TripAdvisor 2013 Annual Report Download - page 93

industry group and currency. Our credit risk related to corporate debt securities is also mitigated by the relatively
short maturity period required by our investment policy. Foreign exchange contracts are transacted with various
international financial institutions with high credit standing.
Our business is also subject to certain risks due to concentrations related to dependence on our relationships
with our customers. We are highly dependent on our advertising and media relationship with Expedia, (see “Note
15—Related Party Transactions”). For the years ended December 31, 2013, 2012 and 2011 our two most
significant advertising customers, Expedia and Priceline, accounted for a combined 47%, 48% and 49% of total
revenue, respectively. As of December 31, 2013 and 2012, there were no customers that accounted for 10% or
more of our accounts receivable. Our overall credit risk related to accounts receivable is mitigated by the
relatively short collection period.
Contingent Liabilities
Periodically, we review the status of all significant outstanding matters to assess any potential financial
exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the
amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated and combined
statements of operations. We provide disclosure in the notes to the consolidated and combined financial
statements for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a
loss may have been incurred that would be material to the financial statements. Significant judgment is required
to determine the probability that a liability has been incurred and whether such liability is reasonably estimable.
We base accruals made on the best information available at the time which can be highly subjective. The final
outcome of these matters could vary significantly from the amounts included in the accompanying consolidated
and combined financial statements.
Comprehensive Income (Loss)
Comprehensive loss currently consists of net income (loss), cumulative foreign currency translation
adjustments, and unrealized gains and losses on available-for-sale securities, net of tax.
Earnings per Share (EPS)
In connection with the Spin-Off a one-for-two reverse stock split of outstanding Expedia capital stock
occurred immediately prior to the Spin-Off, which resulted in 120,661,020 shares of common stock and
12,799,999 shares of Class B common stock outstanding immediately following the Spin-Off.
Basic Earnings Per Share
We compute basic earnings per share by dividing net income attributable to TripAdvisor by the weighted
average number of common shares outstanding during the period. We compute the weighted average number of
common shares outstanding during the reporting period using the total of common stock and Class B common
stock outstanding as of the last day of the previous year end reporting period plus the weighted average of any
additional shares issued and outstanding less the weighted average of any treasury shares repurchased during the
reporting period.
For the year ended December 31, 2011, we computed basic earnings per share using the number of shares of
common stock and Class B common stock outstanding immediately following the Spin-Off, as if such shares
were outstanding for the entire period prior to the Spin-Off, plus the weighted average of any additional shares
issued and outstanding following the Spin-Off date through December 31, 2011.
83