8-KEarnings & ResultsMaterial AgreementsFinancial Events+3

Expedia Group, Inc. 8-K Report, Material Agreement (Feb 11, 2010)

Filed February 11, 2010For Securities:EXPE

Summary

Expedia, Inc. (EXPE) filed this 8-K report on February 11, 2010, primarily to announce the establishment of a new $750 million, three-year revolving credit facility, effective February 8, 2010. This new facility replaces a prior $1 billion, five-year credit agreement that was terminated early without penalty. The new credit facility is unsecured and intended for general corporate purposes, with interest rates tied to the company's senior unsecured debt ratings, ranging from LIBOR plus 300 basis points or an alternate base rate plus 200 basis points when drawn. Undrawn amounts incur a 50 basis point commitment fee. The report also signals that Expedia released its fourth quarter and full-year 2009 financial results on February 11, 2010, alongside this filing. Furthermore, the company declared a quarterly cash dividend of $0.07 per share, payable on March 31, 2010, to shareholders of record on March 11, 2010. Management also indicated plans for investor and analyst presentations in the upcoming months of February, March, and April 2010.

Key Highlights

  • 1Expedia entered into a new $750 million, three-year unsecured revolving credit facility on February 8, 2010.
  • 2The new credit facility replaces a prior $1 billion, five-year revolving credit facility, which was terminated early.
  • 3The new facility is for general corporate purposes.
  • 4Interest rates on the new facility are variable, based on senior unsecured debt ratings, with drawn amounts at LIBOR + 300 bps or alternate base rate + 200 bps (with floors).
  • 5A commitment fee of 50 basis points applies to undrawn amounts.
  • 6The company declared a quarterly cash dividend of $0.07 per share, payable on March 31, 2010.
  • 7Expedia announced its fourth quarter and full-year 2009 financial results on February 11, 2010.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the entry into a new material definitive agreement, specifically a $750 million, three-year revolving credit facility, and to announce the termination of a previous credit facility. It also serves to disclose the company's fourth quarter and full-year 2009 financial results and a dividend declaration.

The filing indicates that Expedia terminated its prior $1 billion, five-year credit facility, which was scheduled to expire in August 2010, and replaced it with a new $750 million, three-year facility. While the exact reasons for the change are not explicitly detailed beyond the replacement, it suggests a strategic decision to adjust its financing structure, potentially aligning with current financial market conditions or corporate strategy. The new facility is smaller in principal amount and has a shorter term.

The new credit facility is a $750 million, three-year unsecured revolving credit facility. It is available for general corporate purposes. Interest rates vary based on Expedia's credit ratings, with drawn amounts subject to specific spreads over LIBOR or the alternate base rate. An undrawn commitment fee of 50 basis points also applies. The facility includes restrictive covenants, such as leverage and interest expense coverage ratios, which are consistent with previous covenants.

Expedia declared a quarterly cash dividend of $0.07 per share of common stock. This dividend is payable on March 31, 2010, to shareholders of record as of the close of business on March 11, 2010.