TripAdvisor 2015 Annual Report Download - page 58
Download and view the complete annual report
Please find page 58 of the 2015 TripAdvisor annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.
statementsofoperationsandhaverecordedforeignexchangelossesof$6million,$11millionand$0millionfortheyearsendedDecember31,2015,2014and
2013,respectively,ininterestincomeandother,netonourconsolidatedstatementsofoperations.
Wecurrentlymanageourexposuretoforeigncurrencyriskthroughinternallyestablishedpoliciesandprocedures.Totheextentpracticable,weminimize
ourforeigncurrencyexposuresbymaintainingnaturalhedgesbetweenourcurrentassetsandcurrentliabilitiesinsimilarlydenominatedforeigncurrencies,aswell
as,usingderivativefinancialinstruments.Weuseforeignexchangederivativecontractstomanagecertainshort-termforeigncurrencyrisktotryandreducethe
effectsoffluctuatingforeigncurrencyexchangeratesonourcashflowsdenominatedinforeigncurrencies.Wedonotusefinancialinstrumentsfortrading
purposesandarenotapartytoanyleveragedderivatives.
Ourobjectiveistohedgeonlythosecurrencyexposuresthatcanbeconfidentlyidentifiedandquantifiedandthatmayresultinsignificantimpactstoour
cashortheconsolidatedstatementofoperations.Ourpolicydoesnotallowspeculationinderivativeinstrumentsforprofitorexecutionofderivativeinstrument
contractsforwhichtherearenounderlyingexposures.Weaccountforourderivativeinstrumentsaseitherassetsorliabilitiesandcarrythematfairvalue.
OurcurrentderivativecontractsprincipallyaddressforeignexchangefluctuationriskfortheEuroversustheU.S.Dollar.AsofDecember31,2015and
2014,wehadoutstandingforwardcurrencycontractsnotdesignatedashedgingcontractswithanotionalvalueof$25millionand$20million,respectively.These
contractshadmaturitiesoflessthan90days.ThefairvalueofthesederivativesatbothDecember31,2015and2014,werenotmaterial.Fortheyearsended
December31,2015and2014,gainsrelatedtoourderivativescontractswererecordedtointerestincomeandother,netonourconsolidatedstatementsofoperations
of$2millionand$1million,respectively.Ahypothetical10%changeoftheforeignexchangeratesrelativetotheU.S.Dollar,withallothervariablesheld
constant,wouldresultinanapproximatechangeoflessthan$3millioninthefairvalueofouroutstandingforwardcurrencycontractsatDecember31,2015,anda
resultingequivalentgainorlossonourconsolidatedstatementofoperations.Referto“Note5—Financial Instruments ”inthenotestotheconsolidatedfinancial
statementsinItem8forfurtherdetailonourderivativeinstruments.
Asweincreaseouroperationsininternationalmarkets,ourexposuretopotentiallyvolatilemovementsinforeigncurrencyexchangeratesincreases.The
economicimpacttousofforeigncurrencyexchangeratemovementsislinkedtovariabilityinrealgrowth,inflation,interestrates,governmentalactionsandother
factors.Thesechanges,ifmaterial,couldcauseustoadjustourforeigncurrencyriskstrategies.
55