TripAdvisor 2015 Annual Report Download - page 84
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Derivative Financial Instruments
Ourcurrentforwardcontractsarenotdesignatedashedgesandhavecurrentmaturitiesoflessthan90days.Consequently,anygainorlossresultingfrom
thechangeinfairvaluewasrecognizedinourconsolidatedstatementofoperations.Werecordedanetgainof$2millionand$1millionfortheyearsended
December31,2015and2014,respectively,relatedtooursettledandoutstandingforwardcontractsinourconsolidatedstatementsofoperationsin“Interestincome
andother,net.”AllgainsandlossesfortheyearendedDecember31,2013werenotmaterial.
Thefollowingtableshowsthenotionalprincipalamountsofouroutstandingderivativeinstrumentsthatarenotdesignatedashedginginstrumentsforthe
periodspresented:
December 31,
2015 December 31,
2014
(in millions)
Foreignexchange-forwardcontracts(1)(2) $ 25 $ 20
(1) DerivativecontractsaddressforeignexchangefluctuationsfortheEuroversustheU.S.Dollar.
(2) Thefairvalueofourderivativesarenotmaterialforallperiodspresentedandarereportedasassetsinprepaidexpensesandothercurrentassetsonour
consolidatedbalancesheets.WemeasurethefairvalueofouroutstandingorunsettledderivativesusingLevel2fairvalueinputs,asweuseapricingmodel
thattakesintoaccountthecontracttermsaswellascurrentforeigncurrencyexchangeratesinactivemarkets.
Concentration of Credit Risk
Counterpartiestocurrencyexchangederivativesconsistofmajorinternationalfinancialinstitutions.Wemonitorourpositionsandthecreditratingsofthe
counterpartiesinvolvedand,bypolicylimits,theamountofcreditexposuretoanyoneparty.Whilewemaybeexposedtopotentiallossesduetothecreditriskof
non-performancebythesecounterparties,lossesarenotanticipatedandanycreditriskamountsassociatedwithouroutstandingorunsettledderivativeinstruments
aredeemedtobenotmaterialforanyperiodpresented.
Other Financial Instruments
Otherfinancialinstrumentsnotmeasuredatfairvalueonarecurringbasisincludetradereceivables,tradepayables,deferredmerchantpayables,short-term
debt,accruedandothercurrentliabilitiesandlong-termdebt.Withtheexceptionoflong-termdebt,thecarryingamountapproximatesfairvaluebecauseofthe
shortmaturityoftheseinstrumentsasreportedonourconsolidatedbalancesheetsasofDecember31,2015andDecember31,2014,respectively.Thecarrying
valueofthelong-termdebtfromour2015CreditFacilitybearsinterestatavariablerateandthereforeisalsoconsideredtoapproximatefairvalue.
WedidnothaveanyLevel3assetsorliabilitiesatDecember31,2015or2014.
NOTE 6: PROPERTY AND EQUIPMENT, NET
Propertyandequipmentconsistsofthefollowingfortheperiodspresented:
December 31,
2015
December 31,
2014
(in millions)
Capitalizedsoftwareandwebsitedevelopment $ 127 $ 104
Building(1) 123 -
Leaseholdimprovements 32 40
Computerequipment 36 31
Furniture,officeequipmentandother 17 11
335 186
Less:accumulateddepreciation (88) (77)
Constructioninprogress(1) - 86
Total $ 247 $ 195
(1) TheseamountsrepresentconstructioncostsincurredbythelandlordandtheCompany,relatedtoourcorporateheadquartersinNeedham,MA.Duringthe
yearsendedDecember31,2015and2014,wecapitalized$6millionand$52million,respectively,innon-cashconstructioncostswhichwereincurredby
thelandlord,withacorrespondingliabilityrecordedinotherlong-term
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