Business Context and Reporting Period
Company: Expedia, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: February 4, 2016
Event: Entry into a Material Definitive Agreement (First Amendment to Credit Agreement).
Key Financial Metrics and Debt Structure
This filing details amendments to the company's revolving credit facility rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
- Aggregate Commitments: Increased by $500,000,000 to a total of $1,500,000,000.
- Maturity Date: Extended to February 4, 2021.
- Interest Rate: Reduced by up to 12.5 basis points per annum (variable based on senior unsecured debt ratings).
- Commitment Fee: Reduced by up to 2.5 basis points on undrawn amounts (variable based on ratings).
Material Changes Versus Prior Period
The filing represents a modification of the Amended and Restated Credit Agreement dated September 5, 2014. Key changes include:
- Leverage Ratio: Maximum permissible leverage ratio increased to 3.75:1.
- Interest Coverage: Minimum permissible ratio of consolidated EBITDA to consolidated cash interest expense reduced to 3.00:1.
- Covenants: Certain other modifications to covenants and terms were made.
Guidance, Outlook, and Risks
The filing does not contain management guidance, outlook, or commentary on future business performance. The primary risk disclosure relates to the terms of the amended credit agreement, noting that the description provided in the report is not complete and is qualified by reference to the actual First Amendment (Exhibit 10.1).
Investor Verification Checklist
- Verify the full text of the First Amendment (Exhibit 10.1) for complete covenant details not summarized in the 8-K.
- Confirm the company's current senior unsecured debt rating to determine the specific interest rate and commitment fee applicable under the new terms.
- Review the company's most recent 10-K or 10-Q to assess current leverage and EBITDA levels against the new 3.75:1 leverage and 3.00:1 interest coverage thresholds.