Business Context and Reporting Period
Company: Expedia, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 8, 2012
Event: Entry into a Material Definitive Agreement (Third Amendment to Revolving Credit Facility).
Key Financial Metrics and Debt Structure
This filing details amendments to the company's debt facility rather than reporting operational financial results (revenue, profit, or cash flow). Key debt metrics updated include:
- Total Commitment: Increased by $250,000,000 to $1,000,000,000.
- Sublimits: Swingline and letter of credit sublimits increased by $30,000,000 each to $120,000,000.
- Maturity Date: Extended to November 8, 2017.
- Commitment Fee: Reduced on undrawn amounts by up to 2.5 basis points (variable based on credit ratings).
- Leverage Ratio: Maximum permissible ratio increased to 3.25 to 1.00.
Note: The filing text does not provide current values for revenue, net income, operating cash flow, or total outstanding debt balance.
Material Changes Versus Prior Period
The primary material change is the expansion of the company's borrowing capacity and flexibility under its existing revolving credit facility, originally dated February 8, 2010. This amendment supersedes the First Amendment (August 18, 2010) and Second Amendment (August 31, 2011) regarding the specific terms listed above.
Outlook, Risks, and Management Commentary
Management Commentary: The amendment reflects a strategic adjustment to the company's credit terms, specifically lowering costs on undrawn funds and increasing the allowable leverage ratio to support future operations or acquisitions.
Risks and Contingencies: The filing notes that JPMorgan Chase Bank, N.A., and J.P. Morgan Europe Limited have performed and may continue to perform financial advisory and banking services for the company, for which they receive customary fees. The full terms and covenants are detailed in the attached Exhibit 10.1.
Key Facts for Investor Verification
- Verify the total amount currently drawn against the new $1,000,000,000 facility limit.
- Confirm the company's current senior unsecured debt rating to determine the exact commitment fee reduction.
- Review the specific covenant modifications in Exhibit 10.1 to understand new financial maintenance requirements.
- Assess the impact of the increased leverage ratio (3.25:1) on the company's ability to take on additional debt.