Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | TripAdvisor, Inc. | |
Trading Symbol | TRIP | |
Entity Central Index Key | 0001526520 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
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 And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 126,500,138 | |
Class B Common Stock | ||
Document And Entity 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 | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Income Statement [Abstract] | |||||
Revenue (Note 3) | [1] | $ 422 | $ 433 | $ 798 | $ 811 |
Costs and expenses: | |||||
Cost of revenue | [2] | 27 | 24 | 48 | 44 |
Selling and marketing | [3] | 180 | 217 | 357 | 416 |
Technology and content | [3] | 74 | 68 | 148 | 135 |
General and administrative | [3] | 45 | 46 | 88 | 88 |
Depreciation | 23 | 21 | 46 | 41 | |
Amortization of intangible assets | 7 | 8 | 15 | 16 | |
Total costs and expenses: | 356 | 384 | 702 | 740 | |
Operating income | 66 | 49 | 96 | 71 | |
Other income (expense): | |||||
Interest expense | (2) | (3) | (3) | (6) | |
Interest income and other, net | 4 | (4) | 8 | (2) | |
Total other income (expense), net | 2 | (7) | 5 | (8) | |
Income before income taxes | 68 | 42 | 101 | 63 | |
Provision for income taxes | (34) | (10) | (41) | (27) | |
Net income | $ 34 | $ 32 | $ 60 | $ 36 | |
Earnings per share attributable to common stockholders (Note 4): | |||||
Basic | $ 0.24 | $ 0.23 | $ 0.43 | $ 0.26 | |
Diluted | $ 0.24 | $ 0.23 | $ 0.43 | $ 0.26 | |
Weighted average common shares outstanding (Note 4): | |||||
Basic | 139,070 | 137,831 | 138,744 | 138,572 | |
Diluted | 140,805 | 139,619 | 141,037 | 139,971 | |
[1] | Our revenue is recognized primarily at a point in time for all reported segments. | ||||
[2] | Excludes amortization as follows: | ||||
[3] | Includes stock-based compensation expense as follows |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Costs and expenses: | ||||
Amortization of intangible assets | $ 7 | $ 8 | $ 15 | $ 16 |
Depreciation | 23 | 21 | 46 | 41 |
Amortization adjustment | 17 | 17 | 36 | 34 |
Stock-based compensation: | ||||
Stock-based compensation | 32 | 31 | 60 | 61 |
Selling and Marketing | ||||
Stock-based compensation: | ||||
Stock-based compensation | 6 | 5 | 11 | 11 |
Technology and Content | ||||
Stock-based compensation: | ||||
Stock-based compensation | 14 | 13 | 27 | 26 |
General and Administrative | ||||
Stock-based compensation: | ||||
Stock-based compensation | 12 | 13 | 22 | 24 |
Acquired Technology | ||||
Costs and expenses: | ||||
Amortization of intangible assets | 2 | 2 | 4 | 4 |
Website Development Costs | ||||
Costs and expenses: | ||||
Depreciation | $ 15 | $ 15 | $ 32 | $ 30 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Statement Of Income And Comprehensive Income [Abstract] | |||||
Net income | $ 34 | $ 32 | $ 60 | $ 36 | |
Other comprehensive income (loss): | |||||
Foreign currency translation adjustments | [1] | (1) | (17) | (3) | (9) |
Total other comprehensive loss | (1) | (17) | (3) | (9) | |
Comprehensive income | $ 33 | $ 15 | $ 57 | $ 27 | |
[1] | Foreign currency translation adjustments exclude income taxes due to our intention to indefinitely reinvest the earnings of our foreign subsidiaries in those operations. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | |
Current assets: | |||
Cash and cash equivalents (Note 6) | $ 901 | $ 655 | |
Short-term marketable securities (Note 6) | 65 | 15 | |
Accounts receivable and contract assets, net of allowance for doubtful accounts of $22 and $21, respectively (Note 3) | 270 | 212 | |
Prepaid expenses and other current assets | 35 | 33 | |
Total current assets | 1,271 | 915 | |
Property and equipment, net (Note 7) | 262 | 253 | [1] |
Operating lease right-of-use assets (Note 2) | 75 | ||
Intangible assets, net of accumulated amortization of $155 and $140, respectively | 102 | 118 | |
Goodwill (Note 8) | 754 | 756 | |
Deferred income taxes, net | 1 | 27 | |
Other long-term assets | 101 | 98 | |
TOTAL ASSETS | 2,566 | 2,167 | |
Current liabilities: | |||
Accounts payable | 13 | 15 | |
Deferred merchant payables | 346 | 164 | |
Deferred revenue (Note 3) | 98 | 63 | |
Accrued expenses and other current liabilities | 181 | 151 | [2] |
Total current liabilities | 638 | 393 | |
Deferred income taxes, net | 12 | 21 | |
Other long-term liabilities (Note 11) | 341 | 282 | [1] |
Total Liabilities | 991 | 696 | |
Commitments and contingencies (Note 12) | |||
Stockholders’ equity: (Note 13) | |||
Preferred stock, $0.001 par value Authorized shares: 100,000,000 Shares issued and outstanding: 0 and 0 | |||
Additional paid-in capital | 1,081 | 1,037 | |
Retained earnings | 1,106 | 1,043 | [3] |
Accumulated other comprehensive income (loss) | (65) | (62) | |
Treasury stock-common stock, at cost, 12,056,688 and 12,056,688 shares, respectively | (547) | (547) | |
Total Stockholders’ Equity | 1,575 | 1,471 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,566 | $ 2,167 | |
[1] | Refer to the below discussion regarding the transition accounting for operating and finance leases upon adoption of ASC 842. | ||
[2] | This adjustment primarily represents the short-term portion of operating and finance lease obligations recorded upon adoption of ASC 842, discussed below. | ||
[3] | Represents a cumulative-effect adjustment of $3 million, net of tax to our beginning balance of retained earnings recorded upon adoption of ASC 842. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Allowance for doubtful accounts | $ 22 | $ 21 |
Intangible assets, accumulated amortization | $ 155 | $ 140 |
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 | 138,525,158 | 137,158,010 |
Common stock, shares outstanding | 126,468,470 | 125,101,322 |
Treasury stock, shares | 12,056,688 | 12,056,688 |
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 Statement of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Class B Common Stock | Common Stock | Common StockClass B Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance at Dec. 31, 2017 | $ 1,363 | $ 926 | $ 926 | $ (42) | $ (447) | |||
Beginning balance, shares at Dec. 31, 2017 | 135,617,263 | 12,799,999 | (9,474,490) | |||||
Net income | 36 | 36 | ||||||
Cumulative effect adjustment from adoption of new accounting guidance | 4 | 4 | ||||||
Other comprehensive loss | (9) | (9) | ||||||
Issuance of common stock related to exercises of options and vesting of RSUs | 3 | 3 | ||||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 1,160,769 | |||||||
Repurchase of common stock (Note 13) | $ (100) | $ (100) | ||||||
Repurchase of common stock, shares | (2,582,198) | (2,582,198) | ||||||
Withholding taxes on net share settlements of equity awards | $ (18) | (18) | ||||||
Stock-based compensation | 68 | 68 | ||||||
Ending balance at Jun. 30, 2018 | 1,347 | 979 | 966 | (51) | $ (547) | |||
Ending balance, shares at Jun. 30, 2018 | 136,778,032 | 12,799,999 | (12,056,688) | |||||
Beginning balance at Mar. 31, 2018 | 1,389 | 946 | 934 | (34) | $ (457) | |||
Beginning balance, shares at Mar. 31, 2018 | 136,396,872 | 12,799,999 | (9,727,140) | |||||
Net income | 32 | 32 | ||||||
Other comprehensive loss | (17) | (17) | ||||||
Issuance of common stock related to exercises of options and vesting of RSUs | 3 | 3 | ||||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 381,160 | |||||||
Repurchase of common stock (Note 13) | $ (90) | $ (90) | ||||||
Repurchase of common stock, shares | (2,329,548) | (2,329,548) | ||||||
Withholding taxes on net share settlements of equity awards | $ (6) | (6) | ||||||
Stock-based compensation | 36 | 36 | ||||||
Ending balance at Jun. 30, 2018 | 1,347 | 979 | 966 | (51) | $ (547) | |||
Ending balance, shares at Jun. 30, 2018 | 136,778,032 | 12,799,999 | (12,056,688) | |||||
Beginning balance at Dec. 31, 2018 | $ 1,471 | 1,037 | 1,043 | (62) | $ (547) | |||
Beginning balance, shares at Dec. 31, 2018 | 125,101,322 | 12,799,999 | 137,158,010 | 12,799,999 | (12,056,688) | |||
Net income | $ 60 | 60 | ||||||
Cumulative effect adjustment from adoption of new accounting guidance | 3 | 3 | ||||||
Other comprehensive loss | (3) | (3) | ||||||
Issuance of common stock related to exercises of options and vesting of RSUs | $ 1 | 1 | ||||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 1,367,148 | |||||||
Repurchase of common stock, shares | 0 | |||||||
Withholding taxes on net share settlements of equity awards | $ (26) | (26) | ||||||
Stock-based compensation | 69 | 69 | ||||||
Ending balance at Jun. 30, 2019 | $ 1,575 | 1,081 | 1,106 | (65) | $ (547) | |||
Ending balance, shares at Jun. 30, 2019 | 126,468,470 | 12,799,999 | 138,525,158 | 12,799,999 | (12,056,688) | |||
Beginning balance at Mar. 31, 2019 | $ 1,507 | 1,046 | 1,072 | (64) | $ (547) | |||
Beginning balance, shares at Mar. 31, 2019 | 138,256,630 | 12,799,999 | (12,056,688) | |||||
Net income | 34 | 34 | ||||||
Other comprehensive loss | (1) | (1) | ||||||
Issuance of common stock related to exercises of options and vesting of RSUs | $ 1 | 1 | ||||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 268,528 | |||||||
Repurchase of common stock, shares | 0 | |||||||
Withholding taxes on net share settlements of equity awards | $ (4) | (4) | ||||||
Stock-based compensation | 38 | 38 | ||||||
Ending balance at Jun. 30, 2019 | $ 1,575 | $ 1,081 | $ 1,106 | $ (65) | $ (547) | |||
Ending balance, shares at Jun. 30, 2019 | 126,468,470 | 12,799,999 | 138,525,158 | 12,799,999 | (12,056,688) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities: | ||
Net income | $ 60 | $ 36 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of property and equipment, including amortization of internal-use software and website development | 46 | 41 |
Amortization of intangible assets | 15 | 16 |
Stock-based compensation expense | 60 | 61 |
Deferred tax expense (benefit) | 17 | (3) |
Other, net | 6 | 11 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable and contract assets, prepaid expenses and other assets | (61) | (82) |
Accounts payable, accrued expenses and other liabilities | (1) | 29 |
Deferred merchant payables | 183 | 201 |
Income tax receivables/payables, net | 3 | 5 |
Deferred revenue | 35 | 45 |
Net cash provided by operating activities | 363 | 360 |
Investing activities: | ||
Capital expenditures, including internal-use software and website development | (38) | (31) |
Purchases of marketable securities | (69) | (1) |
Sales of marketable securities | 45 | |
Maturities of marketable securities | 20 | 5 |
Acquisitions and other investments, net of cash acquired | (23) | |
Net cash used in investing activities | (87) | (5) |
Financing activities: | ||
Repurchase of common stock | (100) | |
Proceeds from exercise of stock options | 1 | 3 |
Payment of withholding taxes on net share settlements of equity awards | (26) | (18) |
Other financing activities, net | (3) | |
Net cash used in financing activities | (28) | (353) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2) | (9) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 246 | (7) |
Cash, cash equivalents and restricted cash at beginning of period | 655 | 673 |
Cash, cash equivalents and restricted cash at end of period | $ 901 | 666 |
2015 Credit Facility | ||
Financing activities: | ||
Proceeds from credit facility | 5 | |
Payments to credit facility | (235) | |
Chinese Credit Facilities | ||
Financing activities: | ||
Proceeds from credit facility | 2 | |
Payments to credit facility | $ (10) |
Business Description and Basis
Business Description and Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation | NOTE 1: BUSINESS DESCRIPTION AND BASIS OF PRESENTATION We refer to TripAdvisor, Inc. and our subsidiaries as “TripAdvisor”, “the Company”, “us”, “we” and “our” in these notes to the unaudited condensed consolidated financial statements. Description of Business TripAdvisor is an online travel company and our mission is to help people around the world plan, book and experience the perfect trip. We seek to achieve our mission by providing consumers and travel partners a global platform of rich content, price comparison tools and online reservation and related services for destinations, accommodations, travel activities and experiences, and restaurants. TripAdvisor, Inc., by and through its subsidiaries, owns and operates a portfolio of leading online travel brands. Our flagship brand is TripAdvisor. TripAdvisor-branded websites include tripadvisor.com in the United States and localized versions of the website in 48 markets and 28 languages worldwide. TripAdvisor features approximately 795 million reviews and opinions on approximately 8.4 million places to stay, places to eat and things to do – including 1.4 million hotels, inns, B&Bs and specialty lodging, 900,000 rental properties, 5.0 million restaurants and 1.1 million travel activities and experiences worldwide. We also enable consumers to compare prices and book a number of these travel experiences on either a TripAdvisor website or mobile application (“mobile app”), or on the website or mobile app of one of our travel partners. In addition to the flagship TripAdvisor brand, we manage and operate the following other travel media brands: www.airfarewatchdog.com, www.bokun.io, www.bookingbuddy.com, www.cruisecritic.com, www.familyvacationcritic.com, www.flipkey.com, www.thefork.com (including www.lafourchette.com, www.eltenedor.com, and www.restorando.com), www.holidaylettings.co.uk, www.holidaywatchdog.com, www.housetrip.com, www.jetsetter.com, www.niumba.com, www.onetime.com, www.oyster.com, www.seatguru.com, www.smartertravel.com, www.tingo.com, www.vacationhomerentals.com, and www.viator.com. During the first quarter of 2019, a s part of our continuous review of the business, we evaluated our operations and realigned the reportable segment information which our Officer. The revised segment reporting structure includes the following reportable segments: (1) Hotels, Media & Platform; and (2) Experiences & Dining. For further information on our segments, including the change in segments, and principal revenue streams within these segments refer to “Note 3: Revenue Recognition ” and “Note 15: Segment Information ,” in these notes to our unaudited condensed consolidated financial statements. All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Form 10-Q. These reclassifications had no effect on our unaudited condensed consolidated financial statements in any period. 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’ financials were not material for all periods presented. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“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. unaudited condensed consolidated balance sheet as of December 31, 2018 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. 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 include: (i) recognition and recoverability of goodwill, definite-lived intangibles and other long-lived assets; and (ii) accounting for income taxes. Seasonality Global travel market expenditures tend to follow a seasonal pattern. Correspondingly, advertising investments made by travel partners and, therefore, our revenue and profits, also tend to follow 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. Significant shifts in our business mix or adverse economic conditions could result in future seasonal patterns that are different from historical trends. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES New Accounting Pronouncements Not Yet Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance which require a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. The accounting for the cost of the hosting component of the arrangement (i.e., service costs the customer pays for the cloud computing service) is not affected by this new guidance. The Company uses both internally-developed software and third-party software to operate its business. In June 2016, the FASB issued new accounting guidance which replaces the existing incurred loss impairment model with an expected loss methodology on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable and available-for-sale debt securities. For financial assets measured at amortized cost, this new guidance requires an entity to: (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected; (2) recognize this allowance and changes in the allowance during subsequent periods through net income; and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. For available-for-sale debt securities, this new guidance made several targeted amendments to the existing other-than-temporary impairment model, including: (1) requiring disclosure of the allowance for credit losses; (2) allowing reversals of the previously recognized credit losses until the entity has the intent to sell, is more-likely-than-not required to sell the securities or the maturity of the securities; (3) limiting impairment to the difference between the amortized cost basis and fair value; and (4) not allowing entities to consider the length of time that fair value has been less than amortized cost as a factor in evaluating whether a credit loss exists. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted, including interim periods within those fiscal years beginning after December 15, 2018. Entities are required to adopt this new guidance on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption Recently Adopted Accounting Pronouncements In February 2016, the FASB issued new guidance which revises the accounting for leases (“ASC 842”). ASC 842 requires entities that lease assets to recognize right-of-use (ROU) assets representing its right to use the underlying asset for the lease term and lease liabilities related to the rights and obligations created by those leases on the balance sheet regardless of whether they are classified as finance or operating leases, . In addition, new disclosures are required to meet the objective of enabling users of the financial statements to better understand the amount, timing, and uncertainty of cash flows arising from leases. W to reflect We elected the following practical expedients available in transition upon adoption of ASC 842 and accounting policy updates: 1) the “practical expedients package of three”, which allows us to not reassess the following: a) whether any expired or existing contracts are or contain a lease as of the adoption date, b) the lease classification for any expired or existing leases as of the adoption date; and c) the accounting treatment for initial direct costs for existing leases as of the adoption date; 2) the “short-term lease recognition exemption”, which allows entities to forego recognition of ROU assets and lease liabilities for leases with a lease term of twelve months or less and which also do not include an option to renew the lease term that the entity is reasonably certain to exercise; 3) elect by asset class as an accounting policy, to combine lease and non-lease components as a single component and subsequently account for the combined single component as the lease component; and 4) apply the portfolio approach to similar types of leases where the Company does not reasonably expect the outcome to differ materially from applying the new guidance to individual leases. The adoption of ASC 842 did not have a material impact to our unaudited condensed consolidated statement of operations during the three and six months ended June 30, 2019 or unaudited condensed consolidated statement of cash flows during the six months ended June 30, 2019. The effect on our unaudited condensed consolidated balance sheet as of January 1, 2019 from the adoption of ASC 842 is as follows: Balance at December 31, 2018 Adjustments due to ASC 842 Balance at January 1, 2019 (in millions) Assets: Prepaid expenses and other current assets $ 33 $ (3 ) $ 30 Property and equipment, net (1) 253 8 261 Operating lease right-of-use assets (1) — 75 75 Deferred income taxes, net 27 (1 ) 26 Other long-term assets 98 (2 ) 96 Liabilities: Accrued expenses and other current liabilities (2) 151 21 172 Other long-term liabilities (1) 282 53 335 Retained earnings (3) $ 1,043 $ 3 $ 1,046 (1) Refer to the below discussion regarding the transition accounting for operating and finance leases upon adoption of ASC 842. (2) This adjustment primarily represents the short-term portion of operating and finance lease obligations recorded upon adoption of ASC 842, discussed below. (3) Represents a cumulative-effect adjustment of $3 million, net of tax to our beginning balance of retained earnings recorded upon adoption of ASC 842. We lease office space in a number of countries around the world under non-cancelable lease agreements. Our corporate headquarters lease (“Headquarters Lease”) is our most significant office space lease. The Company has also entered into data center and certain equipment leases, such as network equipment and other leases, which are not material to our unaudited condensed consolidated financial statements. We determine whether a contract is or contains a lease at inception of a contract. We define a lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Control over the use of the identified asset means that we have both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. Our lease contracts contain both lease and non-lease components. We account separately for the lease and non-lease components of office space leases and certain other leases, such as data center leases. We allocate the consideration in the contract to the lease and non-lease components based on each component’s relative standalone price. We determine standalone prices for the lease components based on the prices for which other lessors lease similar assets on a standalone basis. We determine standalone prices for the non-lease component based on the prices that other suppliers charge for services for similar assets on a standalone basis. If observable standalone prices are not readily available, we estimate the standalone prices based on other available observable information. However, for certain categories of equipment leases, such as network equipment and others, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases that have similar characteristics, we apply a portfolio approach to effectively account for operating lease ROU assets and operating lease liabilities, hence we do not expect the outcome to differ materially from applying the new guidance to individual leases. The Company uses its estimated incremental borrowing rate as the discount rate in measuring the present value of our lease payments given the rate implicit in our leases is not typically readily determinable. Given we do not currently borrow on a collateralized basis, our incremental borrowing rate is estimated to approximate the interest rate in which the Company would expect to pay on a collateralized basis over a similar term and payments, and in economic environments where the leased asset is located. We use the portfolio approach to determine the discount rate for leases with similar characteristics or when the Company is reasonably certain that doing so would not materially affect the accounting for those leases to which a single discount rate is applied. Operating Leases Our office space leases, exclusive of our Headquarters Lease, are operating leases, which expire at various dates with the latest maturity in June 2027. Based on the present value of remaining lease payments on the Company's existing leases, we recognized $88 million of both operating ROU assets and operating lease liabilities, respectively on our unaudited condensed consolidated balance sheet upon adoption of ASC 842, as of January 1, 2019. These operating ROU assets were then reduced by a net deferred rent balance of $13 million as of January 1, 2019, which primarily consisted of existing deferred and prepaid rent balances. Operating lease ROU assets and liabilities commencing after January 1, 2019 are recognized at lease commencement date, or the date the lessor makes the leased asset available for use, based on the present value of lease payments over the lease term using the Company’s estimated incremental borrowing rate. ROU assets related to operating leases comprise the initial lease liability, and are then adjusted for any prepaid or deferred rent payments, unamortized initial direct costs, and lease incentives received. Amortization expense for operating lease ROU assets and interest accretion on operating lease liabilities are recognized as a single operating lease cost in our consolidated statement of operations, which results effectively in recognition of rent expense on a straight-line basis over the lease period. The carrying amount of operating lease liabilities are (1) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable; and (2) reduced to reflect lease payments made during the period. We present the combination of both the amortization of operating lease ROU assets and the change in the operating lease liabilities in the same line item in the adjustments to reconcile net income to net cash provided by operating activities in our unaudited condensed consolidated statement of cash flows. Lease incentives are recognized as reductions of rental expense on a straight-line basis over the term of the lease. Certain of our operating leases include options to extend the lease terms for up to 6 years and/or terminate the leases within 1 year, which we include in our lease term if we are reasonably certain to exercise these options. Payments under our operating leases are primarily fixed, however, certain of our operating lease agreements include rental payments which are adjusted periodically for inflation. We recognize these costs as variable lease costs on our unaudited condensed consolidated statement of operations, which were not material during the three and six months ended June 30, 2019 and 2018. In addition, our short-term lease costs were not material in any period. As of June 30, 2019, our operating lease ROU assets was $75 million as presented on our unaudited condensed consolidated balance sheet. Finance Lease In June 2013, we entered into our Headquarters Lease. Pursuant to the Headquarters Lease, the landlord built an approximately 280,000 square foot rental building in Needham, Massachusetts (the “Premises”), and leased the Premises to the Company as our new corporate headquarters for an initial term of 15 years and 7 months or through December 2030. The Company also has an option to extend the term of the Headquarters Lease for two consecutive terms of five years each. The Company was deemed to be the owner of the Premises for accounting purposes only during the construction period under legacy GAAP accounting rules for lease accounting, or ASC 840. Accordingly, the Company recorded project construction costs during the construction period incurred by the landlord as a construction-in-progress asset and a related construction financing obligation on our consolidated balance sheet. The amounts that the Company incurred for normal tenant improvements and structural improvements had also been recorded to the construction-in-progress asset. Upon completion of construction at the end of the second quarter of 2015, we evaluated the construction-in-progress asset and construction financing obligation for de-recognition under the criteria for “sale-leaseback” treatment under ASC 840. We concluded that it did not meet the provisions for sale-leaseback accounting. Therefore, the Headquarters Lease was accounted for as a financing obligation through December 31, 2018, in which we depreciated the building asset over its estimated useful life and incurred interest expense related to the financing obligation, imputed using the effective interest rate method. Upon the adoption of ASC 842 on January 1, 2019, we derecognized the previous assets and liabilities recorded for the Headquarters Lease described above, with the exception of net assets and liabilities of $26 million, primarily related to structural improvements paid by the Company, net of tenant incentives and accumulated amortization, which is classified as net prepaid rent under the new guidance. The Company then assessed the lease classification of our Headquarters Lease and concluded it should be classified and accounted for as a finance lease upon adoption on January 1, 2019. Accordingly, on January 1, 2019, we recognized a finance lease ROU asset and a finance lease liability of $114 million and $88 million, respectively, on our unaudited condensed consolidated balance sheet. The difference between the finance lease ROU asset and finance lease liability represents the aforementioned $26 million of net prepaid rent, and is being amortized straight-line over the remaining lease term. Finance lease ROU assets and finance lease liabilities commencing after January 1, 2019 are recognized similar to an operating lease, at the lease commencement date or the date the lessor makes the leased asset available for use. Finance lease ROU assets are generally amortized on a straight-line basis over the lease term, and the carrying amount of the finance lease liabilities are (1) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable, and (2) reduced to reflect lease payments made during the period. Amortization expense for finance lease ROU assets and interest accretion on finance lease liabilities are recorded to depreciation and interest expense, respectively, in our consolidated statement of operations. We did not update any financial information or provide any disclosures required under the new guidance for the three and six months ended June 30, 2018, respectively, or as of December 31, 2018. The disclosures provided below for the three and six months ended June 30, 2018, respectively, or as of December 31, 2018 are based on the disclosure requirements under ASC 840. The components of lease expense were as follows for the periods presented Three months ended June 30, 2019 Six months ended June 30, 2019 (in millions) Operating lease cost (1) $ 6 $ 12 Finance lease cost Amortization of right-of-use assets (2) $ 2 $ 5 Interest on lease liabilities (3) 1 2 Total finance lease cost $ 3 $ 7 Sublease income (1) (1 ) (2 ) Total lease cost, net $ 8 $ 17 (1) Operating lease costs, net of sublease income, are included within operating expenses in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded operating lease expense of $5 million and $9 million, respectively; and sublease income of $1 million for both the three and six months ended June 30, 2018 in our unaudited condensed consolidated statement of operations in accordance with ASC 840. (2) Amount is included in depreciation expense in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded depreciation expense of $1 million and $2 million, respectively, related to our Headquarters Lease in our unaudited condensed consolidated statement of operations in accordance with ASC 840. (3) Amount is included in interest expense in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded interest expense of $2 million and $4 million, respectively, related to our Headquarters Lease in our unaudited condensed consolidated statement of operations in accordance with ASC 840. Additional information related to our leases is as follows for the periods presented: Six months ended June 30, 2019 Supplemental Cash Flows Information: (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 14 Operating cash outflows from finance lease 2 Financing cash outflows from finance lease (1) 3 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (2) $ 97 Finance lease (3) 88 (1) Amount is included in other financing activities, net on the unaudited condensed consolidated statement of cash flows. (2) Amount includes operating leases existing on January 1, 2019 of $88 million and those that commenced during the six months ended June 30, 2019 of $9 million. (3) Amount represents the finance lease liability arising from obtaining the ROU asset related to our Headquarters Lease, which was recognized upon the adoption of ASC 842 on January 1, 2019. As of June 30, 2019 Weighted-average remaining lease term: Operating leases 4.8 years Finance lease 11.5 years Weighted-average discount rate: Operating leases 4.32% Finance lease 4.49% Future lease payments under non-cancellable leases as of June 30, 2019 were as follows: Year Ending December 31, Operating Leases Finance Lease (in millions) 2019 (excluding the six months ended June 30, 2019) $ 10 $ 4 2020 21 9 2021 20 10 2022 19 10 2023 12 10 Thereafter 12 67 Total future lease payments 94 110 Less imputed interest (9 ) (25 ) Total lease liabilities $ 85 $ 85 Reported on unaudited condensed consolidated balance sheet as of June 30, 2019 Operating Leases Finance Lease Accrued expenses and other current liabilities $ 18 $ 5 Other long-term liabilities 67 80 Total lease liabilities $ 85 $ 85 As of December 31, 2018, future minimum lease commitments under our Headquarters Lease and other non-cancelable operating leases for office space with terms of more than one year and contractual sublease income were as follows: Year Headquarters Lease (1) Other Operating Leases Sublease Income Total Lease Commitments (Net of Sublease Income) (in millions) 2019 9 $ 19 $ (3 ) $ 25 2020 9 18 (2 ) 25 2021 10 16 (2 ) 24 2022 10 16 (2 ) 24 2023 10 9 — 19 Thereafter 67 9 — 76 Total $ 115 $ 87 $ (9 ) $ 193 (1) Amount includes an $83 million financing obligation in other long-term liabilities on our consolidated balance sheet at December 31, 2018, related to the Headquarters Lease. As of June 30, 2019, we did not have any additional operating or finance leases that have not yet commenced but that create significant rights and obligations for us. Significant Accounting Policies Other than our accounting policy for leases, as described above, there have been no other significant changes to our significant accounting policies and estimates since December 31, 2018, as described under “Note 2: Significant Accounting Policies |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2019 | |
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 under Revenue from Contracts with Customers (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 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 and six months ended June 30, 2019 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 reported 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, which is primarily comprised of contextually-relevant booking links to our travel partners’ websites. Our click-based travel partners are predominantly online travel agencies, or OTAs, and direct suppliers in the hotel category. Click-based advertising is generally priced on a cost-per-click, or “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 that our travel partners pay are determined in a dynamic, competitive auction process, also known as our hotel metasearch auction, as travel partner CPC bids for rates and availability listed on our site are submitted. When a CPC bid is submitted, the partner agrees to pay us the bid amount each time a traveler clicks on the link to that partner’s website. 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 transaction revenue from our hotel instant booking feature, which enables hotel shoppers to book directly with a travel partner, with the latter serving as the merchant of record for the transaction, without leaving our website. We earn a commission from our travel partners for each traveler that completes a hotel reservation on our website based on a pre-determined commission rate. Our hotel instant booking revenue includes (i) arrangements where commissions are billable on all instant booking hotel reservations; and (ii) arrangements where the commissions are billable only upon the completion of each traveler’s stay resulting from the reservation. The travel partners provide the service to the travelers and we act as an agent under ASC 606. Our performance obligation in both arrangements is complete at the time of the booking and the commission earned is recognized upon booking, as we have no post-booking service obligations. The amount of revenue recognized for commissions that are billable contingent upon a traveler stay requires an estimate of the impact of cancellations using historical cancellation rates. Contract assets are recognized at the time of booking for commissions that are billable at the time of stay. In addition, we offer subscription-based advertising to hoteliers, owners of B&Bs and other specialty lodging properties. Our performance obligation is generally to enable subscribers to advertise their businesses on our website, as well as 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 for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. We also offer travel partners the opportunity to advertise and promote their business through hotel sponsored placements on our website. 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 that our travel partners pay are based on a pre-determined rate. We record 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. Click-based 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 . Travel partners can promote their brands through display-based advertising placements on our websites 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 websites 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 for consumers to research, book and experience activities and attractions in popular travel destinations both through Viator, our dedicated Experiences offering, and on our TripAdvisor website and mobile apps. We also power travel activities and experiences booking capabilities to consumers on affiliate partner websites, including some of the world’s top airlines, hotel chains, and online and offline travel agencies. We work with local tour or travel activities/experiences operators (“the supplier”) to provide consumers the ability to book tours, activities and experiences (“the activity”) in popular destinations worldwide. We generate commissions for each booking transaction we facilitate through our online reservation system. We provide post-booking service to the customer until the time of the activity, which is the completion of the performance obligation. Revenue is recognized at the time that the activity occurs. We do not control the activity before the supplier activities available on our platform to generate bookings. In these transactions, where we are not the merchant of record, we generally invoice and receive commissions directly from the third-party merchant partners. Our performance obligation is to allow the third-party merchant partners to display and promote on their website suppliers who utilize our platform and we earn a commission when consumers book and complete an activity. We do not control the service and act as an agent for these transactions under ASC 606. Our performance obligation is complete and revenue is recognized at the time of the booking, as we have no post-booking obligations. We recognize this revenue net of an estimate of the impact of cancellations using historical cancellation rates. Contract assets are recognized for commissions that are billable contingent upon completion of the activity. We also provide information and services for consumers to research and book restaurants in popular travel destinations through our dedicated restaurant reservations offering, TheFork, and on our TripAdvisor-branded websites and mobile apps. TheFork is an online restaurant booking platform operating on a number of websites (including www.thefork.com, www.lafourchette.com, www.eltenedor.com, and www.restorando.com), with a network of restaurant partners located primarily across Europe, Australia, and South America. We primarily generate transaction fees (or per seated diner fees) that are paid by restaurants 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, Other We provide information and services for travelers to research and book vacation and short-term rental properties, including full homes, condominiums, villas, beach properties, cabins and cottages. Our Rentals offering generates revenue primarily by offering individual property owners and managers the ability to list their properties on our websites and mobile apps thereby connecting with travelers through a free-to-list, commission-based option or, to a lesser extent, by an annual subscription-based fee structure. 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. In addition, 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 15: Segment Information ”, our business consists of two reportable segments – Hotels, Media & Platform and Experiences & Dining. A reconciliation of disaggregated revenue to segment revenue is also included below. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Major products/revenue sources (1): (in millions) Hotels, Media & Platform TripAdvisor-branded hotels $ 211 $ 231 $ 427 $ 447 TripAdvisor-branded display and platform 43 41 81 77 Total Hotels, Media & Platform 254 272 508 524 Experiences & Dining 125 98 206 161 Other 43 63 84 126 Total Revenue $ 422 $ 433 $ 798 $ 811 (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 from contracts with customers (in millions): June 30, 2019 December 31, 2018 Accounts receivable 261 205 Contract assets 9 7 Total $ 270 $ 212 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. 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 sheets. As of January 1, 2019, we had $63 million recorded as deferred revenue on our unaudited condensed consolidated balance sheet, of which $12 million and $46 million was recognized into revenue, during the three and six months ended June 30, 2019, respectively. As of January 1, 2018, we had $59 million recorded as deferred revenue on our unaudited condensed consolidated balance sheet, of which $13 million and $45 million was recognized in revenue, during the three and six months ended June 30, 2018, 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. 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. There were no significant changes in contract assets or deferred revenue during the six months ended June 30, 2019 and 2018 related to business combinations, impairments, cumulative catch-ups or other material adjustments. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 4: EARNINGS PER SHARE Basic Earnings Per Share Attributable to Common Stockholders We compute basic earnings per share, or Basic EPS, by dividing net income 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. 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 June 30, Six months ended June 30, 2019 2018 2019 2018 Numerator: Net income $ 34 $ 32 $ 60 $ 36 Denominator: Weighted average shares used to compute Basic EPS 139,070 137,831 138,744 138,572 Weighted average effect of dilutive securities: Stock options 187 278 296 198 RSUs/MSUs 1,548 1,510 1,997 1,201 Weighted average shares used to compute Diluted EPS 140,805 139,619 141,037 139,971 Basic EPS $ 0.24 $ 0.23 $ 0.43 $ 0.26 Diluted EPS $ 0.24 $ 0.23 $ 0.43 $ 0.26 Potential common shares, consisting of outstanding stock options, service and performance-based restricted stock units (“RSUs”) and market-based restricted stock units (“MSUs”), totaling approximately 6.1 million shares and 4.8 million shares for the three and six months ended June 30, 2019, respectively, and approximately 6.0 million shares and 9.0 million shares for the three and six months ended June 30, 2018, respectively, have been excluded from the calculation of Diluted EPS because their effect would have been antidilutive. In addition, potential common shares of certain performance-based awards of approximately 0.5 million shares for both the three and six months ended June 30, 2019, and approximately 0.8 million shares for both the three and six months ended June 30, 2018, for which all targets required to trigger vesting had not been achieved, were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods. 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. |
Stock Based Awards and Other Eq
Stock Based Awards and Other Equity Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Awards and Other Equity Instruments | NOTE 5: 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 on our unaudited condensed consolidated statements of operations during the periods presented: Three months ended Six months ended June 30, June 30, 2019 2018 2019 2018 (in millions) (in millions) Selling and marketing $ 6 $ 5 $ 11 $ 11 Technology and content 14 13 27 26 General and administrative 12 13 22 24 Total stock-based compensation expense 32 31 60 61 Income tax benefit from stock-based compensation (8 ) (8 ) (14 ) (15 ) Total stock-based compensation expense, net of tax $ 24 $ 23 $ 46 $ 46 We capitalized $5 million and $9 million of stock-based compensation expense as internal-use software and website development costs during the three and six months ended June 30, 2019, respectively, and $4 million and $7 million during the three and six months ended June 30, 2018, respectively. Stock-Based Award Activity and Valuation 2019 Stock Option Activity During the six months ended June 30, 2019, we granted 674,781 service-based non-qualified stock options under the TripAdvisor, Inc. 2018 Stock and Annual Incentive Plan (the “2018 Plan”). 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. A summary of our stock option activity during the six months ended June 30, 2019, 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, 2018 6,041 $ 54.00 Granted 675 53.31 Exercised (1) (160 ) 42.41 Cancelled or expired (209 ) 60.83 Options outstanding at June 30, 2019 6,347 $ 54.00 6.3 $ 20 Exercisable as of June 30, 2019 3,516 $ 60.19 4.5 $ 7 Vested and expected to vest after June 30, 2019 (2) 6,347 $ 54.00 6.3 $ 20 (1) Inclusive of 100,356 of 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 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 unaudited condensed 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 June 30, 2019 was $46.29. The total intrinsic value of stock options exercised for the six months ended June 30, 2019 and 2018 was $2 million and $6 million, respectively. 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 Six months ended June 30, June 30, 2019 2018 2019 2018 Risk free interest rate 2.22 % 2.71 % 2.42 % 2.66 % Expected term (in years) 5.18 5.45 5.19 5.45 Expected volatility 40.84 % 42.08 % 42.17 % 42.29 % Expected dividend yield — % — % — % — % Weighted-average grant date fair value $ 19.75 $ 19.27 $ 21.80 $ 17.62 The total fair value of stock options vested was $10 million and $12 million for the six months ended June 30, 2019 and 2018, respectively. Cash received from stock option exercises was $1 million and $3 million for the six months ended June 30, 2019 and 2018, respectively. 2019 RSU Activity During the six months ended June 30, 2019, we granted 2,652,790 primarily service-based RSUs under the 2018 Plan which typically vest equally over a four-year requisite service period. A summary of our RSU activity during the six months ended June 30, 2019 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, 2018 6,640 $ 44.93 Granted 2,653 53.38 Vested and released (1) (1,755 ) 47.40 Cancelled (414 ) 46.75 Unvested RSUs outstanding as of June 30, 2019 7,124 $ 47.70 $ 332 (1) A summary of our MSU activity during the six months ended June 30, 2019 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, 2018 284 $ 37.41 Granted (1) 78 57.62 Vested and released ― ― Cancelled ― ― Unvested MSUs outstanding as of June 30, 2019 362 $ 41.76 $ 17 (1) MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2019 through December 31, 2021 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 be issued none at all. These MSUs were granted under the 2018 Plan. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices and TSR of the Company and the Nasdaq Composite Total Return Index over the performance period, was used to calculate the grant-date fair value of our MSU awards. The estimated grant-date fair value of these awards is being amortized on a straight-line basis over the requisite service period through December 31, 2021. Total current income tax benefits associated with the exercise or settlement of TripAdvisor stock-based awards held by our employees was $3 million and $22 million during the three and six months ended June 30, 2019, respectively and $5 million and $9 million during the three and six months ended June 30, 2018, respectively. Unrecognized Stock-Based Compensation A summary of our remaining unrecognized stock-based compensation expense and the weighted average remaining amortization period at June 30, 2019 related to our non-vested equity awards is presented below (in millions, except in years information): Stock Options RSUs/MSUs Unrecognized compensation expense $ 41 $ 292 Weighted average period remaining (in years) 2.9 2.8 |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Investments All Other Investments [Abstract] | |
Financial Instruments | NOTE 6: FINANCIAL INSTRUMENTS Cash, Cash Equivalents, Restricted Cash and Marketable Securities The following tables show our cash, cash equivalents, restricted cash, short-term and long-term available-for-sale marketable debt securities, by major security type, that are measured at fair value on a recurring basis and were categorized using the fair value hierarchy, as well as their classification on June 30, 2019 Amortized Cost Fair Value (2) Cash, Cash Equivalents and Restricted Cash Short-Term Marketable Securities Long-Term Marketable Securities Cash and restricted cash (1) $ 870 $ 870 $ 870 $ — $ — Level 1: Money market funds 31 31 31 — — Level 2: Commercial paper 65 65 — 65 — Total $ 966 $ 966 $ 901 $ 65 $ — December 31, 2018 Amortized Cost Fair Value (2) Cash, Cash Equivalents and Restricted Cash Short-Term Marketable Securities Long-Term Marketable Securities Cash and restricted cash (1) $ 522 $ 522 $ 522 $ — $ — Level 1: Money market funds 128 128 128 — — Level 2: Commercial paper 20 20 5 15 — Total $ 670 $ 670 $ 655 $ 15 $ — (1) As of June 30, 2019 and December 31, 2018, our restricted cash, which primarily consists of escrowed security deposits, was not material and is included in other long-term assets on our unaudited condensed consolidated balance sheets. (2) As of June 30, 2019 and December 31, 2018, any unrealized gains or losses related to our marketable securities were not material. Our cash and cash equivalents consist of cash on hand in global financial institutions, money market funds and marketable securities with maturities of 90 days 90 days 12 months 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. We classify our money market funds and other marketable securities 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 used to measure the fair value of money market funds was derived from quoted prices in active markets for identical assets or liabilities. Fair values for Level 2 marketable securities 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. There were no material realized gains or losses related to the sales of our marketable securities for both the three and six months ended June 30, 2019 and 2018. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis. We consider any unrealized loss position in our available-for-sale marketable debt securities to be temporary in nature and do not consider any of these investments other-than-temporarily impaired as of both June 30, 2019 and December 31, 2018. Derivative Financial Instruments We typically 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. Counterparties to our forward contracts consist of major international 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. For the three and six months ended June 30, 2019 and 2018, respectively, our forward contracts have not been designated as hedges and generally had maturities of less than 90 days. We do not use derivatives for trading or speculative purposes. Our outstanding or unsettled forward contracts were carried at fair value on our unaudited condensed consolidated balance sheets at June 30, 2019 and December 31, 2018. 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 recognized any gain or loss resulting from the change in fair value of our foreign currency forward contracts in interest income and other, net on our unaudited condensed consolidated statement of operations which was not material for both the three and six months ended June 30, 2019, and a net loss of $3 million for both the three and six months ended June 30, 2018. The following table shows the notional principal amounts of our outstanding derivative instruments as of the periods presented: June 30, 2019 December 31, 2018 (in millions) Foreign currency exchange - forward contracts (1) (2) $ 35 $ 13 (1) Our derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. The Company had two outstanding derivative contracts as of both June 30, 2019 and December 31, 2018. (2) The fair value of our outstanding derivatives as of both June 30, 2019 and December 31, 2018 was not material and is included in accrued expenses and other current liabilities on our unaudited condensed consolidated balance sheets. Other Financial Instruments Other financial instruments not measured at fair value on a recurring basis include accounts receivable and contract assets, accounts payable, deferred merchant payables, and accrued and other current liabilities. The carrying amount of these financial instruments approximate their fair value because of the short maturity of these instruments as reported on our unaudited condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018. In addition, we hold investments in equity securities of privately-held companies that do not have a readily determinable fair value. As of both June 30, 2019 and December 31, 2018, the total carrying value of our equity investments in these privately-held companies was $12 million and is included in other long-term assets on our unaudited condensed consolidated balance sheets. Our policy is to measure these investments at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Such observable price changes may include instances where the investee issues equity securities to new investors, thus creating a new indicator of fair value, as an example. On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether these investments are impaired and also monitor for any observable price changes. During the three and six months ended June 30, 2019 and 2018, we did not record any impairment loss on these equity investments or identify any observable price change indicators. The Company did not have any material assets or liabilities measured at fair value on a recurring basis using the Level 3 unobservable inputs at both June 30, 2019 and December 31, 2018. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | NOTE 7: PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following for the periods presented: June 30, 2019 December 31, 2018 (in millions) Capitalized software and website development $ 297 $ 259 Building (1) ― 123 Finance lease right-of-use asset (1) 114 ― Leasehold improvements 45 41 Computer equipment and purchased software 61 52 Furniture, office equipment and other 20 18 537 493 Less: accumulated depreciation (275 ) (240 ) Total $ 262 $ 253 (1) Refer to “Note 2: Significant Accounting Policies |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 8: GOODWILL We assess goodwill, which is not amortized, for impairment annually during the fourth quarter, or more frequently, if events and circumstances indicate impairment may have occurred. We test goodwill for impairment at the reporting unit level. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. Once goodwill has been allocated to the reporting units, it no longer retains its identification with a particular acquisition and becomes identified with the reporting unit in its entirety. Accordingly, the fair value of the reporting unit as a whole is available to support the recoverability of its goodwill. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. Subsequent to our prior annual impairment test in the fourth quarter of 2018 the composition of our reportable segments has been revised, as discussed in “Note 15: Segment Information a qualitative assessment on our previous Hotel reporting unit prior to implementing the revised segment reporting structure and determined that it was more likely than not that the fair value of this reporting unit was greater than the carrying value; which was consistent with our conclusion in the fourth quarter of 2018. Management exercised significant judgment related to the above assessment, including the identification of reporting units, reassignment of assets and liabilities to the new reporting units, reassignment of goodwill to the new reporting units using the relative fair value method, and determination of the fair value of new reporting units. The fair value of our reporting units are generally estimated using an equal weighting of a market approach by using public company multiples and/or other precedent transactions; and a discounted cash flow methodology. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and/or income multiples in estimating the fair value of the reporting units. The following table summarizes our goodwill activity by reportable segment for the periods presented: Hotel Non-Hotel Hotels, Media & Platform Experiences & Dining Other (3) Total (in millions) (in millions) Balance as of December 31, 2018 $ 451 $ 305 $ - $ - $ - $ 756 Allocation to new segments (1) (451 ) (305 ) 405 250 101 - Other adjustments (2) - - - (2 ) - (2 ) Balance as of June 30, 2019 $ - $ - $ 405 $ 248 $ 101 $ 754 (1) Refer to “Note 15: Segment Information (2) Primarily related to impact of changes in foreign currency exchange rates to goodwill. (3) Other consists of the combination of our Rentals, Flights/Cruises/Car Rentals, SmarterTravel, and TripAdvisor China business units and does not constitute a reportable segment. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9: DEBT 2015 Credit Facility We are party to a credit agreement with a group of lenders which, among other things, provides for a $1.2 billion unsecured revolving credit facility (the “2015 Credit Facility”) with a maturity date of May 12, 2022. Borrowings under the 2015 Credit Facility generally bear interest, at 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 2.00% (“Eurocurrency Spread”), based on the Company’s leverage ratio; 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”), based on the Company’s leverage ratio. The Company may borrow from the 2015 Credit Facility in U.S. dollars, Euros and British pound sterling. In addition, our 2015 Credit Facility includes $15 million of borrowing capacity available for letters of credit and $40 million for Swing Line borrowings on same-day notice. As of June 30, 2019, we had issued $3 million of outstanding letters of credit under the 2015 Credit Facility. We are also required to pay a quarterly commitment fee, at an applicable rate ranging from 0.15% to 0.30%, on the daily unused portion of the revolving credit facility for each fiscal quarter and additional fees in connection with the issuance of letters of credit. As of June 30, 2019, our unused revolver capacity was subject to a commitment fee of 0.15%, given the Company’s leverage ratio. As of both June 30, 2019 and December 31, 2018, the Company had no outstanding borrowings under the 2015 Credit Facility. During the six months ended June 30, 2018, the Company made a net repayment of $230 million on our 2015 Credit Facility. These net repayments were primarily made from a one-time cash repatriation of $325 million of foreign earnings to the United States during the first quarter of 2018. We recorded total interest and commitment fees on our 2015 Credit Facility of $1 million for both the three and six months ended June 30, 2019, respectively and $1 million and $2 million for the three and six months ended June 30, 2018, respectively, to interest expense on our unaudited condensed consolidated statements of operations. There is no specific repayment date prior to the maturity date for any borrowings under this credit agreement. We may voluntarily repay any outstanding borrowing under the 2015 Credit Facility at any time without premium or penalty, other than customary breakage costs with respect to Eurocurrency loans. Additionally, 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 debt. The 2015 Credit Facility 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 2015 Credit Facility also requires us to maintain a maximum leverage ratio and contains certain customary affirmative covenants and events of default, including a change of control. If an event of default occurs, the lenders under the 2015 Credit Facility will be entitled to take various actions, including the acceleration of all amounts due under the 2015 Credit Facility. As of June 30, 2019 and December 31, 2018, we were in compliance with all of our debt covenants. Chinese Credit Facilities We also maintain two credit facilities in China (jointly, the “Chinese Credit Facilities”) as of June 30, 2019. We are party to a $30 million, one-year revolving credit facility with Bank of America (the “Chinese Credit Facility—BOA”) that is currently subject to review on a periodic basis with no specific expiration period. We are also party to a RMB 70,000,000 (approximately $10 million) one-year revolving credit facility with J.P. Morgan Chase Bank (“Chinese Credit Facility—JPM”). Our Chinese Credit Facilities generally bear interest at a rate based on the People’s Bank of China benchmark, including certain adjustments which may be made in accordance with market conditions at the time of borrowing. As of both June 30 , 2019 and December 31, 2018, there were no outstanding borrowings under our Chinese Credit Facilities. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10: INCOME TAXES Each interim period is considered an integral part of the annual period and, 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. The Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) introduced significant changes to U.S. income tax law. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time tax on the mandatory deemed repatriation of cumulative foreign earnings (the “Transition Tax”) as of December 31, 2017. Our effective tax rate for the three and six months ended June 30, 2019 was 50.0% and 40.6%, respectively. Our effective tax rate for the three and six months ended June 30, 2018 was 23.8% and 42.9%, respectively. The change in our effective tax rate during the three months ended June 30, 2019, when compared to the same period in 2018, was primarily due to the recognition in the three months ended June 30, 2019 of a $15 million income tax expense for the cumulative benefit taken for excluding stock-based compensation from our inter-company cost-sharing arrangements (Refer to the discussion below of Altera Corporation (“Altera”) litigation with the Internal Revenue Service (“IRS”) for more information regarding this adjustment). The change in our effective tax rate during the six months ended June 30, 2019, when compared to the same period in 2018, was primarily due to the recognition in the three months ended June 30, 2019 of the $15 million income tax expense noted above, offset by a higher benefit from the recognition of excess tax benefits of stock-based compensation and decreased foreign valuation allowances. 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 June 30, 2019, we had an accrued interest liability of $18 million, net of federal and state benefit, 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 and 2012-2016 tax years, under an employment tax audit by the IRS for the 2013 and 2014 tax years, and have various ongoing audits for state income tax returns. These audits include questioning of the timing and the 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 June 30, 2019, no material assessments have resulted, except as noted below regarding our 2009, 2010, and 2011 IRS audit with Expedia . 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. 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 $15 million to $20 million at the close of the audit if the IRS prevails, after consideration of competent authority relief, exclusive of interest and penalties. 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, 2010, and 2011 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. In July 2015, the United States Tax Court (the “Court”) issued an opinion favorable to Altera with respect to Altera’s litigation with the IRS. This opinion was submitted as a final decision under Tax Court Rule 155 during December 2015. The litigation relates to the treatment of stock-based compensation expense in an inter-company cost-sharing arrangement with Altera’s foreign subsidiary. In its opinion, the Court accepted Altera’s position of excluding stock-based compensation from its inter-company cost-sharing arrangement. The IRS appealed the Court decision on February 19, 2016. On June 7, 2019, a three-judge panel from the Ninth Circuit Court of Appeals reversed the Court’s decision and upheld the validity of the Treasury regulation (Reg. sec. 1.482-7A(d)(2)) requiring stock-based compensation costs to be included in the costs shared in a cost-sharing arrangement. Based on this Ninth Circuit Court of Appeals decision, we recorded a cumulative income tax expense of $15 million during the three months ended June 30, 2019, which was a reversal of income tax benefits taken by the Company since the Court’s 2015 opinion. On July 22, 2019, Altera requested a rehearing before the full Ninth Circuit. As a result, the final outcome of the case is uncertain. If the June 7, 2019 Ninth Circuit Court of Appeals decision is reversed, we would anticipate recording an income tax benefit at that time . The Company will continue to monitor this matter and related potential impacts to its consolidated financial statements . |
Other Long-Term Liabilities
Other Long-Term Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Noncurrent [Abstract] | |
Other Long-Term Liabilities | NOTE 11: OTHER LONG-TERM LIABILITIES Other long-term liabilities consists of the following for the periods presented: June 30, 2019 December 31, 2018 (in millions) Unrecognized tax benefits $ 156 $ 148 Long-term income taxes payable 31 31 Financing obligation, net of current portion (1) ― 83 Finance lease liabilities, net of current portion (1) 80 ― Operating lease liabilities, net of current portion (1) 67 ― Other (1) 7 20 Total $ 341 $ 282 (1) Refer to “ Note 2: Significant Accounting Policies ” for additional information on our lease information, including transition accounting and updated accounting policy for leases upon adoption of ASC 842. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12: COMMITMENTS AND CONTINGENCIES There have been no material changes to our commitments and contingencies since December 31, 2018. Refer to “Note 14: Commitments and Contingencies Legal Proceedings In the ordinary course of business, we are parties to regulatory and legal matters, including threats thereof, arising out of our operations. These matters may involve claims involving patent and intellectual property rights (including alleged infringement of third-party intellectual property rights), tax matters (including value-added, excise, transient occupancy and accommodation taxes), regulatory compliance (including competition, consumer matters and data privacy), defamation and other claims. Periodically, we review the status of all significant outstanding matters to assess any potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred; and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of operations. 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 Taxes We are under audit by the IRS and various other domestic and foreign tax authorities with regards to income tax matters. We have reserved for potential adjustments to our provision for income taxes 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 income 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 10: Income Taxes We intend to indefinitely reinvest the remaining foreign undistributed earnings although we will continue to evaluate the impact of the 2017 Tax Act on our capital deployment within and outside the U.S. Should we distribute, or be treated under certain U.S. tax rules as having distributed, the earnings of foreign subsidiaries in the form of dividends or otherwise, we may be subject to U.S. income taxes or tax benefits. The amount of any unrecognized deferred income tax on this temporary difference is not material. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 13: STOCKHOLDERS’ EQUITY On January 31, 2018, our Board of Directors authorized a repurchase of up to $250 million of our shares of common stock under a share repurchase program. This share repurchase program has no expiration date but may be suspended or terminated by our Board of Directors at any time. Our Board of Directors authorized and directed management, working with the Executive Committee of our Board of Directors, to affect the share repurchase program in compliance with applicable legal requirements. The Company did not repurchase any shares of outstanding common stock during the three and six months end June 30, 2019 under the share repurchase program. During the three and six months ended June 30, 2018, we repurchased 2,329,548 and 2,582,198 shares of outstanding common stock under the share repurchase program at an aggregate cost of $90 million and $100 million, or an average share price of $38.60 and $38.73, exclusive of fees and commissions |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 14: RELATED PARTY TRANSACTIONS We consider Liberty TripAdvisor Holdings, Inc. (“LTRIP”) a related party. As of June 30, 2019, LTRIP beneficially owned approximately 18.2 million shares of our common stock and 12.8 million shares of our Class B common stock, which constitute 14.4% 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 22.2% 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 57.4% of our voting power. We had no related party transactions with LTRIP during both the three and six months ended June 30, 2019 and 2018. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 15: SEGMENT INFORMATION Beginning in the first quarter of 2019 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 TripAdvisor-branded hotel metasearch auction-based revenue, transaction revenue from our hotel instant booking feature, subscription-based advertising and hotel sponsored placements advertising revenue; and (2) TripAdvisor-branded display and platform revenue – consisting of TripAdvisor-branded display-based revenue. Our focus within the Hotels, Media & Platform reportable segment is to generate profit while driving increased customer and client engagement with, and high-margin media advertising revenue from, the TripAdvisor platform. Our Experiences & Dining reportable segment, which includes an aggregation of our Experiences and Restaurants operating segments, reflects our ongoing investment focus to drive revenue growth and to reinforce our market leading position in these growing offerings. All remaining business units have been combined into and reported as “Other”, which includes Rentals, Flights/Cruises/Car Rentals, SmarterTravel, and TripAdvisor China, as none of these businesses meet the quantitative thresholds and other criteria to qualify as reportable segments, and therefore are combined and disclosed as Other. 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), and technical infrastructure and other costs supporting the TripAdvisor platform. The nature of the services provided and revenue recognition policies are summarized by reported segment in “Note 3: Revenue Recognition All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Form 10-Q. These reclassifications had no effect on our unaudited condensed consolidated financial statements in any period. 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 for income taxes; (2) other income (expense), net; (3) depreciation of property and equipment, including amortization of internal use software and website development; (4) amortization of intangible assets; (5) stock-based compensation and other stock-settled obligations; (6) goodwill, long-lived asset and intangible asset impairments; (7) legal reserves and settlements; and (8) non-recurring expenses and income. The following tables present our segment information for the three and six months ended June 30, 2019 and 2018 and includes a reconciliation of Adjusted EBITDA to Net Income. We record depreciation of property and equipment, including amortization of internal-use software and website development, amortization of intangible assets, stock-based compensation and other stock-settled obligations, legal reserves and settlements, other income (expense), net, other non-recurring expenses and income, net, and income taxes, 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 in Other. Three months ended June 30, 2019 Hotels, Media & Platform (1) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 254 $ 125 $ 43 $ - $ 422 Adjusted EBITDA 108 7 13 - 128 Depreciation (23 ) (23 ) Amortization of intangible assets (7 ) (7 ) Stock-based compensation (32 ) (32 ) Operating income 66 Other income, net 2 Income before income taxes 68 Provision for income taxes (34 ) Net income 34 Three months ended June 30, 2018 Hotels, Media & Platform (2) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 272 $ 98 $ 63 $ - $ 433 Adjusted EBITDA 85 16 8 - 109 Depreciation (21 ) (21 ) Amortization of intangible assets (8 ) (8 ) Stock-based compensation (31 ) (31 ) Operating income 49 Other expense, net (7 ) Income before income taxes 42 Provision for income taxes (10 ) Net income 32 Six months ended June 30, 2019 Hotels, Media & Platform (1) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 508 $ 206 $ 84 $ - $ 798 Adjusted EBITDA 212 (17 ) 22 - 217 Depreciation (46 ) (46 ) Amortization of intangible assets (15 ) (15 ) Stock-based compensation (60 ) (60 ) Operating income 96 Other income, net 5 Income before income taxes 101 Provision for income taxes (41 ) Net income 60 Six months ended June 30, 2018 Hotels, Media & Platform (2) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 524 $ 161 $ 126 $ - $ 811 Adjusted EBITDA 162 12 15 - 189 Depreciation (41 ) (41 ) Amortization of intangible assets (16 ) (16 ) Stock-based compensation (61 ) (61 ) Operating income 71 Other expense, net (8 ) Income before income taxes 63 Provision for income taxes (27 ) Net income 36 (1) Includes unallocated corporate general and administrative costs of $17 million and $31 million and TripAdvisor-branded advertising expenses (primarily television advertising) of $26 million and $55 million for the three and six months ended June 30, 2019, respectively. (2) Includes unallocated corporate general and administrative costs of $19 million and $39 million and TripAdvisor-branded advertising expenses (primarily television advertising) of $35 million and $61 million for the three and six months ended June 30, 2018, respectively. (3) Other consists of the combination of our Rentals, Flights/Cruises/Car Rentals, SmarterTravel and TripAdvisor China business units and does not constitute a reportable segment. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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’ financials were not material for all periods presented. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“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. unaudited condensed consolidated balance sheet as of December 31, 2018 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. |
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 include: (i) recognition and recoverability of goodwill, definite-lived intangibles and other long-lived assets; and (ii) accounting for income taxes. |
Seasonality | Seasonality Global travel market expenditures tend to follow a seasonal pattern. Correspondingly, advertising investments made by travel partners and, therefore, our revenue and profits, also tend to follow 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. Significant shifts in our business mix or adverse economic conditions could result in future seasonal patterns that are different from historical trends. |
New Accounting Pronouncements Not Yet Adopted and Recently Adopted Accounting Pronouncements | New Accounting Pronouncements Not Yet Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance which require a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. The accounting for the cost of the hosting component of the arrangement (i.e., service costs the customer pays for the cloud computing service) is not affected by this new guidance. The Company uses both internally-developed software and third-party software to operate its business. In June 2016, the FASB issued new accounting guidance which replaces the existing incurred loss impairment model with an expected loss methodology on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable and available-for-sale debt securities. For financial assets measured at amortized cost, this new guidance requires an entity to: (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected; (2) recognize this allowance and changes in the allowance during subsequent periods through net income; and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. For available-for-sale debt securities, this new guidance made several targeted amendments to the existing other-than-temporary impairment model, including: (1) requiring disclosure of the allowance for credit losses; (2) allowing reversals of the previously recognized credit losses until the entity has the intent to sell, is more-likely-than-not required to sell the securities or the maturity of the securities; (3) limiting impairment to the difference between the amortized cost basis and fair value; and (4) not allowing entities to consider the length of time that fair value has been less than amortized cost as a factor in evaluating whether a credit loss exists. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted, including interim periods within those fiscal years beginning after December 15, 2018. Entities are required to adopt this new guidance on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption Recently Adopted Accounting Pronouncements In February 2016, the FASB issued new guidance which revises the accounting for leases (“ASC 842”). ASC 842 requires entities that lease assets to recognize right-of-use (ROU) assets representing its right to use the underlying asset for the lease term and lease liabilities related to the rights and obligations created by those leases on the balance sheet regardless of whether they are classified as finance or operating leases, . In addition, new disclosures are required to meet the objective of enabling users of the financial statements to better understand the amount, timing, and uncertainty of cash flows arising from leases. W to reflect We elected the following practical expedients available in transition upon adoption of ASC 842 and accounting policy updates: 1) the “practical expedients package of three”, which allows us to not reassess the following: a) whether any expired or existing contracts are or contain a lease as of the adoption date, b) the lease classification for any expired or existing leases as of the adoption date; and c) the accounting treatment for initial direct costs for existing leases as of the adoption date; 2) the “short-term lease recognition exemption”, which allows entities to forego recognition of ROU assets and lease liabilities for leases with a lease term of twelve months or less and which also do not include an option to renew the lease term that the entity is reasonably certain to exercise; 3) elect by asset class as an accounting policy, to combine lease and non-lease components as a single component and subsequently account for the combined single component as the lease component; and 4) apply the portfolio approach to similar types of leases where the Company does not reasonably expect the outcome to differ materially from applying the new guidance to individual leases. The adoption of ASC 842 did not have a material impact to our unaudited condensed consolidated statement of operations during the three and six months ended June 30, 2019 or unaudited condensed consolidated statement of cash flows during the six months ended June 30, 2019. The effect on our unaudited condensed consolidated balance sheet as of January 1, 2019 from the adoption of ASC 842 is as follows: Balance at December 31, 2018 Adjustments due to ASC 842 Balance at January 1, 2019 (in millions) Assets: Prepaid expenses and other current assets $ 33 $ (3 ) $ 30 Property and equipment, net (1) 253 8 261 Operating lease right-of-use assets (1) — 75 75 Deferred income taxes, net 27 (1 ) 26 Other long-term assets 98 (2 ) 96 Liabilities: Accrued expenses and other current liabilities (2) 151 21 172 Other long-term liabilities (1) 282 53 335 Retained earnings (3) $ 1,043 $ 3 $ 1,046 (1) Refer to the below discussion regarding the transition accounting for operating and finance leases upon adoption of ASC 842. (2) This adjustment primarily represents the short-term portion of operating and finance lease obligations recorded upon adoption of ASC 842, discussed below. (3) Represents a cumulative-effect adjustment of $3 million, net of tax to our beginning balance of retained earnings recorded upon adoption of ASC 842. We lease office space in a number of countries around the world under non-cancelable lease agreements. Our corporate headquarters lease (“Headquarters Lease”) is our most significant office space lease. The Company has also entered into data center and certain equipment leases, such as network equipment and other leases, which are not material to our unaudited condensed consolidated financial statements. We determine whether a contract is or contains a lease at inception of a contract. We define a lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Control over the use of the identified asset means that we have both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. Our lease contracts contain both lease and non-lease components. We account separately for the lease and non-lease components of office space leases and certain other leases, such as data center leases. We allocate the consideration in the contract to the lease and non-lease components based on each component’s relative standalone price. We determine standalone prices for the lease components based on the prices for which other lessors lease similar assets on a standalone basis. We determine standalone prices for the non-lease component based on the prices that other suppliers charge for services for similar assets on a standalone basis. If observable standalone prices are not readily available, we estimate the standalone prices based on other available observable information. However, for certain categories of equipment leases, such as network equipment and others, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases that have similar characteristics, we apply a portfolio approach to effectively account for operating lease ROU assets and operating lease liabilities, hence we do not expect the outcome to differ materially from applying the new guidance to individual leases. The Company uses its estimated incremental borrowing rate as the discount rate in measuring the present value of our lease payments given the rate implicit in our leases is not typically readily determinable. Given we do not currently borrow on a collateralized basis, our incremental borrowing rate is estimated to approximate the interest rate in which the Company would expect to pay on a collateralized basis over a similar term and payments, and in economic environments where the leased asset is located. We use the portfolio approach to determine the discount rate for leases with similar characteristics or when the Company is reasonably certain that doing so would not materially affect the accounting for those leases to which a single discount rate is applied. Operating Leases Our office space leases, exclusive of our Headquarters Lease, are operating leases, which expire at various dates with the latest maturity in June 2027. Based on the present value of remaining lease payments on the Company's existing leases, we recognized $88 million of both operating ROU assets and operating lease liabilities, respectively on our unaudited condensed consolidated balance sheet upon adoption of ASC 842, as of January 1, 2019. These operating ROU assets were then reduced by a net deferred rent balance of $13 million as of January 1, 2019, which primarily consisted of existing deferred and prepaid rent balances. Operating lease ROU assets and liabilities commencing after January 1, 2019 are recognized at lease commencement date, or the date the lessor makes the leased asset available for use, based on the present value of lease payments over the lease term using the Company’s estimated incremental borrowing rate. ROU assets related to operating leases comprise the initial lease liability, and are then adjusted for any prepaid or deferred rent payments, unamortized initial direct costs, and lease incentives received. Amortization expense for operating lease ROU assets and interest accretion on operating lease liabilities are recognized as a single operating lease cost in our consolidated statement of operations, which results effectively in recognition of rent expense on a straight-line basis over the lease period. The carrying amount of operating lease liabilities are (1) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable; and (2) reduced to reflect lease payments made during the period. We present the combination of both the amortization of operating lease ROU assets and the change in the operating lease liabilities in the same line item in the adjustments to reconcile net income to net cash provided by operating activities in our unaudited condensed consolidated statement of cash flows. Lease incentives are recognized as reductions of rental expense on a straight-line basis over the term of the lease. Certain of our operating leases include options to extend the lease terms for up to 6 years and/or terminate the leases within 1 year, which we include in our lease term if we are reasonably certain to exercise these options. Payments under our operating leases are primarily fixed, however, certain of our operating lease agreements include rental payments which are adjusted periodically for inflation. We recognize these costs as variable lease costs on our unaudited condensed consolidated statement of operations, which were not material during the three and six months ended June 30, 2019 and 2018. In addition, our short-term lease costs were not material in any period. As of June 30, 2019, our operating lease ROU assets was $75 million as presented on our unaudited condensed consolidated balance sheet. Finance Lease In June 2013, we entered into our Headquarters Lease. Pursuant to the Headquarters Lease, the landlord built an approximately 280,000 square foot rental building in Needham, Massachusetts (the “Premises”), and leased the Premises to the Company as our new corporate headquarters for an initial term of 15 years and 7 months or through December 2030. The Company also has an option to extend the term of the Headquarters Lease for two consecutive terms of five years each. The Company was deemed to be the owner of the Premises for accounting purposes only during the construction period under legacy GAAP accounting rules for lease accounting, or ASC 840. Accordingly, the Company recorded project construction costs during the construction period incurred by the landlord as a construction-in-progress asset and a related construction financing obligation on our consolidated balance sheet. The amounts that the Company incurred for normal tenant improvements and structural improvements had also been recorded to the construction-in-progress asset. Upon completion of construction at the end of the second quarter of 2015, we evaluated the construction-in-progress asset and construction financing obligation for de-recognition under the criteria for “sale-leaseback” treatment under ASC 840. We concluded that it did not meet the provisions for sale-leaseback accounting. Therefore, the Headquarters Lease was accounted for as a financing obligation through December 31, 2018, in which we depreciated the building asset over its estimated useful life and incurred interest expense related to the financing obligation, imputed using the effective interest rate method. Upon the adoption of ASC 842 on January 1, 2019, we derecognized the previous assets and liabilities recorded for the Headquarters Lease described above, with the exception of net assets and liabilities of $26 million, primarily related to structural improvements paid by the Company, net of tenant incentives and accumulated amortization, which is classified as net prepaid rent under the new guidance. The Company then assessed the lease classification of our Headquarters Lease and concluded it should be classified and accounted for as a finance lease upon adoption on January 1, 2019. Accordingly, on January 1, 2019, we recognized a finance lease ROU asset and a finance lease liability of $114 million and $88 million, respectively, on our unaudited condensed consolidated balance sheet. The difference between the finance lease ROU asset and finance lease liability represents the aforementioned $26 million of net prepaid rent, and is being amortized straight-line over the remaining lease term. Finance lease ROU assets and finance lease liabilities commencing after January 1, 2019 are recognized similar to an operating lease, at the lease commencement date or the date the lessor makes the leased asset available for use. Finance lease ROU assets are generally amortized on a straight-line basis over the lease term, and the carrying amount of the finance lease liabilities are (1) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable, and (2) reduced to reflect lease payments made during the period. Amortization expense for finance lease ROU assets and interest accretion on finance lease liabilities are recorded to depreciation and interest expense, respectively, in our consolidated statement of operations. We did not update any financial information or provide any disclosures required under the new guidance for the three and six months ended June 30, 2018, respectively, or as of December 31, 2018. The disclosures provided below for the three and six months ended June 30, 2018, respectively, or as of December 31, 2018 are based on the disclosure requirements under ASC 840. The components of lease expense were as follows for the periods presented Three months ended June 30, 2019 Six months ended June 30, 2019 (in millions) Operating lease cost (1) $ 6 $ 12 Finance lease cost Amortization of right-of-use assets (2) $ 2 $ 5 Interest on lease liabilities (3) 1 2 Total finance lease cost $ 3 $ 7 Sublease income (1) (1 ) (2 ) Total lease cost, net $ 8 $ 17 (1) Operating lease costs, net of sublease income, are included within operating expenses in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded operating lease expense of $5 million and $9 million, respectively; and sublease income of $1 million for both the three and six months ended June 30, 2018 in our unaudited condensed consolidated statement of operations in accordance with ASC 840. (2) Amount is included in depreciation expense in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded depreciation expense of $1 million and $2 million, respectively, related to our Headquarters Lease in our unaudited condensed consolidated statement of operations in accordance with ASC 840. (3) Amount is included in interest expense in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded interest expense of $2 million and $4 million, respectively, related to our Headquarters Lease in our unaudited condensed consolidated statement of operations in accordance with ASC 840. Additional information related to our leases is as follows for the periods presented: Six months ended June 30, 2019 Supplemental Cash Flows Information: (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 14 Operating cash outflows from finance lease 2 Financing cash outflows from finance lease (1) 3 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (2) $ 97 Finance lease (3) 88 (1) Amount is included in other financing activities, net on the unaudited condensed consolidated statement of cash flows. (2) Amount includes operating leases existing on January 1, 2019 of $88 million and those that commenced during the six months ended June 30, 2019 of $9 million. (3) Amount represents the finance lease liability arising from obtaining the ROU asset related to our Headquarters Lease, which was recognized upon the adoption of ASC 842 on January 1, 2019. As of June 30, 2019 Weighted-average remaining lease term: Operating leases 4.8 years Finance lease 11.5 years Weighted-average discount rate: Operating leases 4.32% Finance lease 4.49% Future lease payments under non-cancellable leases as of June 30, 2019 were as follows: Year Ending December 31, Operating Leases Finance Lease (in millions) 2019 (excluding the six months ended June 30, 2019) $ 10 $ 4 2020 21 9 2021 20 10 2022 19 10 2023 12 10 Thereafter 12 67 Total future lease payments 94 110 Less imputed interest (9 ) (25 ) Total lease liabilities $ 85 $ 85 Reported on unaudited condensed consolidated balance sheet as of June 30, 2019 Operating Leases Finance Lease Accrued expenses and other current liabilities $ 18 $ 5 Other long-term liabilities 67 80 Total lease liabilities $ 85 $ 85 As of December 31, 2018, future minimum lease commitments under our Headquarters Lease and other non-cancelable operating leases for office space with terms of more than one year and contractual sublease income were as follows: Year Headquarters Lease (1) Other Operating Leases Sublease Income Total Lease Commitments (Net of Sublease Income) (in millions) 2019 9 $ 19 $ (3 ) $ 25 2020 9 18 (2 ) 25 2021 10 16 (2 ) 24 2022 10 16 (2 ) 24 2023 10 9 — 19 Thereafter 67 9 — 76 Total $ 115 $ 87 $ (9 ) $ 193 (1) Amount includes an $83 million financing obligation in other long-term liabilities on our consolidated balance sheet at December 31, 2018, related to the Headquarters Lease. As of June 30, 2019, we did not have any additional operating or finance leases that have not yet commenced but that create significant rights and obligations for us. |
Significant Accounting Policies | Significant Accounting Policies Other than our accounting policy for leases, as described above, there have been no other significant changes to our significant accounting policies and estimates since December 31, 2018, as described under “Note 2: Significant Accounting Policies |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Components of Lease Expense | Three months ended June 30, 2019 Six months ended June 30, 2019 (in millions) Operating lease cost (1) $ 6 $ 12 Finance lease cost Amortization of right-of-use assets (2) $ 2 $ 5 Interest on lease liabilities (3) 1 2 Total finance lease cost $ 3 $ 7 Sublease income (1) (1 ) (2 ) Total lease cost, net $ 8 $ 17 (1) Operating lease costs, net of sublease income, are included within operating expenses in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded operating lease expense of $5 million and $9 million, respectively; and sublease income of $1 million for both the three and six months ended June 30, 2018 in our unaudited condensed consolidated statement of operations in accordance with ASC 840. (2) Amount is included in depreciation expense in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded depreciation expense of $1 million and $2 million, respectively, related to our Headquarters Lease in our unaudited condensed consolidated statement of operations in accordance with ASC 840. (3) Amount is included in interest expense in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded interest expense of $2 million and $4 million, respectively, related to our Headquarters Lease in our unaudited condensed consolidated statement of operations in accordance with ASC 840. |
Additional Information Related to Leases | Additional information related to our leases is as follows for the periods presented: Six months ended June 30, 2019 Supplemental Cash Flows Information: (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 14 Operating cash outflows from finance lease 2 Financing cash outflows from finance lease (1) 3 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (2) $ 97 Finance lease (3) 88 (1) Amount is included in other financing activities, net on the unaudited condensed consolidated statement of cash flows. (2) Amount includes operating leases existing on January 1, 2019 of $88 million and those that commenced during the six months ended June 30, 2019 of $9 million. (3) Amount represents the finance lease liability arising from obtaining the ROU asset related to our Headquarters Lease, which was recognized upon the adoption of ASC 842 on January 1, 2019. As of June 30, 2019 Weighted-average remaining lease term: Operating leases 4.8 years Finance lease 11.5 years Weighted-average discount rate: Operating leases 4.32% Finance lease 4.49% |
Summary of Future Lease Payments Under Non-Cancellable Leases | Future lease payments under non-cancellable leases as of June 30, 2019 were as follows: Year Ending December 31, Operating Leases Finance Lease (in millions) 2019 (excluding the six months ended June 30, 2019) $ 10 $ 4 2020 21 9 2021 20 10 2022 19 10 2023 12 10 Thereafter 12 67 Total future lease payments 94 110 Less imputed interest (9 ) (25 ) Total lease liabilities $ 85 $ 85 Reported on unaudited condensed consolidated balance sheet as of June 30, 2019 Operating Leases Finance Lease Accrued expenses and other current liabilities $ 18 $ 5 Other long-term liabilities 67 80 Total lease liabilities $ 85 $ 85 |
Future Minimum Commitments Under Our Corporate Headquarters Lease and Other Non-Cancelable Operating Leases | As of December 31, 2018, future minimum lease commitments under our Headquarters Lease and other non-cancelable operating leases for office space with terms of more than one year and contractual sublease income were as follows: Year Headquarters Lease (1) Other Operating Leases Sublease Income Total Lease Commitments (Net of Sublease Income) (in millions) 2019 9 $ 19 $ (3 ) $ 25 2020 9 18 (2 ) 25 2021 10 16 (2 ) 24 2022 10 16 (2 ) 24 2023 10 9 — 19 Thereafter 67 9 — 76 Total $ 115 $ 87 $ (9 ) $ 193 (1) Amount includes an $83 million financing obligation in other long-term liabilities on our consolidated balance sheet at December 31, 2018, related to the Headquarters Lease. |
Accounting Standards Update 2016-02 | |
Adoption of ASC 842 on Unaudited Condensed Consolidated Balance Sheet | The effect on our unaudited condensed consolidated balance sheet as of January 1, 2019 from the adoption of ASC 842 is as follows: Balance at December 31, 2018 Adjustments due to ASC 842 Balance at January 1, 2019 (in millions) Assets: Prepaid expenses and other current assets $ 33 $ (3 ) $ 30 Property and equipment, net (1) 253 8 261 Operating lease right-of-use assets (1) — 75 75 Deferred income taxes, net 27 (1 ) 26 Other long-term assets 98 (2 ) 96 Liabilities: Accrued expenses and other current liabilities (2) 151 21 172 Other long-term liabilities (1) 282 53 335 Retained earnings (3) $ 1,043 $ 3 $ 1,046 (1) Refer to the below discussion regarding the transition accounting for operating and finance leases upon adoption of ASC 842. (2) This adjustment primarily represents the short-term portion of operating and finance lease obligations recorded upon adoption of ASC 842, discussed below. (3) Represents a cumulative-effect adjustment of $3 million, net of tax to our beginning balance of retained earnings recorded upon adoption of ASC 842. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six months ended June 30, 2019 2018 2019 2018 Major products/revenue sources (1): (in millions) Hotels, Media & Platform TripAdvisor-branded hotels $ 211 $ 231 $ 427 $ 447 TripAdvisor-branded display and platform 43 41 81 77 Total Hotels, Media & Platform 254 272 508 524 Experiences & Dining 125 98 206 161 Other 43 63 84 126 Total Revenue $ 422 $ 433 $ 798 $ 811 (1) Our revenue is recognized primarily at a point in time for all reported segments. |
Summary of Balances of Accounts Receivable and Contract Assets from Contracts with Customers | The following table provides information about the opening and closing balances of accounts receivable and contract assets from contracts with customers (in millions): June 30, 2019 December 31, 2018 Accounts receivable 261 205 Contract assets 9 7 Total $ 270 $ 212 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six months ended June 30, 2019 2018 2019 2018 Numerator: Net income $ 34 $ 32 $ 60 $ 36 Denominator: Weighted average shares used to compute Basic EPS 139,070 137,831 138,744 138,572 Weighted average effect of dilutive securities: Stock options 187 278 296 198 RSUs/MSUs 1,548 1,510 1,997 1,201 Weighted average shares used to compute Diluted EPS 140,805 139,619 141,037 139,971 Basic EPS $ 0.24 $ 0.23 $ 0.43 $ 0.26 Diluted EPS $ 0.24 $ 0.23 $ 0.43 $ 0.26 |
Stock Based Awards and Other _2
Stock Based Awards and Other Equity Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Amount of Stock-Based Compensation Expense Related to Stock-Based Awards | The following table presents the amount of stock-based compensation expense related to stock-based awards on our unaudited condensed consolidated statements of operations during the periods presented: Three months ended Six months ended June 30, June 30, 2019 2018 2019 2018 (in millions) (in millions) Selling and marketing $ 6 $ 5 $ 11 $ 11 Technology and content 14 13 27 26 General and administrative 12 13 22 24 Total stock-based compensation expense 32 31 60 61 Income tax benefit from stock-based compensation (8 ) (8 ) (14 ) (15 ) Total stock-based compensation expense, net of tax $ 24 $ 23 $ 46 $ 46 |
Summary of Stock Option Activity | A summary of our stock option activity during the six months ended June 30, 2019, 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, 2018 6,041 $ 54.00 Granted 675 53.31 Exercised (1) (160 ) 42.41 Cancelled or expired (209 ) 60.83 Options outstanding at June 30, 2019 6,347 $ 54.00 6.3 $ 20 Exercisable as of June 30, 2019 3,516 $ 60.19 4.5 $ 7 Vested and expected to vest after June 30, 2019 (2) 6,347 $ 54.00 6.3 $ 20 (1) Inclusive of 100,356 of 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 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 unaudited condensed 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 Six months ended June 30, June 30, 2019 2018 2019 2018 Risk free interest rate 2.22 % 2.71 % 2.42 % 2.66 % Expected term (in years) 5.18 5.45 5.19 5.45 Expected volatility 40.84 % 42.08 % 42.17 % 42.29 % Expected dividend yield — % — % — % — % Weighted-average grant date fair value $ 19.75 $ 19.27 $ 21.80 $ 17.62 |
Summary of RSU Activity | A summary of our RSU activity during the six months ended June 30, 2019 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, 2018 6,640 $ 44.93 Granted 2,653 53.38 Vested and released (1) (1,755 ) 47.40 Cancelled (414 ) 46.75 Unvested RSUs outstanding as of June 30, 2019 7,124 $ 47.70 $ 332 (1) |
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 June 30, 2019 related to our non-vested equity awards is presented below (in millions, except in years information): Stock Options RSUs/MSUs Unrecognized compensation expense $ 41 $ 292 Weighted average period remaining (in years) 2.9 2.8 |
MSUs | |
Summary of RSU Activity | A summary of our MSU activity during the six months ended June 30, 2019 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, 2018 284 $ 37.41 Granted (1) 78 57.62 Vested and released ― ― Cancelled ― ― Unvested MSUs outstanding as of June 30, 2019 362 $ 41.76 $ 17 (1) MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2019 through December 31, 2021 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 be issued none at all. These MSUs were granted under the 2018 Plan. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments All Other Investments [Abstract] | |
Schedule of Cash, Cash Equivalents, Restricted Cash and Marketable Securities | The following tables show our cash, cash equivalents, restricted cash, short-term and long-term available-for-sale marketable debt securities, by major security type, that are measured at fair value on a recurring basis and were categorized using the fair value hierarchy, as well as their classification on June 30, 2019 Amortized Cost Fair Value (2) Cash, Cash Equivalents and Restricted Cash Short-Term Marketable Securities Long-Term Marketable Securities Cash and restricted cash (1) $ 870 $ 870 $ 870 $ — $ — Level 1: Money market funds 31 31 31 — — Level 2: Commercial paper 65 65 — 65 — Total $ 966 $ 966 $ 901 $ 65 $ — December 31, 2018 Amortized Cost Fair Value (2) Cash, Cash Equivalents and Restricted Cash Short-Term Marketable Securities Long-Term Marketable Securities Cash and restricted cash (1) $ 522 $ 522 $ 522 $ — $ — Level 1: Money market funds 128 128 128 — — Level 2: Commercial paper 20 20 5 15 — Total $ 670 $ 670 $ 655 $ 15 $ — (1) As of June 30, 2019 and December 31, 2018, our restricted cash, which primarily consists of escrowed security deposits, was not material and is included in other long-term assets on our unaudited condensed consolidated balance sheets. (2) As of June 30, 2019 and December 31, 2018, any unrealized gains or losses related to our marketable securities were not material. |
Notional Principal Amounts of Outstanding Derivative Instruments | The following table shows the notional principal amounts of our outstanding derivative instruments as of the periods presented: June 30, 2019 December 31, 2018 (in millions) Foreign currency exchange - forward contracts (1) (2) $ 35 $ 13 (1) Our derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. The Company had two outstanding derivative contracts as of both June 30, 2019 and December 31, 2018. (2) The fair value of our outstanding derivatives as of both June 30, 2019 and December 31, 2018 was not material and is included in accrued expenses and other current liabilities on our unaudited condensed consolidated balance sheets. |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Components of Property and Equipment, Net | Property and equipment, net consists of the following for the periods presented: June 30, 2019 December 31, 2018 (in millions) Capitalized software and website development $ 297 $ 259 Building (1) ― 123 Finance lease right-of-use asset (1) 114 ― Leasehold improvements 45 41 Computer equipment and purchased software 61 52 Furniture, office equipment and other 20 18 537 493 Less: accumulated depreciation (275 ) (240 ) Total $ 262 $ 253 (1) Refer to “Note 2: Significant Accounting Policies |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill by Reportable Segment | The following table summarizes our goodwill activity by reportable segment for the periods presented: Hotel Non-Hotel Hotels, Media & Platform Experiences & Dining Other (3) Total (in millions) (in millions) Balance as of December 31, 2018 $ 451 $ 305 $ - $ - $ - $ 756 Allocation to new segments (1) (451 ) (305 ) 405 250 101 - Other adjustments (2) - - - (2 ) - (2 ) Balance as of June 30, 2019 $ - $ - $ 405 $ 248 $ 101 $ 754 (1) Refer to “Note 15: Segment Information (2) Primarily related to impact of changes in foreign currency exchange rates to goodwill. (3) Other consists of the combination of our Rentals, Flights/Cruises/Car Rentals, SmarterTravel, and TripAdvisor China business units and does not constitute a reportable segment. |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Noncurrent [Abstract] | |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consists of the following for the periods presented: June 30, 2019 December 31, 2018 (in millions) Unrecognized tax benefits $ 156 $ 148 Long-term income taxes payable 31 31 Financing obligation, net of current portion (1) ― 83 Finance lease liabilities, net of current portion (1) 80 ― Operating lease liabilities, net of current portion (1) 67 ― Other (1) 7 20 Total $ 341 $ 282 (1) Refer to “ Note 2: Significant Accounting Policies ” for additional information on our lease information, including transition accounting and updated accounting policy for leases upon adoption of ASC 842. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Three months ended June 30, 2019 Hotels, Media & Platform (1) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 254 $ 125 $ 43 $ - $ 422 Adjusted EBITDA 108 7 13 - 128 Depreciation (23 ) (23 ) Amortization of intangible assets (7 ) (7 ) Stock-based compensation (32 ) (32 ) Operating income 66 Other income, net 2 Income before income taxes 68 Provision for income taxes (34 ) Net income 34 Three months ended June 30, 2018 Hotels, Media & Platform (2) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 272 $ 98 $ 63 $ - $ 433 Adjusted EBITDA 85 16 8 - 109 Depreciation (21 ) (21 ) Amortization of intangible assets (8 ) (8 ) Stock-based compensation (31 ) (31 ) Operating income 49 Other expense, net (7 ) Income before income taxes 42 Provision for income taxes (10 ) Net income 32 Six months ended June 30, 2019 Hotels, Media & Platform (1) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 508 $ 206 $ 84 $ - $ 798 Adjusted EBITDA 212 (17 ) 22 - 217 Depreciation (46 ) (46 ) Amortization of intangible assets (15 ) (15 ) Stock-based compensation (60 ) (60 ) Operating income 96 Other income, net 5 Income before income taxes 101 Provision for income taxes (41 ) Net income 60 Six months ended June 30, 2018 Hotels, Media & Platform (2) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 524 $ 161 $ 126 $ - $ 811 Adjusted EBITDA 162 12 15 - 189 Depreciation (41 ) (41 ) Amortization of intangible assets (16 ) (16 ) Stock-based compensation (61 ) (61 ) Operating income 71 Other expense, net (8 ) Income before income taxes 63 Provision for income taxes (27 ) Net income 36 (1) Includes unallocated corporate general and administrative costs of $17 million and $31 million and TripAdvisor-branded advertising expenses (primarily television advertising) of $26 million and $55 million for the three and six months ended June 30, 2019, respectively. (2) Includes unallocated corporate general and administrative costs of $19 million and $39 million and TripAdvisor-branded advertising expenses (primarily television advertising) of $35 million and $61 million for the three and six months ended June 30, 2018, respectively. (3) Other consists of the combination of our Rentals, Flights/Cruises/Car Rentals, SmarterTravel and TripAdvisor China business units and does not constitute a reportable segment. |
Business Description and Basi_2
Business Description and Basis of Presentation - Additional Information (Details) Restaurant in Millions, Hotel in Millions | 6 Months Ended |
Jun. 30, 2019MarketLanguageHotelVacationRentalRestaurantActivityandAttraction | |
Accounting Policies [Abstract] | |
Number of markets with localized versions of website | Market | 48 |
Number of languages worldwide | Language | 28 |
Description of user-generated reviews and opinions across broad base of global travel-related businesses | TripAdvisor features approximately 795 million reviews and opinions on approximately 8.4 million places to stay, places to eat and things to do – including 1.4 million hotels, inns, B&Bs and specialty lodging, 900,000 rental properties, 5.0 million restaurants and 1.1 million travel activities and experiences worldwide. |
Number of hotels and accommodations | Hotel | 1.4 |
Number of vacation rentals | VacationRental | 900,000 |
Number of restaurants | Restaurant | 5 |
Number of activities and attractions worldwide | ActivityandAttraction | 1,100,000 |
Significant Accounting Polici_4
Significant Accounting Policies - Adoption of ASC 842 on Unaudited Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | ||
ASSETS | |||||
Prepaid expenses and other current assets | $ 35 | $ 33 | |||
Property and equipment, net | 262 | 253 | [1] | ||
Operating lease right-of-use assets | 75 | ||||
Deferred income taxes, net | 27 | ||||
Other long-term assets | 101 | 98 | |||
Liabilities: | |||||
Accrued expenses and other current liabilities | 181 | 151 | [2] | ||
Other long-term liabilities | 341 | 282 | [1] | ||
Retained earnings | $ 1,106 | $ 1,043 | [3] | ||
Accounting Standards Update 2016-02 | |||||
ASSETS | |||||
Prepaid expenses and other current assets | $ 30 | ||||
Property and equipment, net | [1] | 261 | |||
Operating lease right-of-use assets | [1] | 75 | |||
Deferred income taxes, net | 26 | ||||
Other long-term assets | 96 | ||||
Liabilities: | |||||
Accrued expenses and other current liabilities | [2] | 172 | |||
Other long-term liabilities | [1] | 335 | |||
Retained earnings | [3] | 1,046 | |||
Accounting Standards Update 2016-02 | Adjustments Due to ASC 842 | |||||
ASSETS | |||||
Prepaid expenses and other current assets | (3) | ||||
Property and equipment, net | [1] | 8 | |||
Operating lease right-of-use assets | [1] | 75 | |||
Deferred income taxes, net | (1) | ||||
Other long-term assets | (2) | ||||
Liabilities: | |||||
Accrued expenses and other current liabilities | [2] | 21 | |||
Other long-term liabilities | [1] | 53 | |||
Retained earnings | [3] | $ 3 | |||
[1] | Refer to the below discussion regarding the transition accounting for operating and finance leases upon adoption of ASC 842. | ||||
[2] | This adjustment primarily represents the short-term portion of operating and finance lease obligations recorded upon adoption of ASC 842, discussed below. | ||||
[3] | Represents a cumulative-effect adjustment of $3 million, net of tax to our beginning balance of retained earnings recorded upon adoption of ASC 842. |
Significant Accounting Polici_5
Significant Accounting Policies - Adoption of ASC 842 on Unaudited Condensed Consolidated Balance Sheet (Parenthetical) (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Recorded a net increase in opening retained earnings | $ 3 | $ 4 | |
Accounting Standards Update 2016-02 | Adjustments Due to ASC 842 | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Recorded a net increase in opening retained earnings | $ 3 |
Significant Accounting Polici_6
Significant Accounting Policies - Additional Information (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2013ft² | Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | ||
Schedule Of Accounting Policies [Line Items] | ||||||
Operating lease right-of-use assets | $ 75 | $ 75 | ||||
Operating lease liabilities | 85 | 85 | ||||
Leased area | ft² | 280,000 | |||||
Finance lease liability | 85 | 85 | ||||
ROU asset, net of accumulated amortization | [1] | 2 | 5 | |||
Accumulated amortization | $ 275 | $ 275 | $ 240 | |||
Corporate HQ Building | ||||||
Schedule Of Accounting Policies [Line Items] | ||||||
Lease expiration date | Dec. 1, 2030 | |||||
Initial term of lease | 15 years 7 months | |||||
Extended lease term | 5 years | |||||
Accounting Standards Update 2016-02 | ||||||
Schedule Of Accounting Policies [Line Items] | ||||||
Operating lease right-of-use assets | [2] | $ 75 | ||||
Operating lease liabilities | 88 | |||||
Operating lease, term | 6 years | 6 years | ||||
Operating lease, existence of option to extend | true | |||||
Operating lease, existence of option to terminate | true | |||||
Operating lease, Option to terminate | within 1 year | |||||
Finance lease ROU assets | 114 | |||||
Finance lease liability | 88 | |||||
Finance lease prepaid rent | 26 | |||||
Accounting Standards Update 2016-02 | Property and Equipment, Net | ||||||
Schedule Of Accounting Policies [Line Items] | ||||||
ROU asset, net of accumulated amortization | $ 110 | |||||
Accounting Standards Update 2016-02 | Corporate Headquarters Lease | ||||||
Schedule Of Accounting Policies [Line Items] | ||||||
Net assets and liabilities | 26 | |||||
Accumulated amortization | $ 5 | $ 5 | ||||
Accounting Standards Update 2016-02 | Maximum | ||||||
Schedule Of Accounting Policies [Line Items] | ||||||
Lease expiration date | Jun. 30, 2027 | |||||
Accounting Standards Update 2016-02 | Difference between Leases Guidance in Effect before and after Topic 842 | ||||||
Schedule Of Accounting Policies [Line Items] | ||||||
Operating lease right-of-use assets | 88 | |||||
Deferred rent | $ (13) | |||||
[1] | Amount is included in depreciation expense in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded depreciation expense of $1 million and $2 million, respectively, related to our Headquarters Lease in our unaudited condensed consolidated statement of operations in accordance with ASC 840. | |||||
[2] | Refer to the below discussion regarding the transition accounting for operating and finance leases upon adoption of ASC 842. |
Significant Accounting Polici_7
Significant Accounting Policies - Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||||
Lease Cost [Abstract] | |||||||
Operating lease cost | $ 6 | [1] | $ 5 | $ 12 | [1] | $ 9 | |
Amortization of right-of-use assets | [2] | 2 | 5 | ||||
Interest on lease liabilities | [3] | 1 | 2 | ||||
Total finance lease cost | 3 | 7 | |||||
Sublease income | (1) | [1] | $ (1) | (2) | [1] | $ (1) | |
Total lease cost, net | $ 8 | $ 17 | |||||
[1] | Operating lease costs, net of sublease income, are included within operating expenses in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded operating lease expense of $5 million and $9 million, respectively; and sublease income of $1 million for both the three and six months ended June 30, 2018 in our unaudited condensed consolidated statement of operations in accordance with ASC 840. | ||||||
[2] | Amount is included in depreciation expense in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded depreciation expense of $1 million and $2 million, respectively, related to our Headquarters Lease in our unaudited condensed consolidated statement of operations in accordance with ASC 840. | ||||||
[3] | Amount is included in interest expense in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded interest expense of $2 million and $4 million, respectively, related to our Headquarters Lease in our unaudited condensed consolidated statement of operations in accordance with ASC 840 |
Significant Accounting Polici_8
Significant Accounting Policies - Components of Lease Expense (Paranthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |||
Schedule Of Accounting Policies [Line Items] | ||||||
Operating lease expense | $ 6 | [1] | $ 5 | $ 12 | [1] | $ 9 |
Sublease income | 1 | [1] | 1 | 2 | [1] | 1 |
Depreciation expense | 23 | 21 | 46 | 41 | ||
Interest expense | $ 2 | 3 | $ 3 | 6 | ||
Corporate HQ Building | ||||||
Schedule Of Accounting Policies [Line Items] | ||||||
Depreciation expense | 1 | 2 | ||||
Interest expense | $ 2 | $ 4 | ||||
[1] | Operating lease costs, net of sublease income, are included within operating expenses in our unaudited condensed consolidated statement of operations. During the three and six months ended June 30, 2018, we recorded operating lease expense of $5 million and $9 million, respectively; and sublease income of $1 million for both the three and six months ended June 30, 2018 in our unaudited condensed consolidated statement of operations in accordance with ASC 840. |
Significant Accounting Polici_9
Significant Accounting Policies - Additional Information Related to Leases (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Jun. 30, 2019 | ||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash outflows from operating leases | $ 14 | |||
Operating cash outflows from finance lease | 2 | |||
Financing cash outflows from finance lease | [1] | 3 | ||
Right-of-use assets obtained in exchange for lease liabilities: | ||||
Operating leases | $ 88 | 97 | [2] | |
Finance lease | [3] | $ 88 | ||
Weighted-average remaining lease term: | ||||
Operating leases | 4 years 9 months 18 days | |||
Finance lease | 11 years 6 months | |||
Weighted-average discount rate: | ||||
Operating leases | 4.32% | |||
Finance lease | 4.49% | |||
[1] | Amount is included in other financing activities, net on the unaudited condensed consolidated statement of cash flows. | |||
[2] | Amount includes operating leases existing on January 1, 2019 of $88 million and those that commenced during the six months ended June 30, 2019 of $9 million. | |||
[3] | Amount represents the finance lease liability arising from obtaining the ROU asset related to our Headquarters Lease, which was recognized upon the adoption of ASC 842 on January 1, 2019. |
Significant Accounting Polic_10
Significant Accounting Policies - Additional Information Related to Leases (Parenthetical) (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Jun. 30, 2019 | |
Lessee Disclosure [Abstract] | |||
Operating leases | $ 88 | $ 97 | [1] |
Operating leases commenced amount | $ 9 | ||
[1] | Amount includes operating leases existing on January 1, 2019 of $88 million and those that commenced during the six months ended June 30, 2019 of $9 million. |
Significant Accounting Polic_11
Significant Accounting Policies - Summary of Future Lease Payments Under Non-Cancellable Leases (Details) $ in Millions | Jun. 30, 2019USD ($) | |
Operating Lease Liabilities, Payments Due [Abstract] | ||
2019 (excluding the six months ended June 30, 2019) | $ 10 | |
2020 | 21 | |
2021 | 20 | |
2022 | 19 | |
2023 | 12 | |
Thereafter | 12 | |
Total future lease payments | 94 | |
Less imputed interest | (9) | |
Total lease liabilities | 85 | |
Accrued expenses and other current liabilities | 18 | |
Other long-term liabilities | 67 | [1] |
Total lease liabilities | 85 | |
Finance Lease Liabilities, Payments, Due [Abstract] | ||
2019 (excluding the six months ended June 30, 2019) | 4 | |
2020 | 9 | |
2021 | 10 | |
2022 | 10 | |
2023 | 10 | |
Thereafter | 67 | |
Total future lease payments | 110 | |
Less imputed interest | (25) | |
Total lease liabilities | 85 | |
Accrued expenses and other current liabilities | 5 | |
Other long-term liabilities | 80 | [1] |
Total lease liabilities | $ 85 | |
[1] | Refer to “ Note 2: Significant Accounting Policies ” for additional information on our lease information, including transition accounting and updated accounting policy for leases upon adoption of ASC 842. |
Significant Accounting Polic_12
Significant Accounting Policies - Future Minimum Commitments Under Our corporate Headquarters Lease and Other Non-Cancelable Operating Leases (Details) $ in Millions | Dec. 31, 2018USD ($) | |
Schedule Of Accounting Policies [Line Items] | ||
2019 | $ (3) | |
2020 | (2) | |
2021 | (2) | |
2022 | (2) | |
Total | (9) | |
2019 | 25 | |
2020 | 25 | |
2021 | 24 | |
2022 | 24 | |
2023 | 19 | |
Thereafter | 76 | |
Total | 193 | |
Headquarters Lease | ||
Schedule Of Accounting Policies [Line Items] | ||
2019 | 9 | [1] |
2020 | 9 | [1] |
2021 | 10 | [1] |
2022 | 10 | [1] |
2023 | 10 | [1] |
Thereafter | 67 | [1] |
Total | 115 | [1] |
Other Operating Leases | ||
Schedule Of Accounting Policies [Line Items] | ||
2019 | 19 | |
2020 | 18 | |
2021 | 16 | |
2022 | 16 | |
2023 | 9 | |
Thereafter | 9 | |
Total | $ 87 | |
[1] | Amount includes an $83 million financing obligation in other long-term liabilities on our consolidated balance sheet at December 31, 2018, related to the Headquarters Lease. |
Significant Accounting Polic_13
Significant Accounting Policies - Future Minimum Commitments Under Our corporate Headquarters Lease and Other Non-Cancelable Operating Leases (Parenthetical) (Details) $ in Millions | Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | ||
Other long-term liabilities under financial obligation | $ 83 | [1] |
[1] | Refer to “ Note 2: Significant Accounting Policies ” for additional information on our lease information, including transition accounting and updated accounting policy for leases upon adoption of ASC 842. |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019USD ($) | Mar. 31, 2019Segment | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)Segment | Jun. 30, 2018USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 01, 2018USD ($) | |
Disaggregation Of Revenue [Line Items] | ||||||||
Number of reportable segment | Segment | 2 | 2 | ||||||
Deferred revenue | $ 98 | $ 98 | $ 63 | $ 63 | $ 59 | |||
Revenue recognized | $ 12 | $ 13 | $ 46 | $ 45 | ||||
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 | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | $ 422 | $ 433 | $ 798 | $ 811 |
Hotels, Media & Platform | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | 254 | 272 | 508 | 524 |
Experiences & Dining Segment | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | 125 | 98 | 206 | 161 |
Other | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | 43 | 63 | 84 | 126 |
TripAdvisor-Branded Hotels | Hotels, Media & Platform | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | 211 | 231 | 427 | 447 |
TripAdvisor-Branded Display and Platform | Hotels, Media & Platform | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | $ 43 | $ 41 | $ 81 | $ 77 |
[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 from Contracts with Customers (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Revenue From Contract With Customer [Abstract] | ||
Accounts receivable | $ 261 | $ 205 |
Contract assets | 9 | 7 |
Total | $ 270 | $ 212 |
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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||
Net income | $ 34 | $ 32 | $ 60 | $ 36 |
Denominator: | ||||
Weighted average shares used to compute Basic EPS | 139,070 | 137,831 | 138,744 | 138,572 |
Weighted average effect of dilutive securities: | ||||
Stock options | 187 | 278 | 296 | 198 |
RSUs/MSUs | 1,548 | 1,510 | 1,997 | 1,201 |
Weighted average shares used to compute Diluted EPS | 140,805 | 139,619 | 141,037 | 139,971 |
Basic EPS | $ 0.24 | $ 0.23 | $ 0.43 | $ 0.26 |
Diluted EPS | $ 0.24 | $ 0.23 | $ 0.43 | $ 0.26 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - Stock Options, RSUs and MSUs - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 6.1 | 6 | 4.8 | 9 |
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 | 0.5 | 0.8 | 0.5 | 0.8 |
Stock Based Awards and Other _3
Stock Based Awards and Other Equity Instruments - Amount of Stock-Based Compensation Expense Related to Stock-Based Awards (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 32 | $ 31 | $ 60 | $ 61 |
Income tax benefit from stock-based compensation | (8) | (8) | (14) | (15) |
Total stock-based compensation expense, net of tax | 24 | 23 | 46 | 46 |
Selling and Marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 6 | 5 | 11 | 11 |
Technology and Content | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 14 | 13 | 27 | 26 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 12 | $ 13 | $ 22 | $ 24 |
Stock Based Awards and Other _4
Stock Based Awards and Other Equity Instruments - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Capitalized stock based compensation as internal-use software and website development costs | $ 5,000,000 | $ 4,000,000 | $ 9,000,000 | $ 7,000,000 | |
Cash received from stock option exercises | 1,000,000 | 3,000,000 | |||
Income tax benefits from exercise or settlement of stock-based awards | $ 3,000,000 | $ 5,000,000 | $ 22,000,000 | 9,000,000 | |
Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of stock options issued | 675,000 | ||||
RSU | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock units issued under incentive plan | 2,653,000 | ||||
MSUs | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock units issued under incentive plan | [1] | 78,000 | |||
MSUs | Employees | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Requisite service period for estimated grant-date fair value of stock awards | Dec. 31, 2021 | ||||
2018 Plan | Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of stock options issued | 674,781 | ||||
Term of stock options, granted | 10 years | ||||
Stock awards vest period | 4 years | ||||
Closing stock price | $ 46.29 | $ 46.29 | |||
Total intrinsic value | $ 2,000,000 | 6,000,000 | |||
Total fair value of stock options vested | 10,000,000 | 12,000,000 | |||
Cash received from stock option exercises | $ 1,000,000 | $ 3,000,000 | |||
2018 Plan | RSU | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock awards vest period | 4 years | ||||
Stock units issued under incentive plan | 2,652,790 | ||||
[1] | MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2019 through December 31, 2021 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 be issued none at all. |
Stock Based Awards and Other _5
Stock Based Awards and Other Equity Instruments - Summary of Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | ||
Options Outstanding | ||
Options Outstanding, Beginning balance | 6,041 | |
Options Outstanding, Granted | 675 | |
Options Outstanding, Exercised | [1] | (160) |
Options Outstanding, Cancelled or expired | (209) | |
Options Outstanding, Ending balance | 6,347 | |
Options Outstanding, Exercisable | 3,516 | |
Options Outstanding, Vested and expected to vest | [2] | 6,347 |
Weighted Average Exercise Price per share | ||
Options Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 54 | |
Options Granted, Weighted Average Exercise Price | 53.31 | |
Options Exercised, Weighted Average Exercise Price | [1] | 42.41 |
Options Cancelled or expired, Weighted Average Exercise Price | 60.83 | |
Options Outstanding, Weighted Average Exercise Price, Ending balance | 54 | |
Options Exercisable, Weighted Average Exercise Price | 60.19 | |
Options Vested and expected to vest, Weighted Average Exercise Price | [2] | $ 54 |
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | ||
Options Outstanding, Weighted Average Remaining Contractual Life | 6 years 3 months 18 days | |
Options Exercisable, Weighted Average Remaining Contractual Life | 4 years 6 months | |
Options Vested and expected to vest, Weighted Average Remaining Contractual Life | [2] | 6 years 3 months 18 days |
Options Outstanding, Aggregate Intrinsic Value | $ 20 | |
Options Exercisable, Aggregate Intrinsic Value | 7 | |
Options Vested and expected to vest, Aggregate Intrinsic Value | [2] | $ 20 |
[1] | Inclusive of 100,356 of 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 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 unaudited condensed 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) | 6 Months Ended |
Jun. 30, 2019shares | |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Options non converted into shares due to net share settlement | 100,356 |
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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Risk free interest rate | 2.22% | 2.71% | 2.42% | 2.66% |
Expected term (in years) | 5 years 2 months 4 days | 5 years 5 months 12 days | 5 years 2 months 8 days | 5 years 5 months 12 days |
Expected volatility | 40.84% | 42.08% | 42.17% | 42.29% |
Weighted-average grant date fair value | $ 19.75 | $ 19.27 | $ 21.80 | $ 17.62 |
Stock Based Awards and Other _8
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity (Details) - Restricted Stock Units $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($)$ / sharesshares | ||
RSUs outstanding | ||
Unvested outstanding, Beginning balance | shares | 6,640 | |
Unvested RSUs, Granted | shares | 2,653 | |
Unvested RSUs, Vested and released | shares | (1,755) | [1] |
Unvested RSUs, Cancelled | shares | (414) | |
Unvested outstanding, Ending balance | shares | 7,124 | |
Weighted Average Grant-Date Fair Value Per Share | ||
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Beginning balance | $ / shares | $ 44.93 | |
Weighted Average Grant-Date Fair Value Per Share, Granted | $ / shares | 53.38 | |
Weighted Average Grant-Date Fair Value Per Share, Vested and released | $ / shares | 47.40 | [1] |
Weighted Average Grant-Date Fair Value Per Share, Cancelled | $ / shares | 46.75 | |
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Ending balance | $ / shares | $ 47.70 | |
Aggregate Intrinsic Value | ||
Unvested RSUs outstanding, Aggregate Intrinsic Value | $ | $ 332 | |
[1] | Inclusive of 461,987 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 unaudited condensed consolidated statements of cash flows. |
Stock Based Awards and Other _9
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity (Parenthetical) (Details) | 6 Months Ended |
Jun. 30, 2019shares | |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
RSUs withheld to satisfy withholding tax requirements | 461,987 |
Stock Based Awards and Other_10
Stock Based Awards and Other Equity Instruments - Summary of MSUs Activity (Details) - MSUs $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($)$ / sharesshares | ||
MSUs outstanding | ||
Unvested outstanding, Beginning balance | shares | 284 | |
Unvested MSUs, Granted | shares | 78 | [1] |
Unvested outstanding, Ending balance | shares | 362 | |
Weighted Average Grant-Date Fair Value Per Share | ||
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Beginning balance | $ / shares | $ 37.41 | |
Weighted Average Grant-Date Fair Value Per Share, Granted | $ / shares | 57.62 | [1] |
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Ending balance | $ / shares | $ 41.76 | |
Aggregate Intrinsic Value | ||
Unvested MSUs outstanding, Aggregate Intrinsic Value | $ | $ 17 | |
[1] | MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2019 through December 31, 2021 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 be issued none at all. |
Stock Based Awards and Other_11
Stock Based Awards and Other Equity Instruments - Summary of MSUs Activity (Parenthetical) (Details) - MSUs - Employees | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 through December 31, 2021 relative to the TSR performance of the Nasdaq Composite Total Return Index. |
Performance measurement period start date | Jan. 1, 2019 |
Performance measurement period end date | Dec. 31, 2021 |
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 | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 41 |
Weighted average period remaining (in years) | 2 years 10 months 24 days |
RSUs/MSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period remaining (in years) | 2 years 9 months 18 days |
Unrecognized compensation expense | $ 292 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Cash and Cash Equivalents | $ 901 | $ 655 | |
Short-Term Marketable Securities | 65 | 15 | |
Cash | [1],[2] | 870 | 522 |
Cash and Restricted Cash | [1],[2] | 870 | 522 |
Cash equivalents | [2] | 870 | 522 |
Cash, cash equivalents, restricted cash and marketable securities, amortized cost | 966 | 670 | |
Cash, cash equivalents, restricted cash and marketable securities, fair value | 966 | 670 | |
Money Market Funds | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Cash equivalents | 31 | 128 | |
Level 1 | Money Market Funds | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Cash and Cash Equivalents | 31 | 128 | |
Cash, cash equivalents, restricted cash and marketable securities, fair value | 31 | 128 | |
Level 2 | Commercial Paper | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Amortized Cost | 65 | 20 | |
Fair Value | [1] | 65 | 20 |
Cash and Cash Equivalents | 5 | ||
Short-Term Marketable Securities | $ 65 | $ 15 | |
[1] | As of June 30, 2019 and December 31, 2018, any unrealized gains or losses related to our marketable securities were not material. | ||
[2] | As of June 30, 2019 and December 31, 2018, our restricted cash, which primarily consists of escrowed security deposits, was not material and is included in other long-term assets on our unaudited condensed consolidated balance sheets. |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | ||||
Financial instruments including money market funds maturities period | 90 days | 90 days | ||
Maximum remaining maturity for short-term marketable securities | 12 months | 12 months | ||
Minimum maturities of short-term marketable securities | 90 days | 90 days | ||
Net loss related to forward contract | $ (3) | $ (3) | ||
Cost method investments | $ 12 | $ 12 |
Financial Instruments - Notiona
Financial Instruments - Notional Principal Amounts of Outstanding Derivative Instruments (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | ||
Derivatives Fair Value [Line Items] | |||
Derivative instruments not designated as hedging instruments, description of terms | We typically 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. Counterparties to our forward contracts consist of major international 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. For the three and six months ended June 30, 2019 and 2018, respectively, our forward contracts have not been designated as hedges and generally had maturities of less than 90 days. We do not use derivatives for trading or speculative purposes. | ||
Not Designated as Hedging Instrument | Foreign Exchange-forward Contracts | |||
Derivatives Fair Value [Line Items] | |||
Foreign currency exchange-forward contracts | [1],[2] | $ 35,000,000 | $ 13,000,000 |
[1] | Our derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. The Company had two outstanding derivative contracts as of both June 30, 2019 and December 31, 2018. | ||
[2] | The fair value of our outstanding derivatives as of both June 30, 2019 and December 31, 2018 was not material and is included in accrued expenses and other current liabilities on our unaudited condensed consolidated balance sheets. |
Financial Instruments - Notio_2
Financial Instruments - Notional Principal Amounts of Outstanding Derivative Instruments (Parenthetical) (Details) - Contract | Jun. 30, 2019 | Dec. 31, 2018 |
Not Designated as Hedging Instrument | Foreign Exchange-forward Contracts | ||
Derivatives Fair Value [Line Items] | ||
Number of outstanding derivatives contracts | 2 | 2 |
Property and Equipment, Net - C
Property and Equipment, Net - Components of Property and Equipment, Net (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | ||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | $ 537 | $ 493 | ||
Less: accumulated depreciation | (275) | (240) | ||
Total | 262 | 253 | [1] | |
Capitalized Software and Website Development | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | 297 | 259 | ||
Building | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | [2] | 123 | ||
Finance Lease Right-of-Use Asset | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | [2] | 114 | ||
Leasehold Improvements | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | 45 | 41 | ||
Computer Equipment and Purchased Software | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | 61 | 52 | ||
Furniture, Office Equipment and Other | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | $ 20 | $ 18 | ||
[1] | Refer to the below discussion regarding the transition accounting for operating and finance leases upon adoption of ASC 842. | |||
[2] | Refer to “Note 2: Significant Accounting Policies |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2019USD ($) | Jun. 30, 2019ReportingUnit | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Goodwill, Impairment Loss | $ | $ 0 | |
Number of distinct reporting units | ReportingUnit | 4 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Goodwill by Reportable Segment (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($) | ||
Goodwill [Line Items] | ||
Beginning balance | $ 756 | |
Other adjustments | (2) | [1] |
Ending balance | 754 | |
Hotel Segment | ||
Goodwill [Line Items] | ||
Beginning balance | 451 | |
Allocation to new segments | (451) | [2] |
Non-Hotel Segment | ||
Goodwill [Line Items] | ||
Beginning balance | 305 | |
Allocation to new segments | (305) | [2] |
Hotels, Media & Platform | ||
Goodwill [Line Items] | ||
Allocation to new segments | 405 | [2] |
Ending balance | 405 | |
Experiences & Dining Segment | ||
Goodwill [Line Items] | ||
Allocation to new segments | 250 | [2] |
Other adjustments | (2) | [1] |
Ending balance | 248 | |
Other Segments | ||
Goodwill [Line Items] | ||
Allocation to new segments | 101 | [2],[3] |
Ending balance | $ 101 | [3] |
[1] | Primarily related to impact of changes in foreign currency exchange rates to goodwill. | |
[2] | Refer to “Note 15: Segment Information | |
[3] | Other consists of the combination of our Rentals, Flights/Cruises/Car Rentals, SmarterTravel, and TripAdvisor China business units and does not constitute a reportable segment. |
Debt - Two Thousand Fifteen Cre
Debt - Two Thousand Fifteen Credit Facility - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||||
Total interest and commitments fees | $ 2,000,000 | $ 3,000,000 | $ 3,000,000 | $ 6,000,000 | ||
2015 Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Total interest and commitments fees | 1,000,000 | $ 1,000,000 | 1,000,000 | 2,000,000 | ||
2015 Credit Facility | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity under Credit Facility | 1,200,000,000 | $ 1,200,000,000 | ||||
Interest rate description | Borrowings under the 2015 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 2.00% (“Eurocurrency Spread”), based on the Company’s leverage ratio; 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”), based on the Company’s leverage ratio. The Company may borrow from the 2015 Credit Facility in U.S. dollars, Euros and British pound sterling. In addition, our 2015 Credit Facility includes $15 million of borrowing capacity available for letters of credit and $40 million for Swing Line borrowings on same-day notice. As of June 30, 2019, we had issued $3 million of outstanding letters of credit under the 2015 Credit Facility. We are also required to pay a quarterly commitment fee, at an applicable rate ranging from 0.15% to 0.30%, on the daily unused portion of the revolving credit facility for each fiscal quarter and additional fees in connection with the issuance of letters of credit. As of June 30, 2019, our unused revolver capacity was subject to a commitment fee of 0.15%, given the Company’s leverage ratio | |||||
Credit facility, maturity date | May 12, 2022 | |||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.15% | |||||
Outstanding borrowings | 0 | $ 0 | $ 0 | |||
Repayments of Debt | $ 230,000,000 | |||||
Cash repatriation of foreign earnings | $ 325,000,000 | |||||
2015 Credit Facility | Revolving Credit Facility | Adjusted London Interbank Offered Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.00% | |||||
2015 Credit Facility | Revolving Credit Facility | New York Fed Bank Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.50% | |||||
2015 Credit Facility | Borrowings On Same Day Notice | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity under Credit Facility | 40,000,000 | $ 40,000,000 | ||||
2015 Credit Facility | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity under Credit Facility | 15,000,000 | 15,000,000 | ||||
Letters of credit outstanding amount | $ 3,000,000 | $ 3,000,000 | ||||
2015 Credit Facility | Minimum | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.15% | |||||
2015 Credit Facility | Minimum | Revolving Credit Facility | Eurocurrency Spread | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.25% | |||||
2015 Credit Facility | Minimum | Revolving Credit Facility | Adjusted London Interbank Offered Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.25% | |||||
2015 Credit Facility | Minimum | Revolving Credit Facility | ABR Spread | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.25% | |||||
2015 Credit Facility | Maximum | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.30% | |||||
2015 Credit Facility | Maximum | Revolving Credit Facility | Eurocurrency Spread | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.00% | |||||
2015 Credit Facility | Maximum | Revolving Credit Facility | Adjusted London Interbank Offered Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.00% | |||||
2015 Credit Facility | Maximum | Revolving Credit Facility | ABR Spread | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.00% |
Debt - Chinese Credit Facilitie
Debt - Chinese Credit Facilities - Additional Information (Details) - Chinese Credit Facilities | 6 Months Ended | ||
Jun. 30, 2019USD ($)CreditFacility | Jun. 30, 2019CNY (¥) | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |||
Number of credit facilities | CreditFacility | 2 | ||
Outstanding borrowings | $ 0 | $ 0 | |
Chinese Credit Facility Boa | |||
Debt Instrument [Line Items] | |||
Borrowing capacity under Credit Facility | $ 30,000,000 | ||
Period of credit facility | 1 year | ||
Chinese Credit Facility JPM | |||
Debt Instrument [Line Items] | |||
Borrowing capacity under Credit Facility | $ 10,000,000 | ¥ 70,000,000 | |
Period of credit facility | 1 year |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | ||||||
Income tax expense at federal statutory rate | 21.00% | 35.00% | ||||
Effective tax rate | 50.00% | 23.80% | 40.60% | 42.90% | ||
Cumulative income tax expense recorded upon non-Company related litigation | $ 15,000,000 | |||||
Accrued interest liability | 18,000,000 | $ 18,000,000 | ||||
Accrued penalties | $ 0 | $ 0 | ||||
Minimum | Expedia | IRS | Tax Years 2009 and 2010 | ||||||
Income Taxes [Line Items] | ||||||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | $ 15,000,000 | |||||
Maximum | Expedia | IRS | Tax Years 2009 and 2010 | ||||||
Income Taxes [Line Items] | ||||||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | $ 20,000,000 |
Other Long-Term Liabilities - S
Other Long-Term Liabilities - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | ||
Other Liabilities Noncurrent [Abstract] | ||||
Unrecognized tax benefits | $ 156 | $ 148 | ||
Long-term income taxes payable | 31 | 31 | ||
Financing obligation, net of current portion | [1] | 83 | ||
Finance lease liabilities, net of current portion | [1] | 80 | ||
Operating lease liabilities, net of current portion | [1] | 67 | ||
Other (1) | [1] | 7 | 20 | |
Total other long term liabilities | $ 341 | $ 282 | [2] | |
[1] | Refer to “ Note 2: Significant Accounting Policies ” for additional information on our lease information, including transition accounting and updated accounting policy for leases upon adoption of ASC 842. | |||
[2] | Refer to the below discussion regarding the transition accounting for operating and finance leases upon adoption of ASC 842. |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Jan. 31, 2018 | |
Schedule Of Capitalization Equity [Line Items] | ||||||
Repurchase of common stock, shares | 0 | 2,329,548 | 0 | 2,582,198 | ||
Aggregate cost of shares repurchased, common stock | $ 90,000,000 | $ 100,000,000 | ||||
Average price of shares repurchased, common stock | $ 38.60 | $ 38.73 | ||||
Remaining authorized share repurchased amount | $ 150,000,000 | $ 150,000,000 | ||||
Treasury stock, shares | 12,056,688 | 12,056,688 | 12,056,688 | |||
Aggregate cost of treasury stock | $ 547,000,000 | $ 547,000,000 | $ 547,000,000 | |||
Maximum | ||||||
Schedule Of Capitalization Equity [Line Items] | ||||||
Repurchase of shares of common stock authorized | $ 250,000,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - LTRIP - USD ($) shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transaction [Line Items] | ||||
Beneficially ownership of shares of common stock | 18.2 | |||
Percentage taken from outstanding shares of common stock | 14.40% | |||
Percentage of beneficially ownership of shares of common stock class B | 22.20% | |||
Right to voting | one vote per share | |||
Beneficially ownership of equity securities | 57.40% | |||
Related party transactions | $ 0 | $ 0 | $ 0 | $ 0 |
Class B Common Stock | ||||
Related Party Transaction [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 |
Segment Information - Additiona
Segment Information - Additional Information (Details) - Segment | 3 Months Ended | 6 Months Ended |
Mar. 31, 2019 | Jun. 30, 2019 | |
Segment Reporting [Abstract] | ||
Number of reportable segment | 2 | 2 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | [1] | $ 422 | $ 433 | $ 798 | $ 811 | ||||
Adjusted EBITDA | 128 | 109 | 217 | 189 | |||||
Depreciation | (23) | (21) | (46) | (41) | |||||
Amortization of intangible assets | (7) | (8) | (15) | (16) | |||||
Stock-based compensation | (32) | (31) | (60) | (61) | |||||
Operating income | 66 | 49 | 96 | 71 | |||||
Other income (expense), net | 2 | (7) | 5 | (8) | |||||
Income before income taxes | 68 | 42 | 101 | 63 | |||||
Provision for income taxes | (34) | (10) | (41) | (27) | |||||
Net income | 34 | 32 | 60 | 36 | |||||
Hotels, Media & Platform | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | [1] | 254 | 272 | 508 | 524 | ||||
Experiences & Dining Segment | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | [1] | 125 | 98 | 206 | 161 | ||||
Other | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | [2] | 43 | 63 | 84 | 126 | ||||
Adjusted EBITDA | [2] | 13 | 8 | 22 | 15 | ||||
Reportable Segments | Hotels, Media & Platform | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | 254 | [3] | 272 | [4] | 508 | [3] | 524 | [4] | |
Adjusted EBITDA | 108 | [3] | 85 | [4] | 212 | [3] | 162 | [4] | |
Reportable Segments | Experiences & Dining Segment | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | 125 | 98 | 206 | 161 | |||||
Adjusted EBITDA | 7 | 16 | (17) | 12 | |||||
Corporate and Unallocated | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Depreciation | (23) | (21) | (46) | (41) | |||||
Amortization of intangible assets | (7) | (8) | (15) | (16) | |||||
Stock-based compensation | $ (32) | $ (31) | $ (60) | $ (61) | |||||
[1] | Our revenue is recognized primarily at a point in time for all reported segments. | ||||||||
[2] | Other consists of the combination of our Rentals, Flights/Cruises/Car Rentals, SmarterTravel and TripAdvisor China business units and does not constitute a reportable segment. | ||||||||
[3] | Includes unallocated corporate general and administrative costs of $17 million and $31 million and TripAdvisor-branded advertising expenses (primarily television advertising) of $26 million and $55 million for the three and six months ended June 30, 2019, respectively. | ||||||||
[4] | Includes unallocated corporate general and administrative costs of $19 million and $39 million and TripAdvisor-branded advertising expenses (primarily television advertising) of $35 million and $61 million for the three and six months ended June 30, 2018, respectively. |
Segment Information - Summary_2
Segment Information - Summary of Segment Information (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Segment Reporting Information [Line Items] | |||||
General and administrative | [1] | $ 45 | $ 46 | $ 88 | $ 88 |
Reportable Segments | Hotels, Media & Platform | |||||
Segment Reporting Information [Line Items] | |||||
General and administrative | 17 | 19 | 31 | 39 | |
Advertising expense | $ 26 | $ 35 | $ 55 | $ 61 | |
[1] | Includes stock-based compensation expense as follows |