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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                             to

Commission File Number 001-36603

LIBERTY TRIPADVISOR HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

46-3337365
(I.R.S. Employer
Identification No.)

12300 Liberty Boulevard, Englewood, Colorado 80112

(Address, including zip code, of Registrant’s principal executive offices)

Registrant’s telephone number, including area code: (720875-5200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Series A common stock

LTRPA

The Nasdaq Stock Market LLC

Series B common stock

LTRPB

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes    No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer 

Non-accelerated Filer 

Smaller Reporting Company 

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes   No 

The number of outstanding shares of Liberty TripAdvisor Holdings, Inc. common stock as of October 31, 2021 was:

Series A

Series B

Liberty TripAdvisor Holdings, Inc. common stock

72,290,228

3,216,047

Table of Contents

Table of Contents

Part I – Financial Information

Item 1. Financial Statements

LIBERTY TRIPADVISOR HOLDINGS, INC. Condensed Consolidated Balance Sheets (unaudited)

I-3

LIBERTY TRIPADVISOR HOLDINGS, INC. Condensed Consolidated Statements of Operations (unaudited)

I-5

LIBERTY TRIPADVISOR HOLDINGS, INC. Condensed Consolidated Statements of Comprehensive Earnings (Loss) (unaudited)

I-6

LIBERTY TRIPADVISOR HOLDINGS, INC. Condensed Consolidated Statements of Cash Flows (unaudited)

I-7

LIBERTY TRIPADVISOR HOLDINGS, INC. Condensed Consolidated Statements of Equity (unaudited)

I-8

LIBERTY TRIPADVISOR HOLDINGS, INC. Notes to Condensed Consolidated Financial Statements (unaudited)

I-10

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

I-28

Item 3. Quantitative and Qualitative Disclosures about Market Risk

I-40

Item 4. Controls and Procedures

I-40

Part II Other Information

Item 1. Legal Proceedings

II-1

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

II-1

Item 6. Exhibits

II-2

SIGNATURES

II-3

I-2

Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(unaudited)

    

September 30,

    

December 31,

 

2021

2020

 

amounts in millions

 

Assets

Current assets:

Cash and cash equivalents

$

722

 

423

Accounts receivable and contract assets, net of allowance for credit losses of $32 million and $33 million, respectively

 

198

 

83

Income taxes receivable

52

50

Other current assets

 

28

 

23

Total current assets

 

1,000

 

579

Property and equipment, net

 

121

 

132

Intangible assets not subject to amortization:

Goodwill

 

2,224

 

2,240

Trademarks

 

730

 

732

 

2,954

 

2,972

Intangible assets subject to amortization, net

 

149

 

202

Other assets, at cost, net of accumulated amortization

 

193

 

201

Total assets

$

4,417

 

4,086

(continued)

See accompanying notes to condensed consolidated financial statements.

I-3

Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Condensed Consolidated Balance Sheets (Continued)

(unaudited)

    

September 30,

    

December 31,

 

2021

2020

 

amounts in millions

 

Liabilities and Equity

Current liabilities:

Deferred merchant and other payables

$

145

 

54

Deferred revenue

 

39

 

28

Accrued liabilities and other current liabilities

 

180

 

160

Total current liabilities

 

364

 

242

Long-term debt, including $276 million measured at fair value as of September 30, 2021 (note 5)

 

1,149

 

532

Deferred income tax liabilities

 

150

 

180

Financial instrument liabilities (note 4)

137

14

Preferred stock liability (note 6)

208

Other liabilities

 

320

 

339

Total liabilities

 

2,328

 

1,307

Redeemable preferred stock, $.01 par value. Authorized shares 50,000,000; issued and outstanding 187,414 shares at September 30, 2021 and 325,000 shares at December 31, 2020 (note 6)

472

Equity:

Series A common stock, $.01 par value. Authorized 200,000,000 shares; issued and outstanding 72,290,228 shares at September 30, 2021 and 72,227,256 at December 31, 2020

1

1

Series B common stock, $.01 par value. Authorized shares 7,500,000; issued and outstanding 3,216,047 shares at September 30, 2021 and 2,973,665 December 31, 2020

Series C common stock, $.01 par value. Authorized 200,000,000 shares; no shares issued.

Additional paid-in capital

286

257

Accumulated other comprehensive earnings (loss), net of taxes

 

(18)

 

(23)

Retained earnings (deficit)

 

(513)

 

(278)

Total stockholders' equity

 

(244)

 

(43)

Noncontrolling interests in equity of subsidiaries

 

2,333

 

2,350

Total equity

 

2,089

 

2,307

Commitments and contingencies (note 8)

Total liabilities, redeemable preferred stock and equity

$

4,417

 

4,086

See accompanying notes to condensed consolidated financial statements.

I-4

Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Condensed Consolidated Statements of Operations

(unaudited)

Three months ended

 

Nine months ended

 

September 30,

 

September 30,

 

    

2021

    

2020

    

2021

    

2020

 

amounts in millions, except

 

per share amounts

 

Total revenue, net

$

303

151

661

488

Operating costs and expenses:

Operating expense, including stock-based compensation (note 2)

 

75

 

59

215

208

Selling, general and administrative, including stock-based compensation (note 2)

 

188

 

107

476

388

Depreciation and amortization

 

36

 

41

112

126

Restructuring and other related reorganization costs

42

Impairment of goodwill and intangible assets

3

550

 

299

 

210

803

1,314

Operating income (loss)

 

4

 

(59)

(142)

(826)

Other income (expense):

Interest expense

 

(16)

 

(13)

(43)

(27)

Realized and unrealized gains (losses) on financial instruments, net

82

(1)

189

(1)

Other, net

 

(1)

 

1

(2)

(24)

 

65

 

(13)

144

(52)

Earnings (loss) before income taxes

 

69

 

(72)

2

(878)

Income tax (expense) benefit

 

(1)

 

12

22

115

Net earnings (loss)

 

68

 

(60)

24

(763)

Less net earnings (loss) attributable to noncontrolling interests

 

(4)

 

(43)

(111)

(563)

Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders

$

72

 

(17)

135

(200)

Net earnings (loss) available to common shareholders (note 3)

$

72

(34)

(235)

(247)

Basic net earnings (loss) attributable to Series A and Series B Liberty TripAdvisor Holdings, Inc. shareholders per common share (note 3):

$

0.95

(0.45)

(3.13)

 

(3.29)

Diluted net earnings (loss) attributable to Series A and Series B Liberty TripAdvisor Holdings, Inc. shareholders per common share (note 3):

$

0.94

(0.45)

(3.13)

 

(3.29)

See accompanying notes to condensed consolidated financial statements.

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LIBERTY TRIPADVISOR HOLDINGS, INC.

Condensed Consolidated Statements of Comprehensive Earnings (Loss)

(unaudited)

Three months ended

Nine months ended

September 30,

September 30,

2021

2020

2021

2020

amounts in millions

Net earnings (loss)

$

68

(60)

24

(763)

Other comprehensive earnings (loss), net of taxes:

Foreign currency translation adjustments

 

(11)

16

(20)

2

Credit risk on fair value debt instruments gains (losses)

8

Reclassification adjustment for net losses included in net income

2

2

1

Other comprehensive earnings (loss)

 

(9)

16

(10)

3

Comprehensive earnings (loss)

 

59

(44)

14

(760)

Less comprehensive earnings (loss) attributable to the noncontrolling interests

 

(12)

(31)

(126)

(561)

Comprehensive earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders

$

71

(13)

140

(199)

See accompanying notes to condensed consolidated financial statements.

I-6

Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

Nine months ended

 

September 30,

 

2021

2020

 

amounts in millions

 

Cash flows from operating activities:

    

    

    

    

Net earnings (loss)

$

24

 

(763)

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities

Depreciation and amortization

 

112

 

126

Stock-based compensation

 

93

 

81

Realized and unrealized (gains) losses on financial instruments, net

(189)

1

Impairment of goodwill and intangible assets

550

Deferred income tax expense (benefit)

 

(29)

 

(62)

Other charges (credits), net

 

15

 

29

Changes in operating assets and liabilities

Current and other assets

 

(96)

 

66

Payables and other liabilities

 

105

 

(227)

Net cash provided (used) by operating activities

 

35

 

(199)

Cash flows from investing activities:

Capital expended for property and equipment, including internal-use software and website development

 

(40)

 

(46)

Other investing activities, net

(1)

(1)

Net cash provided (used) by investing activities

 

(41)

 

(47)

Cash flows from financing activities:

Borrowings of debt

 

675

 

1,240

Repayments of debt

 

 

(1,052)

Repurchase of Series A Preferred Stock

(281)

Shares repurchased by subsidiary

(115)

Payment of withholding taxes on net share settlements of equity awards

 

(39)

 

(18)

Issuance of redeemable preferred stock

325

Subsidiary purchase of capped calls

(35)

Other financing activities, net

(8)

(26)

Net cash provided (used) by financing activities

 

312

 

354

Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash

 

(7)

 

4

Net increase (decrease) in cash, cash equivalents and restricted cash

 

299

 

112

Cash, cash equivalents and restricted cash at beginning of period

 

423

 

341

Cash, cash equivalents and restricted cash at end of period

$

722

 

453

See accompanying notes to condensed consolidated financial statements.

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Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Condensed Consolidated Statements of Equity

(unaudited)

Stockholders' equity

Accumulated

Noncontrolling

Additional

other

interest in

Common Stock

paid-in

comprehensive

Retained

equity of

Total

Series A

Series B

Series C

capital

earnings (loss)

earnings

subsidiaries

equity

amounts in millions

Balance at January 1, 2021

    

$

1

    

    

    

257

    

(23)

    

(278)

    

2,350

    

2,307

Net earnings (loss)

 

 

135

    

(111)

    

24

Other comprehensive earnings (loss)

 

5

 

    

(15)

    

(10)

Stock-based compensation

25

 

 

    

78

    

103

Withholding taxes on net share settlements of stock-based compensation

(39)

 

 

    

    

(39)

Shares issued by subsidiary

(9)

17

8

Preferred stock adjustment (note 6)

(370)

(370)

Subsidiary purchase of capped calls, net of tax (note 5)

(6)

(20)

(26)

Preferred stock repurchased with subsidiary shares (note 6)

58

34

92

Balance at September 30, 2021

$

1

 

 

 

286

 

(18)

 

(513)

    

2,333

    

2,089

Stockholders' equity

Accumulated

Noncontrolling

Additional

other

interest in

Common Stock

paid-in

comprehensive

Retained

equity of

Total

Series A

Series B

Series C

capital

earnings (loss)

earnings

subsidiaries

equity

amounts in millions

Balance at June 30, 2021

$

1

290

(17)

(585)

2,318

2,007

Net earnings (loss)

72

(4)

68

Other comprehensive earnings (loss)

(1)

(8)

(9)

Stock-based compensation

8

25

33

Withholding taxes on net share settlements of stock-based compensation

(10)

(10)

Shares issued by subsidiary

(2)

2

Balance at September 30, 2021

$

1

286

(18)

(513)

2,333

2,089

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Table of Contents

Stockholders' equity

Accumulated

Noncontrolling

Additional

other

interest in

Common Stock

paid-in

comprehensive

Retained

equity of

Total

Series A

Series B

Series C

capital

earnings (loss)

earnings

subsidiaries

equity

amounts in millions

Balance at January 1, 2020

    

$

1

    

    

    

237

    

(29)

    

111

    

2,981

    

3,301

Net earnings (loss)

 

 

(200)

    

(563)

    

(763)

Other comprehensive earnings (loss)

 

1

 

    

2

    

3

Stock-based compensation

23

 

 

    

70

    

93

Withholding taxes on net share settlements of stock-based compensation

(18)

(18)

Shares repurchased by subsidiary

17

(132)

(115)

Preferred stock adjustment

(47)

(47)

Other, net

 

 

 

(8)

 

 

(1)

    

6

    

(3)

Balance at September 30, 2020

$

1

 

 

 

251

 

(28)

 

(137)

    

2,364

    

2,451

Stockholders' equity

 

Accumulated

Noncontrolling

 

Additional

other

interest in

 

Common Stock

paid-in

comprehensive

Retained

equity of

Total

 

Series A

Series B

Series C

capital

earnings (loss)

earnings

subsidiaries

equity

 

amounts in millions

 

Balance at June 30, 2020

$

1

244

(32)

(103)

2,372

2,482

Net earnings (loss)

 

 

(17)

    

(43)

    

(60)

Other comprehensive earnings (loss)

 

4

 

    

12

    

16

Stock-based compensation

8

 

 

    

23

    

31

Withholding taxes on net share settlements of stock-based compensation

(1)

(1)

Preferred stock adjustment

(17)

(17)

Balance at September 30, 2020

$

1

 

 

 

251

 

(28)

 

(137)

    

2,364

    

2,451

See accompanying notes to condensed consolidated financial statements

I-9

Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(1) Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of Liberty TripAdvisor Holdings, Inc. and its controlled subsidiaries (collectively, "TripCo," "Consolidated TripCo," the "Company," "we," "us," or “our,” unless the context otherwise requires). TripCo does not have any operations outside of its controlling interest in its subsidiary Tripadvisor, Inc. (“Tripadvisor”). Tripadvisor’s financial performance tends to be seasonally highest in the second and third quarters of a given year, which includes the seasonal peak in consumer demand, traveler hotel and rental stays, and travel activities and experiences taken, compared to the first and fourth quarters, which represent seasonal low points.

The accompanying (a) condensed consolidated balance sheet as of December 31, 2020, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation. The results of operations for any interim period are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2020 as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers (i) recognition and recoverability of goodwill, intangible and long-lived assets and (ii) accounting for income taxes to be its most significant estimates. Some of the Company’s estimates and assumptions required increased judgment and carry a higher degree of variability and volatility as a result of COVID-19 (as defined below). As events continue to evolve and additional information becomes available, the Company’s estimates may change materially in future periods.

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported in Wuhan, China, and on March 11, 2020 was declared a global pandemic. Tripadvisor and the Company continue to be subject to risks and uncertainties as a result of the COVID-19 pandemic.

While we have seen varying degrees of containment of the virus in various countries and positive signs of growing travel demand recovery, the degree of containment and the recovery in travel has varied both region-to-region on a global basis, as well as state-to-state in the U.S. For example, as COVID-19 cases resurge or as new variants are identified, government restrictions and mandates were reinstated in certain geographies globally. Tripadvisor does not know the future path or rate of global or regional COVID-19 transmission, including various existing COVID-19 variants (e.g., the Delta variant) or any possible future variants, nor does it have visibility into when remaining or reinstated restrictions will be lifted, and where additional restrictions may be implemented or reinstated in the future due to resurgence of the virus. Correspondingly, Tripadvisor still does not have forward-looking visibility into the long-term impacts related to consumer demand for travel, usage patterns on its platform, and travel behavior patterns when all travel bans and other government restrictions and mandates are fully lifted.

In the fourth quarter of 2020, multiple COVID-19 vaccines were approved for widespread distribution throughout various parts of the world, including the United States and Europe, and in the first quarter of 2021, vaccination distribution programs were initiated around the world. Vaccine programs in Tripadvisor’s largest markets, the U.S. and Europe, appear to be progressing well, and Tripadvisor expects the same for much of the rest of the world. Tripadvisor is encouraged by these developments, however the timing of widespread vaccine distributions, efficacy against any future or recent variants

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Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(e.g., the Delta variant) of COVID-19, whether there will be resurgences of the virus and subsequent government restrictions, the extent and effectiveness of containment actions taken, and whether consumers demand for travel and hospitality services will continue to be negatively impacted remain uncertain. Therefore, the continuing extent of the impact of the COVID-19 pandemic on Tripadvisor’s business, results of operations, liquidity and financial condition remains uncertain, and is dependent on future developments that cannot be accurately predicted at this time. Tripadvisor continues to believe the travel, leisure, hospitality, and restaurant industries (collectively, the “travel industry”), and Tripadvisor’s financial results, will continue to be adversely and materially affected while the pandemic continues, new variants emerge, and lingering travel bans and other government restrictions and mandates continue to remain in place or be reinstated, all of which negatively impact consumer demand, sentiment and discretionary spending patterns.

In addition, due to the impact of COVID-19 on Tripadvisor’s business, which led to unfavorable working capital trends and material negative operating cash flow during the year ended December 31, 2020, Tripadvisor did not experience its typical seasonal pattern for revenue and profit during the calendar quarters within the year ended December 31, 2020. Although consumer demand, traveler hotel and rental stays, and travel activities and experiences taken generally remain materially lower than historic levels, these trends have improved during 2021, particularly in the second and third quarters of 2021, resulting in increased revenue, and working capital and operating cash flow more akin to typical historical seasonality trends. However, it is difficult to predict the seasonality for the upcoming quarters, given the sustained uncertainty related to the continued economic impact of the COVID-19 pandemic, and the ultimate shape and timing of a recovery in Tripadvisor’s key markets. In addition, significant shifts in Tripadvisor’s business mix or adverse economic conditions could result in future seasonal patterns that are different from historical trends.  

On March 26, 2020, TripCo issued and sold 325,000 shares of TripCo’s newly-created 8% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”) for a purchase price of $1,000 per share. On March 29, 2021 and April 6, 2021, TripCo repurchased a portion of the Series A Preferred Stock. See further discussion about the Series A Preferred Stock in note 6.  

Spin-Off of TripCo from Qurate Retail  

During October 2013, the Board of Directors of Liberty Interactive Corporation and its subsidiaries (subsequently renamed Qurate Retail, Inc. (“Qurate Retail”)) authorized a plan to distribute to the stockholders of its then-outstanding Liberty Ventures common stock shares of a wholly-owned subsidiary, TripCo (the “TripCo Spin-Off”). Following the TripCo Spin-Off, Qurate Retail and TripCo operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. In connection with the TripCo Spin-Off, TripCo entered into certain agreements, including the services agreement, the facilities sharing agreement and the tax sharing agreement, with Qurate Retail and/or Liberty Media Corporation (“Liberty Media”) (or certain of their subsidiaries) in order to govern certain of the ongoing relationships between the companies after the TripCo Spin-Off and to provide for an orderly transition.

Pursuant to the services agreement (except as described below in respect to Gregory B. Maffei), Liberty Media provides TripCo with general and administrative services including legal, tax, accounting, treasury and investor relations support. TripCo reimburses Liberty Media for direct, out-of-pocket expenses incurred by Liberty Media in providing these services and TripCo pays a services fee to Liberty Media under the services agreement that is subject to adjustment semi-annually, as necessary.

In December 2019, TripCo entered into an amendment to the services agreement with Liberty Media in connection with Liberty Media’s entry into a new employment arrangement with Gregory B. Maffei, TripCo’s Chairman, President and Chief Executive Officer.  Under the amended services agreement, components of his compensation will either be paid directly to him by each of TripCo, Liberty Broadband Corporation, and Qurate Retail (collectively, the “Service Companies”) or reimbursed to Liberty Media, in each case, based on allocations among Liberty Media and the Service Companies set forth in the amended services agreement, currently set at 5% for the Company.

Under the facilities sharing agreement, TripCo shares office space with Liberty Media and related amenities at Liberty Media’s corporate headquarters in Englewood, Colorado.

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Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Qurate Retail and TripCo and other agreements related to tax matters.

Under these agreements, approximately $1 million was reimbursable to Liberty Media for both of the three months ended September 30, 2021 and 2020, and approximately $3 million was reimbursable to Liberty Media for both of the nine months ended September 30, 2021 and 2020.

(2) Stock-Based Compensation

TripCo Equity Awards

TripCo has granted to certain of its directors and employees restricted stock units (“RSUs”) and stock options to purchase shares of TripCo common stock (collectively, “Awards”). TripCo measures the cost of employee services received in exchange for an equity classified Award based on the grant-date fair value (“GDFV”) of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award).  The Company measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date.

TripCo has calculated the GDFV for all of its equity classified Awards and any subsequent remeasurement of its liability classified Awards using the Black-Scholes-Merton model. TripCo estimates the expected term of the Awards based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of TripCo common stock. TripCo uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options.

Included in the accompanying condensed consolidated statements of operations are the following amounts of stock-based compensation, the majority of which relates to Tripadvisor as discussed below:

Three months ended

 

Nine months ended

 

September 30,

 

September 30,

 

    

2021

    

2020

    

2021

    

2020

 

amounts in millions

 

Operating expense

$

11

12

36

33

Selling, general and administrative expense

 

19

 

17

57

 

48

$

30

 

29

93

 

81

Stock-based compensation expense related to Tripadvisor was $29 million and $28 million for the three months ended September 30, 2021 and 2020, respectively, and $89 million and $80 million for the nine months ended September 30, 2021 and 2020, respectively.

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Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

TripCo - Outstanding Awards

The following tables present the number and weighted average exercise price (“WAEP”) of the Awards to purchase TripCo common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining contractual life and aggregate intrinsic value of the Awards.

Weighted

average

remaining

Aggregate

contractual

intrinsic

Series A

WAEP

life

value

in thousands

in years

in millions

Outstanding at January 1, 2021

 

1,086

$

7.78

Granted

 

53

$

5.65

Exercised

 

$

Forfeited/Cancelled

 

(1)

$

35.05

Outstanding at September 30, 2021

 

1,138

$

7.67

 

5.2

$

Exercisable at September 30, 2021

 

366

$

14.33

 

3.2

$

    

    

    

    

    

Weighted

    

    

 

average

 

remaining

Aggregate

 

contractual

intrinsic

 

Series B

WAEP

life

value

 

in thousands

in years

in millions

 

Outstanding at January 1, 2021

 

2,397

$

21.93

 

Granted

 

$

 

Exercised

 

$

 

Forfeited/Cancelled

 

$

Outstanding at September 30, 2021

 

2,397

$

21.93

 

4.0

$

16

Exercisable at September 30, 2021

 

2,397

$

21.93

 

4.0

$

16

During the nine months ended September 30, 2021, TripCo granted 154 thousand performance-based RSUs of Series B TripCo common stock to our CEO in connection with his employment agreement. The RSUs had a GDFV of $7.07 per share at the time they were granted.  The RSUs cliff vest one year from the month of grant, subject to the satisfaction of certain performance objectives. Performance objectives, which are subjective, are considered in determining the timing and amount of the compensation expense recognized. When the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The probability of satisfying the performance objectives is assessed at the end of each reporting period.

As of September 30, 2021, the total unrecognized compensation cost related to unvested Awards was approximately $6.3 million. Such amount will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately 2.6 years.

As of September 30, 2021, TripCo reserved 3.5 million shares of Series A and Series B common stock for issuance under exercise privileges of outstanding stock Awards.

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Table of Contents

LIBERTY TRIPADVISOR HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Tripadvisor Equity Grant Awards

The following table presents the number and WAEP of the Awards to purchase Tripadvisor common stock (“TRIP common stock”) granted to certain officers, employees and directors of Tripadvisor.

Weighted

average

TripAdvisor

remaining

Aggregate

stock

contractual

intrinsic

options

WAEP

life

value

in thousands

in years

in millions

Outstanding at January 1, 2021

 

5,615

$

46.31

Granted

 

752

$

45.67

Exercised

 

(691)

$

34.13

Cancelled or expired

(201)

$

43.92

Outstanding at September 30, 2021

 

5,475

$

47.85

 

5.1

$