available at the time which can be highly subjective. Although occasional adverse decisions or settlements may occur, we do not believe that the final disposition of any of these matters will have a material adverse effect on our business. However, the final outcome of these matters could vary significantly from our estimates. Finally, there may be claims or actions pending or threatened against us of which we are currently not aware and the ultimate disposition of which could have a material adverse effect on us. All legal fees incurred by the Company related to any regulatory and legal matters are expensed in the period incurred. Income and Non-Income Taxes We are under audit by the IRS and various other domestic and foreign tax authorities with regards to income tax and non-income tax matters. We have reserved for potential adjustments that may result from examinations by, or any negotiated agreements with, these tax authorities. Although we believe our tax estimates are reasonable, the final determination of audits could be materially different from our historical tax provisions and accruals. The results of an audit could have a material effect on our financial position, results of operations, or cash flows in the period for which that determination is made. Refer to “Note 7: Income Taxes ” for further information on potential contingencies surrounding income taxes. |
Stock Based Awards and Other Eq
Stock Based Awards and Other Equity Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Awards and Other Equity Instruments | NOTE 9: STOCK BASED AWARDS AND OTHER EQUITY INSTRUMENTS Stock-Based Compensation Expense The following table presents the amount of stock-based compensation expense related to stock-based awards, primarily stock options and RSUs, on our unaudited condensed consolidated statements of operations during the periods presented: Three months ended March 31, 2022 2021 (in millions) Selling and marketing $ 3 $ 4 Technology and content 9 12 General and administrative 10 13 Total stock-based compensation 22 29 Income tax benefit from stock-based compensation ( 4 ) ( 5 ) Total stock-based compensation, net of tax effect $ 18 $ 24 We capitalized $ 2 million and $ 3 million of stock-based compensation expense as website development costs during the three months ended March 31, 2022 and 2021, respectively. Stock-Based Award Activity and Valuation 2022 Stock Option Activity A summary of our stock option activity, consisting primarily of service-based non-qualified stock options, is presented below: Weighted Weighted Average Average Exercise Remaining Aggregate Options Price Per Contractual Intrinsic Outstanding Share Life Value (in thousands) (in years) (in millions) Options outstanding at December 31, 2021 5,671 $ 47.03 Granted 23 27.03 Exercised (1) ( 7 ) 24.50 Cancelled or expired ( 327 ) 54.01 Options outstanding at March 31, 2022 5,360 $ 46.55 4.8 $ 1 Exercisable as of March 31, 2022 3,976 $ 49.82 3.7 $ 1 Vested and expected to vest after March 31, 2022 (2) 5,360 $ 46.55 4.8 $ 1 (1) Inclusive of approximately 4,000 stock options which were not converted into shares due to net share settlement in order to cover the aggregate exercise price and the required amount of employee withholding taxes. Potential shares which had been convertible under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Stock and Annual Incentive Plan (the “2018 Plan”) and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows. (2) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award. Aggregate intrinsic value represents the difference between the closing stock price of our common stock and the exercise price of outstanding, in-the-money options. Our closing stock price as reported on Nasdaq as of March 31, 2022 was $ 27.12 . The total intrinsic value of stock options exercised for the three months ended March 31, 2022 was not material, and for the three months ended March 31, 2021 was $ 8 million. The fair value of stock option grants has been estimated at the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions for the periods presented: Three months ended March 31, 2022 2021 Risk free interest rate 1.53 % 0.65 % Expected term (in years) 5.15 5.33 Expected volatility 50.32 % 49.69 % Expected dividend yield — % — % Weighted-average grant date fair value $ 12.26 $ 20.35 Our 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. We amortize the grant-date fair value of our stock option grants 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 grant-date fair value of the award that is vested at that date. The total fair value of stock options vested was $ 6 million and $ 8 million for the three months ended March 31, 2022 and 2021, respectively. 2022 RSU Activity A summary of our activity with respect to restricted stock units (“RSUs”), consisting primarily of service-based vesting terms, is presented below: Weighted Average Grant- Aggregate RSUs Date Fair Intrinsic Outstanding Value Per Share Value (in thousands) (in millions) Unvested RSUs outstanding as of December 31, 2021 5,786 $ 36.82 Granted 4,829 27.24 Vested and released (1) ( 1,272 ) 41.56 Cancelled ( 401 ) 36.61 Unvested RSUs outstanding as of March 31, 2022 (2) 8,942 $ 30.98 $ 243 (1) Inclusive of approximately 295,000 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows. (2) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award. We amortize the grant-date fair value of RSUs as stock-based compensation expense over the vesting term, which is typically over a four-year requisite service period on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. A summary of our activity related to market-based RSUs (“MSUs”), is presented below: Weighted Average Grant- Aggregate MSUs Date Fair Intrinsic Outstanding Value Per Share Value (in thousands) (in millions) Unvested MSUs outstanding as of December 31, 2021 120 $ 28.15 Cancelled ( 35 ) 28.15 Unvested MSUs outstanding as of March 31, 2022 (1) 85 $ 28.15 $ 2 (1) MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of The Nasdaq Composite Total Return Index . Based upon actual attainment relative to the target performance metric, the grantee has the ability to receive up to 200 % of the target number of MSUs originally granted, or to receive none at all. Total current income tax benefits associated with the exercise or settlement of Tripadvisor stock-based awards held by our employees w as $ 2 milli on and $ 9 million during the three months ended March 31, 2022 and 2021, respectively. Unrecognized Stock-Based Compensation A summary of our remaining unrecognized stock-based compensation expense and the weighted average remaining amortization period at March 31, 2022 related to our non-vested equity awards is presented below (in millions, except in years information): Stock Options RSUs/MSUs Unrecognized compensation expense $ 13 $ 233 Weighted average period remaining (in years) 2.3 3.2 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 10: STOCKHOLDERS’ EQUITY On November 1, 2019, our Board of Directors authorized the repurchase of an additional $ 100 million in shares of our common stock under our existing share repurchase program, which increased the amount available to the Company under this share repurchase program to $ 250 million. This share repurchase program has no expiration date but may be suspended or terminated by our Board of Directors at any time. During the three months ended March 31, 2022 and 2021, respectively, the Company did no t repurchase any shares of outstanding common stock under the share repurchase program. As of March 31, 2022 and December 31, 2021, we had $ 75 million remaining available to repurchase shares of our common stock under this share repurchase program and 18,844,614 shares of the Company’s common stock held in treasury with an aggregate cost of $ 722 million. Our Board of Directors authorized and directed management, working with the Executive Committee of our Board of Directors, to affect the share repurchase program discussed above in compliance with applicable legal requirements. While the Board of Directors has not suspended or terminated the share repurchase program, the terms of the Credit Agreement currently limit the Company from engaging in share repurchases during the Leverage Covenant Holiday and the terms of our 2025 Indenture also imposes certain limitations and restrictions on share repurchases. Refer to “Note 6: Debt ” for further information about our Credit Facility and our 2025 Indenture. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 11: EARNINGS PER SHARE Basic Earnings Per Share Attributable to Common Stockholders We compute basic earnings per share, or Basic EPS, by dividing net income (loss) by the weighted average number of common shares outstanding during the period. We compute the weighted average number of common shares outstanding during the reporting period using the total of common stock and Class B common stock outstanding as of the last day of the previous year end reporting period plus the weighted average of any additional shares issued and outstanding less the weighted average of any common shares repurchased during the reporting period. Diluted Earnings Per Share Attributable to Common Stockholders Diluted earnings per share, or Diluted EPS, includes the potential dilution of common equivalent shares outstanding that could occur from stock-based awards and other stock-based commitments using the treasury stock method. We compute Diluted EPS by dividing net income (loss) by the sum of the weighted average number of common and common equivalent shares outstanding during the period. We computed the weighted average number of common and common equivalent shares outstanding during the period using the sum of (i) the number of shares of common stock and Class B common stock used in the Basic EPS calculation as indicated above, and (ii) if dilutive, the incremental weighted average common stock that we would issue upon the assumed exercise of outstanding common equivalent shares, primarily related to stock options and the vesting of restricted stock units using the treasury stock method, and (iii) if dilutive, performance-based and market-based awards based on the number of shares that would be issuable as of the end of the reporting period assuming the end of the reporting period was also the end of the contingency period. Under the treasury stock method, the assumed proceeds calculation includes the actual proceeds to be received from the employee upon exercise of outstanding equity awards and the average unrecognized compensation cost during the period. The treasury stock method assumes that a company uses the proceeds from the exercise of an equity award to repurchase common stock at the average market price for the reporting period. In periods of net income, shares of our common stock subject to the potential conversion of the 2026 Senior Notes outstanding during the period is also included in our weighted average number of shares outstanding used to calculate Diluted EPS using the if-converted method under GAAP, as share settlement is presumed. The Capped Calls are excluded from the calculation of Diluted EPS, as they would be antidilutive. However, upon conversion of the 2026 Senior Notes, unless the market price of our common stock exceeds the cap price, an exercise of the Capped Calls would generally offset any dilution from the 2026 Senior Notes from the conversion price up to the cap price. As of March 31, 2022 and 2021, the market price of a share of our common stock did not exceed the $ 107.36 cap price. In periods of a net loss, common equivalent shares are excluded from the calculation of Diluted EPS as their inclusion would have an antidilutive effect. Accordingly, for periods in which we report a net loss, such as for the three months ended March 31, 2022 and 2021, respectively, Diluted EPS is the same as Basic EPS, since dilutive common equivalent shares are not assumed to have been issued if their effect is antidilutive. Below is a reconciliation of the weighted average number of shares of common stock outstanding in calculating Diluted EPS (shares in thousands and dollars in millions, except per share amounts) for the periods presented: Three months ended March 31, 2022 2021 Numerator: Net income (loss) $ ( 34 ) $ ( 80 ) Denominator: Weighted average shares used to compute Basic EPS 139,092 135,746 Weighted average effect of dilutive securities: Stock options — — RSUs/MSUs — — 2026 Senior Notes (Note 6) — — Weighted average shares used to compute Diluted EPS 139,092 135,746 Basic EPS $ ( 0.24 ) $ ( 0.59 ) Diluted EPS $ ( 0.24 ) $ ( 0.59 ) Potential common shares, consisting of outstanding stock options, RSUs, MSUs, and those issuable under the 2026 Senior Notes, totaling approximately 19.0 million shares and 17.8 million shares for the three months ended March 31, 2022 and 2021, respectively, have been excluded from the calculation of Diluted EPS because their effect would have been antidilutive. In addition, potential common shares from certain performance-based awards of approximately 0.1 million shares for the three months ended March 31, 2022 and 2021, respectively, for which all targets required to trigger vesting had not been achieved, were also excluded from the calculation of weighted average shares used to compute Diluted EPS. The earnings per share amounts are the same for common stock and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. In addition, our non-vested RSUs and MSUs are entitled to dividend equivalents, which are payable to the holder subject to, and only upon vesting of, the underlying awards and are therefore forfeitable. Given such dividend equivalents are forfeitable, we do not consider them to be participating securities and, consequently, they are not subject to the two‑class method of determining earnings per share. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 12: SEGMENT INFORMATION We have two reportable segments: (1) Hotels, Media & Platform; and (2) Experiences & Dining. Our Hotels, Media & Platform reportable segment includes the following revenue sources: (1) Tripadvisor-branded hotels revenue – primarily consisting of hotel auction revenue, CPA revenue, subscription-based advertising revenue, and hotel sponsored placements revenue; and (2) Tripadvisor-branded display and platform revenue – consisting of display-based advertising revenue. Our Experiences & Dining reportable segment includes an aggregation of our Experiences and Dining operating segments. All remaining business units, including Rentals, Flights & Car, and Cruises have been combined into and reported as “Other”, which does not constitute a reportable segment, as none of these businesses meet the quantitative thresholds and/or other criteria to qualify as reportable segments. The nature of the services provided and revenue recognition policies are summarized by reported segment in “Note 3: Revenue Recognition .” Our operating segments are determined based on how our chief operating decision maker manages our business, regularly accesses information and evaluates performance for operating decision-making purposes, including allocation of resources. All direct general and administrative costs are included in the applicable segments and business units; 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. Adjusted EBITDA is our segment profit measure and a key measure used by our management and Board of Directors to understand and evaluate the operating performance of our business and on which internal budgets and forecasts are based and approved. We define Adjusted EBITDA as net income (loss) plus: (1) (provision) benefit for income taxes; (2) other income (expense), net; (3) depreciation and amortization; (4) stock-based compensation and other stock-settled obligations; (5) goodwill, intangible asset, and long-lived asset impairments; (6) legal reserves and settlements; (7) restructuring and other related reorganization costs; and (8) non-recurring expenses and income. The following tables present our segment information for the three months ended March 31, 2022 and 2021 and includes a reconciliation of Adjusted EBITDA to Net Income (Loss). We record depreciation and amortization, stock-based compensation and other stock-settled obligations, goodwill, intangible asset and other long-lived asset impairments, legal reserves and settlements, restructuring and other related reorganization costs, and other non-recurring expenses and income, net, which are excluded from segment operating performance, in corporate and unallocated. In addition, we do not report our 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. Intersegment revenue is not material and is included and eliminated in Other . Three months ended March 31, 2022 Hotels, Media & Platform (1) Experiences & Dining Other Corporate and Total (in millions) Revenue $ 160 $ 92 $ 10 $ — $ 262 Adjusted EBITDA 46 ( 22 ) 3 — 27 Depreciation and amortization ( 25 ) ( 25 ) Stock-based compensation ( 22 ) ( 22 ) Operating income (loss) ( 20 ) Other income (expense), net ( 13 ) Income (loss) before income taxes ( 33 ) (Provision) benefit for income taxes ( 1 ) Net income (loss) ( 34 ) Three months ended March 31, 2021 Hotels, Media & Platform (1) Experiences & Dining Other Corporate and Total (in millions) Revenue $ 88 $ 28 $ 7 $ — $ 123 Adjusted EBITDA ( 3 ) ( 24 ) 1 — ( 26 ) Depreciation and amortization ( 29 ) ( 29 ) Stock-based compensation ( 29 ) ( 29 ) Operating income (loss) ( 84 ) Other income (expense), net ( 12 ) Income (loss) before income taxes ( 96 ) (Provision) benefit for income taxes 16 Net income (loss) ( 80 ) (1) Includes allocated corporate general and administrative costs of $ 19 million and $ 16 million for the three months ended March 31, 2022 and 2021, respectively, and Tripadvisor-branded advertising expenses of $ 1 million for both the three months ended March 31, 2022 and 2021, respectively. Customer Concentrations Refer to “Note 4: Financial Instruments and Fair Value Measurements ” under the section entitled “Risks and Concentrations” for information regarding our major customer concentrations. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited condensed consolidated financial statements include Tripadvisor, our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. All inter-company accounts and transactions have been eliminated in consolidation. One of our subsidiaries that operates in China has variable interests in affiliated entities in China in order to comply with Chinese laws and regulations, which restrict foreign investment in internet content provision businesses. Although we do not own the capital stock of these Chinese affiliates, we consolidate their results as we are the primary beneficiary of the cash losses or profits of these variable interest affiliates and have the power to direct the activity of these affiliates. Our variable interest entities’ financial results were not material for all periods presented. Investments in entities in which we do not have a controlling financial interest are accounted for under the equity method, the fair value option, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. We prepared the unaudited condensed consolidated financial statements following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, we condensed or omitted certain footnotes or other financial information that are normally required by GAAP for annual financial statements. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation, none of which were material to the presentation of the accompanying unaudited condensed consolidated financial statements. Our interim unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2021, previously filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures including notes required by GAAP. As of March 31, 2022, Liberty Tripadvisor Holdings, Inc. (“LTRIP”) beneficially owned approximately 16.4 million shares of our common stock and 12.8 million shares of our Class B common stock, which constitute 13.0 % of the outstanding shares of common stock and 100 % of the outstanding shares of Class B common stock. Assuming the conversion of all of LTRIP’s shares of Class B common stock into common stock, LTRIP would beneficially own 21.0 % of the outstanding common stock. Because each share of Class B common stock is entitled to ten votes per share and each share of common stock is entitled to one vote per share , LTRIP may be deemed to beneficially own equity securities representing nearly 57.0 % of our voting power. We had no related party transactions with LTRIP during the three months ended March 31, 2022 and 2021, respectively. |
Risks and Uncertainties | Risks and Uncertainties We continue 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 existing 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 continue to be negatively impacted remain uncertain. We do not know the future path or potential rate of global or regional COVID-19 resurgences, including existing COVID-19 variants (e.g., Delta and Omicron) or future variants, if any, nor do we 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, we still do not have forward-looking visibility into the long-term impacts related to consumer demand for travel, usage patterns on our 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 our business, results of operations, liquidity and financial condition remains uncertain, and is dependent on future developments that cannot be accurately predicted at this time. We continue to believe the travel, leisure, hospitality, and restaurant industries (collectively, the “travel industry”), and our financial results, will continue to be adversely and materially affected if any 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. |
Accounting Estimates | Accounting Estimates We use estimates and assumptions in the preparation of our unaudited condensed consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our unaudited condensed consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our unaudited condensed consolidated financial statements is accounting for income taxes. 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. |
Seasonality | Seasonality Consumers’ travel expenditures have historically followed a seasonal pattern. Correspondingly, travel partners’ advertising investments, and therefore our revenue and operating profits, have also historically followed a seasonal pattern. Our 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 . During the first half of the year, experience and rentals bookings typically exceed the amount of completed experiences and rental stays, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative . Other factors may also impact typical seasonal fluctuations, which include further significant shifts in our business mix or adverse economic conditions that could result in future seasonal patterns that are different from historical trends. For example, although consumer travel demand generally remained materially lower than historic levels due to the impact of COVID-19 on our business, these trends improved during 2021, resulting in increased revenues, and working capital and operating cash flow more akin to typical historical seasonality trends, which has continued during the three months ended March 31, 2022 . However, it is difficult to predict the seasonality for the upcoming quarters, given the sustained uncertainty related to the continued economic impact of the COVID-19 pandemic and/or potential resurgences, and the pace of continued recovery in our key markets. |
Significant Accounting Policies | There have been no material changes to our accounting policies since December 31, 2021, as described under “Note 2: Significant Accounting Policies ”, in the notes to consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Reconciliation of Disaggregated Revenue to Segment Revenue | A reconciliation of disaggregated revenue to segment revenue is also included below: Three months ended March 31, 2022 2021 Major products/revenue sources (1): (in millions) Hotels, Media & Platform Tripadvisor-branded hotels $ 136 $ 74 Tripadvisor-branded display and platform 24 14 Total Hotels, Media & Platform 160 88 Experiences & Dining 92 28 Other 10 7 Total Revenue $ 262 $ 123 (1) Our revenue is recognized primarily at a point in time for all reported segments. |
Summary of Balances of Accounts Receivable and Contract Assets, Net of Allowance for Credit Losses, from Contracts with Customers | The following table provides information about the opening and closing balances of accounts receivable and contract assets, net of allowance for credit losses, from contracts with customers (in millions): March 31, 2022 December 31, 2021 Accounts receivable 132 105 Contract assets 48 37 Total $ 180 $ 142 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Cash Equivalents Measured at Fair Value on a Recurring Basis | The following table shows our cash equivalents that are measured at fair value on a recurring basis and were categorized using the fair value hierarchy, as well as their classification on our unaudited condensed consolidated balance sheet as of March 31, 2022 (in millions): Amortized Cost Fair Value (1) Cash Equivalents Level 2: Term deposits $ 160 $ 160 $ 160 Total $ 160 $ 160 $ 160 Unrealized gains and losses related to our cash equivalents were not material. |
Net Notional Principal Amounts of Outstanding Derivative Instruments | The following table shows the net notional principal amounts of our outstanding derivative instruments as of the periods presented: March 31, 2022 December 31, 2021 (in millions) Foreign currency exchange-forward contracts (1)(2) $ 22 $ 9 (1) Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. These outstanding derivatives are not designated as hedging instruments and have an original maturity period of 90 days or less. (2) The fair value of our outstanding derivatives as of March 31, 2022 and December 31, 2021, respectively, was not material. The notional amount of a forward contract is the contracted amount of foreign currency to be exchanged and is not recorded on the unaudited condensed consolidated balance sheet. |
Schedule of Aggregate Principal and Fair Value Amount of Outstanding 2025 Senior Notes and 2026 Senior Notes | The following table shows the aggregate principal and fair value amount of our outstanding 2025 Senior Notes and 2026 Senior Notes as of the periods presented, which are classified as long-term debt on our unaudited condensed consolidated balance sheets and considered Level 2 fair value measurements. Refer to “Note 6: Debt ” for additional information on our 2025 Senior Notes and 2026 Senior Notes. March 31, 2022 December 31, 2021 (in millions) 2025 Senior Notes Aggregate principal amount $ 500 $ 500 Carrying value amount (1) 494 493 Fair value amount (2) 516 531 2026 Senior Notes Aggregate principal amount $ 345 $ 345 Carrying value amount (3) 340 340 Fair value amount (2) 293 305 (1) Net of $ 6 million and $ 7 million of unamortized debt issuance costs as of March 31, 2022 and December 31, 2021, respectively. (2) We estimate the fair value of our outstanding 2025 Senior Notes and 2026 Senior Notes based on recently reported market transactions and/or prices for identical or similar financial instruments obtained from a third-party pricing source. (3) Net of $ 5 million in unamortized debt issuance costs as of both March 31, 2022 and December 31, 2021, respectively . |
Accrued Expenses And Other Cu_2
Accrued Expenses And Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Details of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following for the periods presented: March 31, 2022 December 31, 2021 (in millions) Accrued employee salary, bonus, and related benefits $ 41 $ 58 Accrued marketing costs 65 27 Interest payable (1) 8 16 Current income taxes payable 2 3 Finance lease liabilities - current portion 6 6 Operating lease liabilities - current portion 19 20 Other 58 51 Total $ 199 $ 181 (1) Amount relates primarily to unpaid interest accrued on our 2025 Senior Notes. Refer to “Note 6: Debt ” for further information. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Debt | The Company’s outstanding debt consisted of the following for the periods presented: March 31, 2022 Outstanding Principal Amount Unamortized Debt Issuance Costs Carrying Value (in millions) Long-Term Debt: 2025 Senior Notes $ 500 $ ( 6 ) $ 494 2026 Senior Notes 345 ( 5 ) 340 Total Long-Term Debt $ 845 $ ( 11 ) $ 834 December 31, 2021 Outstanding Principal Amount Unamortized Debt Issuance Costs Carrying Value (in millions) Long-Term Debt: 2025 Senior Notes $ 500 $ ( 7 ) $ 493 2026 Senior Notes 345 ( 5 ) 340 Total Long-Term Debt $ 845 $ ( 12 ) $ 833 |
Stock Based Awards and Other _2
Stock Based Awards and Other Equity Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Amount of Stock-Based Compensation Expense Related to Stock-Based Awards, Primarily Stock Options and RSUs | The following table presents the amount of stock-based compensation expense related to stock-based awards, primarily stock options and RSUs, on our unaudited condensed consolidated statements of operations during the periods presented: Three months ended March 31, 2022 2021 (in millions) Selling and marketing $ 3 $ 4 Technology and content 9 12 General and administrative 10 13 Total stock-based compensation 22 29 Income tax benefit from stock-based compensation ( 4 ) ( 5 ) Total stock-based compensation, net of tax effect $ 18 $ 24 |
Summary of Stock Option Activity | A summary of our stock option activity, consisting primarily of service-based non-qualified stock options, is presented below: Weighted Weighted Average Average Exercise Remaining Aggregate Options Price Per Contractual Intrinsic Outstanding Share Life Value (in thousands) (in years) (in millions) Options outstanding at December 31, 2021 5,671 $ 47.03 Granted 23 27.03 Exercised (1) ( 7 ) 24.50 Cancelled or expired ( 327 ) 54.01 Options outstanding at March 31, 2022 5,360 $ 46.55 4.8 $ 1 Exercisable as of March 31, 2022 3,976 $ 49.82 3.7 $ 1 Vested and expected to vest after March 31, 2022 (2) 5,360 $ 46.55 4.8 $ 1 (1) Inclusive of approximately 4,000 stock options which were not converted into shares due to net share settlement in order to cover the aggregate exercise price and the required amount of employee withholding taxes. Potential shares which had been convertible under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Stock and Annual Incentive Plan (the “2018 Plan”) and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows. (2) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award. |
Weighted-Average Assumptions of Estimated Fair Value of Stock Option Grants | The fair value of stock option grants has been estimated at the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions for the periods presented: Three months ended March 31, 2022 2021 Risk free interest rate 1.53 % 0.65 % Expected term (in years) 5.15 5.33 Expected volatility 50.32 % 49.69 % Expected dividend yield — % — % Weighted-average grant date fair value $ 12.26 $ 20.35 |
Summary of RSU Activity | A summary of our activity with respect to restricted stock units (“RSUs”), consisting primarily of service-based vesting terms, is presented below: Weighted Average Grant- Aggregate RSUs Date Fair Intrinsic Outstanding Value Per Share Value (in thousands) (in millions) Unvested RSUs outstanding as of December 31, 2021 5,786 $ 36.82 Granted 4,829 27.24 Vested and released (1) ( 1,272 ) 41.56 Cancelled ( 401 ) 36.61 Unvested RSUs outstanding as of March 31, 2022 (2) 8,942 $ 30.98 $ 243 (1) Inclusive of approximately 295,000 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows. (2) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award. |
Summary of Unrecognized Stock-Based Compensation Expense and Weighted Average Period Remaining | A summary of our remaining unrecognized stock-based compensation expense and the weighted average remaining amortization period at March 31, 2022 related to our non-vested equity awards is presented below (in millions, except in years information): Stock Options RSUs/MSUs Unrecognized compensation expense $ 13 $ 233 Weighted average period remaining (in years) 2.3 3.2 |
MSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of RSU Activity | A summary of our activity related to market-based RSUs (“MSUs”), is presented below: Weighted Average Grant- Aggregate MSUs Date Fair Intrinsic Outstanding Value Per Share Value (in thousands) (in millions) Unvested MSUs outstanding as of December 31, 2021 120 $ 28.15 Cancelled ( 35 ) 28.15 Unvested MSUs outstanding as of March 31, 2022 (1) 85 $ 28.15 $ 2 (1) MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of The Nasdaq Composite Total Return Index . Based upon actual attainment relative to the target performance metric, the grantee has the ability to receive up to 200 % of the target number of MSUs originally granted, or to receive none at all. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted Average Number of Shares of Common Stock Outstanding | Below is a reconciliation of the weighted average number of shares of common stock outstanding in calculating Diluted EPS (shares in thousands and dollars in millions, except per share amounts) for the periods presented: Three months ended March 31, 2022 2021 Numerator: Net income (loss) $ ( 34 ) $ ( 80 ) Denominator: Weighted average shares used to compute Basic EPS 139,092 135,746 Weighted average effect of dilutive securities: Stock options — — RSUs/MSUs — — 2026 Senior Notes (Note 6) — — Weighted average shares used to compute Diluted EPS 139,092 135,746 Basic EPS $ ( 0.24 ) $ ( 0.59 ) Diluted EPS $ ( 0.24 ) $ ( 0.59 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Three months ended March 31, 2022 Hotels, Media & Platform (1) Experiences & Dining Other Corporate and Total (in millions) Revenue $ 160 $ 92 $ 10 $ — $ 262 Adjusted EBITDA 46 ( 22 ) 3 — 27 Depreciation and amortization ( 25 ) ( 25 ) Stock-based compensation ( 22 ) ( 22 ) Operating income (loss) ( 20 ) Other income (expense), net ( 13 ) Income (loss) before income taxes ( 33 ) (Provision) benefit for income taxes ( 1 ) Net income (loss) ( 34 ) Three months ended March 31, 2021 Hotels, Media & Platform (1) Experiences & Dining Other Corporate and Total (in millions) Revenue $ 88 $ 28 $ 7 $ — $ 123 Adjusted EBITDA ( 3 ) ( 24 ) 1 — ( 26 ) Depreciation and amortization ( 29 ) ( 29 ) Stock-based compensation ( 29 ) ( 29 ) Operating income (loss) ( 84 ) Other income (expense), net ( 12 ) Income (loss) before income taxes ( 96 ) (Provision) benefit for income taxes 16 Net income (loss) ( 80 ) (1) Includes allocated corporate general and administrative costs of $ 19 million and $ 16 million for the three months ended March 31, 2022 and 2021, respectively, and Tripadvisor-branded advertising expenses of $ 1 million for both the three months ended March 31, 2022 and 2021, respectively. |
Business Description and Basi_2
Business Description and Basis of Presentation - Additional Information (Details) shares in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)VoteMarketVotePerShareshares | Mar. 31, 2021USD ($) | |
Description Of Business And Basis Of Presentation [Line Items] | ||
Number of markets with localized versions of website | Market | 40 | |
Liberty Tripadvisor Holdings, Inc. | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Beneficially ownership of shares of common stock | 16.4 | |
Percentage taken from outstanding shares of common stock | 13.00% | |
Percentage of beneficially ownership of shares of common stock class B | 21.00% | |
Right to voting | one vote per share | |
Vote per common stock share | VotePerShare | 1 | |
Beneficially ownership of equity securities | 57.00% | |
Related party transactions | $ | $ 0 | $ 0 |
Liberty Tripadvisor Holdings, Inc. | Class B Common Stock | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Beneficially ownership of shares of common stock | 12.8 | |
Percentage taken from outstanding shares of common stock | 100.00% | |
Right to voting | ten votes per share | |
Vote per common stock share | Vote | 10 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2022USD ($)Segment | Mar. 31, 2021USD ($) | Jan. 01, 2022USD ($) | Dec. 31, 2021USD ($) | Jan. 01, 2021USD ($) | |
Disaggregation Of Revenue [Line Items] | |||||
Number of reportable segment | Segment | 2 | ||||
Deferred revenue | $ 59 | $ 36 | $ 36 | $ 28 | |
Revenue recognized | 18 | $ 11 | |||
Contract with customer revenue refunded due to cancellations | $ 2 | $ 2 | |||
ASC 606 | |||||
Disaggregation Of Revenue [Line Items] | |||||
Customer invoices due period | 30 days |
Revenue Recognition - Reconcili
Revenue Recognition - Reconciliation of Disaggregated Revenue to Segment Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Disaggregation Of Revenue [Line Items] | |||
Total Revenue | [1] | $ 262 | $ 123 |
Hotels, Media & Platform | |||
Disaggregation Of Revenue [Line Items] | |||
Total Revenue | [1] | 160 | 88 |
Experiences & Dining Segment | |||
Disaggregation Of Revenue [Line Items] | |||
Total Revenue | [1] | 92 | 28 |
Other | |||
Disaggregation Of Revenue [Line Items] | |||
Total Revenue | [1] | 10 | 7 |
Tripadvisor-Branded Hotels | Hotels, Media & Platform | |||
Disaggregation Of Revenue [Line Items] | |||
Total Revenue | [1] | 136 | 74 |
Tripadvisor-Branded Display and Platform | Hotels, Media & Platform | |||
Disaggregation Of Revenue [Line Items] | |||
Total Revenue | [1] | $ 24 | $ 14 |
[1] | Our revenue is recognized primarily at a point in time for all reported segments. |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Balances of Accounts Receivable and Contract Assets, Net of Allowance for Credit Losses, from Contracts with Customers (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable | $ 132 | $ 105 |
Contract assets | 48 | 37 |
Total | $ 180 | $ 142 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Financial liabilities measured at fair value on a recurring basis | $ 0 | ||
Cash and cash equivalents, consisted of cash deposits | $ 781,000,000 | 723,000,000 | |
Derivative instruments not designated as hedging instruments, description of terms | We generally use forward contracts to reduce the effects of foreign currency exchange rate fluctuations on our cash flows primarily for the Euro versus the U.S. Dollar. For the three months ended March 31, 2022 and 2021, our forward contracts have not been designated as hedges and generally had maturities of less than 90 days. | ||
Foreign currency exchange contracts maturity period, maximum | 90 days | ||
Earnings (losses) from equity method investment, net | $ 1,000,000 | ||
Maturity of term deposits | 90 days or less at the date of purchase | ||
Short-term marketable securities outstanding | $ 0 | 0 | |
Long-term marketable securities outstanding | 0 | $ 0 | |
Other Long-Term Assets | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Redeemable noncontrolling interest, settlement amount | $ 20,000,000 | ||
Percentage of notes receivable due in 5 years | 50.00% | ||
Percentage of notes receivable due in 10 years | 50.00% | ||
Net of accumulated allowance for credit losses, Carrying value | $ 9,000,000 | $ 9,000,000 | |
Chelsea Investment Holding Company PTE, Ltd | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Equity method investment, ownership percentage | 40.00% | ||
Impairment loss on equity method investments | $ 0 | $ 0 | |
Chelsea Investment Holding Company PTE, Ltd | Non-Marketable Investments | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Equity method investments | $ 34,000,000 | $ 34,000,000 | |
Customer Concentration Risk | Sales | Booking | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Customer concentration risk | 10.00% | ||
Customer Concentration Risk | Sales | Expedia and Booking | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Customer concentration risk | 34.00% |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Schedule of Cash Equivalents (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and Cash Equivalents | $ 781 | $ 723 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Amortized Cost | 160 | ||
Cash and Cash Equivalents | [1] | 160 | |
Level 2 | Term Deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Amortized Cost | 160 | ||
Cash and Cash Equivalents | [1] | $ 160 | |
[1] | Unrealized gains and losses related to our cash equivalents were not material. |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements - Net Notional Principal Amounts of Outstanding Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Not Designated as Hedging Instrument | Foreign Exchange-forward Contracts | |||
Derivatives Fair Value [Line Items] | |||
Foreign currency exchange-forward contracts | [1],[2] | $ 22 | $ 9 |
[1] | Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. These outstanding derivatives are not designated as hedging instruments and have an original maturity period of 90 days or less. | ||
[2] | The fair value of our outstanding derivatives as of March 31, 2022 and December 31, 2021, respectively, was not material. The notional amount of a forward contract is the contracted amount of foreign currency to be exchanged and is not recorded on the unaudited condensed consolidated balance sheet. |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measurements - Net Notional Principal Amounts of Outstanding Derivative Instruments (Parenthetical) (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Maximum maturity period of outstanding derivatives are not designated as hedging instruments | 90 days |
Financial Instruments and Fai_7
Financial Instruments and Fair Value Measurements - Schedule of Aggregate Principal and Fair Value Amount of Outstanding 2025 Senior Notes and 2026 Senior Notes (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Carrying value amount | $ 834 | $ 833 | |
Level 2 | 2025 Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | 500 | 500 | |
Carrying value amount | [1] | 494 | 493 |
Fair value amount | [2] | 516 | 531 |
Level 2 | 2026 Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | 345 | 345 | |
Carrying value amount | [3] | 340 | 340 |
Fair value amount | [2] | $ 293 | $ 305 |
[1] | Net of $ 6 million and $ 7 million of unamortized debt issuance costs as of March 31, 2022 and December 31, 2021, respectively. | ||
[2] | We estimate the fair value of our outstanding 2025 Senior Notes and 2026 Senior Notes based on recently reported market transactions and/or prices for identical or similar financial instruments obtained from a third-party pricing source. | ||
[3] | Net of $ 5 million in unamortized debt issuance costs as of both March 31, 2022 and December 31, 2021, respectively . |
Financial Instruments and Fai_8
Financial Instruments and Fair Value Measurements - Schedule of Aggregate Principal and Fair Value Amount of Outstanding 2025 Senior Notes and 2026 Senior Notes (Parenthetical) (Details) - Level 2 - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
2025 Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, issuances costs | $ 6 | $ 7 |
2026 Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, issuances costs | $ 5 | $ 5 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Details of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |||
Accrued employee salary, bonus, and related benefits | $ 41 | $ 58 | |
Accrued marketing costs | 65 | 27 | |
Interest payable | [1] | 8 | 16 |
Current income taxes payable | 2 | 3 | |
Finance lease liabilities - current portion | 6 | 6 | |
Operating lease liabilities - current portion | 19 | 20 | |
Other | 58 | 51 | |
Total | $ 199 | $ 181 | |
[1] | Amount relates primarily to unpaid interest accrued on our 2025 Senior Notes. Refer to “Note 6: Debt ” for further information. |
Debt - Summary of Outstanding D
Debt - Summary of Outstanding Debt (Details) - Long-Term Debt - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Outstanding Principal Amount | $ 845 | $ 845 |
Unamortized Debt Issuance Costs | (11) | (12) |
Carrying Value | 834 | 833 |
2025 Senior Notes | ||
Debt Instrument [Line Items] | ||
Outstanding Principal Amount | 500 | 500 |
Unamortized Debt Issuance Costs | (6) | (7) |
Carrying Value | 494 | 493 |
2026 Senior Notes | ||
Debt Instrument [Line Items] | ||
Outstanding Principal Amount | 345 | 345 |
Unamortized Debt Issuance Costs | (5) | (5) |
Carrying Value | $ 340 | $ 340 |
Debt - Two Thousand Fifteen Cre
Debt - Two Thousand Fifteen Credit Facility - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jul. 01, 2021 | Jun. 30, 2021 | |
Debt Instrument [Line Items] | |||||
Total interest expense and commitments fees | $ 12 | $ 11 | |||
Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Total interest expense and commitments fees | 1 | $ 1 | |||
Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity under Credit Facility | $ 500 | ||||
Credit facility, maturity date | May 12, 2024 | ||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.20% | ||||
Outstanding borrowings | $ 0 | $ 0 | |||
Interest rate description | borrowings under the Credit Facility generally bear interest, at the Company’s option, at a rate per annum equal to either (i) the Eurocurrency Borrowing rate, or the adjusted LIBO rate for the interest period in effect for such borrowing; plus an applicable margin ranging from 1.25% to 2.25% (“Eurocurrency Spread”) with a London Inter-Bank Offered Rate (“LIBOR”) floor of 1.00% per annum; or (ii) the Alternate Base Rate (“ABR”) Borrowing, which is the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1.00% per annum, and (c) the Adjusted LIBO Rate (or LIBO rate multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00%; in addition to an applicable margin ranging from 0.25% to 1.00% (“ABR Spread”). In addition, based on the Company’s existing leverage ratio | ||||
Credit Facility | Revolving Credit Facility | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Floor Interest Rate | 1.00% | ||||
Credit Facility | Revolving Credit Facility | Adjusted LIBOR | |||||
Debt Instrument [Line Items] | |||||
Borrowings, interest rate description | Adjusted LIBO Rate (or LIBO rate multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00% | ||||
Borrowings, interest rate | 1.00% | ||||
Credit Facility | Revolving Credit Facility | New York Fed Bank Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Borrowings, interest rate description | effect on such day plus 1/2 of 1.00% per annum, | ||||
Credit Facility | Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.15% | ||||
Credit Facility | Revolving Credit Facility | Minimum | ABR Spread | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.25% | ||||
Credit Facility | Revolving Credit Facility | Minimum | Eurocurrency Spread | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.25% | ||||
Credit Facility | Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.50% | ||||
Credit Facility | Revolving Credit Facility | Maximum | ABR Spread | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Credit Facility | Revolving Credit Facility | Maximum | Eurocurrency Spread | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.25% | ||||
Credit Facility | Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity under Credit Facility | $ 15 | ||||
Letters of credit outstanding amount | 3 | $ 3 | |||
Credit Facility | Borrowings On Same Day Notice | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity under Credit Facility | $ 40 | ||||
Credit Facility | Amended 2015 Credit Facility in May 2020 and December 2020 | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowings allowed excluding leverage ratio covenant | $ 200 | ||||
Minimum liquidity required | $ 150 | ||||
Credit Facility, description | We amended the Credit Facility during 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 the Company 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 $200 million, and (b) the election of the Company, at which time the leverage ratio covenant will be reinstated (the “Leverage Covenant Holiday”). |
Debt - Two Thousand Twenty Five
Debt - Two Thousand Twenty Five Senior Notes - Additional Information (Details) - USD ($) $ in Millions | Jul. 09, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||
Unpaid interest in accrued expenses and other current liabilities | [1] | $ 8 | $ 16 | ||
Interest expense | $ 12 | $ 11 | |||
7.000% senior notes due July 15, 2025 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, issuance date | Jul. 9, 2020 | ||||
Debt instrument, aggregate principal amount | $ 500 | ||||
Debt instrument, interest rate | 7.00% | 7.00% | |||
Debt Instrument, date of first required payment of interest | Jan. 15, 2021 | ||||
Debt Instrument, maturity date | Jul. 15, 2025 | ||||
Debt instruments purchase agreement date | Jul. 7, 2020 | ||||
Debt instrument, redemption, description | The Company 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. The Company 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, the Company 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. | ||||
Percentage of principal amount to be paid in event of an optional redemption | 100.00% | ||||
Debt instruments offer to purchase percentage of principal amount repurchased | 101.00% | ||||
Unpaid interest in accrued expenses and other current liabilities | $ 7 | $ 16 | |||
Interest expense | $ 9 | $ 8 | |||
7.000% senior notes due July 15, 2025 | Before July 15, 2022 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 40.00% | ||||
[1] | Amount relates primarily to unpaid interest accrued on our 2025 Senior Notes. Refer to “Note 6: Debt ” for further information. |
Debt - Two Thousand Twenty Six
Debt - Two Thousand Twenty Six Senior Notes - Additional Information (Details) | Mar. 25, 2021USD ($) | Mar. 22, 2021$ / shares | Mar. 31, 2022USD ($)TradingDay$ / shares | Mar. 31, 2021USD ($) |
Debt Instrument [Line Items] | ||||
Capped call transactions cost | $ 0 | $ 35,000,000 | ||
Debt Instrument, Conversion, Period Two | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, convertible, consecutive business days immediately following threshold consecutive trading days | TradingDay | 5 | |||
0.250% Senior Notes due April 1, 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, aggregate principal amount | $ 300,000,000 | |||
Debt instrument, interest rate | 0.25% | |||
Debt Instrument, date of first required payment of interest | Oct. 1, 2021 | |||
Debt Instrument, maturity date | Apr. 1, 2026 | |||
Debt instruments purchase agreement date | Mar. 25, 2021 | |||
Debt instrument, frequency of interest payment | semiannually | |||
Debt instrument, redemption, description | The 2026 Senior Notes will be redeemable, in whole or in part, at our 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 Senior Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of our 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 we send the related redemption notice; and (2) the trading day immediately before the date we send such notice. | |||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | |||
Debt Instrument, convertible, threshold trading days | TradingDay | 20 | |||
Debt Instrument, convertible, threshold consecutive trading days | TradingDay | 30 | |||
Debt instrument, convertible, principal amount | $ 1,000 | |||
Debt instrument, initial conversion rate | 13.5483 | |||
Debt instrument, initial conversion price | $ / shares | $ 73.81 | |||
Proceeds from debt, net of issuance costs | $ 340,000,000 | |||
Debt issuance costs | $ 5,000,000 | |||
Debt issuance costs, Percentage | 0.52% | 0.60% | ||
Capped call transactions cost | $ 35,000,000 | |||
Derivative Cap Price | $ / shares | $ 107.36 | |||
Debt instrument, convertible, capped call transactions, percentage of common stock sale price | 100.00% | |||
Share Price | $ / shares | $ 53.68 | |||
Deferred tax asset | $ 9,000,000 | |||
0.250% Senior Notes due April 1, 2026 | Over-allotment Option | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, aggregate principal amount | $ 45,000,000 | |||
0.250% Senior Notes due April 1, 2026 | Debt Instrument, Conversion, Period One | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | |||
Debt Instrument, convertible, threshold trading days | TradingDay | 20 | |||
Debt Instrument, convertible, threshold consecutive trading days | TradingDay | 30 | |||
Debt instrument, conversion, description | 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 our 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; | |||
0.250% Senior Notes due April 1, 2026 | Debt Instrument, Conversion, Period Two | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, convertible, threshold percentage of stock price trigger | 98.00% | |||
Debt Instrument, convertible, threshold consecutive trading days | TradingDay | 5 | |||
Debt instrument, convertible, principal amount | $ 1,000 | |||
0.250% Senior Notes due April 1, 2026 | Common Stock | ||||
Debt Instrument [Line Items] | ||||
Common stock shares covered under capped call transactions | $ 4,700,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | |
Income Taxes [Line Items] | |||
(Provision) benefit for income taxes | $ (1) | $ 16 | |
Accrued interest liability | 40 | ||
Accrued penalties | 0 | ||
Singapore | |||
Income Taxes [Line Items] | |||
Income Taxes Receivable | 48 | ||
Domestic Country | Singapore | |||
Income Taxes [Line Items] | |||
Expected income tax expense (benefit) | $ (76) | ||
Minimum | HMRC | Tax Years 2012 Through 2016 | |||
Income Taxes [Line Items] | |||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | 45 | ||
Minimum | Expedia | IRS | Tax Years 2009 through 2016 | |||
Income Taxes [Line Items] | |||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | 100 | ||
Minimum | Expedia | IRS | 2009 through 2011 Pre Spin-Off Tax Years | |||
Income Taxes [Line Items] | |||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | 20 | ||
Maximum | HMRC | Tax Years 2012 Through 2016 | |||
Income Taxes [Line Items] | |||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | 55 | ||
Maximum | Expedia | IRS | Tax Years 2009 through 2016 | |||
Income Taxes [Line Items] | |||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | 110 | ||
Maximum | Expedia | IRS | 2009 through 2011 Pre Spin-Off Tax Years | |||
Income Taxes [Line Items] | |||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | 30 | ||
COVID-19 Pandemic | |||
Income Taxes [Line Items] | |||
Government grants and other assistance benefits recognized | $ 3 |
Stock Based Awards and Other _3
Stock Based Awards and Other Equity Instruments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Capitalized stock based compensation as internal-use software and website development costs | $ 2 | $ 3 |
Income tax benefits from exercise or settlement of stock-based awards | $ 2 | 9 |
Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Closing stock price | $ 27.12 | |
Total intrinsic value | 8 | |
Term of stock options, granted | 10 years | |
2018 Plan | Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total fair value of stock options vested | $ 6 | $ 8 |
Stock Based Awards and Other _4
Stock Based Awards and Other Equity Instruments - Amount of Stock-Based Compensation Expense Related to Stock-Based Awards, Primarily Stock Options and RSUs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 22 | $ 29 |
Income tax benefit from stock-based compensation | (4) | (5) |
Total stock-based compensation, net of tax effect | 18 | 24 |
Selling and Marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | 3 | 4 |
Technology and Content | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | 9 | 12 |
General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 10 | $ 13 |
Stock Based Awards and Other _5
Stock Based Awards and Other Equity Instruments - Summary of Stock Option Activity (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)$ / sharesshares | ||
Options Outstanding | ||
Options Outstanding, Beginning balance | shares | 5,671 | |
Options Outstanding, Granted | shares | 23 | |
Options Outstanding, Exercised | shares | (7) | [1] |
Options Outstanding, Cancelled or expired | shares | (327) | |
Options Outstanding, Ending balance | shares | 5,360 | |
Options Outstanding, Exercisable | shares | 3,976 | |
Options Outstanding, Vested and expected to vest | shares | 5,360 | [2] |
Weighted Average Exercise Price per share | ||
Options Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 47.03 | |
Options Granted, Weighted Average Exercise Price | $ / shares | 27.03 | |
Options Exercised, Weighted Average Exercise Price | $ / shares | 24.50 | [1] |
Options Cancelled or expired, Weighted Average Exercise Price | $ / shares | 54.01 | |
Options Outstanding, Weighted Average Exercise Price, Ending balance | $ / shares | 46.55 | |
Options Exercisable, Weighted Average Exercise Price | $ / shares | 49.82 | |
Options Vested and expected to vest, Weighted Average Exercise Price | $ / shares | $ 46.55 | [2] |
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | ||
Options Outstanding, Weighted Average Remaining Contractual Life | 4 years 9 months 18 days | |
Options Exercisable, Weighted Average Remaining Contractual Life | 3 years 8 months 12 days | |
Options Vested and expected to vest, Weighted Average Remaining Contractual Life | 4 years 9 months 18 days | [2] |
Options Outstanding, Aggregate Intrinsic Value | $ | $ 1 | |
Options Exercisable, Aggregate Intrinsic Value | $ | 1 | |
Options Vested and expected to vest, Aggregate Intrinsic Value | $ | $ 1 | [2] |
[1] | Inclusive of approximately 4,000 stock options which were not converted into shares due to net share settlement in order to cover the aggregate exercise price and the required amount of employee withholding taxes. Potential shares which had been convertible under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Stock and Annual Incentive Plan (the “2018 Plan”) and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows. | |
[2] | The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award. |
Stock Based Awards and Other _6
Stock Based Awards and Other Equity Instruments - Summary of Stock Option Activity (Parenthetical) (Details) | 3 Months Ended |
Mar. 31, 2022shares | |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Options non converted into shares due to net share settlement | 4,000 |
Stock Based Awards and Other _7
Stock Based Awards and Other Equity Instruments - Weighted-Average Assumptions of Estimated Fair Value of Stock Option Grants (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | ||
Risk free interest rate | 1.53% | 0.65% |
Expected term (in years) | 5 years 1 month 24 days | 5 years 3 months 29 days |
Expected volatility | 50.32% | 49.69% |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average grant date fair value | $ 12.26 | $ 20.35 |
Stock Based Awards and Other _8
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity (Details) - Restricted Stock Units $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)$ / sharesshares | ||
RSUs outstanding | ||
Unvested outstanding, Beginning balance | shares | 5,786,000 | |
Unvested RSUs, Granted | shares | 4,829,000 | |
Unvested RSUs, Vested and released | shares | (1,272,000) | [1] |
Unvested RSUs, Cancelled | shares | (401,000) | |
Unvested outstanding, Ending balance | shares | 8,942,000 | [2] |
Weighted Average Grant-Date Fair Value Per Share | ||
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Beginning balance | $ / shares | $ 36.82 | |
Weighted Average Grant-Date Fair Value Per Share, Granted | $ / shares | 27.24 | |
Weighted Average Grant-Date Fair Value Per Share, Vested and released | $ / shares | 41.56 | [1] |
Weighted Average Grant-Date Fair Value Per Share, Cancelled | $ / shares | 36.61 | |
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Ending balance | $ / shares | $ 30.98 | [2] |
Aggregate Intrinsic Value | ||
Unvested RSUs outstanding, Aggregate Intrinsic Value | $ | $ 243 | [2] |
[1] | Inclusive of approximately 295,000 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows. | |
[2] | The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award. |
Stock Based Awards and Other _9
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity (Parenthetical) (Details) | 3 Months Ended |
Mar. 31, 2022shares | |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
RSUs withheld to satisfy withholding tax requirements | 295,000 |
Stock Based Awards and Other_10
Stock Based Awards and Other Equity Instruments - Summary of Activity for MSUs (Details) - MSUs $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)$ / sharesshares | ||
MSUs outstanding | ||
Unvested outstanding, Beginning balance | shares | 120 | |
Unvested MSUs, Cancelled | shares | (35) | |
Unvested outstanding, Ending balance | shares | 85 | [1] |
Weighted Average Grant-Date Fair Value Per Share | ||
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Beginning balance | $ / shares | $ 28.15 | |
Weighted Average Grant-Date Fair Value Per Share, Cancelled | $ / shares | 28.15 | |
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Ending balance | $ / shares | $ 28.15 | [1] |
Aggregate Intrinsic Value | ||
Unvested MSUs outstanding, Aggregate Intrinsic Value | $ | $ 2 | [1] |
[1] | MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of The Nasdaq Composite Total Return Index . Based upon actual attainment relative to the target performance metric, the grantee has the ability to receive up to 200 % of the target number of MSUs originally granted, or to receive none at all. |
Stock Based Awards and Other_11
Stock Based Awards and Other Equity Instruments - Summary of Activity for MSUs (Parenthetical) (Details) - MSUs - Employee Stock Member | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of originally granted shares that may be earned upon performance achievement, maximum | 200.00% |
Percentage of originally granted shares that may be earned upon performance achievement, minimum | 0.00% |
Stock awards vesting term | MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of The Nasdaq Composite Total Return Index |
Performance measurement period start date | Jan. 1, 2020 |
Performance measurement period end date | Dec. 31, 2022 |
Stock Based Awards and Other_12
Stock Based Awards and Other Equity Instruments -Summary of Unrecognized Stock-Based Compensation Expense and Weighted Average Period Remaining (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 13 |
Weighted average period remaining (in years) | 2 years 3 months 18 days |
RSUs/MSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period remaining (in years) | 3 years 2 months 12 days |
Unrecognized compensation expense | $ 233 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Nov. 01, 2019 | |
Schedule Of Capitalization Equity [Line Items] | ||||
Repurchase of shares of common stock authorized | $ 100 | |||
Repurchase of common stock, shares | 0 | 0 | ||
Remaining authorized share repurchased amount | $ 75 | $ 75 | $ 250 | |
Treasury stock, shares | 18,844,614 | 18,844,614 | ||
Aggregate cost of treasury stock | $ 722 | $ 722 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - Stock Options, RSUs and MSUs shares in Millions | 3 Months Ended | |
Mar. 31, 2022shares | Mar. 31, 2021shares | |
Certain Performance-Based Awards | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 0.1 | 0.1 |
2026 Senior Notes | Maximum | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Cap price | 107.36 | 107.36 |
Antidilutive securities excluded from computation of earnings per share, amount | 19 | 17.8 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Weighted Average Number of Shares of Common Stock Outstanding In Calculating EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income (loss) | $ (34) | $ (80) |
Denominator: | ||
Weighted average shares used to compute Basic EPS | 139,092 | 135,746 |
Weighted average effect of dilutive securities: | ||
Weighted average shares used to compute Diluted EPS | 139,092 | 135,746 |
Basic EPS | $ (0.24) | $ (0.59) |
Diluted EPS | $ (0.24) | $ (0.59) |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2022Segment | |
Segment Reporting [Abstract] | |
Number of reportable segment | 2 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Segment Reporting Information [Line Items] | |||
Revenue | [1] | $ 262 | $ 123 |
Adjusted EBITDA | 27 | (26) | |
Depreciation and amortization | (25) | (29) | |
Stock-based compensation | (22) | (29) | |
Operating income (loss) | (20) | (84) | |
Other income (expense), net | (13) | (12) | |
Income (loss) before income taxes | (33) | (96) | |
(Provision) benefit for income taxes | (1) | 16 | |
Net income (loss) | (34) | (80) | |
Hotels, Media & Platform | |||
Segment Reporting Information [Line Items] | |||
Revenue | [1] | 160 | 88 |
Experiences & Dining Segment | |||
Segment Reporting Information [Line Items] | |||
Revenue | [1] | 92 | 28 |
Other | |||
Segment Reporting Information [Line Items] | |||
Revenue | [1] | 10 | 7 |
Adjusted EBITDA | 3 | 1 | |
Reportable Segments | Hotels, Media & Platform | |||
Segment Reporting Information [Line Items] | |||
Revenue | [2] | 160 | 88 |
Adjusted EBITDA | [2] | 46 | (3) |
Reportable Segments | Experiences & Dining Segment | |||
Segment Reporting Information [Line Items] | |||
Revenue | 92 | 28 | |
Adjusted EBITDA | (22) | (24) | |
Corporate and Unallocated | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | ||
Adjusted EBITDA | 0 | 0 | |
Depreciation and amortization | 25 | 29 | |
Stock-based compensation | $ 22 | $ 29 | |
[1] | Our revenue is recognized primarily at a point in time for all reported segments. | ||
[2] | Includes allocated corporate general and administrative costs of $ 19 million and $ 16 million for the three months ended March 31, 2022 and 2021, respectively, and Tripadvisor-branded advertising expenses of $ 1 million for both the three months ended March 31, 2022 and 2021, respectively. |
Segment Information - Summary_2
Segment Information - Summary of Segment Information (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
General and administrative | $ 40 | $ 38 |
Reportable Segments | Hotels, Media & Platform | ||
Segment Reporting Information [Line Items] | ||
General and administrative | 19 | 16 |
Advertising expense | $ 1 | $ 1 |