Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v2.4.0.8
Segment Information
 6 Months Ended
Jun. 30, 2014
Segment Information  
Segment Information

(8) 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 combined companies that represent 10% or more of its combined annual revenue, annual 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 cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock‑based compensation). 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, 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.

For the six months ended June 30, 2014, TripCo has identified the following combined company as its reportable segment:

·

TripAdvisor, Inc.—an online travel research company, empowering users to plan and maximize their travel experience.

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 combined companies are the same as those described in the Company’s summary of significant accounting policies included in the financial statements for the years ended December 31, 2013, 2012 and 2011.

Performance Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  June 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

TripAdvisor

    

$
323 

    
129 

    
247 

    
113 

 

Corporate and other

 

 
12 

 
(9)

 
16 

 
(5)

 

Combined TripCo

 

$
335 

 
120 

 
263 

 
108 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended  June 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

TripAdvisor

    

$
604 

    
251 

    
477 

    
222 

 

Corporate and other

 

 
25 

 
(15)

 
33 

 
(12)

 

Combined TripCo

 

$
629 

 
236 

 
510 

 
210 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

June 30, 2014

 

 

 

Total

 

Capital

 

 

 

Assets

 

expenditures

 

 

 

amounts in millions

 

TripAdvisor

    

$
7,321 

    
42 

 

Corporate and other

 

 
34 

 

 —

 

Combined TripCo

 

$
7,355 

 
42 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Six months

 

 

ended June 30,

 

ended June 30,

 

 

2014

 

2013

 

2014

 

2013

 

 

amounts in millions

Combined segment Adjusted OIBDA

    

$
120 

    
108 

    

 
236 

    
210 

Stock-based compensation

 

 
(17)

 
(13)

 

 
(34)

 
(30)

Depreciation and amortization

 

 
(72)

 
(78)

 

 
(142)

 
(155)

Interest expense

 

 
(3)

 
(3)

 

 
(5)

 
(6)

Other, net

 

 

 —

 
(2)

 

 

 —

 
(3)

Earnings (loss) before income taxes

 

$
28 

 
12 

 

 
55 

 
16