TripAdvisor 2013 Annual Report Download - page 117

For purposes of governing certain of the ongoing relationships between us and Expedia at and after the
Spin-Off, and to provide for an orderly transition, we and Expedia entered into various agreements, including,
among others, the Separation Agreement, the Tax Sharing Agreement, the Employee Matters Agreement and
Transition Services Agreement, and commercial agreements. The full texts of the Separation Agreement, the Tax
Sharing Agreement, the Employee Matters Agreement and the Transition Services Agreement are incorporated
by reference in this Annual Report on Form 10-K as Exhibits 2.1, 10.2, 10.3 and 10.4. TripAdvisor has satisfied
its obligations under the Separation Agreement, the Employee Matters Agreement and the Transition Services
Agreement. TripAdvisor continues to be subject to certain post-spin obligations under the Tax Sharing
Agreement.
Relationship between Liberty and TripAdvisor
On December 11, 2012, Liberty Interactive Corporation, or Liberty, purchased an aggregate of 4,799,848
shares of common stock of TripAdvisor from Barry Diller, our former Chairman of the Board of Directors and
Senior Executive, and certain of his affiliates (the “Stock Purchase”). As of December 31, 2013, Liberty
beneficially owned 18,159,752 shares of our common stock and 12,799,999 shares of our Class B common stock,
which shares constitute 14.0% of the outstanding shares of Common Stock and 100% of the outstanding shares
of Class B Common Stock. Assuming the conversion of all of the Liberty’s shares of Class B common stock into
common stock, Liberty would beneficially own 21.8% of the outstanding common stock (calculated in
accordance with Rule 13d-3). Because each share of Class B common stock generally is entitled to ten votes per
share and each share of common stock is entitled to one vote per share, Liberty may be deemed to beneficially
own equity securities representing approximately 56.8% of our voting power.
We had no other material related party transactions with Liberty during the years ended December 31, 2013,
2012 or 2011.
NOTE 16: SEGMENT AND GEOGRAPHIC INFORMATION
Segment Information
We have one operating and reportable segment: TripAdvisor. We determined our segment based on how our
chief operating decision maker manages our business, makes operating decisions, evaluates operating
performance and allocates resources. The chief operating decision maker for the Company is our Chief Executive
Officer.
Our primary operating metric for evaluating segment performance is Adjusted EBITDA. We define
Adjusted EBITDA as net income (loss) plus: (1) provision for income taxes; (2) other (income) expense, net;
(3) depreciation of property and equipment, including internal use software and website development;
(4) amortization of intangible assets; (5) stock-based compensation; and (6) non-recurring expenses. Such
amounts are detailed in our segment reconciliation below. In addition, please see our discussion of Adjusted
EBITDA in the section of this Annual Report on Form 10-K entitled “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.”
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