TripAdvisor 2015 Annual Report Download - page 39
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Adjusted EBITDA
Toprovideinvestorswithadditionalinformationregardingourfinancialresults,wealsodiscloseAdjustedEBITDA,whichisanon-GAAPfinancial
measure.WehaveprovidedareconciliationbelowofAdjustedEBITDAtonetincome,themostdirectlycomparableGAAPfinancialmeasure.A“non-GAAP
financialmeasure”referstoanumericalmeasureofacompany’shistoricalorfuturefinancialperformance,financialposition,orcashflowsthatexcludes(or
includes)amountsthatareincludedin(orexcludedfrom)themostdirectlycomparablemeasurecalculatedandpresentedinaccordancewithGAAPinsuch
company’sfinancialstatements.
WedefineAdjustedEBITDAasnetincome(loss)plus:(1)provisionforincometaxes;(2)otherincome(expense),net;(3)depreciationofpropertyand
equipment,includingamortizationofinternalusesoftwareandwebsitedevelopment;(4)amortizationofintangibleassets;(5)stock-basedcompensationandother
stock-settledobligations;(6)goodwill,long-livedassetandintangibleassetimpairments;and(7)othernon-recurringexpenses.AdjustedEBITDAistheprimary
metricbywhichmanagementevaluatestheperformanceofitsbusinessandonwhichinternalbudgetsandforecastsarebased.Inparticular,theexclusionofcertain
expensesincalculatingAdjustedEBITDAfacilitatesoperatingperformancecomparisonsonaperiod-to-periodbasis.Webelievethatbyexcludingcertainnon-
cashexpenses,suchasstock-basedcompensation,AdjustedEBITDAcorrespondsmorecloselytothecashthatoperatingincomegeneratedfromourbusinessand
allowsinvestorstogainanunderstandingofthefactorsandtrendsaffectingtheongoingcashearningscapabilitiesofourbusiness,fromwhichcapitalinvestments
aremadeanddebtisserviced.
OuruseofAdjustedEBITDAhaslimitationsasananalyticaltool,andyoushouldnotconsideritinisolationorasasubstituteforanalysisofourresults
reportedinaccordancewithGAAP.Someoftheselimitationsare:
·AdjustedEBITDAdoesnotreflectourcashexpendituresorfuturerequirementsforcapitalexpendituresorcontractualcommitments;
·AdjustedEBITDAdoesnotreflectchangesin,orcashrequirementsfor,ourworkingcapitalneeds;
·AdjustedEBITDAdoesnotreflecttheinterestexpense,orcashrequirementsnecessarytoserviceinterestorprincipalpaymentsonourdebt;
·AdjustedEBITDAdoesnotconsiderthepotentiallydilutiveimpactofstock-basedcompensationorotherstock-settledobligations;
·Althoughdepreciationandamortizationarenon-cashcharges,theassetsbeingdepreciatedandamortizedmayhavetobereplacedinthefuture,and
AdjustedEBITDAdoesnotreflectcashcapitalexpenditurerequirementsforsuchreplacementsorfornewcapitalexpenditurerequirements;
·AdjustedEBITDAdoesnotreflecttaxpaymentsthatmayrepresentareductionincashavailabletous;and
·Othercompanies,includingcompaniesinourownindustry,maycalculateAdjustedEBITDAdifferentlythanwedo,limitingitsusefulnessasa
comparativemeasure.
Becauseoftheselimitations,youshouldconsiderAdjustedEBITDAalongsideotherfinancialperformancemeasures,includingcashflows,netincomeand
ourotherGAAPresults.
Referto“Note16—Segment and Geographic Information” inthenotestoourconsolidatedfinancialstatementsinItem8forareconciliationofAdjusted
EBITDAtonetincome,themostdirectlycomparablefinancialmeasurecalculatedandpresentedinaccordancewithGAAP,fortheperiodspresentedabove.
Consolidated Revenue and Segments
Revenue by Product
Wederivethesubstantialportionofourrevenuethroughthesaleofadvertising,primarilythroughclick-basedadvertising,whichincludesinstantbooking
revenueand,toalesserextent,display-basedadvertising.Inaddition,weearnrevenuefromacombinationof:subscription-basedandtransaction-basedofferings
fromourBusinessListingsproducts;subscriptionandcommission-basedofferingsfromourVacationRentalsproducts;roomreservationssoldthroughour
JetsetterandTingobrands;destinationactivitiesprimarilysoldthroughViator;andonlinerestaurantreservationsbookedprimarilythroughLafourchette,or
thefork.com.Wealsoderiverevenuefromcontentlicensing.
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