Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Other Intangible Assets

v3.20.2
Goodwill and Other Intangible Assets
9 Months Ended
Sep. 30, 2020
Goodwill and Other Intangible Assets  
Goodwill and Other Intangible Assets

(5) Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill are as follows:

Hotels, Media & Platform

Experiences & Dining

Corporate and other

Total

(in millions)

Balance at January 1, 2020

$

1,923

333

271

2,527

Allocation to new segment (1)

6

(6)

Impairments (2)

(279)

(21)

(300)

Dispositions (3)

(18)

(18)

Other (4)

13

(1)

12

Balance at September 30, 2020

$

1,650

346

225

2,221

(1) Re-allocation of goodwill as a result of changes to reporting units related to Tripadvisor internal restructuring.
(2) TripCo recorded an $18 million goodwill impairment related to a business that was sold in June 2020, and an additional $3 million goodwill impairment during the third quarter of 2020 as a result of strategic decisions made regarding Tripadvisor’s China business. See discussion of the Hotels, Media & Platform reporting unit impairment below.
(3) Dispositions relates to the sale of the aforementioned Tripadvisor business.
(4) Other changes primarily relate to immaterial acquisitions and foreign currency translation on goodwill.

Impairments

Due to the current and expected impact of COVID-19 on Tripadvisor’s operating results, and a sustained decline in Tripadvisor’s stock price, impairments of $250 million of trademarks and $279 million of goodwill were recorded during the three months ended June 30, 2020, respectively, related to the Hotels, Media & Platform reporting unit. The fair value of the trademarks was determined using the relief from royalty method. The fair value of the reporting unit was determined using a combination of market multiples (market approach) and discounted cash flow (income approach) calculations (Level 3). As of September 30, 2020, accumulated goodwill impairment losses for Tripadvisor totaled $1,571 million. 

Based on the quantitative assessment performed during the second quarter and the resulting impairment losses recorded, the estimated fair values of the trademark and Hotels, Media & Platform reporting unit approximate their respective carrying values. TripCo will continue to monitor Tripadvisor’s financial performance, stock price and other events and circumstances that may negatively impact the estimated fair values to determine if future impairment assessments may be necessary.