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(5) Debt Outstanding debt at June 30, 2024 and December 31, 2023 is summarized as follows:
TripCo Exchangeable Senior Debentures due 2051 On March 25, 2021, TripCo issued $300 million aggregate original principal amount of the Debentures. Pursuant to the terms of the offering, on March 31, 2021, the initial purchasers notified the Company of their intention to exercise the option to purchase $30 million aggregate original principal amount of additional Debentures. The additional Debentures were issued on April 5, 2021. Upon an exchange of Debentures, TripCo, at its option, may deliver shares of TRIP common stock or the value thereof in cash or a combination of shares of TRIP common stock and cash. Initially, 14.3299 shares of TRIP common stock are attributable to each $1,000 original principal amount of Debentures, representing an initial exchange price of approximately $69.78 for each share of TRIP common stock. A total of approximately 4.7 million shares of TRIP common stock are attributable to the Debentures. Interest is payable quarterly on March 31, June 30, September 30 and December 31 of each year, commencing June 30, 2021. The Debentures may be redeemed by TripCo, in whole or in part, on or after March 27, 2025. Holders of the Debentures also have the right to require TripCo to purchase their Debentures on March 27, 2025. Accordingly, the Debentures are classified as current debt in the condensed consolidated balance sheet as of June 30, 2024. The redemption and purchase price will generally equal 100% of the adjusted principal amount of the Debentures plus accrued and unpaid interest to the redemption date, plus any final period distribution. TripCo used a portion of the net proceeds from the sale of the Debentures to fund the cash portion of the purchase price for the repurchase of a portion of the Series A Preferred Stock (see note 6 below). TripCo Variable Prepaid Forward The VPF matures in November 2025. At maturity, the accreted loan amount due will be approximately $57 million. As of June 30, 2024, 2.4 million shares of TRIP common stock, with a value of approximately $43 million, were pledged as collateral pursuant to the VPF contract. Tripadvisor Credit Facility Tripadvisor is party to a credit agreement with a group of lenders, initially entered into in June 2015 and, amended and restated in June 2023, which, among other things, provides for a $500 million secured revolving credit facility (the “Credit Facility”). The Credit Facility has a maturity date of June 29, 2028 (unless, on any date that is 91 days prior to the final scheduled maturity date in respect of any indebtedness outstanding under certain “specified debt,” the aggregate outstanding principal amount of such specified debt is $200 million or more then the maturity date will be such business day). As of June 30, 2024 and December 31, 2023, Tripadvisor had no outstanding borrowings under the Credit Facility and had issued $3 million and $4 million, respectively, of undrawn standby letters of credit under the Credit Facility. Tripadvisor’s Credit Facility also includes $15 million of borrowing capacity available for letters of credit and $40 million for swing line borrowings on same-day notice. The Credit Facility, among other things, requires Tripadvisor to maintain a maximum total net leverage ratio of 4.5 to 1.0 and contains certain customary affirmative and negative covenants and events of default, including a change of control. On July 8, 2024, Tripadvisor amended its Credit Facility, which among other things, provides for a new $500 million term loan B credit facility maturing July 8, 2031, with an interest rate based on the plus 2.75% (the “Term Loan B Facility”). The Term Loan B Facility was offered at 99.75% of par and is required to be paid down at 1.00% of the aggregate principal amount per year. On July 15, 2024, Tripadvisor used proceeds from the Term Loan B Facility to fully redeem the $500 million aggregate principal amount of its 7.00% Senior Notes due 2025 (“2025 Senior Notes”). Capped Call Transactions In connection with the issuance of the 2026 Convertible Senior Notes, Tripadvisor entered into privately negotiated capped call transactions (the “Capped Calls”) with certain of the initial purchasers of the 2026 Convertible Senior Notes and/or their respective affiliates and/or other financial institutions at a cost of approximately $35 million. The Capped Calls are considered indexed to Tripadvisor’s own stock and are considered equity under GAAP. The Capped Calls are reported as a reduction to additional paid-in-capital and noncontrolling interest in equity of subsidiaries within stockholders’ equity as of June 30, 2024 and December 31, 2023. Fair Value of Debt As of June 30, 2024, Tripadvisor estimated the fair value of its 2025 Senior Notes to be approximately $502 million and the fair value of its outstanding 0.25% Convertible 2026 Senior Notes (“2026 Convertible Senior Notes”) to be approximately $314 million. Tripadvisor considers the 2025 Senior Notes and the 2026 Convertible Senior Notes (collectively, the “Senior Notes”) to be “Level 2” fair value measurements. The estimated fair values of the Senior Notes are based on recently reported market transactions and/or prices for identical or similar financial instruments obtained from a third-party pricing source. |
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