TripAdvisor 2011 Annual Report Download - page 42

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Table of Contents
reconciliation process to ensure the appropriate amount was retained. The completion of this reconciliation resulted in us recording an additional
receivable from Expedia of $7 million at December 31, 2011. In addition, as provided for in the Separation Agreement, we extinguished all
domestic receivables due from Expedia.
Refer to “Note 1— Organization and Basis of Presentation ” and “Note 11— Debt ” in the notes to the consolidated and combined
financial statements and our debt discussion in the section entitled “—Financial Position, Liquidity and Capital Resources” below for further
information on the divestiture accounting and secured financing.
Commercial Arrangements with Expedia Businesses
Following the Spin-Off, new commercial arrangements with Expedia businesses, including Expedia.com and Hotels.com, were
implemented and are described in “Note 9— Related Party Transactions ” in the notes to our consolidated and combined financial statements.
The new arrangements have terms of up to one year. In connection with the Spin-Off, Expedia expects to lower its CPC pricing by 10-
15%. This
change was rolled out throughout the fourth quarter of 2011, and trended towards the upper end of the expected discount range. We expect the
decrease in CPC pricing paid by Expedia to continue to negatively impact total revenue for the year ending December 31, 2012 by
approximately 5%. Some of this lost revenue may be replaced by advertising revenue from other customers; however, we have not included this
in our forward looking revenue assumptions.
Segment
We have one reportable segment. The segment is determined based on how our chief operating decision maker manages our business,
makes operating decisions and evaluates operating performance.
38