TripAdvisor 2012 Annual Report Download - page 46
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(4) See our consolidated and combined statements of changes in stockholders’ equity and “Note 15—Stockholders’
Equity” in the notes to the consolidated and combined financial statements in Item 8 below for additional
information on changes to our stockholders’ equity and invested capital.
(5) To provide investors with additional information regarding our financial results, we have disclosed Adjusted
EBITDA, a non-GAAP financial measure, within this Annual Report on Form 10-K. Adjusted EBITDA is the
primary metric by which management evaluates the performance of our business and on which internal budgets
are based. We define “Adjusted EBITDA” as operating income, excluding depreciation of property and
equipment, which includes internal use software and website development, amortization of intangible assets,
stock-based compensation and non-recurring expenses incurred to affect the Spin-Off from Expedia during the
year ended December 31, 2011. See a discussion of “Adjusted EBITDA” in Item 7 “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” within this Annual Report on Form 10-K.
We have provided a reconciliation below of adjusted EBITDA to operating income, the most directly
comparable GAAP financial measure.
Year Ended December 31,
2012 2011 2010 2009 2008
(in thousands)
Reconciliation of Adjusted EBITDA:
Adjusted EBITDA ........................... $352,474 $322,918 $260,963 $197,219 $146,626
Depreciation ............................. (19,966) (18,362) (12,871) (9,330) (5,022)
Amortization of intangible assets ............. (6,110) (7,523) (14,609) (13,806) (11,161)
Stock-based compensation(1) ............... (30,102) (17,344) (7,183) (5,905) (5,560)
Spin-off costs ............................ — (6,932) — — —
Operating income ............................. $296,296 $272,757 $226,300 $168,178 $124,883
(1) Includes a one-time expense of $8 million for the year ended December 31, 2011, the majority of which was
recorded to general and administrative expense, primarily due to the modification of vested Expedia stock
options that were unexercised at the date of the Spin-Off. See “Note 4—Stock Based Awards and Other
Equity Instruments” in the notes to the consolidated and combined financial statements in Item 8 below for
additional information on our stock-based compensation.
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