Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v2.4.0.8
Segment Information
 9 Months Ended
Sep. 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 consolidated companies that represent 10% or more of its consolidated 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 nine months ended September 30, 2014, TripCo has identified the following consolidated 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 consolidated 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 included in the Registration Statement.

Performance Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  September 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

TripAdvisor

    

$
354 

    
119 

    
255 

    
104 

 

Corporate and other

 

 
21 

 
(5)

 
19 

 
(2)

 

Consolidated TripCo

 

$
375 

 
114 

 
274 

 
102 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

TripAdvisor

    

$
958 

    
370 

    
732 

    
326 

 

Corporate and other

 

 
46 

 
(20)

 
52 

 
(14)

 

Consolidated TripCo

 

$
1,004 

 
350 

 
784 

 
312 

 

Other Information

 

 

 

 

 

 

 

 

 

 

September 30, 2014

 

 

 

Total

 

Capital

 

 

 

assets

 

expenditures

 

 

 

amounts in millions

 

TripAdvisor

    

$
7,359 

    
55 

 

Corporate and other

 

 
100 

 
2 

 

Consolidated TripCo

 

$
7,459 

 
57 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Nine months

 

 

 

ended September 30,

 

ended September 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

amounts in millions

 

Consolidated segment Adjusted OIBDA

    

$
114 

    
102 

    

 
350 

    
312 

 

Stock-based compensation

 

 
(20)

 
(14)

 

 
(54)

 
(44)

 

Depreciation and amortization

 

 
(77)

 
(78)

 

 
(219)

 
(233)

 

Interest expense

 

 
(4)

 
(3)

 

 
(9)

 
(9)

 

Other, net

 

 
(8)

 
3 

 

 
(8)

 

 —

 

Earnings (loss) before income taxes

 

$
5 

 
10 

 

 
60 

 
26