Segment Information

12 Months Ended

Dec. 31, 2015

Segment Information

Segment Information

(13) Segment Information

TripCo, through its ownership interests in subsidiaries and other companies, is primarily engaged in the on-line commerce industries. TripCo identifies its reportable segments as (A) those consolidated companies that represent 10% or more of its consolidated annual revenue, annual adjusted operating income before depreciation and amortization (“Adjusted OIBDA”) or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of TripCo’s annual pre-tax earnings.

TripCo evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA, gross margin, average sales price per unit, number of units shipped and revenue or sales per customer equivalent. In addition, TripCo reviews nonfinancial measures such as unique website visitors, conversion rates and active customers, as appropriate.

TripCo defines Adjusted OIBDA as revenue less operating expenses, and selling, general and administrative expenses (excluding stock-based compensation),  adjusted for specifically identified non-recurring transactions. TripCo believes this measure is an important indicator of the operational strength and performance of its businesses, including each business’s ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, equity settled liabilities (including stock-based compensation), separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. TripCo generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.

TripCo’s operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments that are also consolidated companies are the same as those described in the Company’s summary of significant accounting policies.

Performance Measures

	Years ended December 31,
	2015			2014		2013
			Adjusted		Adjusted		Adjusted
	Revenue		OIBDA	Revenue	OIBDA	Revenue	OIBDA
	amounts in millions
TripAdvisor	$	1,492	464	1,246	468	945	379
Corporate and other		73	(30)	83	(26)	89	(18)
Consolidated TripCo	$	1,565	434	1,329	442	1,034	361

Other Information

	December 31, 2015			December 31, 2014
	Total		Capital	Total	Capital
	Assets		expenditures	Assets	expenditures
	amounts in millions
TripAdvisor	$	7,235	109	7,284	81
Corporate and other		50	3	82	9
Consolidated TripCo	$	7,285	112	7,366	90

Revenue by Geographic Area

	December 31,
	2015		2014	2013
	amounts in millions
United States	$	807	670	541
United Kingdom		215	191	141
Other countries		543	468	352
Consolidated TripCo	$	1,565	1,329	1,034

Long-lived Assets by Geographic Area

	December 31,
	2015		2014
	amounts in millions
United States	$	150	124
Other countries		30	14
Consolidated TripCo	$	180	138

The following table provides a reconciliation of consolidated Adjusted OIBDA to earnings (loss) before income taxes:

	Years ended December 31,
	2015		2014	2013
	amounts in millions
Consolidated Adjusted OIBDA	$	434	442	361
Stock settled charitable contribution		(67)	—	—
Stock-based compensation		(82)	(74)	(60)
Depreciation and amortization		(268)	(298)	(315)
Impairment of intangible assets		(2)	(2)	(3)
Interest expense		(28)	(13)	(12)
Other, net		17	(11)	1
Earnings (loss) before income taxes	$	4	44	(28)