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Segment and Geographic Information | 12 Months Ended
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Dec. 31, 2019
Segment Reporting [Abstract] |
Segment and Geographic Information | NOTE 18: SEGMENT AND GEOGRAPHIC INFORMATION Beginning in the first quarter of 2019 we have two reportable segments: (1) Hotels, Media & Platform; and (2) Experiences & Dining. Our Hotels, Media & Platform reportable segment includes the following revenue sources: (1) Tripadvisor-branded hotels revenue – primarily consisting of Tripadvisor-branded hotel metasearch auction revenue, and to a lesser extent transaction revenue from our hotel instant booking feature, subscription-based advertising and hotel sponsored placements advertising revenue; and (2) Tripadvisor-branded display and platform revenue – consisting of Tripadvisor-branded display-based revenue. All remaining business units have been combined into and reported as “Other”, which includes Rentals, Flights/Cruises/Car, SmarterTravel, and Tripadvisor China, as none of these businesses meet the quantitative thresholds and other criteria to qualify as reportable segments, and therefore are combined and disclosed as Other. The nature of the services provided and revenue recognition policies are summarized by reported segment in “Note 4: Revenue Recognition.” All direct general and administrative costs are included in the applicable segments and business units; however, all corporate general and administrative costs are included in the Hotels, Media & Platform reportable segment. In addition, the Hotels, Media & Platform reportable segment includes all Tripadvisor-related brand advertising expenses (primarily television advertising), and technical infrastructure and other costs supporting the Tripadvisor platform. Adjusted EBITDA is our segment profit measure and a key measure used by our management and Board of Directors to understand and evaluate the operating performance of our business and on which internal budgets and forecasts are based and approved. 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 amortization of internal use software and website development; (4) amortization of intangible assets; (5) stock-based compensation and other stock-settled obligations; (6) goodwill, long-lived asset and intangible asset impairments; (7) legal reserves and settlements; (8) restructuring and other related reorganization costs; and (9) non-recurring expenses and income. During the fourth quarter of 2019, the Company revised its Adjusted EBITDA definition to exclude restructuring and other related reorganization costs, as the Company believes these costs are not directly tied to the ongoing core operations of our business. The Company believes that excluding these amounts better enables management and investors to compare financial results between periods as these costs may vary independent of business performance. This revision to our definition did not have a material impact to Adjusted EBITDA for any period prior to the year ended December 31, 2019; therefore, no reclassifications have been made to conform the prior periods to the current period presentation. This revision had no effect on consolidated GAAP results in any period. The following tables present our segment information for the years ended December 31, 2019, 2018 and 2017 and includes a reconciliation of Adjusted EBITDA to Net Income. We record depreciation of property and equipment, including amortization of internal-use software and website development, amortization of intangible assets, stock-based compensation and other stock-settled obligations, legal reserves and settlements, restructuring and other related reorganization costs, other income (expense), net, other non-recurring expenses and income, net, and income taxes, which are excluded from segment operating performance, in corporate and unallocated. In addition, we do not report our assets, capital expenditures and related depreciation expense by segment as our CODM does not use this information to evaluate operating segments. Accordingly, we do not regularly provide such information by segment to our CODM. Intersegment revenue is not material and is included in Other.
|  | Year ended December 31, 2019 |
|  | Hotels, Media & Platform (1) |  |  | Experiences & Dining |  |  | Other (2) |  |  | Corporate and Unallocated |  |  | Total |
|  | (in millions) |
Revenue |  | $ | 939 |  |  | $ | 456 |  |  | $ | 165 |  |  | $ | — |  |  | $ | 1,560 |
Adjusted EBITDA |  |  | 378 |  |  |  | 5 |  |  |  | 55 |  |  |  | — |  |  |  | 438 |
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (93 | ) |  |  | (93 | )
Amortization of intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (33 | ) |  |  | (33 | )
Stock-based compensation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (124 | ) |  |  | (124 | )
Restructuring and other related reorganization costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1 | ) |  |  | (1 | )
Operating income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 187 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 7 |
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 194 |
Provision for income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (68 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 126 |
|  | Year ended December 31, 2018 |
|  | Hotels, Media & Platform (1) |  |  | Experiences & Dining |  |  | Other (2) |  |  | Corporate and Unallocated |  |  | Total |
|  | (in millions) |
Revenue |  | $ | 1,001 |  |  | $ | 372 |  |  | $ | 242 |  |  | $ | — |  |  | $ | 1,615 |
Adjusted EBITDA |  |  | 329 |  |  |  | 48 |  |  |  | 45 |  |  |  | — |  |  |  | 422 |
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (82 | ) |  |  | (82 | )
Amortization of intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (34 | ) |  |  | (34 | )
Stock-based compensation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (118 | ) |  |  | (118 | )
Legal reserves and settlements |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (5 | ) |  |  | (5 | )
Operating income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 183 |
Other expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (10 | )
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 173 |
Provision for income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (60 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 113 |
|  | Year ended December 31, 2017 |
|  | Hotels, Media & Platform (1) |  |  | Experiences & Dining |  |  | Other (2) |  |  | Corporate and Unallocated |  |  | Total |
|  | (in millions) |
Revenue |  | $ | 1,022 |  |  | $ | 264 |  |  | $ | 270 |  |  | $ | — |  |  | $ | 1,556 |
Adjusted EBITDA |  |  | 267 |  |  |  | 23 |  |  |  | 41 |  |  |  | — |  |  |  | 331 |
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (79 | ) |  |  | (79 | )
Amortization of intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (32 | ) |  |  | (32 | )
Stock-based compensation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (96 | ) |  |  | (96 | )
Operating income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 124 |
Other expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (14 | )
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 110 |
Provision for income taxes (3) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (129 | )
Net loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (19 | )
(1) | Includes allocated corporate general and administrative costs of $69 million, $77 million and $76 million and Tripadvisor-branded advertising expenses (primarily television advertising) of $77 million, $122 million and $82 million for the years ended December 31, 2019, 2018 and 2017, respectively.
(2) | Other consists of the combination of our Rentals, Flights/Cruises/Car, SmarterTravel and Tripadvisor China business units and does not constitute a reportable segment.
(3) | The year ended December 31, 2017 reflects $67 million of Transition Tax and $6 million of tax expense recorded due to the remeasurement of net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 11: Income Taxes” for further information.
Revenue and Geographic Information Our revenue sources within our Hotels, Media & Platform segment, which are Tripadvisor-branded hotels revenue and Tripadvisor-branded display and platform revenue; which along with our Experience & Dining and Other revenue source, comprise our products. Refer to “Note 4: Revenue Recognition” for our revenue by source. The Company measures its geographic revenue information to the physical location of the Tripadvisor subsidiary which generates the revenue, which is consistent with our measurement of long-lived physical assets, or property and equipment, net. The geographic classification is independent of where the consumer resides, where the consumer is physically located while using the Company's services, or the location of the travel service provider, experience operator or restaurant. For example, a reservation made through Tripadvisor.com at a hotel in the U.S. by a consumer in the U.S. could be part of the Company's non-U.S. revenue.
|  | Year ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
|  | (in millions) |
Revenue |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 821 |  |  | $ | 835 |  |  | $ | 802 |
United Kingdom |  |  | 466 |  |  |  | 508 |  |  |  | 530 |
All other countries |  |  | 273 |  |  |  | 272 |  |  |  | 224 |
Total revenue |  | $ | 1,560 |  |  | $ | 1,615 |  |  | $ | 1,556 |
The Company’s property and equipment, net for the United States and all other countries based on the geographic location of the assets consists of the following for the periods presented:
|  | December 31, |
|  | 2019 |  |  | 2018 |
|  | (in millions) |
Property and equipment, net |  |  |  |  |  |  |  |
United States |  | $ | 227 |  |  | $ | 214 |
All other countries |  |  | 43 |  |  |  | 39 |
Total |  | $ | 270 |  |  | $ | 253 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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