What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2023-02-17 compared with 2022-02-18 · 739 added, 851 removed, 1665 unchanged (49% of the section changed)

1 unchanged sentence

Market Information

Our common stock is quoted on The Nasdaq under the ticker symbol “TRIP.”

Our common stock is quoted on The Nasdaq Global Select Market under the ticker symbol “TRIP.”

Our Class B common stock is not listed and there is no established public trading market for that security.

11 unchanged sentences

As of February 10, 2023, there were 128,164,615 outstanding shares of our common stock held by 1,803 stockholders of record, and 12,799,999 outstanding shares of our Class B common stock held by one stockholder of record:

While the Company did pay a special cash dividend of $3.50 per share to stockholders, or approximately $488 million in the aggregate, on December 4, 2019, we did not declare or pay any dividends during the years ended December 31, 2021 or 2020.

We did not declare or pay any dividends during the years ended December 31, 2022, 2021, or 2020.

Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend on our results of operations, earnings, capital requirements, financial condition, future prospects, contractual restrictions and other factors deemed relevant by our Board of Directors.

In addition, o ur ability to pay dividends was also limited by the terms of our Credit Agreement and our 2025 Indenture.

In addition, our ability to pay dividends was also limited by the terms of our Credit Agreement and our 2025 Indenture.

Therefore, investors should not rely on regular quarterly or annual dividend income from shares of our common stock and investors should not rely on special dividends with any regularity, or at all.

1 unchanged sentence

Securities Authorized for Issuance Under Equity Compensation Plans

The information required under this item is incorporated herein by reference to our 2022 Proxy Statement, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2021.

The information required under this item is incorporated herein by reference to our 2023 Proxy Statement, which proxy statement will be filed with the SEC not later than 120 days after the close of our fiscal year ended December 31, 2022.

Unregistered Sales of Equity Securities

During the quarter ended December 31, 2022, we did not issue or sell any shares of our common stock, Class B common stock or other equity securities pursuant to unregistered transactions in reliance upon an exemption from the registration requirements of the Securities Act.

In March 2021, we completed the sale of $345 million of 2026 Senior Notes.

Refer to “Note 10:

Debt ”

in the notes to the consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information about our 2026 Senior Notes.

Issuer Purchases of Equity Securities

2 unchanged sentences

While the Board of Directors has not suspended or terminated the share repurchase program, the terms of our Credit Agreement limit the Company from engaging in share repurchases and the terms of our 2025 Indenture related to our 2025 Senior Notes impose certain limitations and restrictions on share repurchases.

In addition, the Inflation Reduction Act of 2022 imposes a 1% excise tax on certain corporate stock buybacks.

Refer to “Note 9:

Debt ”

in the notes to the consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information about our Credit Agreement and our 2025 Indenture .

in the notes to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information about our Credit Agreement and our 2025 Indenture.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information concerning our results of operations and financial condition.

This discussion should be read in conjunction with our accompanying consolidated financial statements and the notes in Item 8 on this Annual Report on Form 10-K.

Tripadvisor operates the world’s largest travel guidance platform, connecting a global audience of prospective travelers with travel partners through rich content, price comparison tools, and online reservation and related services for destinations, accommodations, travel activities and experiences, and restaurants .

Our mission is to help people around the world plan, book and experience the perfect trip.

In 2000, under our flagship brand Tripadvisor, we launched www.Tripadvisor.com in the U.S.

Since then, we have built a portfolio of travel guidance brands and businesses, seamlessly connecting travelers to destinations, accommodations, travel activities and experiences, and restaurants in over 40 markets and over 20 languages worldwide.

As of December 31, 2021, Tripadvisor featured more than 1 billion reviews and opinions on nearly 8 million hotels and other accommodations, restaurants, experiences, airlines and cruises.

In addition to the flagship Tripadvisor brand, we own and operate a portfolio of online travel brands and businesses, operating under various websites, connected by the common goal of providing consumers the most comprehensive travel-planning and trip-taking resources in the travel industry.

For information on our portfolio of brands and our business model, see the discussion set forth in Part I, Item 1.

“Business”, under the captions “Overview”

and “Our Business Model.”

Our reporting structure includes the following reportable segments:

(1) Hotels, Media & Platform;

and (2) Experiences & Dining.

For further information regarding our segments, including the principal revenue streams within these segments and timing of revenue recognition and cashflows, refer to “Note 4:

This discussion should be read in conjunction with our accompanying consolidated financial statements and the notes in Item 8 of this Annual Report on Form 10-K.

The Tripadvisor group operates as a family of brands with a purpose of connecting people to experiences worth sharing.

Our vision is to be the world’s most trusted source for travel and experiences.

The Company operates across three reportable segments:

Tripadvisor Core, Viator, and TheFork.

We leverage our brands, technology platforms, and capabilities to connect our large, global audience with partners by offering rich content, travel guidance products and services, and two-sided marketplaces for experiences, accommodations, restaurants, and other travel categories.

Tripadvisor Core’s purpose is to empower everyone to be a better traveler by serving as the world’s most trusted and essential travel guidance platform.

Since Tripadvisor’s founding in 2000, the Tripadvisor brand has developed a relationship of trust and community with travelers and experience seekers by providing an online global platform for travelers to discover, generate, and share authentic UGC in the form of ratings and reviews for destinations, POIs, experiences, accommodations, restaurants, and cruises in over 40 countries and over 20 languages across the world.

As of December 31, 2022, Tripadvisor offered more than 1 billion user-generated ratings and reviews on nearly 8 million experiences, accommodations, restaurants, airlines, and cruises.

Tripadvisor’s online platform attracts one of the world’s largest travel audiences, with hundreds of millions of visitors in 2022.

Viator’s purpose is to bring more wonder into the world—to bring extraordinary, unexpected, and forever memorable experiences to more people, more often, wherever they are traveling.

In doing so, Viator elevates tens of thousands of businesses, large and small.

Viator delivers on its purpose by enabling travelers to discover and book iconic, unique and memorable experiences from experience operators around the globe.

Our online marketplace is comprehensive and easy-to-use, connecting millions of travelers to the world’s largest supply of bookable tours, activities and attractions—over 300,000 experiences from more than 50,000 operators as of December 31, 2022.

Viator is a pure-play experiences OTA singularly focused on the needs of both travelers and operators with the largest supply of bookable experiences available to travelers.

TheFork’s purpose is to deliver happiness through amazing dining experiences.

TheFork delivers on its purpose by providing an online marketplace that enables diners to discover and book online reservations at more than 55,000 restaurants in 12 countries, as of December 31, 2022, across the UK, western and central Europe, and Australia.

TheFork has become an urban, gastronomic guide with a strong community that offers more than 20 million restaurant reviews.

The online travel industry in which we operate is large, highly dynamic and competitive.

We describe below the impact on our business from COVID-19, other current trends affecting our business and reportable segments, including key drivers of our financial results, and uncertainties that may impact our ability to execute on our objectives and strategies.

The COVID-19 pandemic had a significant negative impact on the global economy and the travel, leisure, hospitality and restaurant industries in particular beginning in 2020.

Since the beginning of the pandemic, the pervasiveness and severity of travel restrictions and stay-at-home directives have varied by country and state;

however, as of December 31, 2022, most of the countries in which we operate had eased or completely lifted such restrictions.

While the COVID-19 pandemic negatively and materially affected our results for the years ended

December 31, 2020 and 2021, in 2022, although some areas of our business recovered faster than others, as discussed below, we generally experienced a recovery in travel demand and our financial performance during 2022.

Although all periods included in our consolidated financial statements presented in this Annual Report on Form 10-K were impacted at varying degrees by the COVID-19 pandemic, none of these periods are considered comparable, and no periods affected by the pandemic are expected to be comparable to future periods.

As a result, for additional context, below we provide information regarding our performance for the year ended December 31, 2022 as compared to the year ended December 31, 2019, before the impacts of the COVID-19 pandemic.

Our consolidated revenue for the year ended December 31, 2022 was approximately $1.5 billion, an increase of 65%, when compared to the same period in 2021.

In comparison to a pre-COVID-19 timeframe, consolidated revenue for the year ended December 31, 2022 was approximately 96% of 2019’s comparable period, an increase from approximately 58% of 2019’s comparable period during the year ended December 31, 2021, primarily attributable to what we believe to be increased consumer travel demand for travel industry related services, combined with the easing of government travel restrictions.

Revenue trends also improved as 2022 progressed, as consolidated revenue for the third and fourth quarter of 2022 exceeded parity with 2019's comparable periods, in comparison to approximately 70% and 99% of 2019’s comparable periods during the first and second quarters of 2022, respectively.

Tripadvisor Core revenue increased by 45% during the year ended December 31, 2022, when compared to the same period in 2021, despite the significant impact from the Omicron variant in the month of January 2022, as travel demand and revenue rebounded significantly during 2022.

In comparison to a pre-COVID-19 timeframe, during the year ended December 31, 2022, Tripadvisor Core revenue reached approximately 79% of 2019’s comparable period, an increase from approximately 54% of 2019’s comparable period during 2021.

Tripadvisor-branded hotels revenue increased 44% during the year ended December 31, 2022, when compared to 2021, primarily driven by growth in hotel meta (formerly referred to as hotel auction).

During 2022, Tripadvisor-branded hotels revenue reached approximately 83% of 2019’s comparable period, an increase from approximately 58% of 2019’s comparable period during 2021.

The Company saw continued strength of recovery in our U.S.

hotel meta revenue throughout 2022 on strong consumer travel demand, reaching parity with 2019’s comparable period during the year ended December 31, 2022.

Revenue recovery in Europe and the rest of the world has been slower relative to the U.S.

due to relative brand strength and recognition, but also due to uneven macroeconomic environments.

While slower to recover than Tripadvisor-branded hotels revenue, our Tripadvisor-branded display and platform revenue increased 33% during the year ended December 31, 2022, when compared to 2021.

In comparison to a pre-COVID-19 timeframe, Tripadvisor-branded display and platform revenue for the year ended December 31, 2022 was approximately 81% of 2019’s comparable period, an increase from approximately 61% of 2019’s comparable period in 2021.

This improvement in 2022 was primarily driven by an increase in marketing spend from our advertisers in correlation with increasing consumer travel demand, as discussed above.

Our Tripadvisor experiences and dining revenue increased by 91% as a result of the travel demand recovery, combined with the easing of government restrictions, as well as the continued execution by our business, primarily driven by performance in our experiences offering as we continue to make investments in this offering to gain market share.

In comparison to a pre-COVID-19 timeframe, Tripadvisor experiences and dining revenue for the year ended December 31, 2022 was approximately 115% of 2019’s comparable period, an increase from approximately 60% of 2019’s comparable period in 2021.

Financial results in Other revenue also improved during the year ended December 31, 2022, when compared to 2021, primarily driven by similar trends of increased consumer travel demand as part of the global travel demand recovery.

The offerings within Other revenue complement our Tripadvisor Core segment’s long-term strategy of delivering comprehensive guidance across the traveler journey.

However, Other revenue during the year ended December 31, 2022 has been slower to recover when compared against 2019's comparable period as we continue to balance capital deployment across our portfolio that align with our strategic priorities across the segment.

We have also divested certain offerings within Other revenue since 2019.

We began to see improvement in our Viator segment’s financial results during the third quarter of 2021, and this trend has continued throughout 2022, as revenue increased by 168% during the year ended December 31, 2022, when compared to 2021, primarily driven by the consumer demand recovery across all geographies, in conjunction with the lifting of various government restrictions on experience activities and the travel industry recovery, as well as continued execution by our business.

In comparison to a pre-COVID-19 timeframe, our Viator segment revenue for 2022 was approximately 171% of 2019’s comparable period, an increase from approximately 64% of 2019’s comparable period in 2021.

During the first quarter of 2021, restaurants in most of the European countries in which TheFork operates were ordered to remain closed.

In TheFork segment, we saw a notable recovery beginning in mid-May 2021, as restaurants in most European countries in which TheFork operates began reopening for in-restaurant dining.

However, late in the fourth quarter of 2021 and early into the first quarter of 2022, Omicron-related restrictions and related impact to consumer demand within Europe again negatively impacted TheFork.

These Omicron-related restrictions were again lifted late in the first quarter of 2022, bringing a recovery of consumer demand and revenue, although European consumer demand and restaurant openings remained below pre-pandemic levels through 2022.

TheFork segment revenue during 2022 increased by approximately 48%, primarily driven by improving consumer demand, when compared to 2021.

In comparison to a pre-COVID-19 timeframe, TheFork revenue for 2022 was approximately 99% of 2019’s comparable period, an increase from approximately 67% of 2019’s comparable period in 2021.

Other Current Trends

In response to increased consumer travel demand, we increased our performance marketing investments in 2022 across the Tripadvisor group.

In Tripadvisor Core, we observed strong performance in hotel meta primarily driven by increased CPC pricing during 2022.

This environment allowed us to increase performance marketing at a profitable ROAS (return on advertising spend), while our direct traffic, including SEO, has been slower to recover.

Historically, we have generated a significant amount of direct traffic from search engines, such as Google, through strong SEO performance.

We believe our SEO traffic acquisition performance has been negatively impacted in the past, and may be impacted in the future by search engines (primarily Google) increasing the prominence of their own products in search results.

Over the long-term, we are focused on driving a greater percentage of our traffic from direct sources and channels that are more profitable than performance marketing channels.

The global experiences market is large, growing, and highly fragmented, with the vast majority of bookings still occurring through traditional offline sources.

We are observing a secular shift, however, as this market continues to grow and moves online faster.

We are observing similar trends in terms of online adoption by both consumers and partners in the global restaurants category, particularly in Europe.

Given the competitive positioning of our businesses relative to the attractive growth prospects in these categories, we expect to continue to invest in these categories across the Tripadvisor group, and in particular, within Viator and TheFork, to continue accelerating revenue growth, operating scale, and market share gains for the long-term.

For information regarding our business strategy and business models, see the discussion set forth in Part I, Item 1.

“Business,”

of this Form 10-K under the captions “Our Business Strategy”, and “Our Business Models.”

Consolidated Results of Operations

In the second quarter of 2022, as part of our continuous review of the business and in consultation with our CEO, who also serves as our CODM, we evaluated our operations and realigned the reportable segment information which our CODM regularly assesses to evaluate performance for operating decision-making purposes, including allocation of resources.

The revised segment reporting structure includes the following reportable segments:

(1) Tripadvisor Core;

and (3) TheFork.

For further information, including the change in segments and principal revenue streams within these segments, refer to “Note 3:

Revenue Recognition ”

1 unchanged sentence

Segment and Geographic Information ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K.

Executive Financial Summary

Tripadvisor is the world’s largest travel guidance platform, as measured by unique users de-duplicated monthly, according to SimilarWeb.

As a result, Tripadvisor represents an attractive platform for travel partners –

including hotel chains, independent hoteliers, OTAs, destination marketing organizations, experience operators, restaurants, and other travel-related and non-travel related product and service providers –

who seek to market and sell their products and services to a global audience.

Tripadvisor’s platform and product offerings enable consumers to discover, research and price shop a variety of travel products, including hotels, flights, cruises, cars, vacation rentals, tours, travel activities and other experiences, and restaurants;

and book a number of these travel experiences either directly on our platform, or on our travel partners’

websites or mobile apps.

Business Trends

The online travel industry in which we operate is large and also highly dynamic and competitive.

Our overall strategy is to deliver more value to consumers and travel partners in order to generate more monetization on our platform.

While we operate with a long-term growth focus, our specific growth objectives and resource allocation strategies can differ in both duration and magnitude within our segments.

We describe below these dynamics, as well as the current trends affecting our overall business and reportable segments, key drivers of our financial results, and uncertainties that may impact our ability to execute on our objectives and strategies.

The COVID-19 pandemic has caused a significant negative impact on the travel, leisure, hospitality, and restaurant industries (collectively, the “travel industry”), and consequently adversely and materially affected our

business, results of operations, liquidity and financial condition during the years ended December 31, 2021 and 2020.

Among other impacts, COVID-19 has negatively impacted global consumer travel demand and consumers’

ability to travel and take part in other travel, leisure, and dining activities, thereby causing many of our travel partners to operate at significantly reduced and/or intermittent service levels during this timeframe.

Commencing in late February 2020 and progressively worsening through March 2020, we experienced a significant decline in consumer demand for our products and services as well as an increase in customer cancellations, concurrent with widespread travel restrictions imposed by governments and businesses in response to the COVID-19 pandemic.

In the second half of March 2020 and throughout April 2020, significant year-over-year revenue declines generally stabilized across the Company’s segments and products, a trend which generally continued throughout the second quarter of 2020, although modestly improved during the third quarter of 2020.

Beginning in the fourth quarter of 2020, however, local governments, particularly in Europe, began to impose new restrictions to mitigate the spread of the virus, which again negatively impacted trends.

Also, in the fourth quarter of 2020, multiple COVID-19 vaccines were approved for widespread distribution throughout various parts of the world, including the United States and Europe, and in the first quarter of 2021, vaccination distribution programs were initiated around the world.

Vaccine programs in our largest markets, the U.S and Europe, appear to be progressing well, and we expect the same for much of the rest of the world.

We are encouraged by recent developments, although the timing and extent of widespread vaccine distributions on a global basis, and efficacy against recent variants (e.g., the Delta and Omicron) and future variants, if any, of COVID-19 remains unclear.

The adverse impact to our business from COVID-19 has been significant, albeit unevenly at different points in time and in different geographies throughout 2020.

This adverse impact has been driven by the pandemic’s proliferation, intermittent containment and resurgence of the virus, and new variants of the virus introduced throughout the world, followed by travel restrictions and other mandates put in place, lifted and/or reinstated at different timeframes during 2020 and 2021 by local governments to mitigate the spread of the virus.

As such, the travel industry’s recovery from the COVID-19 pandemic has been varied and uneven region-to-region on a global basis, as well as state-to-state in the U.S.

These adverse impacts continued to negatively impact the travel industry and dampen consumer demand for our products and services at varied levels throughout 2021, although to a materially lesser extent in 2021 as the travel industry broadened its recovery.

In addition, the ultimate duration of the negative impact of COVID-19 on our results of operations, liquidity and financial condition remains uncertain and is dependent upon factors beyond our control, such as the continued transmission rate of COVID-19, including any new variants and/or additional resurgences of existing variants, if any, the extent and effectiveness of containment actions taken, vaccine efficacy, and the ultimate impact of these and other factors on consumer demand for travel and usage patterns on our platform.

Although uncertainty remains, we generally saw continued improvement in the travel market in 2021 and expect that the market will continue to improve in 2022, driven by continued vaccination programs, the gradual lifting of government restrictions, and what we believe to be continued significant pent-up consumer demand for travel industry related services.

Traffic trends on our platform, a leading indicator of consumer travel demand, have improved since the trough of significant declines seen in the second half of March 2020 and throughout April 2020, as monthly unique users on Tripadvisor-branded websites for April 2020 were approximately 33% of the comparable period in 2019.

By means of showing a comparison to a pre-COVID-19 timeframe, average monthly unique users on Tripadvisor-branded websites during the fourth quarter of 2021 were approximately 73% of 2019's comparable period despite impact late in the quarter from the Omicron variant, in comparison to approximately 55%, 70% and 76% of 2019’s comparable periods during the first, second and third quarters of 2021, respectively, driven by vaccine progress, the easing of various government restrictions, albeit unevenly, and consumer travel demand’s improving recovery.

Our consolidated revenue for the year ended December 31, 2021 was $902 million, or an increase of 49%, when compared to the same period in 2020.

In addition, by means of showing a comparison to a pre-COVID-19 timeframe, consolidated revenue for the year ended December 31, 2021 was 58% of 2019’s comparable period.

Our consolidated revenue for the year ended December 31, 2020, was approximately 39% of 2019’s comparable period.

Revenue trends have also improved as 2021 has progressed as consolidated revenue for the fourth quarter of 2021 was approximately 72% of 2019's comparable period, in comparison to a pproximately 33%, 56% and 71% of 2019’s comparable periods during the first, second and third quarters of 2021, respectiv ely.

This increase in revenue was driven largely by continued strength in the U.S.

marketplace, but also due to marked improvement in Europe, where

revenue began accelerating in May 2021 and continued through the third quarter of 2021, however was again impacted by the emergence of the Omicron variant late in the fourth quarter of 2021.

In response to the impact of the COVID-19 pandemic, we took several steps to further strengthen our financial position and balance sheet, and maintain financial liquidity and flexibility, including, but not limited to, restructuring activities, reducing our ongoing operating expenses and headcount, additional borrowings and issuances of debt, and amendments to our Credit Facility, all of which are described in more detail below.

During the first quarter of 2020, we borrowed $700 million under the Credit Facility as a precautionary measure to reinforce our liquidity position and preserve financial flexibility in light of uncertainty in the global markets resulting from COVID-19.

We repaid these borrowings in full in the third quarter of 2020 using proceeds from our 2025 Senior Notes.

In addition, during 2020, by means of amendments to our Credit Facility, we were able to secure, among other things, covenant relief in the form of suspending our leverage ratio covenant, until the earlier of the first day after June 30, 2021 through maturity on which borrowings and other revolving credit utilizations under the revolving commitments exceed $200 million, or such earlier date as we may elect, when the leverage ratio covenant will then be reinstated.

We also extended the maturity date of this facility to May 2024.

In July 2020, we completed the sale of $500 million aggregate principal amount of senior notes in a private offering, our 2025 Senior Notes, at 7.0% per annum with a maturity date of July 15, 2025.

We used the proceeds received of $490 million, net of debt issuance costs, to repay a portion of our Credit Facility borrowings.

In March 2021, we completed the sale of $345 million aggregate principal amount of senior notes in a private offering, our 2026 Senior Notes, at 0.25% per annum with a maturity date of April 1, 2026 .

Concurrently, we used a portion of the proceeds received from the 2026 Senior Notes to enter into privately negotiated capped call transactions with certain of the initial purchasers of the 2026 Senior Notes and/or their respective affiliates and/or other financial institutions at a cost of approximately $35 million.

The Company intends to use the remainder of the proceeds from this offering for general corporate purposes, which may include repayment of debt, including the redemption and/or purchase of a portion of its 2025 Senior Notes prior to maturity.

We believe these measures provide us additional financial flexibility which we believe is important given our continued limited ability to predict our future financial performance due to the uncertainties associated with COVID-19.

Refer to “Note 10:

in the notes to the consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information about our Credit Facility, 2025 Senior Notes, and 2026 Senior Notes.

Cost Reduction Measures

During the first quarter of 2020, the Company instituted a cost reduction initiative to preserve cash flows, including targeted workforce reduction measures largely in the Experiences & Dining segment, in addition to optimizing and reducing brand advertising as the Company pivoted to leverage newer advertising mediums we believe will be more effective than our historically television-focused campaign.

During the latter part of the first quarter of 2020, and in response to the COVID-19 pandemic, the Company instituted additional cost reduction measures, including the elimination of the majority of discretionary spending, business travel and non-critical vendor relationships, brand advertising, as well as the temporary cessation of nearly all new hiring and contingent staff, reduction of targeted employee benefits and the furlough of over 100 employees.

In April 2020, management approved and the Company announced an additional cost reduction initiative in response to the continued economic and financial impacts resulting from the COVID -19 pandemic, which included the following:

Enacting a workforce reduction eliminating more than 900 employees;

Furloughing additional employees bringing the total furloughed employees during March and April 2020 to approximately 850 employees, primarily in our European operations at The Fork;

Making targeted reductions of the Company’s office lease portfolio, primarily either through subleasing or allowing property leases to expire.

The Company incurred total pre-tax restructuring and other related reorganization costs of approximately $41 million during the year ended December 31, 2020, as a result of these measures.

Such costs were both recorded on our consolidated statement of operations and fully paid by the Company during 2020 .

CARES Act and Other Governmental Relief

In March 2020, the U.S.

government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), an emergency economic stimulus package enacted in response to the COVID-19 pandemic, which includes numerous income tax provisions, some of which are effective retroactively.

During the year ended December 31, 2021, the Company did not record any income tax benefit under the CARES Act;

however, during the year ended December 31, 2020, the Company recorded an income tax benefit of $23 million as a result of a loss carryback provision provided under the CARES Act.

In addition, certain governments have passed legislation to help businesses during the COVID-19 pandemic through loans, wage subsidies, wage tax relief or other financial aid.

Some of these governments have extended or are considering extending these programs.

We have participated in several of these programs, including the CARES Act in the U.S., the United Kingdom's job retention scheme, as well as similar programs in other jurisdictions.

In addition, in certain countries, such as within the European Union, Singapore, Australia, and other jurisdictions, we participated in programs where government assistance came in the form of wage subsidies and reductions in wage-related employer taxes paid by us.

During the years ended December 31, 2021 and 2020, we recognized government grants and other assistance benefits of $9 million and $12 million, respectively, as a reduction of personnel and overhead costs in the consolidated statements of operations.

For further details of income tax benefits and other government assistance recorded by the Company under the CARES Act and other governmental relief programs, refer to “Note 12:

Income Taxes ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K.

Hotels, Media & Platform Segment

Our Hotels, Media & Platform segment is comprised of:

Tripadvisor-branded hotels revenue and Tripadvisor-branded Display and Platform Revenue.

Tripadvisor-branded hotels revenue primarily consists of hotel auction revenue and, to a lesser extent, hotel B2B revenue, which primarily includes subscription-based advertising services that we offer to travel partners and click-based revenue generated from hotel sponsored placement advertising that enables hotels to enhance their visibility on Tripadvisor hotel pages.

Tripadvisor-branded Display and Platform Revenue primarily includes impression-based advertising revenue.

Our overall strategic objective in our Hotels, Media & Platform segment is to drive revenue and profits while delivering compelling services to consumers and driving a holistic user experience, increased customer engagement and monetization, as well as offering travel partners a diverse set of advertising opportunities on the Tripadvisor platform.

For consumers, we test and implement product enhancements that deliver a more engaging and comprehensive hotel shopping experience.

This includes providing rich, immersive content –

reviews, photos, videos and ratings, among other contributions, increasing the number of travel partners and properties as well as the available hotel supply on our platform.

We believe providing consumers tools to discover, research, price shop and book a comprehensive selection of accommodations helps increase brand awareness and brand loyalty and, over time, can result in deeper consumer engagement, more qualified leads delivered to travel partners and greater monetization on our platform.

We seek to monetize our influence through hotel-related product improvements, supply and marketing efforts and customer advertising opportunities.

Historically, we have generated a significant amount of hotel shoppers from search engines, such as Google.

A hotel shopper is a visitor to our platform that views either a listing of hotels in a city or a specific hotel page.

Our key ongoing objective related to traffic acquisition is to attract or acquire hotel shoppers at or above our desired marketing return on investment targets.

Over the long-term, we are focused on driving a greater percentage of our traffic from direct traffic sources rather than search engines, which comes with little to no traffic acquisition costs.

As noted in the “COVID-19”

discussion above, easing of travel restrictions across the world, rising vaccination rates, and an increase in consumer travel demand drove improved financial results during 2021, as Hotel, Media & Platform revenue increased by 52% during the year ended December 31, 2021, when compared to the same period in 2020, despite the impact from the rise of the Delta variant late in the third quarter of 2021 and then the emergence of the Omicron variant late in the fourth quarter of 2021.

Tripadvisor-branded hotels revenue increased 55% during the year ended December 31, 2021, when compared to the same period in 2020, primarily driven by our hotel auction revenue, which reached approximately 58% of 2019’s comparable period, an increase from 32% in 2020 of 2019’s comparable period.

The Company saw particular strength in recovery of domestic consumer travel, most notably in the U.S., whereas international travel and, in particular, inter-continental travel, has been slower to recover.

hotel auction revenue during the year ended December 31, 2021, reached nearly 85% of 2019’s comparable period on strong consumer travel demand, and improved sequentially during the first three quarters of 2021, when compared as a percentage to 2019's comparable periods, while declining in the fourth quarter of 2021 again due to the emergence of the Omicron variant.

In addition, our U.S.

hotel auction CPC rates regained 2019 levels in early May 2021 and remained above 2019 levels through December 2021, demonstrating strong travel partner engagement on our platform as consumer travel demand recovers in the U.S.

Although slower to recover, hotel auction revenue in Europe and the rest of the world also showed improvement during 2021, however, as with the U.S., Europe was also negatively impacted by the emergence of the Omicron variant late in the fourth quarter of 2021.

As a result of these overall positive trends noted above, we increased our performance marketing investment throughout 2021 in correlation with the increase in consumer travel demand and a more favorable hotel auction environment.

While slower to recover than Tripadvisor-branded hotels revenue, our display and platform revenue increased by 41% during the year ended December 31, 2021, when compared to the same period in 2020.

In addition, and by means of also showing a comparison to a pre-COVID-19 timeframe, Tripadvisor-branded display and platform rev enue improved when compared to the comparable period in 2020, while reaching approximately 60% o f 2019’s comparable period in 2021 and also improved sequentially during the first three quarters of 2021 when compared to 2019’s comparable periods, while declining modestly in the fourth quarter of 2021, when compared as a percentage to the 2019 comparable period, due to the emergence of the Omicron variant.

This overall improvement for 2021 was primarily driven by an increase in marketing spend from our advertisers in correlation with increasing consumer travel demand, as discussed above.

Over the long-term, we believe that improving our offerings to deepen consumer engagement on our platform will enable us to more effectively monetize our influence.

For example, in Tripadvisor-branded display and platform revenue, we enable travel partners to amplify their brand, generate brand impressions, and potentially drive qualified leads and bookings for their businesses.

Historically, we have limited both the type and number of display-based advertising opportunities we make available to travel partners, particularly on mobile phone, which, in turn, has limited display-based advertising revenue growth.

However, we continue to work on initiatives to better leverage our audience, content, data, travel influence and platform breadth to open up new media advertising opportunities through a more modern, high-powered advertising suite spanning native, video and programmatic solutions.

We have broadened our solution to a larger set of advertising travel endemic and non-travel endemic advertising partners, including industries such as entertainment, spirits, and finance.

On the consumer side, we are focused on making Tripadvisor membership more valuable for consumers.

As an example, during 2021, we launched Tripadvisor Plus, an annual subscription-based membership that offers financial incentives, benefits and perks to members who book hotels and experiences on our platform.

As discussed above, the Company initiated cost reduction measures in response to the COVID-19 pandemic in 2020, the majority of which were related to personnel and overhead costs and brand advertising, or television advertising, for this segment.

During 2021, we maintained the majority of these cost savings in this segment,

however, as noted above, the Company increased its performance marketing spend during the year.

Relative strength in CPC pricing allowed us to increase spend in marketing channels at a profitable ROAS (return on ad spend), while our free traffic, or SEO traffic, has been slower to recover.

These efforts demonstrate our continued focus on increasing the quality of customer engagement on our platform, including driving membership growth, increasing personalization, and innovating our mobile app experience.

We believe delivering –

and improving upon –

a great experience for users will encourage more users to use our services more frequently, increase member growth and member engagement, and drive loyalty to our brand and services.

In turn, we believe this makes our platform more attractive for travel partners, and can result in increased monetization over time for us and our travel partners.

Experiences & Dining Segment

Our Experiences & Dining offerings contribute to the comprehensive user experience we deliver, which we believe helps to increase awareness of, loyalty to, and engagement with our products, drive more bookings to Experiences & Dining travel partners and generate greater revenue and increased profitability on our platform.

Given the significant market opportunities in these large categories, we expect to continue to invest in building these offerings to drive consumer engagement, bookings and revenue growth for the long-term.

Since the first quarter of 2020, this segment’s revenue has been negatively and materially impacted at varying levels by a significant reduction in consumer demand due to the COVID-19 pandemic, which has reduced consumer willingness to research, purchase, and consume travel activities.

This negative impact has also been driven by a wide variety of government-instituted actions and restrictions around the globe aimed at limiting the spread of the virus, all of which have impacted consumer access to experience offerings and restaurants.

For example, during the first quarter of 2021, restaurants in most of the European countries in which our Dining business operates were ordered to remain closed.

However, during most of 2021, our Experiences & Dining segment’s financial results improved significantly, as revenue in this segment increased by 65% during the year ended December 31, 2021, when compared to the same period in 2020, driven by our Experiences offering, as a result of the growing travel demand recovery driven by vaccine progress and various government restrictions being gradually lifted.

B y means of showing a comparison to a pre-COVID-19 timeframe, during the fourth quarter of 2021, our Experiences & Dining segment revenue reached approximately 90% of the fourth quarter of 2019 revenue, an increase from 81% of the third quarter of 2019 revenue in the third quarter of 2021, despite the impact of the Delta and Omicron variants.

In addition, our Experiences & Dining segment revenue during the year ended December 31, 2021, was 67% of 2019’s comparable period, an increase from 40% of 2019’s comparable period during the year ended December 31, 2020.

During the year ended December 31, 2021, our Experiences revenue grew over 230%, when compared to the same period in 2020, and reached 64% of 2019’s comparable period revenue, primarily driven by our Viator point of sale business.

As a result of strong consumer demand in our Viator business with the growing travel demand recovery during 2021, we significantly increased investments in performance marketing channels in order to capture additional market share while maintaining a positive return on investment measured over the projected lifetime of a customer.

In Dining, we saw a notable recovery since mid-May 2021, as restaurants in most European countries in which TheFork operates began reopening for in-restaurant dining.

However, late in the fourth quarter of 2021, Omicron-related restrictions and related impact to consumer demand within Europe again began to impact Dining .

Overall, Dining revenue during the year ended December 31, 2021, decreased by 5%, when compared to the same period in 2020, primarily driven by the impact of COVID-19, as restaurants in most of the European countries in which our Dining business operates were ordered to remain closed during the first quarter of 2021, while Dining revenue during the final three quarters of 2021 exceeded the total from the comparable quarters for 2020 by approximately 29%.

By means of showing a comparison to a pre-COVID-19 timeframe, Dining revenue during the year ended December 31, 2021 reached 74% of 2019's comparable period.

As discussed above, the Company initiated cost reduction measures in response to the COVID-19 pandemic during 2020, the majority of which was related to personnel and overhead costs and brand advertising in this segment.

During 2021, we maintained the majority of cost savings in this segment, however, as noted above, the Company significantly increased its performance marketing spend during the year.

During 2021, we have explored new initiatives to delight and engage consumers.

For example, we improved our site navigation, recommen dations, sort orders, quality of our experience products, mobile apps, and offered new consumer payment options, as new customer acquisition remains top priority during the growing travel recovery.

For operators, we launched a new advertising program, Viator Accelerate, which is aimed at helping operators increase their visibility on the platform through targeted advertising, ultimately with the goal of increasing bookings and reach.

Other is a combination of our Rentals, Flights & Car, and Cruise offerings and is not considered a reportable segment.

Other revenue continues to experience the ongoing negative impact of COVID-19, particularly in our Flights and Cruise offerings, and was also negatively impacted by the sale of our SmarterTravel business during the second quarter of 2020.

We continue to operate these businesses opportunistically as they complement our overall strategic objectives to deliver more value to consumers and travel partners.

Consolidated Results of Operations

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Form 10-K.

These reclassifications had no effect on our consolidated financial statements in any period.

During the fourth quarter of 2022, the Company was the subject of a targeted fraud scheme, resulting in the payment of refunds to an external party for products which were fraudulently subscribed within Tripadvisor Core.

As a result, the Company incurred a loss of approximately $8 million, which was recorded to general and administrative expense on the consolidated statement of operations for the year ended December 31, 2022.

These fraudulent transactions had no impact on revenue, as the fraudulent subscriptions were cancelled in a timely manner by the Company.

Operating process changes were put into place to provide further safeguards against this type of activity happening in the future.

Although we continue to vigorously pursue recovery of our losses and related expenses arising from this incident, there can be no assurance of recovery or of the timing of any such recovery.

A discussion regarding our financial condition and results of operations for fiscal year 2022 compared to fiscal year 2021 is presented below.

1 unchanged sentence

"Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 18, 2022.

As noted above, during the second quarter of 2022, we revised our segment reporting structure.

We did not include a discussion regarding our financial condition and results of operations for fiscal year 2021 compared to fiscal year 2020, as we believe the changes in our reportable segments is not a material change to understand the financial condition, changes in financial conditions, and results of operations of our revised reportable segments due to the impact of COVID-19 during those years, which is discussed above.

Results of Operations

23 unchanged sentences

= not meaningful

(1) See “Adjusted EBITDA”

discussion below for more information.

(1) Adjusted EBITDA is considered a non-GAAP measure as defined by the SEC.

Please refer to “Adjusted EBITDA”

below for more information, including tabular reconciliations to the most directly comparable GAAP financial measure.

Revenue and Segment Information

2 unchanged sentences

(in millions)

Hotels, Media & Platform

Experiences & Dining

Tripadvisor Core (1)

Intersegment Eliminations (1)

Total revenue

Adjusted EBITDA by Segment:

Hotels, Media & Platform

Experiences & Dining

Tripadvisor Core

Total Adjusted EBITDA

Adjusted EBITDA Margin by Segment (2) :

Hotels, Media & Platform

Experiences & Dining

Tripadvisor Core

= not meaningful

(1) Tripadvisor Core segment revenue figures are shown gross of intersegment (intercompany) revenue, which is eliminated on a consolidated basis.

Refer to “Note 19:

Segment and Geographic Information ”

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for a discussion of intersegment revenue for all periods presented.

(2) “Adjusted EBITDA Margin by Segment”

is defined as Adjusted EBITDA by segment divided by revenue by segment.

Hotels, Media & Platform Segment

Hotels, Media & Platform segment revenue increased by $188 million during the year ended December 31, 2021, when compared to the same period in 2020, primarily due to in creased hotel auction revenue, particularly in the U.S., and, to a lesser extent, increased hotel auction revenue in Europe, due to the impact of growing consumer travel demand and increasing travel industry recovery on our business, as discussed above .

Adjusted EBITDA in our Hotels, Media & Platform segment increased $98 million, during the year ended December 31, 2021 when compared to the same period in 2020.

This was primarily due to an increase in revenue as noted above, and, to a lesser extent, a reduction in personnel costs as a result of workforce reductions related to our cost-reduction measures during 2020 in response to COVID-19, partially offset by an increase in direct selling and marketing expenses related to search engine marketing, or SEM, and other online paid traffic acquisition costs in response to increasing consumer travel demand as travel restrictions ease, vaccination rates increase, and the travel industry recovers, and, to a lesser extent, an increase in personnel and overhead costs to help support business and key staff retention growth during the growing travel demand recovery.

The following is a detailed discussion of the revenue sources within our Hotels, Media & Platform segment:

Tripadvisor Core Segment

Tripadvisor Core segment revenue increased by $301 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to increased hotel meta revenue, and, to a lesser extent, an increase in Tripadvisor experiences and dining and Tripadvisor-branded display and platform revenue, all of which was due to the impact of increased consumer travel demand, the easing of travel restrictions and travel industry recovery on our business.

In addition, we estimate this segment's revenue growth was negatively impacted by foreign currency fluctuations of approximately 6% during the year ended December 31, 2022 when compared to the same period in 2021.

Adjusted EBITDA in our Tripadvisor Core segment increased $168 million during the year ended December 31, 2022 when compared to the same period in 2021.

This was primarily due to an increase in revenue as noted above, partially offset by an increase in direct selling and marketing expenses related to SEM and other online paid traffic acquisition costs in response to increased consumer travel demand as travel restrictions eased and the travel industry recovered, and to a lesser extent, increased personnel and overhead costs to support business growth during the travel demand recovery.

The following is a detailed discussion of the revenue sources within our Tripadvisor Core segment:

Year ended December 31,

Hotels, Media & Platform:

Tripadvisor Core:

(in millions)

1 unchanged sentence

Tripadvisor-branded display and platform

Total Hotels, Media & Platform revenue

Tripadvisor experiences and dining (1)

Total Tripadvisor Core Revenue

(1) Tripadvisor experiences and dining revenue within the Tripadvisor Core segment is shown gross of intersegment (intercompany) revenue, which is eliminated on a consolidated basis.

Refer to “Note 19:

Segment and Geographic Information ”

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for a discussion of intersegment revenue for all periods presented.

Tripadvisor-branded Hotels Revenue

Tripadvisor-branded hotels revenue primarily includes hotel auction revenue and, to a lesser extent, hotel B2B revenue, which includes click-based revenue generated from hotel sponsored placement advertising that enable hotels to enhance their visibility on Tripadvisor hotel pages, and subscription-based advertising services that we offer to travel partners.

For the years ended December 31, 2021, 2020, and 2019, 82%, 81%, and 83%, respectively, of our total Hotels, Media & Platform segment revenue was derived from Tripadvisor-branded hotels revenue.

Tripadvisor-branded hotels revenue increased $160 million or 55% during the year ended December 31, 2021 when compared to the same period in 2020.

This increase was primarily driven by our hotel auction revenue, particularly in the U.S., and, to a lesser extent, an increase in hotel auction revenue in Europe, despite the impact from the Delta variant late in the third quarter of 2021 and the emergence of the Omicron variant late in the fourth quarter of 2021, due to rising consumer travel demand and travel industry recovery, given rising vaccination rates and easing of government travel and leisure restrictions.

As consumer travel demand continued to increase during 2021, the Company saw continued improvement in hotel auction monetization, as CPC rates during the second half of 2021 exceeded parity of 2019's comparable period, which enabled increased efficient marketing investment on performance channels, enhancing our 2021 hotel auction revenue growth.

S ee “

Business Trends ”

above for further discussion.

For the years ended December 31, 2022, 2021, and 2020, 67%, 68%, and 60%, respectively, of our Tripadvisor Core segment revenue was derived from Tripadvisor-branded hotels revenue.

Tripadvisor-branded hotels revenue increased $199 million during the year ended December 31, 2022 when compared to the same period in 2021.

This increase was primarily driven by our hotel meta revenue across all geographic markets, and, to a lesser extent, hotel B2B revenue, which has been slower to recover than hotel meta, due to the impact of increased consumer travel demand, the easing of travel restrictions and travel industry recovery on our business.

As consumer travel demand increased during 2022, the Company saw continued improvement in hotel meta monetization, as CPC rates during 2022 were consistently near or exceeded parity with 2019's comparable period, which enabled increased efficient marketing investment on performance channels, enhancing our 2022 hotel meta revenue growth.

Tripadvisor-branded Display and Platform Revenue

For the years ended December 31, 2021, 2020, and 2019, 18%, 19%, and 17%, respectively, of our total Hotels, Media & Platform segment revenue was derived from Tripadvisor-branded display and platform revenue, which consists of revenue from display-based advertising across our platform.

Tripadvisor-branded display and platform revenue increased $28 million or 41% during the year ended December 31, 2021, when compared to the same period in 2020, primarily driven by an increase in marketing spend from our advertisers in correlation with increasing consumer travel demand, as discussed above.

Experiences & Dining Segment

For the years ended December 31, 2021, 2020, and 2019, our Experiences & Dining segment revenue accounted for 34%, 31% and 29%, respectively, of total consolidated revenue.

Experiences & Dining segment revenue increased by $121 million or 65% during the year ended December 31, 2021, when compared to the same period in 2020, driven by Experiences revenue, as discussed above under “Business Trends.”

This segment’s revenue has been negatively and materially impacted at varying levels by a significant reduction in consumer demand due to the COVID-19 pandemic at varying levels during 2020 and 2021.

However, during 2021, our Experiences & Dining segment’s financial results significantly improved as a result of the growing consumer travel demand recovery, albeit unevenly, driven by vaccine progress and various government restrictions being gradually lifted during the same time period, which is discussed further under “

Business Trends ”

Experiences & Dining segment Adjusted EBITDA loss decreased by $43 million during the year ended December 31, 2021 when compared to the same period in 2020, primarily due to an increase in revenue as noted above, a reduction in personnel costs as a result of workforce reductions related to our cost-reduction measures during 2020 in response to COVID-19, and, to a lesser extent, lower television advertising costs, office lease costs, and bad debt expense, partially offset by increased selling and marketing expenses related to SEM and other online paid traffic acquisition costs in response to increased consumer demand for experiences and restaurants as part of the growing consumer travel demand recovery and, to a lesser extent, an increase in personnel and overhead costs to help support business growth and key staff retention during the growing travel demand recovery.

Other revenue, which includes Rentals revenue, in addition to primarily click-based advertising and display-based advertising revenue from our Flights & Cars, and Cruises offerings on Tripadvisor websites and mobile apps, decreased by $11 million or 19% during the year ended December 31, 2021, when compared to the same period in 2020, primarily due to the continued negative impact of COVID-19 on these offerings, and the sale of our SmarterTravel business during the second quarter of 2020.

Adjusted EBITDA in Other increased $10 million or 67% during the year ended December 31, 2021, when compared to the same period in 2020, was primarily due to reduction in personnel costs as a result of workforce reductions related to our cost-reduction measures during the first half of 2020 in response to COVID-19 and lower non-income tax costs, partially offset by a decrease in revenue, as noted above.

For the years ended December 31, 2022, 2021, and 2020, 13%, 15%, and 14%, respectively, of our Tripadvisor Core segment revenue was derived from Tripadvisor-branded display and platform revenue, which consists of revenue from display-based advertising across our platform.

Tripadvisor-branded display and platform revenue increased $32 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily driven by an increase in marketing spend from our advertisers, particularly DMOs, in correlation with increased consumer travel demand.

Tripadvisor Experiences and Dining Revenue

For the years ended December 31, 2022, 2021, and 2020, 14%, 11%, and 13%, respectively, of our Tripadvisor Core segment revenue was derived from our Tripadvisor experiences and dining revenue, which includes intercompany (intersegment) revenue consisting of affiliate marketing commissions earned primarily from experience bookings, and to a lesser extent, restaurant reservation bookings on Tripadvisor-branded websites and mobile apps, fulfilled by Viator and TheFork, respectively, which are eliminated on a consolidated basis, in addition to revenue earned from Tripadvisor's restaurant service offerings.

Tripadvisor experiences and dining revenue increased by $64 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily driven by increased consumer travel demand for experiences across all geographies, in conjunction with the lifting of various government restrictions on experience activities and the travel industry recovery.

Other Revenue

For the years ended December 31, 2022, 2021, and 2020, 5%, 7%, and 12%, respectively, of our Tripadvisor Core segment revenue was derived from Other revenue, which includes alternative accommodation rentals revenue, in addition to primarily click-based advertising and display-based advertising revenue from our cruise, flights, and rental cars offerings on Tripadvisor websites and mobile apps.

Other revenue increased by $6 million during the

year ended December 31, 2022 when compared to the same period in 2021, primarily due to the impact of increased consumer travel demand and travel industry recovery on our business.

Viator Segment

Viator segment revenue increased by $309 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily driven by the consumer demand recovery for experiences across all geographies, in conjunction with the lifting of various government restrictions on experience activities and the travel industry recovery during the same period.

Viator is also benefitting from a larger macro trend, or secular shift, as the large global market in which it operates continues to grow, and, in addition, migrate online from traditional offline sources.

In addition, we estimate this segment's revenue growth was negatively impacted by foreign currency fluctuations of approximately 16% during the year ended December 31, 2022, when compared to the same period in 2021.

Adjusted EBITDA loss in our Viator segment decreased by $20 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to an increase in revenue as noted above.

This was largely offset by an increase in selling and marketing expenses related to SEM, other online paid traffic acquisition costs, and other marketing costs in response to increased consumer demand for experiences as part of the consumer travel demand recovery and to grow market share, and, to a lesser extent, an increase in direct costs from credit card payments and other revenue-related transaction costs in direct correlation with the increase in revenue, as well as increased personnel and overhead costs to support business growth during the travel demand recovery.

TheFork Segment

TheFork segment revenue increased by $41 million during the year ended December 31, 2022 when compared to the same period in 2021, driven by consumer travel demand recovery and various government restrictions on restaurants being lifted in Europe, combined with the travel industry recovery during the same time period, despite the impact of foreign currency fluctuations, which we estimate negatively impacted this segment's revenue growth during the year ended December 31, 2022 in the amount of approximately 19%, when compared to the same period in 2021.

Adjusted EBITDA loss in TheFork segment decreased by $7 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to an increase in revenue as noted above, and to a lesser extent, incremental non-income tax related government assistance benefits related to COVID-19 relief of $8 million.

This was largely offset by an increase in selling and marketing expenses related to online paid traffic acquisition costs and television advertising costs, in response to consumer travel demand recovery as government restrictions on restaurants were lifted and the travel industry recovered and, to a lesser extent, an increase in personnel and overhead costs to support business growth during the travel demand recovery.

Consolidated Expenses

6 unchanged sentences

Total cost of revenue

Cost of revenue increased $19 million during the year ended December 31, 2021 when compared to the same period in 2020, primarily due to increased direct costs from credit card payment and other revenue-related transaction costs in our Experiences & Dining segment in correlation with an increase in revenue.

Cost of revenue increased $42 million during the year ended December 31, 2022 when compared to the same period in 2021, the majority of which is due to increased direct costs from credit card payment processing fees and other revenue-related transaction costs in our Viator segment in direct correlation with the increase in revenue, as Viator serves as the merchant of record for the majority of its experience booking transactions.

Selling and Marketing

5 unchanged sentences

Total selling and marketing

Direct selling and marketing costs increased $166 million during the year ended December 31, 2021 when compared to the same period in 2020, primarily due to an increase in our SEM and other online traffic acquisition spend in our Hotels, Media & Platform and Experiences & Dining segments in response to increasing consumer travel demand as travel activity restrictions ease and the travel industry recovers.

Personnel and overhead costs decreased $13 million during the year ended December 31, 2021 when compared to the same period in 2020, primarily as a result of a reduction in headcount related to our cost-reduction measures across our business in response to COVID-19 implemented during the first half of 2020, partially offset by increased personnel and overhead related to performance bonuses and additional headcount to help support business growth and key staff retention during the growing travel demand recovery during 2021.

Direct selling and marketing costs increased $295 million during the year ended December 31, 2022 when compared to the same period in 2021.

In addition, direct selling and marketing costs as a percentage of total consolidated revenue was 39% during the year ended December 31, 2022, an increase from 33% when compared to the same period in 2021.

These increases were primarily due to an increase of approximately $277 million in SEM, other paid online traffic acquisition spend, and other marketing costs, the substantial majority of which was incurred within our Tripadvisor Core and Viator segments, in order to capture increased consumer travel demand primarily in hotel meta and for experiences, as travel activity restrictions eased and the travel industry recovered, while direct traffic in Tripadvisor Core, including SEO traffic, has been slower to recover, as well as, and to a lesser extent, increased television advertising costs of $12 million in TheFork segment in order to regain brand awareness levels as pandemic related restaurant restrictions subsided in Europe and the industry recovered.

Personnel and overhead costs increased $20 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to an increase in headcount and contingent staff to support business growth during the travel demand recovery.

Technology and Content

5 unchanged sentences

Total technology and content

Technology and content costs decreased $8 million during the year ended December 31, 2021 when compared to the same period in 2020, primarily due to decreased personnel and overhead costs across our business as a result of a reduction in headcount driven by cost-reduction measures across our business in response to COVID-19 implemented during the first half of 2020, partially offset by an increase in performance bonuses, contingent staff costs, and stock-based compensation expense to help support business growth and key staff retention during the growing travel demand recovery during 2021.

Technology and content costs increased $10 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to increased personnel and overhead costs resulting from additional headcount and contingent staff to support business growth during the travel demand recovery, partially offset by a decrease in stock-based compensation expense of $10 million.

General and Administrative

General and administrative expenses consist primarily of personnel and related overhead costs, including personnel engaged in leadership, finance, legal, and human resources, as well as stock-based compensation expense for those same personnel.

General and administrative costs also include professional service fees and other fees including audit, legal, tax and accounting, and other costs including bad debt expense, non-income taxes, such as sales, use and other non-income related taxes.

General and administrative costs also include professional service fees and other fees including audit, legal, tax and accounting, and other operating costs including bad debt expense, non-income taxes, such as sales, use, digital services, and other non-income related taxes.

Year ended December 31,

3 unchanged sentences

Total general and administrative

General and administrative costs decreased $6 million during the year ended December 31, 2021 when compared to the same period in 2020.

Personnel and overhead costs increased $13 million during the year ended December 31, 2021, when compared to the same period in 2020, primarily driven by an increase in performance bonuses, recruiting costs, and stock-based compensation expense to help support business growth and key staff retention during the growing consumer travel demand recovery, partially offset by decreased personnel and overhead costs as a result of a reduction in headcount driven by cost-reduction measures across our business in response to COVID-19 implemented during the first half of 2020.

Professional service fees and other decreased $19 million during the year ended December 31, 2021, when compared to the same period in 2020, primarily due to a decrease in bad debt expense of $14 million due to improved collection trends as the travel industry recovers and to a lesser extent a decrease in third-party professional service costs related to cost-reduction measures and other non-income related taxes costs.

General and administrative costs increased $5 million during the year ended December 31, 2022 when compared to the same period in 2021.

Personnel and overhead costs decreased $4 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to a decrease in stock-based compensation expense of $18 million, partially offset by additional headcount to support business growth during the travel demand recovery.

Professional service fees and other costs increased $9 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to an increase in digital service taxes in Europe of $8 million and an approximate $8 million loss incurred during the fourth quarter of 2022 as the result of a fraud scheme resulting in payments to an external party, as discussed above, partially offset by an increase in non-income tax related government assistance benefits related to COVID-19 relief of $9 million during the year ended December 31, 2022.

Depreciation and amortization

5 unchanged sentences

Total depreciation and amortization

Depreciation and amortization decreased $14 million during the year ended December 31, 2021 when compared to the same period in 2020, primarily due to the completion of amortization related to certain intangible assets from business acquisitions in previous years and lower depreciation related to computer equipment, leasehold improvements, furniture and capitalized website development costs driven by a reduction in headcount related to our cost-reduction measures across our business in response to COVID-19 implemented during the first half of 2020.

Impairment of Goodwill

Year ended December 31,

(in millions)

Impairment of goodwill

The Company recorded a goodwill impairment charge of $3 million related to our Tripadvisor China reporting unit in the third quarter of 2020.

Refer to “Note 8:

Goodwill and Intangible Assets, Net”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

Restructuring and other related reorganization costs

Restructuring and other related reorganization costs consist primarily of employee severance and related benefits.

Year ended December 31,

(in millions)

Restructuring and other related reorganization costs

The Company incurred restructuring and other related reorganization costs of $41 million during the year ended December 31, 2020, primarily due to actions taken by the Company in response to COVID-19 .

Depreciation and amortization decreased $14 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to the completion of amortization related to certain intangible assets from business acquisitions and capitalized website development costs in previous years.

Interest Expense

Interest expense primarily consists of interest incurred, commitment fees, and debt issuance cost amortization related to our Credit Facility, 2025 Senior Notes, 2026 Senior Notes, as well as interest on our finance lease.

Interest expense primarily consists of interest incurred, commitment fees, and debt issuance cost amortization related to the Credit Facility, 2025 Senior Notes, 2026 Senior Notes, as well as interest on finance leases.

Year ended December 31,

1 unchanged sentence

Interest expense

Interest expense increased $10 million during the year ended December 31, 2021 when compared to the same period in 2020, primarily due to the issuance of our 2025 Senior Notes in July 2020, partially offset by lower interest expense on our Credit Facility as the Company did not borrow from this facility during 2021.

Interest expense did not change materially during the year ended December 31, 2022 when compared to the same period in 2021.

The majority of interest expense reported during the years ended December 31, 2022 and 2021 were as a result of the 2025 Senior Notes.

Refer to “Note 9:

Debt ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.

Interest Income

Interest income primarily consists of interest earned from bank deposits available on demand, money market funds, overnight demand deposits and marketable securities, including amortization of discounts and premiums on our marketable securities.

Interest income primarily consists of interest earned from bank deposits available on demand, term deposits, money market funds, and marketable securities, including amortization of discounts and premiums on our marketable securities.

Year ended December 31,

1 unchanged sentence

Interest income

Interest income decreased $2 million during the year ended December 31, 2021, when compared to the same period in 2020, primarily due to a reduction in average interest rates earned on our investments during 2021.

Interest income increased $14 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to an increase in the average amount of cash invested and increased interest rates received on bank deposits during 2022.

Other Income (Expense), Net

3 unchanged sentences

Other income (expense), net

Other expense, net increased $2 million during the year ended December 31, 2021 when compared to the same period in 2020, primarily due to increased foreign currency transaction losses as a result of the fluctuation of foreign exchange rates during 2021 and a net increase in allowance for credit losses of $2 million, when compared to 2020, on a long-term note receivable, partially offset by a loss on sale of business of $6 million during 2020, which did not reoccur in 2021.

Other expense, net decreased $5 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to a $5 million allowance for credit losses recorded on our long-term note receivable during 2021, which did not reoccur in 2022.

Refer to “Note 17:

Other Income (Expense), Net ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for additional information.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information.

(Provision) Benefit for Income Taxes

3 unchanged sentences

Effective tax rate

We had an income tax benefit of $37 million for the year ended December 31, 2021.

The decrease in our income tax benefit during the year ended December 31, 2021 when compared to the same period in 2020, was

primarily due to greater pretax losses incurred the year ended December 31, 2020 than 2021, and an income tax benefit of $23 million during the year ended December 31, 2020 from the tax rate differential in tax years applicable to U.S.

loss carryforwards that became eligible for carryback under the CARES Act that did not reoccur in 2021.

This was partially offset by an increase in the recognition of stock-based compensation windfalls related to the increase in the Company’s common stock price during the year ended December 31, 2021 and a partial release of a valuation allowance on our U.K.

subsidiary's interest carryforward deferred tax asset.

We recorded a total income tax provision of $47 million for the year ended December 31, 2022.

The change in our income taxes and our effective tax rate during the year ended December 31, 2022, when compared to the same period in 2021, was primarily due to an increase in pretax income recognized during the year ended December 31, 2022.

Refer to “Note 11:

Income Taxes ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.

Net income (loss)

3 unchanged sentences

Net income (loss) margin

Net loss decreased $141 million during the year ended December 31, 2021, when compared to the same period in 2020, primarily due to an increase in revenue, as described above in “

Revenue and Segment Information ”, restructuring costs incurred of $41 million during the year ended December 31, 2020, which did not reoccur during the year ended December 31, 2021, and decreased personnel and overhead costs across our business as a result of a reduction in headcount driven by cost-reduction measures across our business in response to COVID-19 implemented during the year ended December 31, 2020, partially offset largely by an increase in selling and marketing expenses in response to increasing consumer travel demand as travel activity restrictions ease and the travel industry recovers and, to a lesser extent, an increase in personnel and overhead costs during the year ended December 31, 2021 to help support business growth and key staff retention during the growing consumer travel demand recovery, all of which is described above under “

Net income (loss) improved $168 million during the year ended December 31, 2022 when compared to the same period in 2021, primarily due to an increase in revenue, as described in more detail above under “

Revenue and Segment Information ”, largely offset by an increase in selling and marketing expenses in response to increasing consumer travel demand as travel activity restrictions eased and the travel industry recovered, and to a lesser extent, an increase in personnel and overhead costs to support business growth during the consumer travel demand recovery and increased direct costs from credit card payment fees and other revenue-related transaction costs in direct correlation with the increase in revenue during the year ended December 31, 2022, all of which is described in more detail above under “

Consolidated Expenses.

11 unchanged sentences

(4) stock-based compensation and other stock-settled obligations;

(5) goodwill, intangible asset, and long-lived asset impairments;

(5) goodwill, long-lived asset, and intangible asset impairments;

(6) legal reserves and settlements;

17 unchanged sentences

Net income (loss)

(Benefit) provision for income taxes

Provision (benefit) for income taxes

Other expense (income), net

1 unchanged sentence

Impairment of goodwill

Legal reserves and settlements

Non-recurring expenses (income) (1)

Stock-based compensation

1 unchanged sentence

Adjusted EBITDA

(1) The Company incurred a loss of approximately $8 million during the fourth quarter of 2022, as the result of a targeted payment fraud scheme by an external party, as discussed above.

The Company considers such costs to be non-recurring in nature.

To the extent the Company recovers any losses in future periods related to this incident, the Company plans to reduce Adjusted EBITDA by the recovery amount in that same period.

Liquidity and Capital Resources

2 unchanged sentences

Our principal source of liquidity is cash flow generated from operations and our existing cash and cash equivalents balance.

Our liquidity needs can also be met through drawdowns under our Credit Facility.

As of December 31, 2021 and 2020, we had $723 million and $418 million, respectively, of cash and cash equivalents, and $497 million of available borrowing capacity under our Credit Facility as of December 31, 2021 .

As of December 31, 2021, approximately $151 million of our cash and cash equivalents were held by our international subsidiaries outside of the U.S., of which approximately 50% was located in the U.K.

Our liquidity needs can also be met through drawdowns under the Credit Facility.

As of December 31, 2022 and 2021, we had $1.0 billion and $723 million, respectively, of cash and cash equivalents, and $496 million of available borrowing capacity under our Credit Facility as of December 31, 2022.

As of December 31, 2022, approximately $157 million of our cash and cash equivalents were held by our international subsidiaries outside of the U.S., of which approximately 40% was held in the U.K.

As of December 31, 2022, the significant majority of our cash was denominated in U.S.

As of December 31, 2021, t he Company had $845 million in long-term debt, as a result of the issuance of our 2025 Senior Notes in July 2020 and 2026 Senior Notes in March 2021, as discussed below.

As of December 31, 2021, we ha d $427 million of cumulative undistributed earnings in foreign subsidiaries which were no longer considered to be indefinitely reinvested.

As of December 31, 2022, we had $445 million of cumulative undistributed earnings in foreign subsidiaries which were no longer considered to be indefinitely reinvested.

As of December 31, 2022, we maintained a deferred income tax liability on our consolidated balance sheet, which was not material, for the U.S.

2 unchanged sentences

Income Taxes ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

Credit Facility

As of December 31, 2021, we are party to our Credit Facility, which, among other things, provides for a $500 million revolving credit facility with a maturity date of May 12, 2024.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.

As of December 31, 2022, we are party to the Credit Facility, which, among other things, provides for a $500 million revolving credit facility with a maturity date of May 12, 2024.

The Company may borrow from the Credit Facility in U.S.

dollars and Euros.

The Credit Facility requires us to maintain a maximum leverage ratio and contains certain customary affirmative covenants and events of default, including a change of control.

Borrowings under the Credit Facility generally bear interest, at the Company’s option, at a rate per annum equal to either (i) the Eurocurrency Borrowing rate, or the adjusted LIBO rate for the interest period in effect for such borrowing;

plus an applicable margin ranging from 1.25% to 2.00% (“Eurocurrency Spread”), based on the Company’s leverage ratio;

or (ii) the Alternate Base Rate (“ABR”) Borrowing, which is the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1.00% per annum and (c) the Adjusted LIBO Rate (or LIBO rate multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00%;

in addition to an applicable margin ranging from 0.25% to 1.00% (“ABR Spread”), based on the Company’s leverage ratio.

However, we amended the Credit Facility in May 2020 and December 2020, to among other things, suspend the leverage ratio covenant for quarterly testing of compliance beginning in the second quarter of 2020, replacing it with a minimum liquidity covenant through June 30, 2021 (requiring the Company to maintain $150 million of unrestricted cash, cash equivalent and short-term investments less deferred merchant payables plus available revolver capacity), until the earlier of (a) the first day after June 30, 2021 through maturity on which borrowings and other revolving credit utilizations under the revolving commitments exceed $200 million, and (b) the election of the Company, at which time the leverage ratio covenant will be reinstated (the “Leverage Covenant Holiday”).

We amended the Credit Facility in May 2020 and December 2020 to, among other things, suspend the leverage ratio covenant for quarterly testing of compliance beginning in the second quarter of 2020, replacing it with a minimum liquidity covenant through June 30, 2021 (requiring the Company to maintain $150 million of unrestricted cash, cash equivalent and short-term investments less deferred merchant payables plus available revolver capacity), until the earlier of (a) the first day after June 30, 2021 through maturity on which borrowings and other revolving credit utilizations under the revolving commitments exceed $200 million, and (b) the election of the Company, at which time the leverage ratio covenant (the “Leverage Covenant Holiday”) will be reinstated.

The Company remained in the Leverage Covenant Holiday as of December 31, 2022.

During the Leverage Covenant Holiday, any borrowings under the Credit Facility bear interest at LIBOR plus a 2.25% margin with a LIBOR floor of 1% per annum.

We are also required to pay a quarterly commitment fee, at an applicable rate of 0.5%, on the daily unused portion of the revolving credit facility for each fiscal quarter while the Leverage Covenant Holiday is in place .

Based on the Company’s existing leverage ratio, any outstanding or future borrowings under the Credit Facility generally bear interest, at the Company’s option, at a rate per annum equal to either (i) the Eurocurrency Borrowing rate, or the adjusted LIBO rate for the interest period in effect for such borrowing;

plus an applicable margin ranging from 1.25% to 2.00% with a London Inter-Bank Offered Rate (“LIBO rate”) floor of 1.00% per annum;

or (ii) the Alternate Base Rate Borrowing, which is the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1.00% per annum, and (c) the Adjusted LIBO Rate (or LIBO rate multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00%;

in addition to an applicable margin ranging from 0.25% to 1.00%.

In addition, based on the Company’s existing leverage ratio, we are required to pay a quarterly commitment fee, at an applicable rate ranging from 0.15% to 0.30% as of December 31, 2022, on the daily unused portion of the Credit Facility for each fiscal quarter during the Leverage Covenant Holiday and in connection with the issuance of letters of credit.

The Credit Facility includes restrictions on the Company’s ability to make certain payments and distributions, including share repurchases and dividends.

As of December 31, 2021 and 2020, respectively, we had no outstanding borrowings and were in compliance with our covenant requirements in effect under the Credit Facility.

As of December 31, 2022 and 2021, we had no outstanding borrowings and were in compliance with our covenant requirements in effect under the Credit Facility.

While there can be no assurance that we will be able to meet the leverage ratio covenant after the Leverage Covenant Holiday ceases, based on our current projections, we do not believe there is a material risk we will not remain in compliance throughout the next twelve months.

During the first quarter of 2020, the Company borrowed $700 million under the Credit Facility.

These funds were drawn down as a precautionary measure to reinforce our liquidity position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic.

The Company repaid those borrowings in full during the third quarter of 2020 with proceeds received from the 2025 Senior Notes, as discussed below.

2025 Senior Notes

In July 2020, the Company completed the sale of $500 million in 2025 Senior Notes.

The 2025 Senior Notes provide, among other things, that interest, at an interest rate of 7.0% per annum, will be payable on January 15 and July 15 of each year, which began on January 15, 2021, until their maturity on July 15, 2025.

T he Company used the proceeds from the 2025 Senior Notes, or $490 million, net of approximately $10 million in debt issuance costs, to

repay a portion of our outstanding borrowings under our Credit Facility, as noted above .

As of December 31, 2022, the Company had $845 million in long-term debt, as a result of the issuance of our 2025 Senior Notes in July 2020 and 2026 Senior Notes in March 2021, as discussed below.

In July 2020, the Company completed the sale of $500 million of our 2025 Senior Notes.

The 2025 Senior Notes provide, among other things, that interest, at an interest rate of 7.0% per annum, is payable on January 15 and July 15 of each year, which began on January 15, 2021, until their maturity on July 15, 2025.

The 2025 Senior Notes are senior unsecured obligations of the Company and are guaranteed by certain of the Company’s domestic subsidiaries.

2026 Senior Notes

In March 2021, the Company completed the sale of $345 million of our 2026 Senior Notes.

The 2026 Senior Notes provide, among other things, that interest, at an interest rate of 0.25% per annum, will be payable on April 1 and October 1 of each year, which began on October 1, 2021, until their maturity on April 1, 2026.

The 2026 Senior Notes provide, among other things, that interest, at an interest rate of 0.25% per annum, is payable on April 1 and October 1 of each year, which began on October 1, 2021, until their maturity on April 1, 2026.

Concurrently, the Company used a portion of the proceeds from the 2026 Senior Notes to enter into privately negotiated capped call transactions with certain of the initial purchasers of the 2026 Senior Notes and/or their respective affiliates and/or other financial institutions at a cost of approximately $35 million.

The Company intends to use the remainder of the proceeds from this offering for general corporate purposes, which may include repayment of debt, including the partial redemption and/or purchase of the 2025 Senior Notes prior to maturity.

The Company intends to use the remainder of the proceeds from this offering for general corporate purposes, which may include repayment of debt, including the

partial redemption and/or purchase of the 2025 Senior Notes prior to maturity.

The 2026 Senior Notes are senior unsecured obligations of the Company and are guaranteed by certain of the Company’s domestic subsidiaries.

The 2025 Senior Notes and 2026 Senior Notes are not registered securities and there are currently no plans to register these notes as securities in the future.

As a result, Rule 3-10 of Regulation S-X promulgated by the SEC is not applicable and no separate financial statements are required for the guarantor subsidiaries of these notes.

We may from time to time repurchase our outstanding 2025 Senior Notes or 2026 Senior Notes through tender offers, open market purchases, privately negotiated transactions or otherwise.

Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

For further information on our Credit Facility, 2025 Senior Notes, and 2026 Senior Notes, refer to “Note 10:

For further information on the Credit Facility, 2025 Senior Notes, and 2026 Senior Notes, refer to “Note 9:

Debt ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

Significant uses of capital and other liquidity matters

During the years ended December 31, 2020 and 2019, we repurchased 4,707,450 and 2,059,846 shares, respectively, of the Company’s outstanding common stock at an aggregate cost of $115 million and $60 million, respectively, under our share repurchase program.

The Company did not repurchase any shares of outstanding common stock under the share repurchase program during 2021 and had $75 million remaining available to repurchase shares of our common stock as of December 31, 2021.

T he terms of our Credit Agreement were amended to limit the Company from share repurchases during the Leverage Covenant Holiday and the terms of the 2025 Indenture related to the 2025 Senior Notes also impose certain limitations and restrictions on share repurchases.

During the year ended December 31, 2020, we repurchased 4,707,450 shares of the Company’s outstanding common stock at an aggregate cost of $115 million, under our share repurchase program.

The Company did not repurchase any shares of outstanding common stock under the share repurchase program during 2022 or 2021 and had $75 million remaining available to repurchase shares of our common stock as of December 31, 2022.

The terms of our Credit Agreement were amended to limit the Company from share repurchases during the Leverage Covenant Holiday and the terms of the 2025 Indenture related to the 2025 Senior Notes also impose certain limitations and restrictions on share repurchases.

Our business typically experiences seasonal fluctuations that affect the timing of our annual cash flows during the year related to working capital.

In our Experiences business and our Rentals free-to-list model, we receive cash from travelers at the time of booking or prior to the occurrence of an experience or rental, and we record these amounts, net of commissions, on our consolidated balance sheet as deferred merchant payables.

We pay the operator, or the experience supplier and/or property rental owners, after the travelers’

From our experience bookings, we receive cash from travelers at the time of booking or prior to the occurrence of an experience, and we record these amounts, net of commissions, on our consolidated balance sheet as deferred merchant payables.

We pay the operator, or the experience supplier, after the travelers’

Therefore, we generally receive cash from the traveler prior to paying the operator and this operating cycle represents a source or use of cash to us.

During the first half of the year Experiences and Rentals bookings typically exceed the amount of completed experiences and rental stays, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative.

However, this seasonal trend was negatively and materially impacted by COVID-19’s impact on our business throughout the year of 2020, albeit unevenly, primarily reflecting the decline in consumer demand for our products and increased cancellations of reservations.

Although consumer demand, traveler hotel and rental stays, and travel activities and experiences taken generally remains materially lower than historic lev els, these trends improved during 2021, resulting in increased revenues, working capital and operating cash flow more akin to typical and historical seasonality trends.

H owever, the ultimate extent and longevity of the COVID-19 pandemic, including new or existing variants (i.e.

Delta and/or Omicron), and its impact on travel, regional and global markets, and overall economic activity in currently affected countries and/or globally remains unknown and impossible to predict with certainty, as such, the impacts on our business, including our operating cash flows, while generally improving, remain uncertain at this point in time.

Other factors may also impact typical seasonal fluctuations, which include

further significant shifts in our business mix or adverse economic conditions unrelated to COVID-19 that could result in future seasonal patterns that are different from historical trends.

During the first half of the year, experiences bookings typically exceed the amount of completed experiences, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative.

Certain factors may impact our typical seasonal fluctuations, which may include any significant shifts in our business mix or adverse economic conditions that could result in future seasonal patterns that are different from historical trends.

For example, the negative impact to our business from COVID-19 materially affected our historical trends at varying levels during the years ended December 31, 2021 and 2020, while these trends significantly improved during the year ended December 31, 2022, resulting in increased revenues, and working capital and operating cash flow more akin to typical historical trends.

In addition, new or different payment options offered to our customers could impact the timing of cash flows.

For example, during the third quarter of 2019 we introduced a new payment option, “Reserve Now, Pay Later”

which allows our travelers the option to reserve certain experiences and defer payment until a date no later than two days before the experience date, which although used in a minority of bookings through 2021, may affect the timing of our future cash flows and working capital.

For example, our “Reserve Now, Pay Later”

payment option available in our Viator segment, which allows travelers the option to reserve certain experiences and defer payment until a date no later than two days before the experience date, which although not used in a majority of bookings to date, may continue to increase, and affect the timing of our future cash flows and working capital.

As discussed in “Note 11:

Income Taxes ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K, we have received Notices of Proposed Adjustments issued by the IRS for tax years 2009 through 2016, as of December 31, 2021.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries, and would result in an increase to our worldwide income tax expense in an estimated range of $95 million to $105 million, exclusive of interest expense, at the close of the audit if the IRS prevails.

In addition, we received from HM Revenue & Customs (“HMRC") in the U.K.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K, we have received Notices of Proposed Adjustments issued by the IRS for tax years 2009 through 2011, and 2014 through 2016, as of December 31, 2022.

The statute of limitation of assessment for all years subject to the Notices of Proposed Adjustment remain open.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries and would result in an increase to our worldwide income tax expense, for the open tax years, in an estimated range of $85 million to $95 million, exclusive of interest expense, at the close of the audit if the IRS prevails.

In January 2023, we received a final notice regarding a MAP settlement for the 2009 through 2011 tax years, which we accepted in February 2023.

Accepting this MAP settlement will result in an estimated net cash outflow of $70 million to $80 million, inclusive of related interest expense, expected during 2023.

In the first quarter of 2023, we will record additional tax expense as a discrete item, inclusive of interest, in an estimated range of $25 million to $35 million specifically related to this settlement.

This MAP settlement supersedes the Notices of Proposed Adjustment for 2009 through 2011 from the IRS, described above.

We will review the impact of the acceptance of this settlement position to our transfer pricing income tax

reserves for the subsequent tax years during the first quarter of 2023.

Based on this new information received subsequent to year end, adjustments may occur, which could be material.

In addition, we received from HMRC in the U.K.

an issue closure notice relating to adjustments for 2012 through 2016 tax years, as of December 31, 2022.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries and would result in an increase to our worldwide income tax expense in an estimated range of $45 million to $55 million, exclusive of interest expense, at the close of the audit if HMRC prevails.

transition tax adjustments, at the close of the audit if HMRC prevails.

We disagree with the proposed adjustments and we intend to defend our positions through applicable administrative and, if necessary, judicial remedies.

Although the ultimate timing for resolution of these matters is uncertain, any future payments would negatively impact our operating cash flows.

The CARES Act, enacted in March 2020, made tax law changes to provide financial relief to companies as a result of the business impacts of COVID-19.

Key income tax provisions of the CARES Act include changes in net operating loss (“NOL”) carryback and carryforward rules, increase of the net interest expense deduction limit, and immediate write-off of qualified improvement property.

The CARES Act allowed us to carryback our U.S.

federal NOL incurred in 2020, generating an expected tax refund of $48 million, which is reported in income taxes receivable on our consolidated balance sheet as of December 31, 2021.

This tax refund is expected to be received during 2022.

Although the ultimate timing for resolution of certain of these income tax matters is uncertain, any future payments would negatively and materially impact our operating cash flows.

The CARES Act, enacted in March 2020, made tax law changes to provide financial relief to companies as a result of the impact to businesses related to COVID-19.

Key income tax provisions of the CARES Act include changes in NOL carryback and carryforward rules, increase of the net interest expense deduction limit, and immediate write-off of qualified improvement property.

The CARES Act allowed the Company to carry back U.S.

federal NOLs incurred in 2020, generating an expected U.S.

federal tax benefit of $76 million, of which $64 million was refunded during the year ended December 31, 2022.

The remaining refund of $12 million is included in current income taxes payable within accrued expenses and other current liabilities on our consolidated balance sheet as of December 31, 2022 and is expected to be received during the year ended December 31, 2023.

In addition, $25 million of this refund received during the year ended December 31, 2022, was recorded to long-term taxes payable within other long-term liabilities on our consolidated balance sheet as of December 31, 2022, which reflects future transition tax payments expected to be made by the Company related to the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”).

We believe that our available cash and cash equivalents will be sufficient to fund our foreseeable working capital requirements, capital expenditures, existing business growth initiatives, debt and interest obligations, lease commitments, and other financial commitments through at least the next twelve months.

Our future capital requirements may also include capital needs for acquisitions and/or other expenditures in support of our business strategy, which may potentially reduce our cash balance and/or require us to borrow under our Credit Facility or to seek other financing alternatives.

In addition, our capital requirements may increase due to the continued impact of the COVID-19 pandemic, including new, if any, or existing variants (i.e.

Delta and Omicron), which has resulted in reduced revenues and operating cash flows for the Company, and the extent and duration to which it may continue to impact the Company’s business and the travel industry remains unclear.

Given the continued uncertainty in the uneven market and economic conditions related to the COVID-19 pandemic, we will continue to evaluate the nature and extent of the impact to our liquidity and capital requirements, and therefore our capital structure.

Our future capital requirements may also include capital needs for acquisitions and/or other expenditures in support of our business strategy, which may potentially reduce our cash balance and/or require us to borrow under the Credit Facility or to seek other financing alternatives.

Our cash flows from operating, investing and financing activities, as reflected in our consolidated statements of cash flows, are summarized in the following table:

5 unchanged sentences

Financing activities

During the year ended December 31, 2021, our primary use of cash was financing activities (including payment of withholding taxes on net share settlements of our equity awards of $44 million and purchase of Capped Calls of $35 million) and investing activities (including capital expenditures of $54 million).

This use of cash was funded primarily with cash on hand, operating cash flow and financing activities, which includes $340 million of proceeds from the issuance of our 2026 Senior Notes, net of financing costs.

For the year ended December 31, 2021, net cash provided by operating activities increased by $302 million when compared to the same period in 2020, primarily due to a decrease in net losses of $141 million and an increase in working capital of $227 million, primarily driven by an increase in deferred merchant payables and deferred revenue reflecting the cash received from travelers due to an increase in experiences bookings which exceeded our payments to traveler suppliers, an increase in marketing cost accruals and a decrease in income tax payments, partially offset by an increase in accounts receivable across the business, all largely reflective of the increasing consumer demand for travel activities during 2021, in addition to timing of vendor payments and collection of receivables, as well as, and to a lesser extent, a decrease in non-cash items of $66 million which was primarily due to an increase in deferred income tax benefits and a decrease in bad debt expense.

For the year ended December 31, 2021, net cash used in investing activities decreased by $2 million when compared to the same period in 2020, as capital expenditures decreased slightly as part of cost-reduction measures across the business implemented during the first half of 2020 in response to COVID-19.

For the year ended December 31, 2021, net cash provided by financing activities decreased by $78 million when compared to the same period in 2020, primarily due to cash provided from the issuance of our 2025 Senior Notes in the third quarter of 2020 of $490 million, net of financing costs, partially offset by cash used to purchase shares of our common stock under our share repurchase program of $115 million during the year ended December 31, 2020, both which did not reoccur in 2021, as contrasted to proceeds received from the issuance of our 2026 Senior Notes of $340 million in the first quarter of 2021, net of financing costs, and cash received for stock option exercises of $8 million during the year ended December 31, 2021, which was partially offset by payments of $35 million for the Capped Calls in connection with our 2026 Senior Notes, which also occurred during the first quarter of 2021, and an increase in payment of withholding taxes on net share settlements of equity awards of $23 million during the year ended December 31, 2021.

During the year ended December 31, 2022, our primary source of cash was from operations, while our primary use of cash was from financing activities (including payment of withholding taxes on net share settlements of equity awards of $20 million) and investing activities (including capital expenditures of $56 million).

This use of cash was funded with cash and cash equivalents, and operating cash flows.

Net cash provided by operating activities for the year ended December 31, 2022, increased by $292 million when compared to the same period in 2021, primarily due to a decrease in net losses of $168 million and an increase in working capital of $154 million.

The increase in working capital was driven primarily by a $64 million U.S.

federal tax refund related to the CARES Act, an increase of $42 million related to the timing of vendor payments due to increased selling and marketing costs, and to a lesser extent, an increase of $18 million in deferred merchant payables reflecting the timing of when cash was received from travelers, principally due to an increase in experiences bookings, net of cancellations, which exceeded our payments to experience operators.

These increases

were partially offset by the increase in accounts receivable related to increased billings, reflective of the increasing consumer demand for travel activities during the year, as well as, and to a lesser extent, a decrease in non-cash items of $30 million which was primarily due to a decrease in stock-based compensation expense and depreciation and amortization, partially offset by a decrease in deferred income tax benefits.

Net cash used in investing activities for the year ended December 31, 2022 decreased by $2 million when compared to the same period in 2021, as capital expenditures by the Company were materially consistent in both fiscal years.

Net cash provided by financing activities for the year ended December 31, 2022 decreased by $290 million when compared to the same period in 2021, primarily due to proceeds received from the issuance of our 2026 Senior Notes of $340 million, net of financing costs, partially offset by payments of $35 million for the Capped Calls in connection with our 2026 Senior Notes during the first quarter of 2021, both of which did not reoccur during the year ended December 31, 2022, and to a lesser extent, cash received for stock option exercises of $8 million during the year ended December 31, 2021, partially offset by a decrease in payment of withholding taxes on net share settlements of equity awards of $24 million during the year ended December 31, 2022 when compared to the same period in 2021.

The following table summarizes our current and long-term material cash requirements, both accrued and off-balance sheet, as of December 31, 2022:

7 unchanged sentences

Expected commitment fee payments on Credit Facility (7)

Purchase obligations (8)

Purchase obligations and other (8)

Total (9)(10)

(1) Represents outstanding principal on our 2025 Senior Notes due July 2025 and assumes that our existing debt is repaid at maturity.

Refer to “Note 10:

Debt ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

(2) Expected interest payments on our 2025 Senior Notes are based on a fixed interest rate of 7.0%, as of December 31, 2022 and assumes that our existing debt is repaid at maturity.

Refer to “Note 10:

Debt ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

(3) Represents outstanding principal on our 2026 Senior Notes due April 2026 and assumes that our existing debt is repaid at maturity.

Refer to “Note 10:

Debt ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

(4) Expected interest payments on our 2026 Senior Notes are based on a fixed interest rate of 0.25%, as of December 31, 2022 and assumes that our existing debt is repaid at maturity.

Refer to “Note 10:

Debt ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

(5) Estimated future lease payments for our Headquarters Lease in Needham, Massachusetts.

Refer to “Note 7:

Leases ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

These amounts exclude expected rental income under non-cancelable subleases.

(6) Estimated future lease payments for our operating leases, primarily for office space, with non-cancelable lease terms.

These amounts exclude expected rental income under non-cancelable subleases.

Refer to “Note 7:

Leases ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

(7) Expected commitment fee payments are based on the daily unused portion of the Credit Facility, issued letters of credit, and the effective commitment fee rate as of December 31, 2022;

however, these variables could change significantly in the future.

Refer to “Note 10:

Debt ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information.

(8) Estimated purchase obligations that are fixed and determinable, primarily related to telecommunication and licensing contracts, with various expiration dates through approximately June 2029.

2 unchanged sentences

(9) Excluded from the table was $204 million of unrecognized tax benefits, including interest, which is included in other long-term liabilities on our consolidated balance sheet as of December 31, 2022, for which we cannot make a reasonably reliable estimate of the amount and period of payment.

Refer to “Note 12:

Income Taxes”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further discussion.

(10) Excluded from the table w as $3 million of undrawn standby letters of credit, primarily as security deposits for certain property leases as of December 31, 2021.

As of December 31, 2021, other than the items discussed above, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC, that have, or are reasonably likely to have, a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

(10) Excluded from the table was $4 million of undrawn standby letters of credit, primarily as security deposits for certain property leases as of December 31, 2022.

As of December 31, 2022, other than the items discussed above, we did not have any off-balance sheet arrangements, that have, or are reasonably likely to have, a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Office Lease Commitments

2 unchanged sentences

We account for our Headquarters Lease as a finance lease as of December 31, 2022.

In addition to our Headquarters Lease, we also have contractual obligations in the form of operating leases for office space, in which we lease an aggregate of approximately 430,000 square feet, at approximately 35 other locations across North America, Europe, Asia Pacific and South America, in cities such as New York, London, Sydney, Barcelona, Buenos Aires, and Paris, primarily used for sales offices, subsidiary headquarters, and international management teams, pursuant to leases with various expiration dates, with the latest expiring in June 2027.

In addition to our Headquarters Lease, we have contractual obligations in the form of operating leases for office space, in which we lease an aggregate of approximately 400,000 square feet, at approximately 30 other locations across North America, Europe, Asia Pacific and South America, in cities such as New York, London, Sydney, Barcelona, Buenos Aires, and Paris, primarily used for sales offices, subsidiary headquarters, and international management teams, pursuant to leases with various expiration dates, with the latest expiring in July 2027.

Contingencies

In the ordinary course of business, we are party to regulatory and legal matters, including threats thereof, arising out of or in connection with our operations.

In the ordinary course of business, we are party to legal, regulatory and administrative matters, including threats thereof, arising out of or in connection with our operations.

These matters may involve claims involving patent and other intellectual property rights (including privacy, alleged infringement of third-party intellectual property rights), tax matters (including value-added, excise, transient occupancy and accommodation taxes), regulatory compliance (including competition, consumer matters and data privacy), defamation and reputational claims.

5 unchanged sentences

Although occasional adverse decisions or settlements may occur, we do not believe that the final disposition of any of these matters will have a material adverse effect on our business.

However, the final outcome

of these matters could vary significantly from our estimates.

However, the final outcome of these matters could vary significantly from our estimates.

Finally, there may be claims or actions pending or threatened against us of which we are currently not aware and the ultimate disposition of which could have a material adverse effect on us.

4 unchanged sentences

By virtue of consolidated income tax returns previously filed with Expedia, we are currently under an IRS audit for the 2009, 2010 and short-period 2011 tax years.

We are separately under examination by the IRS for the short-period 2011, 2012 through 2016, and 2018 tax years, and have various ongoing audits for foreign and state income tax returns.

These audits include questioning of the timing and the amount of income and deductions and the allocation of income among various tax jurisdictions.

We are separately under examination by the IRS for the 2014 through 2016, and 2018 tax years, and have various ongoing audits for foreign and state income tax returns.

These audits include questioning the timing and amount of income and deductions and the allocation of income among various tax jurisdictions.

These examinations may lead to proposed or ordinary course adjustments to our taxes.

We are no longer subject to tax examinations by tax authorities for years prior to 2009.

During June 2021, we closed an employment tax audit by the IRS for the 2015 through 2017 tax years with no material assessments.

As of December 31, 2021, no material assessments have resulted, except as noted below regarding our 2009, 2010, and 2011 IRS audit with Expedia and our 2012 through 2016 standalone IRS audit.

As of December 31, 2022, no material assessments have resulted, except as noted below regarding our 2009, 2010, and 2011 IRS audit with Expedia, our 2014 through 2016 standalone IRS audit, and our 2012 through 2016 HM Revenue & Customs (“HMRC”) audit.

In January 2017 and April 2019, as part of the IRS audit of Expedia, we received Notices of Proposed Adjustment from the IRS for the 2009, 2010, and 2011 tax years.

Subsequently, in September 2019, as part of Tripadvisor’s standalone audit, we received Notices of Proposed Adjustment from the IRS for the 2012 and 2013 tax years, and in August 2020, we received Notices of Proposed Adjustments from the IRS for the 2014, 2015 and 2016 tax years.

The estimated range takes into consideration competent authority relief and transition tax regulations, and is exclusive of deferred tax consequences and interest expense, which would be significant.

Subsequently, in August 2020, we received Notices of Proposed Adjustment from the IRS for the 2014, 2015, and 2016 tax years.

The statute of limitation of assessment for all years subject to the Notices of Proposed Adjustment outlined above remain open.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries and would result in an increase to our worldwide income tax expense, for the open tax years, in an estimated range of $85 million to $95 million at the close of the audit if the IRS prevails, which includes $20 million to $30 million related to the 2009 through 2011 pre Spin-Off tax years.

The estimated ranges take into consideration competent authority relief and transition tax regulations and is exclusive of deferred tax consequences and interest expense, which would be significant.

We disagree with the proposed adjustments, and we intend to defend our position through applicable administrative and, if necessary, judicial remedies.

1 unchanged sentence

Based on our interpretation of the regulations and available case law, we believe the position we have taken with regard to transfer pricing with our foreign subsidiaries is sustainable.

In addition to the risk of additional tax for 2009 through 2016 transactions, if the IRS were to seek transfer pricing adjustments of a similar nature for transactions in subsequent years, we would be subject to significant additional tax liabilities.

We have requested competent authority assistance under Mutual Agreement Procedure (“MAP”) for tax years 2009 through 2016.

We expect the competent authorities to present a resolution for the 2009 through 2011 tax years in the near future.

Upon receipt, we will assess the resolution provided by the competent authorities as well as its impact on our existing income tax reserves for all subsequent years which remain open.

In addition to the risk of additional tax for the open years outlined above, if the IRS were to seek transfer pricing adjustments of a similar nature for transactions in subsequent years, we would be subject to significant additional tax liabilities.

We have previously requested competent authority assistance under the MAP for open tax years 2009 through 2011 and 2014 through 2016.

In January 2023, we received a final notice regarding a MAP settlement for the 2009 through 2011 tax years, which we accepted in February 2023.

This MAP settlement supersedes the Notices of Proposed Adjustment for 2009 through 2011 from the IRS, described above.

We will review the impact of the acceptance of this settlement position to our transfer pricing income tax reserves for the subsequent tax years during the first quarter of 2023.

Based on this new information received subsequent to year end, adjustments may occur, which could be material.

In January 2021, we received an issue closure notice relating to adjustments for 2012 through 2016 tax years from HMRC.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries and would result in an increase to our worldwide income tax expense in an estimated range of $45 million to $55 million, exclusive of interest expense, at the close of the audit if HMRC prevails.

transition tax adjustments, at the close of the audit if HMRC prevails.

We disagree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies.

3 unchanged sentences

The OECD/G20 Inclusive Framework has issued various guidelines, policy notes, and proposals that if adopted could result in an overhaul of the international taxation system under which our current tax obligations are determined.

In October 2021, more than 130 countries tentatively signed on to a framework, expected to be implemented in 2023, which calls for a minimum tax rate on corporations of 15% and a reallocation of profits from the largest and most profitable businesses to countries where they make sales.

The proposed framework, once enacted, envisages new international tax rules and the removal of all digital services

In October 2021, more than 130 countries tentatively signed on to a framework, which calls for a minimum tax rate on corporations of 15% and a reallocation of profits from the largest and most profitable businesses to countries where they make sales.

The proposed framework, once enacted, envisages new international tax rules and the removal of all digital services taxes.

As this framework is subject to further negotiation and implementation by each member country, the timing and ultimate impact of any such changes on our tax obligations is uncertain.

As the OECD/G20 continues to drive toward a consensus framework, several countries which have previously enacted unilateral digital services tax initiatives, such as France, Italy, Spain, and the U.K., will continue to impose these revenue-based taxes until implementation of the consensus framework.

During the years ended December 31, 2021 and 2020, we recorded $1 million and $2 million, respectively, of digital service tax to general and administrative expense on our consolidated statement of operations.

During the years ended December 31, 2022, 2021 and 2020, we recorded $9 million, $1 million and $2 million, respectively, of digital service tax to general and administrative expense on our consolidated statement of operations.

Due to the one-time transition tax on the deemed repatriation of undistributed foreign subsidiary earnings and profits in 2017, as a result of the 2017 Tax Act, the majority of previously unremitted earnings have been subjected to U.S.

4 unchanged sentences

Income Taxes ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information on potential tax contingencies, including current audits by the IRS and various other domestic and foreign tax authorities, and other income tax and non-income tax matters.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on potential tax contingencies, including current audits by the IRS and various other domestic and foreign tax authorities, and other income tax and non-income tax matters.

Certain Relationships and Related Party Transactions

1 unchanged sentence

Related Party Transactions ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

Critical Accounting Policies and Estimates

9 unchanged sentences

Significant Accounting Policies ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for an overview of our significant accounting policies and new accounting pronouncements that we have adopted or that we plan to adopt that have had or may have an impact on our financial statements.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for an overview of our significant accounting policies and any new accounting pronouncements that we have adopted or that we plan to adopt that have had or may have an impact on our financial statements.

A discussion of information about the nature and rationale for our critical accounting estimates is below:

2 unchanged sentences

We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting.

Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted income tax rates expected to be in effect

when we realize the underlying items of income and expense.

Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted income tax rates expected to be in effect when we realize the underlying items of income and expense.

We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies.

We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized.

As of December 31, 2021, we had a valuation allowance of approximately $123 million rela ted to certain NOL carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not be realized.

As of December 31, 2022, we had a valuation allowance of approximately $114 million related to certain NOL carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not be realized.

We classify deferred tax assets and liabilities as noncurrent on our consolidated balance sheet.

2 unchanged sentences

We record liabilities to address uncertain tax positions we have taken in previously filed tax returns or that we expect to take in a future tax return.

The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that our tax position, based on technical merits, will be sustained upon examination.

The determination for required liabilities is based upon an analysis of each

individual tax position, taking into consideration whether it is more likely than not that our tax position, based on technical merits, will be sustained upon examination.

For those positions for which we conclude it is more likely than not it will be sustained, we recognize the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the taxing authority.

3 unchanged sentences

Income Taxes ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K and “Contingencies”

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K and “Contingencies”

above for further information, including certain uncertainties, estimates, and potential contingencies related to ongoing audits regarding income taxes.

2 unchanged sentences

Market risk refers to the risk of loss arising from adverse changes in stock prices, interest rates and foreign currency exchange rates.

We are exposed to market risks primarily due to our international operations, our ongoing investment and financial activities, as well as changes in economic conditions in all significant markets in which we operate which has been heightened during the COVID-19 pandemic.

The risk of loss can be assessed from the perspective of adverse changes in our future earnings, cash flows, fair values of our assets, and financial condition.

Our exposure to market risk, at any point in time, may include risk, including to any borrowings under our Credit Facility, or outstanding debt related to our 2025 Senior Notes and 2026 Senior Notes, derivative instruments, capped calls, cash and cash equivalents, short term and long term marketable securities, if any, accounts receivable, intercompany receivables/payables, accounts payable, deferred merchant payables and other balances and transactions denominated in foreign currencies.

Our exposure to market risk, at any point in time, may include risks related to any borrowings under the Credit Facility, or outstanding debt related to the 2025 Senior Notes and 2026 Senior Notes, derivative instruments, capped calls, cash and cash equivalents, short-term and long-term marketable securities, if any, accounts receivable, intercompany receivables/payables, accounts payable, deferred merchant payables and other balances and transactions denominated in foreign currencies.

We have established policies, procedures and internal processes governing our management of market risks and the use of financial instruments to manage and attempt to mitigate our exposure to such risks.

7 unchanged sentences

Our interest income and expense is most sensitive to fluctuations in U.S.

and LIBOR interest rates.

We generally invest our excess cash in bank deposits at major global

banks, money market funds, and marketable securities.

interest rates.

We generally invest our excess cash in bank deposits at major global banks, money market funds, and marketable securities.

Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements.

1 unchanged sentence

Our investment policy requires our investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss.

As of December 31, 2021 and 2020, respectively, we had no outstanding cash equivalents or marketable securities in our investment portfolio, and no outstanding borrowings under our Credit Facility.

As of December 31, 2022 and 2021, respectively, we had no outstanding marketable securities in our investment portfolio, and no outstanding borrowings under our Credit Facility.

In July 2020, we issued 2025 Senior Notes with a principal balance of $500 million at a fixed rate of 7.0% and in March 2021, we issued 2026 Senior Notes with a principal balance of $345 million at a fixed rate of 0.25%.

As of December 31, 2022, the fair value of our 2025 Senior Notes and 2026 Senior Notes were approximately $498 million and $281 million, respectively, based on recently reported market transactions and prices for identical or similar financial instruments obtained from a third-party pricing source.

Since our 2 025 Senior Notes and 2026 Senior Notes bear interest at a fixed rate, we are more sensitive to the equity market price volatility of our shares than changes in interest rates.

The fair value of the 2025 Senior Notes and 2026 Senior Notes will likely change when the market price of our stock fluctuates.

Since our 2025 Senior Notes and 2026 Senior Notes bear interest at a fixed rate, we are more sensitive to the capital market conditions of our shares than changes in interest rates.

The fair value of the 2025 Senior Notes and 2026 Senior Notes will likely change based on the capital market conditions.

Refer to “Note 4:

2 unchanged sentences

Debt ”

in the notes to our consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further information on our cash and cash equivalents, investments and other financial instruments, 2026 Senior Notes, 2025 Senior Notes and our Credit Facility.

in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on our cash and cash equivalents, investments and other financial instruments, 2026 Senior Notes, 2025 Senior Notes and our Credit Facility.

We currently do not hedge our interest rate risk;

20 unchanged sentences

on our consolidated statements of operations.

Future transactional gains and

losses are inherently difficult to predict as they are reliant on how the multiple currencies in which we transact fluctuate in relation to the U.S.

Future transactional gains and losses are inherently difficult to predict as they are reliant on how the multiple currencies in which we transact fluctuate in relation to the U.S.

dollar and other functional currencies, and the relative composition and denomination of monetary assets and liabilities each period.

9 unchanged sentences

These forward contracts were not designated as hedges and had maturities of less than 90 days.

We recognize gains and losses from forward contracts in our consolidated statement of operations and recorded net g ains of $2 million, $1 million, and $1 million for the years ended December 31, 2021, 2020 and 2019, respectively, in other income (expense), net on our consolidated statements of operations.

R efer to “Note 5:

We recognize gains and losses from forward contracts in our consolidated statement of operations upon settlement or a change in fair value, as a result, we recorded net gains of $4 million, $2 million, and $1 million for the years ended December 31, 2022, 2021 and 2020, respectively, in other income (expense), net on our consolidated statements of operations.

Refer to “Note 4:

Financial Instruments and Fair Value Measurements ”

in the notes to the consolidated financial statements in Item 8 on this Annual Report on Form 10-K for further detail on our derivative instruments.

We expect that we will increase our operations internationally as, or when, COVID-19 restrictions are fully lifted and as international markets continue to reopen.

Our exposure to potentially volatile movements in foreign currency exchange rates will increase as we begin to increase our operations in these international markets.

in the notes to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further detail on our derivative instruments.

We expect that we will continue to increase our operations internationally.

Our exposure to potentially volatile movements in foreign currency exchange rates will increase as we increase our operations in these international markets.

The economic impact to us of foreign currency exchange rate movements is linked to variability in real growth, inflation, interest rates, governmental actions, and other factors.

We continue to monitor the current economic environment, including the impact of a potential U.S.

recession and increased inflation globally, which has been heightened by the conflict between Russia and Ukraine.

These changes, if material, could cause us to adjust our foreign currency risk strategies.

For example, Brexit (pursuant to which the United Kingdom ceased to be a member of the European Union) has caused volatility in currency exchange rates, including between the U.S.

dollar and the British pound.

Although, the U.K.

finalized the terms of the departure on December 24, 2020, certain decisions still need to be made on financial services, among others, and disputes may lead to tariffs being imposed on some goods in the future.

Continued uncertainty regarding our international operations and U.K.

relations may result in future currency exchange rate volatility which may impact our business and results of operations.

In addition, the geopolitical tensions resulting from Russia’s invasion of Ukraine, including increased cyberattacks, military conflicts and sanctions, may result in additional financial volatility that may adversely affect our results of operations.

Financial Statements and Supplementary Data

35 unchanged sentences

Sufficiency of Audit Evidence over Revenue

As discussed in Notes 2 and 4 to the consolidated financial statements, and disclosed in the consolidated statements of operations, the Company had $902 million in revenue for the year ended December 31, 2021, of which $452 million was hotels related, $97 million was display and platform related, $307 million related to experiences and

dining and $46 million of other revenue.

Each of these categories of revenue has multiple revenue streams and the Company’s processes and information technology (IT) systems differ between each revenue stream.

As discussed in Notes 2 and 3 to the consolidated financial statements, and disclosed in the consolidated statements of operations, the Company had $1,492 million in revenue, net of intersegment revenue of $93 million, for the year ended December 31, 2022, of which $966 million was Tripadvisor Core related, $493 million was Viator related and $126 million was TheFork related.

Each of these categories of revenue has

multiple revenue streams and the Company’s processes and information technology (IT) systems differ between each revenue stream.

We identified the evaluation of sufficiency of audit evidence over revenue as a critical audit matter.

This matter required especially subjective auditor judgment due to the number of revenue streams and the related IT applications utilized throughout the revenue recognition processes.

Subjective auditor judgment was required to evaluate that relevant revenue data was captured and aggregated throughout these various IT applications which included the involvement of IT professionals with specialized skills and knowledge.

This matter also included determining the revenue streams over which procedures would be performed and evaluating the nature and extent of evidence obtained over each revenue stream.

Subjective auditor judgment was required to evaluate that relevant revenue data was captured and aggregated throughout these various IT applications.

This matter also included determining the revenue streams over which procedures would be performed and evaluating the nature and extent of evidence obtained over each revenue stream, both of which included the involvement of IT professionals with specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter.

18 unchanged sentences

Costs and expenses:

Cost of revenue (1)(2)

Cost of revenue (1) (exclusive of depreciation and amortization as shown separately below)

Selling and marketing (1)

15 unchanged sentences

Earnings (loss) per share attributable to common stockholders (Note 16):

Numerator used to compute net income (loss) per share attributable to common stockholders (Note 16):

Weighted average common shares outstanding (Note 16):

(1) Excludes amortization expense as follows:

Amortization of acquired technology included in

Amortization of capitalized website development costs included in

(1) Includes stock-based compensation expense as follows (Note 14):

5 unchanged sentences

TRIPADVISOR, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSI VE INCOME (LOSS)

(in millions)

21 unchanged sentences

Total current assets

Property and equipment, net (Note 6)

Property and equipment, net (Note 5, Note 6)

Operating lease right-of-use assets (Note 6)

22 unchanged sentences

Shares issued and outstanding:

0 and 0 , respectively

Common stock, $ 0.001 par value

28 unchanged sentences

Repurchase of common stock (Note 15)

Cash dividends declared to common stockholders (declared at $ 3.50 per share) (Note 16)

Common stock dividend equivalents awarded to holders of nonvested restricted stock units (Note 16)

Withholding taxes on net share settlements of equity awards

2 unchanged sentences

Net income (loss)

Cumulative effect adjustment from adoption of new accounting guidance

Other comprehensive income (loss), net of tax

Issuance of common stock related to exercise of options and vesting of RSUs

Repurchase of common stock (Note 16)

Purchase of capped calls, net of tax of $ 9 million (Note 9)

Withholding taxes on net share settlements of equity awards

4 unchanged sentences

Issuance of common stock related to exercise of options and vesting of RSUs

Purchase of capped calls, net of tax of $ 9 million (Note 10)

Withholding taxes on net share settlements of equity awards

24 unchanged sentences

Capital expenditures, including capitalized website development

Acquisitions and other investments, net of cash acquired (Note 3)

Purchases of marketable securities

Sales of marketable securities

Maturities of marketable securities

Acquisitions and other investments, net of cash acquired

Other investing activities, net

2 unchanged sentences

Repurchase of common stock (Note 15)

Payment of common stock cash dividends to stockholders (Note 16)

Proceeds from issuance of 2026 Senior Notes, net of financing costs (Note 9)

7 unchanged sentences

Payment of withholding taxes on net share settlements of equity awards

Payments of finance lease obligation (Note 7)

Payments of finance lease obligation and other financing activities, net (Note 6)

Net cash provided by (used in) financing activities

4 unchanged sentences

Supplemental disclosure of cash flow information:

Cash paid during the period for income taxes, net of refunds

Cash paid (received) during the period for income taxes, net of refunds

Cash paid during the period for interest

2 unchanged sentences

development costs (Note 14)

Equity method investment acquired for non-cash consideration (Note 5)

The accompanying notes are an integral part of these consolidated financial statements.

4 unchanged sentences

and our wholly-owned subsidiaries as “Tripadvisor,”

“Tripadvisor group,”

“the Company,”

13 unchanged sentences

As a result of the Liberty Spin-Off, effective August 27, 2014, LTRIP became a separate, publicly traded company holding 100 % of Liberty’s interest in Tripadvisor.

As a result of these transactions, and as of December 31, 2021, LTRIP beneficially owned approximately 16.4 million shares of our common stock and 12.8 million shares of our Class B common stock, which constitute approximately 13 % of the outstanding shares of common stock and 100 % of the outstanding shares of Class B common stock.

Assuming the conversion of all of LTRIP’s shares of Class B common stock into common stock, LTRIP would beneficially own approximately 21 % of the outstanding common stock.

Because each share of Class B common stock is entitled to ten votes per share and each share of common stock is entitled to one vote per share , LTRIP may be deemed to beneficially own equity securities representing nearly 57 % of our voting power.

As a result of these transactions, and as of December 31, 2022, LTRIP beneficially owned approximately 16.4 million shares of our common stock and 12.8 million shares of our Class B common stock, which constitute nearly 13 % of the outstanding shares of common stock and 100 % of the outstanding shares of Class B common stock.

Assuming the conversion of all of LTRIP’s shares of Class B common stock into common stock, LTRIP would beneficially own nearly 21 % of the outstanding common stock.

Description of Business

Our mission is to help people around the world plan, book and experience the perfect trip .

In 2000, under our flagship brand Tripadvisor, we launched www.Tripadvisor.com in the U.S.

Tripadvisor features more than 1 billion reviews and opinions on nearly 8 million hotels and other accommodations, restaurants, experiences, airlines and cruises.

In addition to the flagship Tripadvisor brand, we own and operate a portfolio of travel media brands and businesses, operating under various websites, including the following :

www.bokun.io , www.cruisecritic.com, www.flipkey.com, www.thefork.com , www.helloreco.com, www.holidaylettings.co.uk, www.housetrip.com , www.jetsetter.com, www.niumba.com, www.seatguru.com, www.singleplatform.com, www.vacationhomerentals.com, and www.viator.com .

The Tripadvisor group operates as a family of brands with a purpose of connecting people to experiences worth sharing.

Our vision is to be the world’s most trusted source for travel and experiences.

The Company operates across three reportable segments:

Tripadvisor Core, Viator, and TheFork.

Tripadvisor Core’s purpose is to empower everyone to be a better traveler by serving as the world’s most trusted and essential travel guidance platform.

The Tripadvisor brand offers travelers and experience seekers an online global platform for travelers to discover, generate, and share authentic user-generated content (“UGC”) in the form of ratings and reviews for destinations, points-of-interest (“POIs”), experiences, accommodations, restaurants, and cruises in over 40 countries and over 20 languages across the world.

As of December 31, 2022, Tripadvisor offered more than 1 billion user-generated ratings and reviews on nearly 8 million experiences, accommodations, restaurants, airlines, and cruises.

Viator enables travelers to discover and book iconic, unique and memorable experiences from experience operators around the globe.

Our online marketplace is comprehensive, connecting travelers to bookable tours, activities and attractions—consisting of over 300,000 experiences from more than 50,000 operators as of December 31, 2022.

TheFork provides an online marketplace that enables diners to discover and book online reservations at more than 55,000 restaurants in 12 countries, as of December 31, 2022, across the UK, western and central Europe, and Australia.

Risks and Uncertainties

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported in Wuhan, China, and on March 11, 2020 was declared a global pandemic.

COVID-19 has caused material and adverse declines in consumer demand within the travel, hospitality, restaurant, and leisure industry.

The pandemic’s proliferation, concurrent with travel

bans, varying levels of governmental restrictions and mandates globally to limit the spread of the virus, has dampened consumer demand for our products and services, and impacted consumer sentiment and discretionary spending patterns, all of which have adversely and materially impacted our results of operations, liquidity and financial condition during the year ended December 31, 2020, and to a lesser degree during the year ended December 31, 2021 as the travel industry experienced, albeit uneven, ongoing recovery.

In response to the COVID-19 pandemic, we took several steps to further strengthen our financial position and balance sheet including but not limited to, restructuring activities, primarily by significantly reducing our ongoing operating expenses and headcount.

COVID-19 caused material and adverse declines in consumer demand within the travel, hospitality, restaurant, and leisure industry.

The pandemic’s proliferation, concurrent with travel bans, varying levels of governmental restrictions and mandates globally to limit the spread of the virus, dampened consumer demand for our products and services, and impacted consumer sentiment and discretionary spending patterns.

Consequently, the COVID-19 pandemic adversely and materially affected our business, results of operations, liquidity and financial condition during the years ended December 31, 2021 and 2020.

In 2022, we generally experienced a travel demand recovery fueled by the continued easing of government restrictions globally and increased consumer travel demand.

During the year ended December 31, 2020, in response to the COVID-19 pandemic, we took several steps to further strengthen our financial position and balance sheet including but not limited to, restructuring activities, primarily by significantly reducing our ongoing operating expenses and headcount.

During the year ended December 31, 2020, the Company incurred total restructuring and other related reorganization costs of $ 41 million which consisted of employee severance and related benefits.

These costs were fully paid by the Company as of December 31, 2020.

In addition, in order to maintain financial liquidity and flexibility during this time period, the Company (i) borrowed $ 700 million from our Credit Facility in the first quarter of 2020 (subsequently repaid during the third quarter of 2020);

2 unchanged sentences

Debt ”.

In the fourth quarter of 2020, multiple COVID-19 vaccines were approved for widespread distribution throughout various parts of the world, including the United States and Europe, and in the first quarter of 2021, vaccination distribution programs were initiated around the world.

Vaccine programs in our largest markets, the U.S.

and Europe, appear to be progressing well, and we expect the same for much of the rest of the world.

We are encouraged by these developments;

however, while we have seen varying degrees of containment of the virus (including variants) in various countries and positive signs of growing travel demand recovery during 2021, the degree of containment and the recovery in travel has varied both region-to-region on a global basis, as well as state-to-state in the U.S.

For example, as COVID-19 cases resurged or as new variants were identified, government restrictions and mandates were reinstated in certain geographies globally during 2021.

Therefore, we continue to be subject to risks and uncertainties as a result of the COVID-19 pandemic.

The timing of widespread vaccine distributions, efficacy against any future or recent variants (e.g., Delta and Omicron) of COVID-19, whether there will be resurgences of the virus and subsequent government restrictions, the extent and effectiveness of containment actions taken, and whether consumers demand for travel and hospitality services will continue to be negatively impacted remain uncertain.

We do not know the future path or rate of global or regional COVID-19 transmission, including existing COVID-19 variants (e.g., Delta and Omicron) or future variants, if any, nor do we have visibility into when remaining or reinstated restrictions will be lifted, and where additional restrictions may be implemented or reinstated in the future due to resurgence of the virus.

Correspondingly, we still do not have forward-looking visibility into the long-term impacts related to consumer demand for travel, usage patterns on our platform, and travel behavior patterns when all travel bans and other government restrictions and mandates are fully lifted.

Therefore, the continuing extent of the impact of the COVID-19 pandemic on our business, results of operations, liquidity and financial condition remains uncertain, and is dependent on future developments that cannot be accurately predicted at this time.

We continue to believe the travel, leisure, hospitality, and restaurant industries (collectively, the “travel industry”), and our financial results, will continue to be adversely and materially affected while the pandemic continues, new variants emerge, and lingering travel bans and other government restrictions and mandates continue to remain in place or be reinstated, all of which negatively impact consumer demand, sentiment and discretionary spending patterns.

Consumers’

travel expenditures have historically followed a seasonal pattern.

Correspondingly, travel partners’

advertising investments, and therefore our revenue and operating profits, have also historically followed a seasonal pattern.

Our financial performance tends to be seasonally highest in the second and third quarters of a given year, which includes the seasonal peak in consumer demand, traveler hotel and rental stays, and travel activities and experiences taken, compared to the first and fourth quarters, which represent seasonal low points .

During the first half of the year, experience and rentals bookings typically exceed the amount of completed experiences and rental

stays, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative .

Other factors may also impact typical seasonal fluctuations, which include further significant shifts in our business mix or adverse economic conditions that could result in future seasonal patterns that are different from historical trends.

For example, due to the impact of COVID-19 on our business, we did not experience our typical seasonal pattern for revenue and operating profits during the year ended December 31, 2020.

COVID-19 contributed significantly to unfavorable working capital trends and material negative operating cash flow during the year ended December 31, 2020, most notably occurring during the first half of 2020, when we typically generate significant positive cash flow.

Although consumer demand, traveler hotel and rental stays, and travel activities and experiences taken generally remain materially lower than historic levels, these trends have improved during 2021, resulting in increased revenues, and working capital and operating cash flow more akin to typical historical seasonality trends .

However, it is difficult to predict the seasonality for 2022, given the sustained uncertainty related to the continued economic impact of the COVID-19 pandemic, and the ultimate shape and timing of a recovery in our key markets.

We may continue to be subject to risks and uncertainties related to the COVID-19 pandemic.

We believe the travel, leisure, hospitality, and restaurant industries, and our financial results, would be adversely and materially affected upon a resurgence of existing COVID-19 variants (e.g., Delta, Omicron, and BA.5) or if new variants emerge, which result in reinstated travel bans and/or other government restrictions and mandates, all of which would likely negatively impact consumer demand, sentiment and discretionary spending patterns.

Additionally, other distinct health-related events, political instability, geopolitical conflicts, acts of terrorism, fluctuations in currency values, changes in global economic conditions, including the impact of a potential U.S.

recession, and increased inflation, are examples of other events that could have a negative impact on the travel industry, and as a result, our financial results in the future.

Consumers' travel expenditures have historically followed a seasonal pattern.

Correspondingly, travel partner advertising investments, and therefore our revenue and operating profits, have also historically followed a seasonal pattern.

Our financial performance tends to be seasonally highest in the second and third quarters of a given year, which includes the seasonal peak in consumer demand, including traveler accommodation stays, and travel experiences taken, compared to the first and fourth quarters, which represent seasonal low points.

In addition, during the first half of the year, experience bookings typically exceed the amount of completed experiences, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative .

SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

All inter-company accounts and transactions have been eliminated in consolidation.

Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation.

Additionally, certain prior period amounts may have been reclassified for comparability with the current period presentation, none of which were material.

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

We believe that the assumptions underlying our consolidated financial statements are reasonable.

However, these consolidated financial statements do not present our future financial position, the results of our future operations and cash flows.

However, these consolidated financial statements do not present our future financial position, or the results of our future operations and cash flows.

One of our subsidiaries that operates in China has variable interests in affiliated entities in China in order to comply with Chinese laws and regulations, which restrict foreign investment in internet content provision businesses.

9 unchanged sentences

The significant estimate underlying our consolidated financial statements is accounting for income taxes.

The COVID-19 pandemic has created significant uncertainty in macroeconomic conditions, which may cause further business disruptions and continue to adversely and materially impact our results of operations.

As a result, some of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve and additional information becomes available, our estimates may change materially in future periods

Refer to our accounting policy for income taxes disclosed below and "Note 11:

Income Taxes " for information regarding our significant income tax estimates.

Revenue Recognition

11 unchanged sentences

We expense the costs associated with communicating the advertisements in the period in which the advertisement takes place.

We expense the production costs associated with advertisements in the period in which the advertisement first takes place.

We expense the

production costs associated with advertisements in the period in which the advertisement first takes place.

For the years ended December 31, 2022, 2021 and 2020, we recorded advertising expense of $ 572 million, $ 282 million, and $ 118 million, respectively, in selling and marketing expense on our consolidated statements of operations.

5 unchanged sentences

Stock-Based Compensation

25 unchanged sentences

At each reporting period, we reassess the probability of achieving the performance targets and the performance period required to meet those targets.

The estimation of whether the performance targets will be achieved and of the performance period required to achieve the targets requires judgment, and to the extent actual results or updated estimates differ from our current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised, or the change in estimate will be applied prospectively depending on whether the change affects the estimate of total compensation cost to be recognized or merely affects the period over which compensation cost is to be recognized.

The estimation of whether the performance targets will be achieved and the performance period required to achieve the targets requires judgment, and to the extent actual results or updated estimates differ from our current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised, or the change in estimate will be applied prospectively depending on whether the change affects the estimate of total compensation cost to be recognized or merely affects the period over which compensation cost is to be recognized.

The ultimate number of shares issued and the related compensation expense recognized will be based on a comparison of the final performance metrics to the specified targets.

5 unchanged sentences

Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value.

The Company accounts for forfeitures in the period in which they occur, rather than estimate expected forfeitures.

The Company accounts for forfeitures in the period in which they occur, rather than estimating expected forfeitures.

We record income taxes under the asset and liability method.

2 unchanged sentences

We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as

well as assessing available tax planning strategies.

We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies.

We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized.

4 unchanged sentences

Cash, Cash Equivalents and Marketable Securities

Cash, Cash Equivalents, Restricted Cash and Marketable Securities

Our cash consists of bank deposits held in global financial institutions.

Our cash equivalents generally consist of highly liquid investments, generally including money market funds, overnight demand deposits, and marketable securities, with maturities of 90 days or less at the date of purchase.

For all periods presented, our restricted cash, which primarily consists of escrowed security deposits, was not material and is included in other long-term assets on our consolidated balance sheet.

Our cash equivalents generally consist of highly liquid investments, generally including money market funds, available on demand cash deposits, term deposits, and marketable securities, with maturities of 90 days or less at the date of purchase.

For all periods presented, our restricted cash, which primarily consists of escrowed security deposits, was not material and is included in prepaid expenses and other current assets on our consolidated balance sheet.

We classify marketable securities as either short-term or long-term based on each instrument’s underlying contractual maturity date and as to whether and when we intend to sell a particular security prior to its maturity date.

14 unchanged sentences

Any portion of the unrealized loss on the available-for-sale securities that is not attributable to a credit loss would be recognized as an unrealized loss in accumulated other comprehensive income (loss) within our consolidated statements of changes in stockholders’

The Company's investment portfolio at any point in time may contain investments, including, in U.S.

The Company's investment portfolio at any point in time may contain various investments, including, in U.S.

treasury and U.S.

government agency securities, taxable and tax-exempt municipal notes, corporate notes and bonds,

commercial paper, non-U.S.

government agency securities, taxable and tax-exempt municipal notes, corporate notes and bonds, commercial paper, non-U.S.

government agency securities, overnight demand deposits, and money market funds.

8 unchanged sentences

Our customer invoices are generally due 30 days from the time of invoicing.

The Company historically recorded an allowance for doubtful accounts using the incurred loss model.

Upon adoption of ASC 326 –

Financial Instruments –

Credit Losses (“ASC 326”), the Company transitioned to the “expected credit loss”

methodology in estimating its allowance for credit losses, which the Company adopted on January 1, 2020.

The Company uses the “expected credit loss”

methodology, allowed under GAAP, in estimating its allowance for credit losses.

We apply the “expected credit loss”

1 unchanged sentence

The Company develops its expectation for future losses by assessing the profiles of its customers using their historical payment patterns, any known changes to those customers’

ability to fulfill their payment obligations, and assessing broader economic conditions that may impact our customers’

ability to fulfill their payment obligations, and assessing broader economic conditions that may

impact our customers’

ability to pay their obligations.

5 unchanged sentences

When the Company becomes aware of facts and circumstances affecting an individual customer, it also takes that specific customer information into account as part of its calculation of expected credit losses.

The Company's exposure to credit losses may increase if our customers are adversely affected by changes in macroeconomic pressures or uncertainty associated with local or global economic recessions, including the economic impact to our customers associated with COVID-19, or other customer-specific factors.

The following table presents the changes in our allowance for credit losses for the periods presented:

21 unchanged sentences

We account for non-marketable equity investments through which we exercise significant influence but do not have control over the investee under the equity method.

Under this method, the investment, originally recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the investment as they occur rather than as dividends or other distributions are received.

Under this method, the investment, originally recorded at

cost, is adjusted to recognize the Company’s share of net earnings or losses of the investment as they occur rather than as dividends or other distributions are received.

Losses are limited to the extent of the Company’s investment in, advances to and commitments for the investee.

In the event we are unable to obtain accurate financial information from the investee in a timely manner, we record our share of earnings or losses of such equity investment on a lag.

Non-marketable equity investments that are not accounted for under the equity method and that do not have a readily determinable fair value are accounted for under the measurement alternative.

Non-marketable equity investments that are not accounted for under the equity method and that do not have a readily determinable fair value are accounted for under the measurement alternative, allowed under GAAP.

Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

1 unchanged sentence

We classify our non-marketable equity investments as long-term assets on our consolidated balance sheet as those investments do not have stated contractual maturity dates.

On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether these investments are impaired.

On a quarterly basis, we perform a qualitative assessment considering impairment indicators, if any, to evaluate whether these investments are impaired.

Qualitative factors considered include industry and market conditions, financial performance, business prospects, and other relevant events and factors.

5 unchanged sentences

We account for acquired businesses using the acquisition method of accounting which requires that tangible assets and identifiable intangible assets acquired and assumed liabilities be recorded at the date of acquisition at their respective fair values.

Any excess purchase price over the estimated fair value of the net tangible and intangible

assets acquired is allocated to goodwill.

Any excess purchase price over the estimated fair value of the net tangible and intangible assets acquired is allocated to goodwill.

When determining the fair values of assets acquired and liabilities assumed, management makes estimates and assumptions, especially with respect to intangible assets.

8 unchanged sentences

We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach.

Once goodwill has been allocated to the reporting units, it no longer retains its identification with a particular acquisition and becomes identified with the reporting unit in its entirety.

Once goodwill has been allocated to the reporting units, it no longer retains its identification

with a particular acquisition and becomes identified with the reporting unit in its entirety.

Accordingly, the fair value of the reporting unit as a whole is available to support the recoverability of its goodwill.

2 unchanged sentences

Periodically, we may choose to forgo the initial qualitative assessment and proceed directly to a quantitative analysis to assist in our annual evaluation.

When assessing goodwill for impairment, our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, including, but not limited to the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments from the date of acquisition to establish an updated baseline quantitative analysis, and other performance and market indicators.

When assessing goodwill for impairment, our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, including, but not limited to the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments from the date of acquisition or to establish an updated baseline quantitative analysis, and other performance and market indicators.

During a qualitative assessment, if we determine that it is not more likely than not that the implied fair value of the goodwill is less than its carrying amount, no further testing is necessary.

3 unchanged sentences

In determining the estimated fair values of reporting units in a quantitative goodwill impairment test, we generally use a blend, of the following recognized valuation methods:

the income approach (discounted cash flows model) and the market valuation approach, which we believe compensates for the inherent risks of using either model on a stand-alone basis.

the income approach (i.e.

discounted cash flows model) and the market valuation approach, which we believe compensates for the inherent risks of using either model on a stand-alone basis.

The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future.

4 unchanged sentences

The market valuation approach indicates the fair value of the business based on a comparison to comparable publicly traded firms in similar lines of business and other precedent transactions.

Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and/or income multiples in estimating the fair value of the reporting units.

Our significant estimates in the market valuation approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and/or income multiples in estimating the fair value of the reporting units.

Valuations are performed by management or third-party valuation specialists under management's supervision, where appropriate.

1 unchanged sentence

However, such assumptions are inherently uncertain and actual results could differ from those estimates.

The use of different assumptions, estimates

or judgments could trigger the need for an impairment charge, or materially increase or decrease the amount of any such impairment charge.

The use of substantially different assumptions, estimates or judgments could trigger the need for an impairment charge, or materially increase or decrease the amount of any such impairment charge.

During the second quarter of 2022, subsequent to our annual impairment test in the fourth quarter of 2021, the composition of our reportable segments was changed, as discussed in “Note 19:

Segment and Geographic Information .”

Following the change in reportable segments, our new reporting units for the purposes of goodwill impairment testing are as follows:

(1) Tripadvisor Core, (2) Viator (formerly Experiences), and (3) TheFork.

The Tripadvisor Core reporting unit includes the operations of the following legacy reporting units (including the carrying value of their related goodwill):

Hotels, Media & Platform, Rentals, Flights & Car, Cruises, and Tripadvisor Restaurants.

As a result of this reporting unit change, we performed a qualitative assessment on our legacy reporting units prior to operationalizing the new segment reporting structure and determined that it was more likely than not that the fair value of all legacy reporting units was greater than the carrying value, which is consistent with our conclusion reached in the fourth quarter of 2021.

We then performed a goodwill impairment test for each of the three new reporting units (Tripadvisor Core, Viator, and TheFork) upon the change in reportable segments using a quantitative assessment.

We concluded the estimated fair values were significantly in excess of the carrying values for these reporting units, and therefore, no indications of impairment were identified as a result of these changes in the second quarter of 2022.

During the Company's annual goodwill impairment test in the fourth quarter of 2022, a qualitative assessment was performed for all our reporting units.

We determined that it was not more likely than not that the fair value of

any reporting unit was less than its carrying value, and, accordingly, no impairment charges were recorded during the year ended December 31, 2022.

As part of the qualitative assessment for our annual 2022 goodwill impairment analysis of our reporting units, the factors that we considered included, but were not limited to:

(a) changes in macroeconomic conditions in the overall economy and the specific markets in which we operate, (b) our ability to access capital, (c) changes in the online travel industry, (d) changes in the level of competition, (e) evaluation of current and future forecasted financial results of the reporting units, (f) comparison of our current financial performance to historical and budgeted results of the reporting units, (g) change in excess of the Company’s market capitalization over its book value, (h) changes in estimates, valuation inputs, and/or assumptions since the last quantitative analysis of the reporting units during the second quarter of 2022, (i) changes in the regulatory environment, (j) changes in strategic outlook or organizational structure and leadership of the reporting units;

and (k) other relevant factors, and how these factors might impact specific performance in future periods.

Intangible Assets

6 unchanged sentences

If, however, we determine that it is more likely than not that the implied fair value of the indefinite-lived intangible asset is less than its carrying amount, we compare the implied fair value of the indefinite-lived asset with its carrying amount.

If the carrying amount of an individual indefinite-lived intangible asset exceeds its implied fair value, the individual asset is written down by an amount equal to such excess.

If the carrying amount of an individual indefinite-lived intangible asset exceeds its implied fair value, the individual asset's carrying value is written down by an amount equal to such excess.

The assessment of qualitative factors is optional and at our discretion.

3 unchanged sentences

This method requires us to estimate future revenues, the appropriate royalty rate and the weighted average cost of capital, however, such assumptions are inherently uncertain and actual results could differ from those estimates.

The use of different assumptions, estimates or judgments could trigger the need for an impairment charge, or materially increase or decrease the amount of any such impairment charge.

The use of significantly different assumptions, estimates or judgments could trigger the need for an impairment charge, or materially increase or decrease the amount of any such impairment charge.

Impairment of Long-Lived Assets

We periodically review the carrying amount of our definite-lived intangible assets and other long-term assets, including property and equipment and capitalized website development, to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable.

We periodically review the carrying amount of our definite-lived intangible assets and other long-term assets, including property and equipment, net and operating lease right-of-use assets, to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable.

Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others.

The Company’s impairment evaluation is performed at the asset group level or the lowest level for which identified cash flows are largely independent, which the Company has defined as the reporting unit level.

If such facts indicate a potential impairment, we assess the recoverability of the asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset of the group.

If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows, using an appropriate discount rate.

Any impairment would be measured by the amount that the carrying values, of such asset groups, exceed their fair value and would be included in operating income (loss) on the consolidated statement of operations.

Any impairment would be measured by the amount that the carrying values, of such asset groups, exceed their

fair value and would be included in operating income (loss) on the consolidated statement of operations.

Considerable management judgment is necessary to estimate the fair value of asset groups.

4 unchanged sentences

We pay the operators, generally the third-party experience providers and vacation rental owners, after the travelers’

Therefore, we receive payment from the traveler prior to paying the

operator and this operating cycle represents a working capital source or use of cash to us.

Therefore, we receive payment from the traveler prior to paying the operator and this operating cycle represents a working capital source or use of cash to us.

Our deferred merchant payables balance was $ 203 million and $ 113 million at December 31, 2022 and 2021, respectively, on our consolidated balance sheets.

The increase in our deferred merchant payables during the year ended December 31, 2021 was primarily due to the ongoing recovery in the business from the impact of COVID-19 on our results of operations .

Refer to “Note 4:

Revenue Recognition ”

for further discussion of the impact COVID-19 had on our deferred merchant payables balance in our consolidated balance sheets.

The increase in our deferred merchant payables during the year ended December 31, 2022 was primarily due to increased consumer demand for travel industry related services, combined with the easing of government travel restrictions put in place due to COVID-19.

Foreign Currency Translation and Transaction Gains and Losses

Our consolidated financial statements are reported in U.S.

Certain of our subsidiaries outside of the U.S.

use the local currency as their functional currency and not the U.S.

Therefore assets and liabilities of our foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date, and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable reporting period.

The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in stockholders’

equity on our consolidated balance sheet.

In addition, our subsidiaries also engage in transactions in currencies other than its functional currency.

Transactions denominated in currencies other than the functional currency are recorded based on foreign currency exchange rates at the time such transactions arise.

Subsequent changes in foreign currency exchange rates result in transaction gains and losses which are reflected in our consolidated statements of operations as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions.

Accordingly, we have recorded net foreign currency exchange losses of $ 5 million and $ 4 million for the years ended December 31, 2022 and 2021, respectively, and a net foreign currency exchange gain of $ 5 million for the year ended December 31, 2020, in other income (expense), net on our consolidated statements of operations.

These amounts also include transaction gains and losses, both realized and unrealized from forward contracts.

Derivative Financial Instruments

12 unchanged sentences

for additional information on derivatives.

Foreign Currency Translation and Transaction Gains and Losses

Our consolidated financial statements are reported in U.S.

Certain of our subsidiaries outside of the U.S.

use the local currency as their functional currency and not the U.S.

The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in stockholders’

equity on our consolidated balance sheet.

In addition, our subsidiaries also engage in transactions in currencies other than its functional currency.

Transactions denominated in currencies other than the functional currency are recorded based on foreign currency exchange rates at the time such transactions arise.

Accordingly, we have recorded net foreign currency exchange losses of $ 4 million and $ 2 million for the years ended December 31, 2021 and 2019, respectively, and a net foreign currency exchange gain of $ 5 million for the year ended December 31, 2020, in other income (expense), net on our consolidated statements of operations.

These amounts also include transaction gains and losses, both realized and unrealized from forward contracts.

Fair Value Measurements and Disclosures

2 unchanged sentences

As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability at the measurement date.

The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on

either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

GAAP provides the following hierarchical levels of inputs used to measure fair value:

5 unchanged sentences

We defer costs we incur to issue debt, which are presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, and amortize these costs using the effective interest rate method to interest expense over the term of the debt.

We also defer costs we incur to enter into or amend a revolving credit facility, which are presented in the balance sheet as a long-term asset, and amortize these costs using the effective interest rate method to interest expense over the term of the credit facility.

We also defer costs we incur to enter into a credit facility or to amend our existing revolving credit facility, which are presented in the balance sheet as a long-term asset, and amortize these costs using the effective interest rate method to interest expense over the term of the credit facility.

Certain Risks and Concentrations

In addition to the impact of COVID-19, which is discussed in “Note 1:

Organization and Business Description”, our business is subject to certain risks and concentrations, including a concentration related to dependence on our relationships with our customers.

For the years ended December 31, 2021, 2020 and 2019 our two most significant travel partners, Expedia (and its subsidiaries) and Booking (and its subsidiaries), each accounted for 10 % or more of our consolidated revenue and together accounted for approximately 34 %, 25 % and 33 %, respectively, of our consolidated revenue, with nearly all of this revenue concentrated in our Hotels, Media & Platform segment.

Our business is subject to certain risks and concentrations, including a concentration related to dependence on our relationships with our customers.

For the years ended December 31, 2022, 2021 and 2020 our two most significant travel partners, Expedia (and its subsidiaries) and Booking (and its subsidiaries), each accounted for 10 % or more of our consolidated revenue and together accounted for approximately 35 %, 34 % and 25 %, respectively, of our consolidated revenue, with nearly all of this revenue concentrated in our Tripadvisor Core segment.

Additionally, our business is dependent on relationships with third-party service operators that we rely on to fulfill service obligations to our customers where the Company is the merchant of record, such as our experience providers and vacation rental owners.

However, no one operator’s inventory resulted in more than 10 % of our revenue on a consolidated basis in any period presented.

However, no one operator’s inventory resulted in more than 10 % of our revenue on a consolidated basis or at a reportable segment level in any period presented.

Refer to “Note 3:

2 unchanged sentences

Segment and Geographic Information ”

for information regarding concentrations related to geographic and product revenues.

Financial instruments, which potentially subject us to concentration of credit risk at any point in time, generally consist, at any point in time;

cash and cash equivalents, corporate debt securities, forward contracts, and accounts receivable.

We maintain some cash balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits.

Our cash is generally composed of available on demand bank balances with financial institutions primarily denominated in U.S.

dollars, Euros, British pounds, and Australian dollars.

We invest in highly-rated corporate debt securities, and our investment policy limits the amount of credit exposure to any one issuer, 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.

Forward contracts are transacted with major international financial institutions with high credit standings, which to date, have typically had maturities of less than 90 days .

for information regarding concentrations related to geographic and product revenues, respectively.

As of December 31, 2022 and 2021, Expedia accounted for approximately 19 % and 10 %, respectively, of our total accounts receivable and contract assets.

Our overall credit risk related to accounts receivable is mitigated by the relatively short collection period.

Financial instruments, which potentially subject us to concentration of credit risk, generally consist, at any point in time, of cash and cash equivalents, corporate debt securities, forward contracts, capped calls, and accounts receivable.

We maintain cash balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits in the U.S.

and similar programs outside the U.S.

Our cash is generally composed of available on demand bank deposits or term deposits with major global financial institutions primarily denominated in U.S.

dollars, and to a lesser extent Euros, British pounds, and Australian dollars.

We may invest in highly-rated corporate debt securities, and our investment policy limits the amount of credit exposure to any one issuer, 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.

Forward contracts and capped calls are transacted with major

international financial institutions with high credit standings.

Forward contracts, which, to date, have typically had maturities of less than 90 days , also mitigates risk.

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 statements of operations.

We provide disclosure in the notes to the consolidated 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 consolidated financial statements.

We provide disclosure in the notes to the consolidated 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 consolidated financial statements.

Significant judgment may be required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable.

12 unchanged sentences

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance which simplifies the accounting for convertible debt instruments by reducing the number of accounting models and embedded conversion features that could be recognized separately from the primary contract.

The new accounting guidance requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives.

The new accounting guidance requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments.

This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted, including adoption in any interim period.

We early adopted this new guidance in the first quarter of 2021 and there was no impact to any prior periods.

Refer to “Note 10:

Debt ”

as the Company applied this guidance to its 2026 Senior Notes.

As of December 31, 2021, there are no other newly issued accounting standards expected to have a material impact on the Company’s financial statements or disclosures.

ACQUISITIONS AND OTHER INVESTMENTS

We had no material acquisitions during the years ended December 31, 2021 and 2020, respectively.

During the year ended December 31, 2019, we acquired companies which were accounted for as purchases of businesses under the acquisition method, or GAAP.

The fair value of purchase consideration has been allocated to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values on the acquisition date, with the remaining amount recorded to goodwill.

Acquired goodwill represents the premium we paid over the fair value of the net tangible and intangible assets acquired.

We paid a premium in each of these transactions for a number of reasons, including expected operational synergies, the assembled workforces, and the future development initiatives of the assembled workforces.

The results of each of these acquired businesses have been included in the consolidated financial statements beginning on the respective acquisition dates.

Pro-forma results of operations for these acquisitions have not been presented as the financial impact to our consolidated financial statements, both individually and in aggregate, would not be materially different from historical results.

Acquisition-related costs were expensed as incurred.

For the year ended December 31, 2019, these costs were $ 2 million and are included in general and administrative expenses on our consolidated statement of operations.

2019 Acquisition of Businesses and Other Investments

During the year ended December 31, 2019, we completed three acquisitions with a total purchase price consideration of $ 109 million for 100 % ownership of the following:

(1) SinglePlatform, an online content

management and syndication platform company based in the U.S.

acquired in December 2019 , (2) BookaTable, an online restaurant reservation and booking platform company based in the U.K.

acquired in December 2019 ;

and (3) Restorando, an online restaurant reservation and booking platform company based in Argentina acquired in February 2019 .

We paid cash consideration of $ 107 million, net of $ 2 million of cash acquired.

The aggregate purchase price consideration was allocated to the fair value of assets acquired and liabilities assumed.

The following summarizes the final purchase price allocation, in millions:

Intangible assets (2)

Net tangible assets (liabilities) (3)

Total purchase price consideration

(1) Goodwill of $ 53 million is not deductible for tax purposes.

(2) Identifiable definite-lived intangible assets acquired were comprised of trade names of $ 2 million with a weighted average life of 2 years , customer lists and supplier relationships of $ 10 million with a weighted average life of 8 years , subscriber relationships of $ 6 million with a weighted average life of approximately 3 years , and technology and other of $ 8 million with a weighted average life of approximately 6 years .

The overall weighted-average life of the identifiable definite-lived intangible assets acquired in the purchase of these businesses was 6 years , and are being amortized on a straight-line basis over their estimated useful lives from acquisition date.

(3) Primarily includes cash acquired of $ 2 million, accounts receivable of $ 3 million, prepaid expenses and other current assets of $ 2 million and liabilities assumed of $ 10 million, including accounts payable, accrued expenses and other current liabilities, and deferred revenue, which reflect their respective fair values at acquisition.

During the year ended December 31, 2019, we also invested $ 2 million in the equity securities of a privately-held company.

Refer to “Note 5:

Financial Instruments and Fair Value Measurements”

for further disclosure of our non-marketable investments.

As of December 31, 2022, there are no recently issued accounting standards which are expected to have a material impact on the Company’s financial statements or disclosures.

REVENUE RECOGNITION

We generate all of our revenue from contracts with customers.

We generate all our revenue from contracts with customers.

We recognize revenue when we satisfy a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that we expect to receive in exchange for those services.

10 unchanged sentences

There was no significant revenue recognized in the years ended December 31, 2022, 2021 and 2020 related to performance obligations satisfied in prior periods, respectively.

We have applied a practical expedient and do not disclose the value of unsatisfied performance obligations that have an original expected duration of less than one year, and we do not have any material unsatisfied performance obligations over one year.

The value related to our remaining or

partially satisfied performance obligations relates to subscription services that are satisfied over time or services that are recognized at a point in time, but not yet achieved.

We have applied a practical expedient and do not disclose the

value of unsatisfied performance obligations that have an original expected duration of less than one year.

The Company expects to complete its performance obligations within one year from the initial transaction date.

The value related to our remaining or partially satisfied performance obligations relates to subscription services that are satisfied over time or services that are recognized at a point in time, but not yet achieved.

Our timing of services, invoicing and payments are discussed in more detail below and do not include a significant financing component.

5 unchanged sentences

We amortize these contract costs on a straight-line basis over the estimated customer life, which is based on historical customer retention rates.

Amortization expense recorded to selling and marketi ng expense on our consolidated statements of operations duri ng each of the years ended December 31, 2021, 2020 and 2019, were $ 1 million.

Amortization expense recorded to selling and marketing expense on our consolidated statements of operations during each of the years ended December 31, 2022, 2021 and 2020, was $ 1 million .

We assess such asset for impairment when events or circumstances indicate that the carrying amount may not be recoverabl e.

5 unchanged sentences

Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue–producing transaction, that are collected by us from a customer, are reported on a net basis, or in other words excluded from revenue on our consolidated financial statements.

The application of our revenue recognition policies and a description of our principal activities, organized by segment, from which we generate our revenue, are presented below.

Hotels, Media & Platform Segment

The application of our revenue recognition policies and a description of our principal activities, organized by reportable segment, from which we generate our revenue, are presented below.

Tripadvisor Core Segment

Tripadvisor-branded Hotels Revenue .

Our largest source of Hotels, Media & Platform segment revenue is generated from click-based advertising on Tripadvisor-branded websites, or hotel auction revenue, which is primarily comprised of contextually-relevant booking links to our travel partners’

Our click-based travel partners are predominantly OTAs and hotels.

Click-based advertising is generally priced on a cost-per-click, or “CPC”, basis, with payments from travel partners determined by the number of travelers who click on a link multiplied by the CPC rate for each specific click.

CPC rates are determined in a dynamic, competitive auction process, where our travel partner CPC bids for rates and availability to be listed on our platform are submitted.

Our largest source of Tripadvisor Core segment revenue is generated from click-based advertising on Tripadvisor-branded websites, which we refer to as our hotel meta (formerly referred to as hotel auction) revenue, which is primarily comprised of contextually-relevant booking links to our travel partners’

Our click-based travel partners are predominantly online travel agencies, or OTAs, and hotels.

Click-based advertising is generally priced on a cost-per-click, or “CPC”

basis, with payments from travel partners determined by the number of travelers who click on a link multiplied by the CPC rate for each specific click.

CPC rates are determined in a dynamic, competitive auction process, where the travel partner bids for rates and availability to be listed on our platform.

When a CPC bid is submitted, the travel partner agrees to pay us the bid amount each time a traveler clicks on the link to that travel partner’s websites.

10 unchanged sentences

CPA revenue is billable only upon the completion of each traveler’s stay resulting from a hotel reservation.

The travel partners provide the service to the travelers and we act as an agent under ASC 606 –

Revenue from Contracts with Customers (“ASC 606”).

Our performance obligation is complete at the time of the hotel reservation booking, and the commission earned is recognized upon booking, as we have no post-booking service obligations.

The travel partners provide the service to the travelers and we act as an agent under GAAP.

Our performance obligation is complete at the time of the hotel reservation booking, and the commission earned is recognized upon booking, as we have no post-booking service

We recognize this revenue net of an estimate of the impact of cancellations, using historical cancellation rates and current trends.

Contract assets are recognized at the time of booking for

commissions that are billable at the time of stay.

CPA revenue is generally billed to our travel partners on a monthly basis consistent with the timing of the service.

In addition, we offer hotel business to business (“B2B”) solutions, including subscription-based advertising to hotels, owners of B&Bs and other specialty lodging properties.

Contract assets are recognized at the time of booking for commissions that are billable upon the completion of a traveler's stay.

CPA revenue is generally billed to our travel partners monthly for traveler stays completed in that month.

In addition, we offer business-to-business (“B2B”) solutions to hotels, including subscription-based advertising to hotels, owners of B&Bs, and other specialty lodging properties.

Our performance obligation is generally to enable subscribers to advertise their businesses on our platform, as well as to manage and promote their website URL, email address, phone number, special offers and other information related to their business.

10 unchanged sentences

We record this click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner as our performance obligation is fulfilled at that time.

Hotel sponsored placements revenue is generally billed to our travel partners on a monthly basis consistent with the timing of the service.

Hotel sponsored placements revenue is generally billed to our travel partners monthly, consistent with the timing of the service.

Tripadvisor-branded Display and Platform Revenue.

We offer travel partners the ability to promote their brands through display-based advertising placements on our platform across all of our segments and business units.

We offer travel partners the ability to promote their brands through display-based advertising placements across our platform.

Our display-based advertising clients are predominantly direct suppliers of hotels, airlines and cruises, as well as destination marketing organizations.

4 unchanged sentences

We have applied the practical expedient to measure progress toward completion, as we have the right to invoice the customer in an amount that directly corresponds with the value to the customer of our performance to date, which is measured based on impressions delivered.

Experiences & Dining Segment

We provide information and services that allow travelers to research and book tours, activities and attractions in popular travel destinations in our Viator online marketplace.

We also power travel tours, activities and attractions booking capabilities to travelers on third-party distribution partner websites, including the Tripadvisor platform, and some of the world’s top airlines, hotel chains, and online and offline travel agencies.

We work with local tour, activities, and attraction operators (the “operator”) to provide travelers (the “customer”) the ability to book tours, activities and attractions (the “experience”) in destinations worldwide.

We generate commissions for each booking transaction we facilitate through our online reservation system, in exchange for certain activities, including the use of the Company’s booking platform, post-booking customer support (24/7) until the time of the experience and payment processing activities as merchant of record, which is the completion of the performance obligation.

Tripadvisor Experiences and Dining Revenue .

We generate revenue from our experiences and restaurant service offerings on Tripadvisor-branded websites and mobile apps.

Tripadvisor receives intercompany (intersegment) revenue consisting of affiliate marketing commissions earned primarily from experience bookings and, to a lesser extent, restaurant reservation bookings, on Tripadvisor-branded websites and mobile apps, fulfilled by Viator and TheFork, respectively, which are eliminated on a consolidated basis.

The performance obligations, timing of customer payments for our experiences and dining transactions, and methods of revenue recognition are consistent with the Viator and TheFork segments, as described below.

In addition, Tripadvisor restaurant service offerings, or B2B restaurants offering, generate subscription fees for subscription-based advertising to our restaurant partners that allow restaurants to manage and promote their website URL, email address, phone number, special offers and other information related to their business, as well as access to certain online reservation management services, marketing analytic tools, and menu syndication services.

As the performance obligation is to provide restaurants with access to these services over the subscription period, subscription fee revenue is recognized over the period of the subscription service on a straight-line basis as efforts are expended evenly throughout the contract period.

Subscription-based advertising services are generally billed at the inception of the service.

When prepayments are received, we recognize deferred revenue initially on our consolidated balance sheet for the amount of prepayment in excess of revenue recognized, until the performance obligation is satisfied.

In addition, we offer restaurant partners the opportunity to advertise and promote their business through restaurant media advertising placements on our platform.

This service is generally priced on a CPC basis, with payments from restaurant partners determined by the number of clicks by consumers on the sponsored link multiplied by the CPC rate for each specific click.

CPC rates for media advertising placements agreed to by our restaurant partners are based on a pre-determined

contractual rate.

We record this click-based advertising revenue as the click occurs and diner leads are sent to the restaurant partner as our performance obligation is fulfilled at that time.

Click-based revenue is generally billed to our restaurant partners monthly, consistent with the timing of the service.

Other Revenue .

We also offer travelers alternative accommodations rentals (formerly referred to as vacation rentals), cruises, flights, and rental cars solutions on our platforms which complement our end-to-end travel experience.

Our alternative accommodation rentals offering provides information and services that allow travelers to research and book vacation and short-term rental properties, including full homes, condominiums, villas, beach properties, cabins and cottages.

Our alternative accommodation rentals offering primarily generates revenue by offering individual property owners and managers the ability to list their properties on our platform thereby connecting with travelers through a free-to-list, commission-based option.

These properties are listed on our Tripadvisor-branded websites and mobile apps, and Tripadvisor's portfolio of travel media brands, including, www.flipkey.com, www.holidaylettings.co.uk, www.niumba.com, and www.vacationhomerentals.com.

We earn commissions associated with rental transactions through our free-to-list model from both the traveler and the property owner or manager.

We provide post-booking service to the travelers, property owners and managers until the time the rental commences, which is the time the performance obligation is completed.

Revenue from transaction fees is recognized at the time that the rental commences.

We act as an agent in the transactions, under GAAP, as we do not control any properties before the property owner provides the accommodation to the traveler and do not have inventory risk.

We generally collect payment from the traveler at the time of booking, representing the amount due to the property owner or manager, as well as our commission.

That portion of the payment representing our commission is recorded as deferred revenue on our consolidated balance sheet until revenue is recognized, and that portion of the payment representing the amount due to the property owner is recorded as a deferred merchant payable on our consolidated balance sheet until payment is made to the property owner after the completion of the rental.

In addition, Other Revenue includes revenue generated from cruises, flights, and rental cars offerings on Tripadvisor-branded websites and mobile apps and Tripadvisor’s portfolio of brands, which primarily includes click-based advertising and display-based advertising revenue.

The performance obligations, timing of customer payments for these offerings, and methods of revenue recognition are generally consistent with click-based advertising and display-based advertising revenue, as described above.

Viator Segment

We provide an online marketplace that allows travelers to research and book tours, activities and attractions in popular travel destinations across the globe through our stand-alone Viator-branded platform, which includes website, mobile web, and mobile app.

Through Viator, we also power traveler bookings of tours, activities and attractions on behalf of third-party distribution partner websites, including the Tripadvisor platform as well as many of the world’s major OTA, airlines, hotels, online and offline travel agencies, and other prominent content and eCommerce brands.

We work with local tour, activities, and experience operators (“operators”) to provide travelers (“customers”) the ability to book tours, activities and attractions (the “experience”) in destinations worldwide.

We generate commissions for each booking transaction we facilitate through our online reservation system, in exchange for certain activities, including the use of the Company’s booking platform, post-booking customer support (24/7) until the time of the experience and payment processing activities as the merchant of record, which is the completion of the performance obligation.

These activities are not distinct from each other and are not separate performance obligations.

As a result, the Company’s single performance obligation is to facilitate an experience, which is complete upon the time the experience occurs, and when revenue is recognized.

We do not control the experience or have inventory risk before the operator provides the experience to our customer and therefore act as agent for substantially all of these transactions under ASC 606.

We do not control the experience or have inventory risk before the operator provides the experience to our customer and therefore act as agent for substantially all of these transactions under GAAP.

We collect payment from the customer prior to the experience occurring, which includes both our commission and the amount due to the operator.

We record our commissions as deferred revenue on our

consolidated balance sheet when payment is received, including amounts which are refundable subject to cancellation, until the experience occurs when revenue is recognized.

The amount due to the operator is recorded as deferred merchant payables on our consolidated balance sheet until completion of the experience when payment is made to the operator.

To a much lesser extent, we earn commissions from third-party merchant partners (the “customer”) who display and promote on their websites the operator experiences available on our platform to generate bookings.

In these transactions, where we are not the merchant of record, and we generally invoice and receive commissions directly from the third-party merchant partners.

Our performance obligation is to allow the third-party distribution partners to display and promote on their website experiences, offered by operators who utilize our platform, and we earn a commission when travelers book and complete an experience on the third-party merchant partner website.

We do not control the service or have inventory risk, and therefore act as an agent for these transactions under ASC 606.

We receive payment shortly after the booking in the majority of these transactions and make payments to the operators after the experience is complete.

We record our commissions as deferred revenue on our consolidated balance sheet when payment is received, including amounts which are refundable subject to cancellation, until the experience occurs when revenue is recognized.

The amount due to the operator is recorded as a deferred merchant

payable on our consolidated balance sheet until completion of the experience, after which payment is made to the operator.

To a much lesser extent, we earn commissions from third-party distribution partners, in this case the customers, who display and promote on their websites the operator experiences available on our platform to generate bookings.

In these transactions, we are not the merchant of record, and we generally invoice and receive commissions directly from the third-party distribution partners.

We do not control the service or have inventory risk, and therefore act as an agent for these transactions under GAAP.

We receive payment prior to the experience date in the majority of these transactions and make payments to the operators after the experience is complete.

Our performance obligation is complete, and revenue is recognized at the time of the booking, as we have no post-booking obligations to the customer.

1 unchanged sentence

Contract assets are recognized for commissions that are contractually billable contingent upon completion of the experience.

We also provide information and services for consumers to research and book restaurant reservations in popular travel destinations through our dedicated online restaurant reservations offering, TheFork, and on our Tripadvisor-branded websites and mobile apps.

TheFork Segment

We provide information and services for consumers to research and book restaurants through our dedicated online restaurant reservations platform, TheFork.

We primarily generate transaction fees (or per seated diner fees) that are paid by our restaurant customers for diners seated primarily from bookings through TheFork’s online reservation system.

1 unchanged sentence

We invoice restaurants monthly for transaction fees.

To a lesser extent, we also generate subscription fees for subscription-based advertising to restaurants, access to certain online reservation management services, marketing analytic tools, and menu syndication services provided by TheFork and Tripadvisor.

Subscription fees are generally billable in advance of service.

When prepayments are received, we recognize deferred revenue initially on our consolidated balance sheet, for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied.

In addition, we also offer restaurant partners the opportunity to advertise and promote their business through restaurant media advertising placements on our platform.

This service is generally priced on a CPC basis, with payments from restaurant partners determined by the number of consumers who click on the sponsored link multiplied by the CPC rate for each specific click.

CPC rates for media advertising placements that our restaurant partners pay are based on a pre-determined contractual rate.

We record this click-based advertising revenue as the click occurs and diner leads are sent to the restaurant partner as our performance obligation is fulfilled at that time.

Click-based revenue is generally billed to our restaurant partners on a monthly basis consistent with the timing of the service.

We provide information and services that allow travelers to research and book vacation and short-term rental properties, including full homes, condominiums, villas, beach properties, cabins and cottages.

Our Rentals offering primarily generates revenue by offering individual property owners and managers the ability to list their properties on our platform thereby connecting with travelers through a free-to-list, commission-based option.

These properties are listed on www.flipkey.com, www.holidaylettings.co.uk, www.housetrip.com, www.niumba.com, and www.vacationhomerentals.com, and on our Tripadvisor-branded websites and mobile apps.

We earn commissions associated with rental transactions through our free-to-list model from both the traveler, and the property owner or manager.

We provide post-booking service to the travelers, property owners and managers until the time the rental commences, which is the time the performance obligation is completed.

Revenue from transaction fees is recognized at the time that the rental commences.

We act as an agent, under ASC 606, in the transactions as we do not control any properties before the property owner provides the accommodation to the traveler and do not have inventory risk.

We generally collect payment from the traveler at the time of booking, representing the amount due to the property owner or manager, as well as our commission.

That portion of the payment representing our commission is recorded as deferred revenue on our consolidated balance sheet until revenue is recognized, and that portion of the payment

representing the amount due to the property owner is recorded as deferred merchant payables on our consolidated balance sheet until payment is made to the property owner after the completion of the rental.

In addition, Other also includes revenue generated from flights, cruises, and car offerings on Tripadvisor-branded websites and mobile apps and Tripadvisor’s portfolio of travel media brands, which primarily includes click-based advertising and display-based advertising revenue.

To a lesser extent, we also generate subscription fees for providing access to certain online reservation management services, marketing analytic tools, and menu syndication services.

Our performance obligation is to provide restaurants with access to these services over the subscription period, which generally is one-month, and we recognize revenue once our performance obligation is met and invoice restaurants monthly for these subscription services.

Practical Expedients and Exemptions

3 unchanged sentences

We disaggregate revenue from contracts with customers into major products/revenue sources.

We have determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

We have determined that disaggregating revenue into these categories achieves the disclosure objective under GAAP, which is to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

As noted in “Note 19:

Segment and Geographic Information ”, our business consists of two reportable segments –

(1) Hotels, Media & Platform;

and (2) Experiences & Dining.

Other consists of a combination of business units, and does not constitute a reportable segment.

A reconciliation of disaggregated revenue to segment revenue is also included below.

Segment and Geographic Information ”

our business consists of three reportable segments –

(1) Tripadvisor Core;

and (3) TheFork.

A reconciliation of disaggregated revenue to reportable segment revenue is included below.

Year ended December 31,

1 unchanged sentence

(in millions)

Hotels, Media & Platform

Tripadvisor Core

Tripadvisor-branded hotels

Tripadvisor-branded display and platform

Total Hotels, Media & Platform

Experiences & Dining

Tripadvisor experiences and dining (2)

Total Tripadvisor Core

Intersegment eliminations (2)

Total Revenue

(1) Our revenue is recognized primarily at a point in time for all reported segments.

(2) Tripadvisor experiences and dining revenue within the Tripadvisor Core segment are shown gross of intersegment (intercompany) revenue, which is eliminated on a consolidated basis.

See “Note 19:

Segment and Geographic Information ”

for a discussion of intersegment revenue for all periods presented.

Contract Balances

7 unchanged sentences

The difference between the opening and closing balances of our contract assets primarily results from the timing difference between when we satisfy our performance obligations and the time when the principal completes the service in the transaction.

Our contract assets increased during 2021 as a result of the ongoing recovery of consumer travel demand, and increased utilization of our CPA model by travel partners.

During the year ended December 31, 2021, bad debt expense recorded to our allowance for expected credit losses on accounts receivable and contract assets decreased by $ 14 million, when compared to the same period in 2020, primarily due to improved collection trends with our customers as the travel industry recovers.

Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and ultimate severity of the impact of COVID-19, including existing variants (i.e.

Delta and Omicron) and/or new variants, if any.

Contract liabilities generally include payments received in advance of performance under the contract, and are realized as revenue as the performance obligation to the customer is satisfied, which we present as deferred revenue on our consolidated balance sheets.

As of January 1, 2022 and 2021, we had $ 36 million and $ 28 million, respectively, recorded as deferred revenue on our consolidated balance sheets, of which $ 34 million and $ 23 million, respectively, was recognized in revenue and $ 2 million and $ 4 million was refunded due to cancellations by travelers during the years ended December 31, 2022 and 2021, respectively.

1 unchanged sentence

There were no significant changes in contract assets or deferred revenue during the years ended December 31, 2022 and 2021 related to business combinations, impairments, cumulative catch-ups or other material adjustments.

However, to the extent the COVID-19 pandemic continues and/or new variants continue to emerge, we may incur additional significant and unanticipated cancellations by consumers related to future travel, accommodations and experience bookings, which have been reserved by travelers and recorded as deferred revenue on our consolidated balance sheet as of December 31, 2021 .

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

We had no financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020.

Cash, Cash Equivalents and Marketable Securities

As of December 31, 2021 and 2020, we had $ 723 million and $ 418 million of cash and cash equivalents, respectively, which consisted of available on demand cash deposits in major global financial institutions.

We had no outstanding investments classified as either short-term or long-term marketable securities as of December 31, 2021 and 2020, respectively, and no material realized gains or losses related to the sales of any marketable securities for the years ended December 31, 2021, 2020 and 2019.

As of December 31, 2022 and 2021, we had $ 1.0 billion and $ 723 million of cash and cash equivalents, respectively, which consisted of available on demand cash deposits and term deposits with maturities of 90 days or less at the date of purchase, in each case, with major global financial institutions.

We had no outstanding investments classified as either short-term or long-term marketable securities as of December 31, 2022 and 2021, respectively, and there were no purchases or sales of any marketable securities during the years ended December 31, 2022, 2021 and 2020.

The following table shows our cash equivalents, which are measured at fair value on a recurring basis and categorized using the fair value hierarchy, as well as their classification on our consolidated balance sheet as of December 31, 2022 (in millions):

Amortized Cost

Fair Value (1)

Cash Equivalents

Term deposits

(1) We did not have any unrealized gains and losses related to our cash equivalents.

We had no material financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2021.

We generally classify any existing cash equivalents and marketable securities within Level 1 and Level 2 as we value these financial instruments using quoted market prices (Level 1) or alternative pricing sources (Level 2).

4 unchanged sentences

Derivative Financial Instruments

We generally use forward contracts to reduce the effects of foreign currency exchange rate fluctuations on our cash flows primarily for the Euro versus the U.S.

We generally use forward contracts to reduce the effects of foreign currency exchange rate fluctuations on our cash flows for the Euro versus the U.S.

For the periods ended December 31, 2022, 2021 and 2020, respectively, our forward contracts have not been designated as hedges and generally had maturities of less than 90 days .

32 unchanged sentences

(2) We estimate the fair value of our outstanding 2025 Senior Notes and 2026 Senior Notes based on recently reported market transactions and/or prices for identical or similar financial instruments obtained from a third-party pricing source.

(3) Net of $ 5 million in unamortized debt issuance costs.

The Company did no t have any assets or liabilities measured at fair value on a recurring basis using Level 3 unobservable inputs at both December 31, 2021 and December 31, 2020.

(3) Net of $ 4 million and $ 5 million of unamortized debt issuance costs as of December 31, 2022 and 2021, respectively.

The Company did no t have any assets or liabilities measured at fair value on a recurring basis using Level 3 unobservable inputs at both December 31, 2022 and 2021.

Assets Measured at Fair Value on a Non-recurring Basis

10 unchanged sentences

An impairment loss, based on the excess of the carrying value over the estimated fair value of the investment based on Level 3 inputs, is recognized in earnings when an impairment is deemed to be other than temporary.

Due to the COVID-19 pandemic and ongoing operating losses, we performed a qualitative assessment to evaluate whether this equity investment is impaired as of December 31, 2021.

Due to ongoing operating losses, primarily due to the ongoing negative impact of COVID-19 in China, we performed a qualitative assessment to evaluate whether this equity investment is impaired as of December 31, 2022.

During the years ended December 31, 2022, 2021 and 2020, respectively, we did no t record any impairment loss on this equity investment.

6 unchanged sentences

As of both December 31, 2022 and 2021, the total carrying value of this investment was $ 2 million, and included in non-marketable investments on our consolidated balance sheets.

Our policy is to measure these equity investments at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer such observable price changes may include instances where the investee issues equity securities to new investors, thus creating a new indicator of fair value, as an example.

On a quarterly basis, we perform a qualitative

assessment considering impairment indicators, if any, to evaluate whether these investments are impaired and also monitor for any observable price changes.

During the years ended December 31, 2021, 2020, and 2019, we did no t record any impairment loss on our equity investments or note any observable price change indicators.

Our policy is to measure this equity investment at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer such observable price changes may include instances where the investee issues equity securities to new investors, thus creating a new indicator of fair value, as an example.

On a quarterly basis, we perform a qualitative assessment considering impairment indicators, if any, to evaluate whether this investment is impaired and monitor for any observable price changes.

During the years ended December 31, 2022, 2021 and 2020, we did no t record any impairment loss on this equity investment or note any observable price change indicators.

Other Long-Term Assets

In June 2020, the Company was issued collateralized notes (the “Notes Receivable”) with a total principal amount of $ 20 million from a privately-held company, in exchange for an existing equity investment held in the investee by the Company, and other-long term receivables, net, which the Company held due from the same investee.

The Company has classified the Notes Receivable as held-to-maturity, as the Company has concluded it has the positive intent and ability to hold the Notes Receivable until maturity, with 50 % due in 5 years and remaining 50 % due in 10 years from issuance date.

The Company has since recorded a $ 5 million and $ 3 million allowance for credit losses under ASC 326 during the years ended December 31, 2021 and 2020, respectively, in other income (expense), net on the consolidated statement of operations, related to the Notes Receivable.

As of December 31, 2021 and 2020, the carrying value of the Notes Receivable was $ 9 million and $ 14 million, respectively, net of accumulated allowance for credit losses, and is classified in other long-term assets on our consolidated balance sheet at amortized cost.

The Company has classified the Notes Receivable as held-to-maturity, as the Company has concluded it has the positive intent and ability to hold the Notes Receivable until maturity, with 50 % due in five years and remaining 50 % due in 10 years from issuance date.

The Company recorded a $ 5 million and $ 3 million allowance for credit losses under GAAP during the years ended December 31, 2021 and 2020, respectively, in other income (expense), net on the consolidated statement of operations, related to the Notes Receivable.

As of both December 31, 2022 and 2021, the carrying value of the Notes Receivable was $ 9 million, net of accumulated allowance for credit losses, and is classified in other long-term assets, net on our consolidated balance sheet at amortized cost.

On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether the Notes Receivable are impaired and monitor for changes to our allowance for credit losses.

Other non-financial assets, such as property and equipment, goodwill, intangible assets, and operating lease right-of-use assets are adjusted to fair value when an impairment charge is recognized or the underlying investment is sold.

Such fair value measurements are based predominately on Level 3 inputs.

Such fair value measurements, if necessary, are based predominately on Level 3 inputs.

Refer to “Note 5:

10 unchanged sentences

Capitalized website development

Finance lease right-of-use asset

Finance lease right-of-use asset (Note 6)

Leasehold improvements

2 unchanged sentences

accumulated depreciation

As of December 31, 2021 and December 31, 2020, the carrying value of our capitalized website development costs, net of accumulated amortization, was $ 97 million and $ 108 million, respectively.

As of December 31, 2022 and 2021, the carrying value of our capitalized website development costs, net of accumulated amortization, was $ 91 million and $ 97 million, respectively.

For the years ended December 31, 2022, 2021 and 2020, we capitalized $ 56 million, $ 55 million and $ 63 million, respectively, related to website development costs.

For the years ended December 31, 2022, 2021 and 2020, we recorded amortization of capitalized website development costs o f $ 61 m illion, $ 64 million and $ 67 million, respectively, which is included in depreciation expense on our consolidated statements of operations for those years.

During the year ended December 31, 2022, we retired and subsequently disposed of certain capitalized website development projects, which were no longer in use and fully depreciated, with a total cost of $ 22 million.

We determine whether a contract is or contains a lease at inception of a contract.

We define a lease as a contract, or part of a contract, that conveys the right to control the use of identified property or equipment (an identified asset) for a period of time in exchange for consideration.

Control over the use of the identified asset means

that we have both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.

Control over the use of the identified asset means that we have both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.

Our lease contracts contain both lease and non-lease components which we combine as a single component under our accounting policy by asset class, except for office space leases and certain other leases, such as colocation data center leases, which we account separately for the lease and non-lease components.

8 unchanged sentences

We use the portfolio approach to determine the discount rate for leases with similar characteristics or when the Company is reasonably certain that doing so would not materially affect the accounting for those leases to which a single discount rate is applied.

We establish assets and liabilities for the estimated construction costs incurred under lease arrangements where we are considered the owner for accounting purposes only, or build-to-suit leases, to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease.

involved in the construction of structural improvements or take construction risk prior to commencement of a lease.

Upon occupancy of facilities under build-to-suit leases, we assess whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance under GAAP.

If we continue to be the deemed owner, for accounting purposes, the facilities are accounted for as finance obligations.

Finance Leases

Finance lease ROU assets and finance lease liabilities are recognized at the lease commencement date or the date the lessor makes the leased asset available for use.

Finance lease ROU assets are generally amortized on a straight-line basis over the lease term, and the carrying amount of finance lease liabilities are (1) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable, and (2) reduced to reflect lease payments made during the period.

Amortization expense for finance lease ROU assets and interest accretion on finance lease liabilities are recorded to depreciation and interest expense, respectively, in our consolidated statement of operations.

We lease approximately 280,000 square feet of office space for our corporate headquarters in Needham, Massachusetts (the “Headquarters Lease”).

The Headquarters Lease has an expiration date of December 2030 , with an option to extend the lease term for two consecutive terms of five years each.

Our Headquarters Lease is accounted for as a finance lease.

Operating Leases

Our office space leases, exclusive of our Headquarters Lease, are operating leases, which we lease an aggregate of approximately 430,000 square feet at approximately 35 locations across North America, Europe, Asia Pacific and South America, in cities such as New York, London, Sydney, Barcelona, Buenos Aires and Paris, primarily used as sales offices, subsidiary headquarters, and for international operations, pursuant to leases with various expiration dates, with the latest expiring in June 2027 .

Our office space leases, exclusive of our Headquarters Lease, are operating leases, which we lease an aggregate of approximately 400,000 square feet at approximately 30 locations across North America, Europe, Asia Pacific and South America, in cities such as New York, London, Sydney, Barcelona, Buenos Aires and Paris, primarily used as sales offices, subsidiary headquarters, and for international operations, pursuant to leases with various expiration dates, with the latest expiring in July 2027 .

Operating lease ROU assets and liabilities are recognized at lease commencement date, or the date the lessor makes the leased asset available for use, based on the present value of lease payments over the lease term using the Company’s estimated incremental borrowing rate.

7 unchanged sentences

Payments under our operating leases are primarily fixed, however, certain of our operating lease agreements include rental payments which are adjusted periodically for inflation.

We recognize these costs as variable lease costs on our consolidated statement of operations, which were

not material during the years ended December 31, 2021, 2020 and 2019.

We recognize these costs as variable lease costs on our consolidated statement of operations, which were not material during the years ended December 31, 2022, 2021 and 2020.

In addition, our short-term lease costs were not material in any period presented.

1 unchanged sentence

Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs and are included in other long-term liabilities on our consolidated balance sheet.

Our asset retirement obligations were not material as of both December 31, 2021 and December 31, 2020.

Finance Lease

Finance lease ROU assets and finance lease liabilities are recognized at the lease commencement date or the date the lessor makes the leased asset available for use.

We lease approximately 280,000 square feet of office space for our corporate headquarters in Needham, Massachusetts, or Headquarters Lease.

Our Headquarters Lease, has an expiration date of December 2030 , with an option to extend the lease term for two consecutive terms of five years each.

Our Headquarters Lease was accounted for as a finance lease upon the adoption of ASC 842 on January 1, 2019.

Our asset retirement obligations were not material as of both December 31, 2022 and 2021.

Operating and finance lease assets and liabilities are included on our consolidated balance sheet as follows for the periods presented:

44 unchanged sentences

Operating leases

Finance lease (2)

(1) Amount related to 2019 includes operating leases, recognized upon adoption of ASC 842 on January 1, 2019 of $ 88 million, and those that commenced during the year ended December 31, 2019 of $ 18 million.

(2) Amount related to 2019 represents the finance lease obligation arising from obtaining the ROU asset related to our Headquarters Lease, which was recognized upon the adoption of ASC 842 on January 1, 2019.

Year ended December 31,

14 unchanged sentences

GOODWILL AND INTANGIBLE ASSETS, NET

During the Company's annual goodwill impairment test in the fourth quarter of 2021, a qualitative assessment was performed for all our reporting units.

We determined that it was not more likely than not that the fair value of any reporting unit was less than its carrying value, and, accordingly, no impairment charges were recorded during the year ended December 31, 2021.

As part of our qualitative assessment for our 2021 goodwill impairment analysis of our reporting units, the factors that we considered included, but were not limited to:

(j) changes in strategic outlook or organizational structure and leadership of the reporting units;

and (k) other relevant factors, and how these factors might impact specific performance in future periods.

Although our annual impairment testing did not result in any impairment, due to the COVID-19 environment and our inability to predict the expected duration and ultimate severity of the impact of COVID-19, or the impact of existing variants (i.e.

Delta and/or Omicron) or new variants, if any, we will continue to monitor our financial performance, stock price and other events and circumstances that may indicate a negative impact to the estimated fair values of our reporting units to determine if future impairment assessments may be necessary.

A continued and prolonged duration, and/or decline in the outlook for future revenue and cash flows or other factors, related to COVID-19 or other events, could result in a determination that a non-cash impairment adjustment is required, which could be material.

The following table summarizes our goodwill activity by reportable segment for the periods presented:

1 unchanged sentence

Experiences & Dining

Tripadvisor Core

(in millions)

Balance as of December 31, 2020

Re-allocation of goodwill (1)

Impairment (2)

Disposition (3)

Foreign currency translation adjustments

Other adjustments (4)

Balance as of December 31, 2021

Foreign currency translation adjustments

Allocation to new segments (1)

Balance as of December 31, 2022

(1) Re-allocation of goodwill as a result of changes to reporting units related to internal restructuring during the second quarter of 2020.

(2) Represents a goodwill impairment charge related to our Tripadvisor China reporting unit.

(3) Disposition relates to the sale of our SmarterTravel business.

(4) Other adjustments primarily relate to an immaterial business acquisition in our Experiences & Dining reportable segment.

(5) Other consists of the combination of Rentals, Flights & Car, and Cruises, and does not constitute a reportable segment.

During the third quarter of 2020, the Company recognized a goodwill impairment charge of $ 3 million, which represented all of the goodwill previously allocated to our Tripadvisor China reporting unit.

This impairment was driven by strategic operating decisions made by the Company in the third quarter of 2020.

Consequently, Tripadvisor China was no longer considered a reporting unit as of December 31, 2020.

There were no goodwill impairment charges recognized to our consolidated statements of operations during the years ended December 31, 2021 and 2019, respectively.

As of both December 31, 2021 and 2020, accumulated goodwill impairment losses totaled $ 3 million, which was associated with Other.

(1) Refer to “Note 19:

Segment and Geographic Information ”

for information regarding our reportable segment changes in the second quarter of 2022.

(2) Other consists of the combination of Rentals, Flights & Car, and Cruises, and did not previously constitute a reportable segment.

There were no goodwill impairment charges recognized on our consolidated statements of operations during the years ended December 31, 2022 and 2021, respectively.

Refer to “Note 2:

Significant Accounting Policies ”

for discussion regarding the Company’s 2022 interim and annual goodwill impairment assessments.

During 2020, the Company recognized a goodwill impairment charge of $ 3 million, which represented all goodwill previously allocated to our former Tripadvisor China reporting unit.

This impairment was driven by strategic operating decisions made by the Company.

As of both December 31, 2022 and 2021, accumulated goodwill impairment losses totaled $ 3 million, which was associated with the Tripadvisor Core segment as of December 31, 2022 and Other as of December 31, 2021.

Intangible assets, acquired in business combinations and recorded at fair value on the date of purchase, consisted of the following for the periods presented:

5 unchanged sentences

Amortization expense for definite-lived intangible assets was $ 13 million, $ 20 million, and $ 26 million, for the years ended December 31, 2022, 2021 and 2020, respectively.

Our indefinite-lived intangible assets relate to trade names and trademarks.

During the Company's annual indefinite-lived intangible impairment test during the fourth quarter of 2021, a qualitative assessment was performed.

Our indefinite-lived intangible assets relate to trade names and trademarks for the Tripadvisor brand.

During the Company's annual indefinite-lived intangible impairment test during the fourth quarter of 2022, a qualitative

assessment was performed.

As part of our qualitative assessment we considered, amongst other factors, the amount of excess fair value of our trade names and trademarks to the carrying value of those same assets, changes in estimates, and valuation input assumptions, since our previous quantitative analysis.

12 unchanged sentences

Technology and other

Refer to “Note 3:

Acquisitions and Other Investments ”

above for a discussion of definite lived intangible assets acquired in business combinations during the years ended December 31, 2021, 2020 and 2019.

Our definite-lived intangible assets are being amortized on a straight-line basis.

40 unchanged sentences

2025 Senior Notes

2026 Senior Notes

Total Long-Term Debt

Credit Facility

We are party to a credit agreement with a group of lenders initially entered into in June 2015 (as amended, the “Credit Agreement”), which, among other things, provides for a $ 500 million unsecured revolving credit facility (the “Credit Facility”) with a maturity date of May 12, 2024 .

We are party to a credit agreement with a group of lenders initially entered into in June 2015 (as amended, the “Credit Agreement”), which, among other things, provides for a $ 500 million secured revolving credit facility (the “Credit Facility”) with a maturity date of May 12, 2024 .

The Company may borrow from the Credit Facility in U.S.

dollars and Euros.

In addition, the Credit Facility includes $ 15 million of borrowing capacity available for letters of credit and $ 40 million for Swing Line borrowings on same-day notice.

As of December 31, 2022 and 2021, we had issued $ 4 million and $ 3 million, respectively, of undrawn standby letters of credit under the Credit Facility.

The Credit Facility, among other things, requires us to maintain a maximum leverage ratio and contains certain customary affirmative covenants and events of default, including a change of control.

We amended the Credit Facility in May 2020 and December 2020 to, among other things:

We amended the Credit Facility during 2020 to, among other things:

suspend the leverage ratio covenant for quarterly testing of compliance beginning in the second quarter of 2020, replacing it with a minimum liquidity covenant through June 30, 2021 (requiring the Company to maintain $ 150 million of unrestricted cash, cash equivalents and short-term investments less deferred merchant payables plus available revolver capacity), until the earlier of (a) the first day after June 30, 2021 through maturity on which borrowings and other revolving credit utilizations under the revolving commitments exceed $ 200 million, and (b) the election of the Company, at which time the leverage ratio covenant will be reinstated (the “Leverage Covenant Holiday”).

decrease the aggregate amount of revolving loan commitments available to $ 500 million from $ 1.2 billion;

extend the maturity date of the Credit Facility from May 12, 2022 to May 12, 2024 ;

secure the obligations under the agreement.

The Company remained in the Leverage Covenant Holiday as of December 31, 2022.

During the Leverage Covenant Holiday, any outstanding or future borrowings under the Credit Facility bear interest at LIBOR plus a 2.25 % margin with a LIBOR floor of 1 % per annum.

We are required to pay a quarterly commitment fee, at an applicable rate of 0.5 %, on the daily unused portion of the Credit Facility for each fiscal quarter during the Leverage Covenant Holiday and also additional fees in connection with the issuance of letters of credit.

The Company may borrow from the Credit Facility in U.S.

dollars and Euros.

In addition, our Credit Facility includes $ 15 million of borrowing capacity available for letters of credit and $ 40 million for Swing Line borrowings on same-day notice.

As of December 31 , 2021, we had issued $ 3 million of outstanding letters of credit under the Credit Facility.

As of both December 31, 2021 and 2020, the Company had no outstanding borrowings under the Credit Facility.

plus an applicable margin ranging from 1.25 % to 2.00 % with a London Inter-Bank Offered Rate (“LIBO rate”) floor of 1.00 % per annum;

or (ii) the Alternate Base Rate Borrowing, which is the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1.00% per annum , and (c) the Adjusted LIBO Rate (or LIBO rate multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00 % ;

in addition to an applicable margin ranging from 0.25 % to 1.00 %.

In addition, based on the Company’s existing leverage ratio

, we are required to pay a quarterly commitment fee, at an applicable rate ranging from 0.15 % to 0.30 % as of December 31, 2022, on the daily unused portion of the Credit Facility for each fiscal quarter during the Leverage Covenant Holiday and in connection with the issuance of letters of credit.

As of December 31, 2022 and 2021, the Company had no outstanding borrowings under the Credit Facility.

During the first quarter of 2020, the Company borrowed $ 700 million under the Credit Facility.

These funds were drawn down as a precautionary measure to reinforce the Company’s liquidity position and preserve financial flexibility in light of uncertainty in the global markets resulting from COVID-19.

The Company repaid these borrowings in full in July 2020.

We recorded interest and commitment fees on our Credit Facility of $ 3 million, $ 10 million and $ 2 million for the years ended December 31, 2021, 2020 and 2019, respectively, to interest expense on our consolidated statements of operations.

The Company repaid these borrowings in full during July 2020.

For the years ended December 31, 2022, 2021 and 2020, we recorded total interest expense and commitment fees on the Credit Facility of $ 1 million, $ 3 million and $ 10 million , respectively, to interest expense on our consolidated statements of operations.

In connection with the amendments to our Credit Facility in 2020, we incurred additional lender fees and debt financing costs totaling $ 7 million, which were capitalized as deferred financing costs and recorded to other long-term assets on the consolidated balance sheet, while $ 2 million of previously deferred financing costs related to the Credit Facility were immediately recognized to interest expense on our consolidated statement of operations for the year ended December 31, 2020.

As of December 31, 2021, the Company had $ 4 million remaining in deferred financing costs in connection with the Credit Facility.

As of December 31, 2022 and 2021, the Company had $ 2 million and $ 4 million, respectively, remaining in deferred financing costs in connection with the Credit Facility.

These costs will be amortized over the remaining term of the Credit Facility, using the effective interest rate method, and recorded to interest expense on our consolidated statement of operations.

2 unchanged sentences

Additionally, the Company believes that the likelihood of the lender exercising any subjective acceleration rights, which would permit the lenders to accelerate repayment of any outstanding borrowings, is remote.

As such, we classify any borrowings under this facility as long-term deb t.

As such, we classify any borrowings under this facility as long-term debt.

The Credit Agreement contains a number of covenants that, among other things, restrict our ability to incur additional indebtedness, create liens, enter into sale and leaseback transactions, engage in mergers or consolidations, sell or transfer assets, pay dividends and distributions, make investments, loans or advances, prepay certain subordinated indebtedness, make certain acquisitions, engage in certain transactions with affiliates, amend material agreements governing certain subordinated indebtedness, and change our fiscal year.

1 unchanged sentence

In addition, to secure the obligations under the Credit Agreement, the Company and certain subsidiaries have granted security interests and liens in and on substantially all of their assets as well as pledged shares of certain of the Company’s subsidiaries.

The Credit Agreement also contains certain customary affirmative covenants and events of default, including a chang e of control.

The Credit Agreement also contains certain customary affirmative covenants and events of default, including a change of control.

If an event of default occurs, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of all amounts due under the Credit Facility.

3 unchanged sentences

The 2025 Senior Notes were issued pursuant to an indenture, dated July 9, 2020 (the “2025 Indenture”), among the Company, the guarantors and the trustee.

The 2025 Indenture provides, among other things, that interest will be payable on the 2025 Senior Notes semiannually on January 15 and July 15 of each year, which began on January 15, 2021 , and continue until their maturity date of July 15, 2025 .

The 2025 Indenture provides, among other things, that interest is payable on the 2025 Senior Notes semiannually on January 15 and July 15 of each year, which began on January 15, 2021 , and continue until their maturity date of July 15, 2025 .

The 2025 Senior Notes are senior unsecured obligations of the Company and are guaranteed by certain of the Company’s domestic subsidiaries .

The Company has the option to redeem all or a portion of the 2025 Senior Notes at any time on or after July 15, 2022 at the redemption prices set forth in the 2025 Indenture, plus accrued and unpaid interest, if any.

The Company may also redeem all or any portion of the 2025 Senior Notes at any time prior to July 15, 2022, at a price equal to 100 % of the aggregate principal amount thereof plus a make-whole premium and accrued and unpaid interest, if any.

In addition, before July 15, 2022, the Company may redeem up to 40 % of the aggregate principal amount of the 2025 Senior Notes with the net proceeds of certain equity offerings at the redemption price set forth in the 2025 Indenture, provided that certain conditions are met.

Subject to certain limitations, in the event of a Change of Control Triggering Event (as defined in the 2025 Indenture), the Company will be required to make an offer to purchase the 2025 Senior Notes at a price equal to 101 % of the aggregate principal amount of the 2025 Senior Notes

repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.

principal amount of the 2025 Senior Notes repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.

These features have been evaluated as embedded derivatives under GAAP;

however, the Company has concluded they do not meet the requirements to be accounted for separately.

As of December 31, 2021 and 2020, unpaid interest on our 2025 Senior Notes totaled approximately $ 16 million and $ 17 million, respectively, and was included in accrued expenses and other current liabilities on our consolidated balance sheets, an d $ 35 million and $ 17 m illion was recorded as interest expense on our consolidated statements of operations for the years ended December 31, 2021 and 2020, respectively .

As of both December 31, 2022 and 2021, unpaid interest on our 2025 Senior Notes totaled approximately $ 16 million and was included in accrued expenses and other current liabilities on our consolidated balance sheets, an d $ 35 million, $ 35 million and $ 17 m illion was recorded as interest expense on our consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020, respectively.

In the third quarter of 2020, the Company used all proceeds from the 2025 Senior Notes to repay a portion of our Credit Facility outstanding borrowings.

9 unchanged sentences

On March 25, 2021, we entered into a purchase agreement for the sale of $ 300 million aggregate principal amount of 0.25 % Convertible 2026 Senior Notes due 2026 (the “2026 Senior Notes”) in a private offering to qualified institutional buyers.

The 2026 Senior Notes included of an over-allotment option that provided the initial purchasers of the 2026 Senior Notes with the option to purchase an additional $ 45 million aggregate principal amount of the 2026 Senior Notes;

The 2026 Senior Notes included an over-allotment option that provided the initial purchasers of the 2026 Senior Notes with the option to purchase an additional $ 45 million aggregate principal amount of the 2026 Senior Notes;

such over-allotment option was fully exercised.

3 unchanged sentences

The 2026 Senior Notes are senior unsecured obligations of the Company, although guaranteed by certain of the Company’s domestic subsidiaries, with interest payable semiannually in arrears on April 1 and October 1 of each year, which began on October 1, 2021 .

As of December 31, 2021, unpaid interest on our 2026 Senior Notes was not material.

As of December 31, 2022 and 2021, unpaid interest on our 2026 Senior Notes was not material.

The 2026 Senior Notes will be redeemable, in whole or in part, at our option at any time, and from time to time, on or after April 1, 2024 and on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2026 Senior Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice;

3 unchanged sentences

The 2026 Senior Notes are our general senior unsecured obligations and rank equally in right of payment with all of our existing and future senior indebtedness, and senior in right of payment to all of our future subordinated indebtedness.

The 2026 Senior Notes will be effectively subordinated to any of our existing and future secured indebtedness, including borrowings under our Credit Facility, to the extent of the value of the assets securing such indebtedness.

The 2026 Senior Notes will be effectively subordinated to any of our existing and future secured indebtedness, including borrowings under the Credit Facility, to the extent of the value of the assets securing such indebtedness.

Holders may convert their 2026 Senior Notes at any time prior to the close of business on the business day immediately preceding January 1, 2026, in multiples of $ 1,000 principal amount, only under the following conditions and circumstances:

10 unchanged sentences

The debt issuance costs will be amortized over the remaining term of the 2026 Senior Notes, using the effective interest rate method, and recorded to interest expense on our consolidated statement of operations.

During the year ended December 31, 2021, our effective interest rate on our 2026 Senior Notes, including debt issuance costs, was approxi mately 0.53 %, and $ 1 m illion was recorded as interest expense on our consolidated statement of operations for the year ended December 31, 2021.

During the years ended December 31, 2022 and 2021, our effective interest rate on our 2026 Senior Notes, including debt issuance costs, was approxi mately 0.47 % and 0.53 %, respectively, and $ 1 million was recorded as interest expense on our consolidated statements of operations for both the years ended December 31, 2022 and 2021.

The 2026 Senior Notes are unsecured and do not contain any financial covenants, restrictions on dividends, incurrence of senior debt or other indebtedness, or restrictions on the issuance or repurchase of securities by the Company.

8 unchanged sentences

The Capped Calls are considered indexed to our own stock and are considered equity classified under GAAP, and included as a reduction to additional paid-in-capital within stockholders’

equity on the consolidated balance sheet as of December 31, 2021.

equity on our consolidated balance sheets as of both December 31, 2022 and 2021.

The Capped Calls are not accounted for as derivatives and their fair value is not remeasured each reporting period.

In addition, we recorded a deferred tax asset of $ 9 million associated with the Capped Calls on our consolidated balance sheet as of December 31, 2021, as we made an income tax election allowable under the IRS regulations in order to recover the cost of the Capped Calls as interest expense for income tax purposes only over the term of the 2026 Senior Notes.

In addition, upon entering into the Capped Calls we recorded an associated deferred tax asset of $ 9 million, as we made an income tax election allowable under the IRS regulations in order to recover the cost of the Capped Calls as interest expense for income tax purposes only over the term of the 2026 Senior Notes.

OTHER LONG-TERM LIABILITIES

8 unchanged sentences

Income Taxes ”

for information on our unrecognized tax benefits.

for information regarding our unrecognized tax benefits.

Amounts include accrued interest related to this liability .

3 unchanged sentences

for additional information .

(3) Amount relates to the long-term portion of transition tax payable related to the 2017 Tax Act.

Refer to “Note 11:

Income Taxes ,”

for additional information.

The following table presents a summary of our domestic and foreign income (loss) before income taxes for the periods presented:

19 unchanged sentences

Tax credit carryforward

Capitalized research expenses (1)

Interest carryforward

9 unchanged sentences

Net deferred tax asset (liability)

(1) As required by the 2017 tax Cuts and Jobs Act, effective January 1, 2022, our research and development expenditures were capitalized and amortized, which resulted in a deferred tax asset.

At December 31, 2022, we had federal, state, and foreign net operating loss carryforwards (“NOLs”) of approximately $ 2 million, $ 97 million, and $ 306 million, respectively.

federal NOLs of $ 41 million may be carried forward indefinitely, and U.S.

federal NOLs of $ 2 million expire at various times starting from 2029 .

State NOLs of $ 28 million may be carried forward indefinitely, and state NOLs of $ 211 million expire at various times starting from 2023 .

Foreign NOLs of $ 317 million may be carried forward indefinitely, and foreign NOLs of $ 26 million expire at various times starting from 2022 .

As of December 31, 2021, we had a valuation allowance of approximately $ 123 million rela ted to certain NOL carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not

This amount represented an increase of $ 17 million, as compared to the balance as of December 31, 2020.

The increase was primarily related to additional foreign NOLs.

State NOLs of $ 13 million may be carried forward indefinitely, while the remaining state NOLs of $ 84 million expire at various times starting from 2024 .

Foreign NOLs of $ 302 million may be carried forward indefinitely, while the remaining foreign NOLs of $ 4 million expire at various times starting from 2023 .

As of December 31, 2022, we had a valuation allowance of approximately $ 114 million rela ted to certain NOL carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not be realized.

This amount represented a decrease of $ 9 million, as compared to the balance as of December 31, 2021.

The decrease was primarily related to a change in a deferred tax asset in our U.K.

subsidiaries.

Except for such foreign deferred tax assets, discussed above, we expect to realize all of our deferred tax assets.

During the year ended December 31, 2021, the Company performed an analysis to determine if it was more likely than not that it would be able to utilize, in future periods, the net deferred tax assets associated with its U.S.

net operating loss carryforward.

Although the U.S.

has incurred cumulative pre-tax losses in fiscal 2021 and prior two years, the Company has concluded that the positive evidence outweighs the negative evidence and, thus, that the deferred tax assets not otherwise subject to a valuation allowance are realizable on a more likely than not basis.

As such, we did not record a valuation allowance at December 31, 2021.

Positive evidence includes our strong history of earnings prior to the COVID-19 pandemic, the 2020 U.S.

taxable loss carryback as a result of the CARES Act, as well as expected future taxable income in which we believe we will utilize the deferred tax assets.

Due to the COVID-19 environment and our limited ability to predict the expected duration and ultimate severity of the impact of COVID-19, we will continue to monitor our financial performance to determine if valuation allowance against our deferred tax assets may be necessary in the future.

During the year ended December 31, 2021, we determined that $ 15 million of a deferred tax asset within our U.K.

subsidiary was more likely than not realizable, resulting in an income tax benefit in our consolidated statement of operations.

We determined that the positive evidence, principally our U.K.

subsidiaries’

forecasts of future taxable income combined with no longer incurring current interest expense in the U.K.

that will be subject to limitation, outweighed the negative evidence, resulting in the valuation allowance release.

Release of the remaining valuation allowance would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings.

The timing and amount of any potential valuation allowance release is subject to significant management judgment, as well as prospective earnings.

A reconciliation of the (benefit) provision for income taxes to the amounts computed by applying the statutory federal income tax rate to income (loss) before income taxes is as follows for the periods presented:

Due to the negative impact from COVID-19 in recent years and the continued risks and uncertainties that remain, in addition to economic uncertainty of a potential U.S.

recession and global inflationary pressures, we will continue to monitor our financial performance to determine if the valuation allowance against our deferred tax assets may be necessary in the future.

A reconciliation of the provision (benefit) for income taxes to the amounts computed by applying the statutory federal income tax rate to income (loss) before income taxes is as follows for the periods presented:

Year Ended December 31,

4 unchanged sentences

Unrecognized tax benefits and related interest

Change in cost-sharing treatment of stock-based compensation

FDII, GILTI and other provisions

Rate differential on US NOL carryback (2)

5 unchanged sentences

Provision (benefit) for income taxes

(1) During 2021, we extinguished intercompany debt which resulted in a reduction of our overall foreign rate differential.

(2) As a result of the CARES Act, an income tax benefit of $ 23 million was recorded during the year ended December 31, 2020 related to the income tax rate differential in tax years applicable to U.S.

loss carryforwards that became eligible for carryback.

(2) During 2019, we completed an intra-entity transfer from China to Singapore of certain IP.

As a result of the transfer, we utilized NOLs and consequently released the valuation allowance on certain deferred tax assets on our China entity .

The CARES Act made tax law changes to provide financial relief to companies as a result of the business impacts of COVID-19.

The CARES Act allowed the Company to carryback our U.S.

federal NOLs incurred in 2020, generating an expected U.S.

federal tax benefit of $ 76 million, of which $ 48 million will be refunded.

This refund is recorded in income taxes receivable on our consolidated balance sheet as of December 31, 2021 and is

expected to be received during 2022.

As a result of the 2020 U.S.

federal NOL carryback, we also reduced our long-term transition tax payable related to the 2017 Tax Act by $ 28 million.

In addition, certain governments have passed legislation to help businesses during the COVID-19 pandemic through loans, wage subsidies, wage tax relief or other financial aid.

Some of these governments have extended or are considering extending these programs.

We have participated in several of these programs, including the CARES Act in the U.S., the United Kingdom's job retention scheme, as well as similar programs in other jurisdictions.

In addition, in certain countries, such as within the European Union, Singapore, Australia, and other jurisdictions, we are also participating in programs where government assistance is in the form of wage subsidies and reductions in wage-related employer taxes paid by us.

During the years ended December 31, 2021 and 2020, we recognized government grants and other assistance benefits of $ 9 million and $ 12 million, respectively.

These amounts are not income tax related and were recorded as a reduction of personnel and overhead costs in the consolidated statements of operations.

federal tax benefit of $ 76 million, of which $ 64 million was refunded during the year ended December 31, 2022.

The remaining refund of $ 12 million is included in income taxes payable on our consolidated balance sheet as of December 31, 2022 and is expected to be received during the year ending December 31, 2023.

In addition, $ 25 million of this refund received was recorded to long-term taxes payable on our consolidated balance sheet as of December 31, 2022, which reflects future transition tax payments to be made by the Company related to the 2017 Tax Act.

In addition, certain governments have passed legislation to assist businesses during the COVID-19 pandemic through loans, wage subsidies, wage tax relief or other financial aid.

We participated in several of these programs, including the CARES Act in the U.S., the United Kingdom's job retention scheme, as well as similar programs in other global jurisdictions.

In addition, in certain countries, such as within the European Union, Singapore, Australia, and other global jurisdictions, we also participated in programs where government assistance was in the form of wage subsidies and reductions in wage-related employer taxes paid by us.

We recognize these government assistance benefits when there is a reasonable assurance of compliance with the conditions associated with the assistance and the amount is received.

During the years ended December 31, 2022, 2021 and 2020, we recognized government grants and other assistance benefits of $ 12 million, $ 9 million and $ 12 million , respectively.

These amounts are not income tax related and were recorded as a reduction of personnel and overhead costs within operating costs in the consolidated statements of operations.

The Company does not expect any additional future benefits of this nature.

Due to the one-time transition tax on the deemed repatriation of undistributed foreign subsidiary earnings and profits in 2017, the majority of previously unremitted earnings have been subjected to U.S.

federal income tax.

To the extent future distributions from these subsidiaries will be taxable, a deferred tax liability has been accrued which was not material as of December 31, 2021.

the extent future distributions from these subsidiaries will be taxable, a deferred tax liability has been accrued which was not material as of December 31, 2022.

As of December 31, 2022, $ 445 million of our cumulative undistributed foreign earnings were no longer considered to be indefinitely reinvested.

4 unchanged sentences

By virtue of consolidated income tax returns previously filed with Expedia, we are currently under an IRS audit for the 2009, 2010 and short-period 2011 tax years.

We are separately under examination by the IRS for the short-period 2011, 2012 through 2016, and 2018 tax years, and have various ongoing audits for foreign tax years, including a 2012 through 2016 HMRC audit, as well as state income tax audits.

These audits include questioning of the timing and the amount of income and deductions and the allocation of income among various tax jurisdictions.

We are separately under examination by the IRS for the 2014 through 2016, and 2018 tax years, and have various ongoing audits for foreign and state income tax returns.

These audits include questioning the timing and amount of income and deductions and the allocation of income among various tax jurisdictions.

These examinations may lead to proposed or ordinary course adjustments to our taxes.

We are no longer subject to tax examinations by tax authorities for years prior to 2009.

As of December 31, 2021, no material assessments have resulted, except as noted below regarding our 2009, 2010, and 2011 IRS audit with Expedia, our 2012 through 2016 standalone IRS audit, and our 2012 through 2016 HMRC audit.

In January 2017 and April 2019, as part of the IRS audit of Expedia, we received Notices of Proposed Adjustment from the IRS for the 2009, 2010, and 2011 tax years.

Subsequently, in September 2019, as part of our standalone audit, we received Notices of Proposed Adjustment from the IRS for the 2012 and 2013 tax years;

and in August 2 020, we received Notices of Proposed Adjustment from the IRS for the 2014, 2015, and 2016 tax years.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries, and would result in an increase to our worldwide income tax expense in an estimated range of $ 95 million to $ 105 million at the close of the audit if the IRS prevails, which includes $ 20 million to $ 30 million related to the 2009 through 2011 pre Spin-Off tax years.

The estimated range takes into consideration competent authority relief and transition tax regulations, and is exclusive of deferred tax consequences and interest expense, which would be significant.

We disag ree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies.

Subsequently, in August 2020, we received Notices of Proposed Adjustment from the IRS for the 2014, 2015, and 2016 tax years.

The statute of limitation of assessment for all years subject to the Notices of Proposed Adjustment outlined above remain open.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries and would result in an increase to our worldwide income tax expense, for the open tax years, in an estimated range of $ 85 million to $ 95 million at the close of the audit if the IRS prevails, which includes $ 20 million to $ 30 million related to the 2009 through 2011 pre Spin-Off tax y ears.

The estimated ranges take into consideration competent authority relief and transition tax regulations and is exclusive of deferred tax consequences and interest expense, which would be significant.

We disagree with the proposed adjustments, and we intend to defend our position through applicable administrative and, if necessary, judicial remedies.

Our policy is to review and update tax reserves as facts and circumstances change.

Based on our interpretation of the regulations and available case law, we believe the position

we have taken with regard to transfer pricing with our foreign subsidiaries is sustainable.

We have requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for tax years 2009 through 2016.

We expect the competent authorities to present a resolution for the 2009 through 2011 tax years in the near future.

Upon receipt, we will assess the resolution provided by the competent authorities as well as its impact on our existing income tax reserves for all open subsequent years.

Based on our interpretation of the regulations and available case law, we believe the position we have taken with regard to transfer pricing with our foreign subsidiaries is sustainable.

We have previously requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for open tax years 2009 through 2011 and 2014 through 2016.

We evaluated our transfer pricing reserves as of December 31, 2022, based on the facts and circumstances that existed as of the reporting date and consider them to be the Company’s best estimate as of December 31, 2022.

In January 2023, we received a final notice regarding a MAP settlement for the 2009 through 2011 tax years, which we accepted in February 2023.

In the first quarter of 2023, we will record additional income tax expense as a discrete item, inclusive of interest, in an estimated range of $ 25 million to $ 35 million specifically related to this settlement.

This MAP settlement supersedes the Notices of Proposed Adjustment for 2009 through 2011 from the IRS, described above.

We will review the impact of the acceptance of this settlement position to our transfer pricing income tax reserves for the subsequent tax years during the first quarter of 2023.

Based on this new information received subsequent to year end, adjustments may occur, which could be material.

In January 2021, we received from HMRC an issue closure notice relating to adjustments for 2012 through 2016 tax years.

8 unchanged sentences

Increases to tax positions related to the prior year

Decreases to tax positions related to the prior year

Decreases due to lapsed statute of limitations

Decreases due to tax positions related to the prior year

Settlements during current year

Balance, end of year

As of December 31, 2021, we had $ 144 million of unrecognized tax benefits, net of interest, which is classified as long-term and included in other long-term liabilities and deferred income taxes, net on our consolidated balance sheet.

As of December 31, 2022, we had $ 204 million of unrecognized tax benefits, inclusive of interest, which is classified as long-term and primarily included in other long-term liabilities on our consolidated balance sheet.

The amount of unrecognized tax benefits, if recognized, would reduce income tax expense by $ 74 million, due to correlative adjustments in other tax jurisdictions.

1 unchanged sentence

As of December 31, 2022 and 2021, total gross interest accrued was $ 47 million and $ 39 million, respectively, and was recorded in unrecognized tax benefits in other long-term liabilities on the consolidated balance sheets.

We do not anticipate any material changes in the next year.

As a result of the impact of the IRS audit described above, we anticipate a material adjustment to these reserves in 2023.

COMMITMENTS AND CONTINGENCIES

As of December 31, 2021, we have contractual obligations and commercial commitments that include expected interest on our 2026 Senior Notes and 2025 Senior Notes, expected commitment fees on our Credit Facility, and long-term purchase obligations, as summarized in the table below.

The expected amounts and timing of payments discussed below was estimated based on information available to us as of December 31, 2021.

As of December 31, 2022, we have contractual obligations and commercial commitments that include expected interest payments on our 2026 Senior Notes and 2025 Senior Notes, expected commitment fees on our Credit Facility, and non-cancellable long-term purchase obligations, as summarized in the table below.

The expected amounts and timing of payments discussed below were estimated based on information available to us as of December 31, 2022.

(in millions)

5 unchanged sentences

Refer to “Note 9:

Debt ”

for additional information on our 2025 Senior Notes.

1 unchanged sentence

Refer to “Note 9:

Debt ”

for additional information on our 2026 Senior Notes.

9 unchanged sentences

Legal Proceedings

In the ordinary course of business, we are party to regulatory and legal matters, including threats thereof, arising out of, or in connection with our operations.

In the ordinary course of business, we are party to legal, regulatory and administrative matters, including threats thereof, arising out of, or in connection with our operations.

These matters may involve claims involving intellectual property rights (including privacy, alleged infringement of third-party intellectual property rights), tax matters (including value-added, excise, transient occupancy and accommodation taxes), regulatory compliance (including competition and consumer protection matters), defamation and reputational claims, personal injury claims, labor and employment matters and commercial disputes.

28 unchanged sentences

The matching contributions portion of an employee’s account, vests after two years of service.

Additionally, at the end of the 401(k) Plan year, we make a discretionary matching

contribution to eligible participants.

Additionally, at the end of the 401(k) Plan year, we make a discretionary matching contribution to eligible participants.

This additional discretionary matching employer contribution (or “true up”) is limited to match only contributions up to 3% of eligible compensation.

1 unchanged sentence

Our contribution to the 401(k) Plan and our non-U.S.

defined contribution plans which are recorded in our consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019 were $ 10 million, $ 11 million, and $ 14 million, respectively.

Tripadvisor, Inc.

defined contribution plans which are recorded in our consolidated statements of operations

for the years ended December 31, 2022, 2021 and 2020 were $ 11 million, $ 10 million, and $ 11 million, respectively.

Deferred Compensation Plan for Non-Employee Directors

7 unchanged sentences

From the inception of the Deferred Compensation Plan through December 31, 2022, a total of 557 shares have been issued for such purpose.

Tripadvisor, Inc.

Executive Severance Plan and Summary Plan Description

5 unchanged sentences

The severance benefits provided pursuant to the Severance Plan are determined based on the job classification of the Participants (as reflected in internal job profile designations) and, in certain cases, their years of service with the Company.

During the years ended December 31, 2021 and 2020, respectively, we recognized $ 1 million and $ 5 million of expense under this plan on our consolidated statements of operations.

E xpense recorded under this plan to our consolidated statement of operations was not significant during the year ended December 31, 2019.

During the years ended December 31, 2022, 2021 and 2020, respectively, we recognized $ 1 million, $ 1 million and $ 5 million of expense under the Severance Plan on our consolidated statements of operations.

STOCK BASED AWARDS AND OTHER EQUITY INSTRUMENTS

8 unchanged sentences

Total stock-based compensation expense

Income tax benefit from stock-based compensation

Total stock-based compensation expense, net of

Income tax benefit from stock-based compensation expense

Total stock-based compensation expense, net of tax effect

We capitalized $ 10 million, $ 13 million and $ 15 million of stock-based compensation expense as website development costs during the years ended December 31, 2022, 2021 and 2020, respectively.

15 unchanged sentences

2022 Stock Option Activity

A summary of our stock option activity, consisting primarily of service-based non-qualified stock options, is presented below:

A summary of our stock option activity, consisting of service-based non-qualified stock options, is presented below:

(in thousands)

6 unchanged sentences

Vested and expected to vest after December 31, 2022 (3)

(1) Inclusive of approximately 516,000 stock options awarded to Matt Goldberg, our CEO, during July 2022.

The estimated grant-date fair value per option, using a Black-Scholes option pricing model was $ 9.23 .

These stock options shall vest over four years, with 25 % vesting on July 1, 2023 and 6.25 % of the remaining award vesting in equal quarterly installments commencing thereafter, subject to the CEO’s continuous employment with the Company.

The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through July 1, 2026 .

(2) Inclusive of approximately 10,000 stock options for the year ended December 31, 2022, which were not converted into shares due to net share settlement in order to cover the aggregate exercise price and the required amount of employee withholding taxes.

5 unchanged sentences

Our closing stock price as reported on Nasdaq as of December 31, 2022 was $ 17.98 .

The total intrinsic value of stock options exercised for the years ended December 31, 2021 and 2019 was $ 9 million and $ 2 million, respectively, and for the year ended December 31, 2020 was not material.

The total intrinsic value of stock options exercised for the year ended December 31, 2021 was $ 9 million, and for the years ended December 31, 2022 and 2020, was no t material.

The fair value of stock option grants has been estimated at the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions for the periods presented:

5 unchanged sentences

The total fair value of stock options vested for the years ended December 31, 2022, 2021 and 2020 were $ 16 million, $ 31 million, and $ 14 million, respectively.

Cash received from stock option exercises for the years ended December 31, 2021 and 2019 was $ 8 million and $ 2 million, respectively, and for the year ended December 31, 2020 was not material.

A summary of restricted stock units (“RSUs”) activity, consisting primarily of service-based vesting terms, presented below:

Cash received from stock option exercises for the year ended December 31, 2021 was $ 8 million, and for the years ended December 31, 2022 and 2020, was no t material.

2022 RSU Activity

A summary of our restricted stock units (“RSUs”) activity, consisting primarily of service-based vesting terms, is presented below:

Value Per Share

4 unchanged sentences

Unvested RSUs outstanding as of December 31, 2022 (3)

(1) Inclusive of approximately 258,000 RSUs awarded to our CEO during July 2022.

The estimated grant-date fair value per RSU, based on the quoted price of our common stock on the date of grant, was $ 18.47 .

This service-based RSU award shall vest over four years, with 25 % vesting on July 1, 2023 and 6.25 % of the remaining award vesting in equal quarterly installments commencing thereafter, subject to the CEO’s continuous employment with the Company.

The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through July 1, 2026 .

(2) Inclusive of approximately 820,000 RSUs for the year ended December 31, 2022, withheld due to net share settlement to satisfy required employee tax withholding requirements.

3 unchanged sentences

(3) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award.

On May 27, 2020 and July 15, 2020, the Compensation Committee of the Board of Directors, approved modifications to the Company’s annual RSU and stock option grants, respectively, issued to its employees in the first quarter of 2020.

O n May 27, 2020 and July 15, 2020, the Compensation Committee of the Board of Directors, approved modifications to the Company’s annual RSU and stock option grants, respectively, issued to its employees in the first quart

Such modifications reduced the original grant-date vesting period from four years to two years .

1 unchanged sentence

There was no change to the original fair value of the impacted RSUs or stock options as a result of this modification.

On December 31, 2021, the Section 16 Committee of our Board of Directors approved and granted to Stephen Kaufer, the Company’s CEO, the following:

(i) stock option to purchase 115,200 shares of common stock, which will vest and become exercisable 25 % on August 1, 2022 and the balance will vest in quarterly installments over the following three years ;

On December 31, 2021, the Section 16 Committee of our Board of Directors approved and granted to Stephen Kaufer, the Company’s CEO at the time, the following:

(i) stock option to purchase 115,200 shares of common stock, 25 % of which vested and became exercisable on August 1, 2022, while the balance vests in quarterly installments over the following three years;

with an estimated grant-date fair value per option of $ 12.59 , using a Black-Scholes option pricing model;

1 unchanged sentence

with an estimated grant-date fair value per option of $ 13.18 , using a Black-Scholes option pricing model;

and (iii) 106,382 RSUs, which will vest and settle 25 % on August 1, 2022 and the balance will vest in quarterly installments over the following three years, with an estimated grant-date fair value of $ 27.26 per RSU, ba sed on the quoted price of our common stock on the date of grant.

and (iii) 106,382 RSUs, 25 % of which vested and settled on August 1, 2022, while the balance vests in quarterly installments over the following three years, with an estimated grant-date fair value of $ 27.26 per RSU, ba sed on the quoted price of our common stock on the date of grant.

The estimated fair value of these awards totaled $ 6 million and was fully recognized as stock-based compensation expense to the consolidated statement of operations for the year ended December 31, 2021, given the Company concluded there was no substantive future requisite service condition for these awards that existed at grant date for GAAP purposes.

A summary of our MSU activity is presented below:

During the year ended December 31, 2022, the Company reversed $3 million of this previously recorded stock-based compensation expense related to these awards as the Company concluded that certain awards scheduled to vest were no longer achievable as a result of new terms executed in Mr.

Kaufer's Consulting Service Agreement entered into on May 3, 2022.

The full text of this Consulting Service Agreement is incorporated by reference in this Annual Report on Form 10-K as Exhibit 10.45.

A summary of our market-based RSUs (“MSUs”) activity is presented below:

Value Per Share

4 unchanged sentences

Unvested MSUs outstanding as of December 31, 2022

(1) MSU cancellations primarily reflect performance targets not being attained during the performance period.

(2) MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of The Nasdaq Composite Total Return Index.

Based upon actual attainment relative to the target performance metric, the grantee has the ability to receive up to 200 % of the target number of MSUs originally granted, or to receive none at all.

A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices and TSR of the Company and The Nasdaq Composite Total Return Index over the performance period, was

used to calculate the grant-date fair value of our MSU awards.

(1) Inclusive of approximately 378,000 MSUs awarded to our CEO during July 2022.

A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices was used to calculate the grant-date fair value of our MSU awards.

These MSUs shall vest on July 1, 2025, with 25 % vesting if our stock price is equal to or greater than $ 35.00 but less than $ 45.00 , 50 % if our stock price is equal to or greater than $ 45.00 but less than $ 55.00 and 100 % if our stock price is equal to or greater than $ 55.00 , subject to the CEO’s continuous employment with, or performance of services for, the Company.

The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through July 1, 2026 .

All other MSU grants during the year, to various employees, contained similar vesting and performance conditions.

(2) MSU cancellations primarily reflect performance targets not being attained by the end of the performance period.

A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices was used to calculate the grant-date fair value of our MSU awards.

The estimated grant-date fair value of these awards is amortized on a straight-line basis over the requisite service period.

11 unchanged sentences

Common stock is entitled to one vote per share and Class B common stock is entitled to 10 votes per share .

Holders of Tripadvisor common stock, acting as a single class, are entitled to elect a number of directors equal to 25 % percent of the total number of directors, rounded up to the next whole number, which was three dire ctors as of December 31, 2021.

Holders of Tripadvisor common stock, acting as a single class, are entitled to elect a number of directors equal to 25 % of the total number of directors, rounded up to the next whole number, which was three dire ctors as of December 31, 2022.

Class B common stockholders may, at any time, convert their shares into common stock, on a one for one share basis.

13 unchanged sentences

On November 1, 2019, our Board of Directors authorized the repurchase of an additional $ 100 million in shares of our common stock under our existing share repurchase program, which increased the amount available to the Company under this share repurchase program to $ 250 million.

During the years ended December 31, 2020 and 2019, we repurchased 4,707,450 and 2,059,846 shares, respectively, of our outstanding common stock at an average share price of $ 24.32 and $ 29.32 per share, exclusive of fees and commissions, respectively, or $ 115 million and $ 60 million in the aggregate, respectively.

During the year ended December 31, 2021, the Company did no t repurchase any shares of outstanding common stock under the share repurchase program.

During the year ended December 31, 2020, we repurchased 4,707,450 shares of our outstanding common stock at an average share price of $ 24.32 per share, exclusive of fees and commissions, or $ 115 million in the aggregate.

During the years ended December 31, 2022 and 2021, the Company did no t repurchase any shares of outstanding common stock under the share repurchase program.

As of December 31, 2022, we had $ 75 million remaining available to repurchase shares of our common stock under this share repurchase program, with 18,844,614 shares of the Company’s common stock held in treasury with an aggregate cost of $ 722 million.

Our Board of Directors authorized and directed management, working with the Executive Committee of our Board of Directors, to affect the share repurchase program discussed above in compliance with applicable legal requirements.

While the Board of Directors has not suspended or terminated the share repurchase program, the terms of the Credit Agreement currently limit the Company from engaging in share repurchases during the Leverage Covenant Holiday and the terms of our 2025 Indenture also imposes certain limitations and restrictions on share repurchases.

Covenant Holiday and the terms of our 2025 Indenture also imposes certain limitations and restrictions on share repurchases.

Refer to “Note 9:

1 unchanged sentence

for further information about our Credit Agreement and our 2025 Indenture.

On November 1, 2019, the Company's Board of Directors declared a special cash dividend of $ 3.50 per share, or approximately $ 488 million in the aggregate.

The dividend was payable on December 4, 2019 to stockholders of record on November 20, 2019 .

During the years ended December 31, 2022, 2021 and 2020, our Board of Directors did no t declare any dividends on our outstanding common stock.

1 unchanged sentence

Our ability to pay dividends is also limited by the terms of our Credit Agreement during the Leverage Covenant Holiday and our 2025 Indenture.

In connection with the declaration of such dividends, our non-vested RSUs were entitled to dividend equivalents, which will be payable to the holder subject to, and only upon vesting of, the underlying awards.

EARNINGS PER SHARE

5 unchanged sentences

We compute Diluted EPS by dividing net income (loss) by the sum of the weighted average number of common and common equivalent shares outstanding during the period.

We computed the weighted average number of common and common equivalent shares outstanding during the period using the sum of (i) the number of shares of common stock and Class B common stock used in the Basic EPS calculation as indicated above, and (ii) if dilutive, the incremental weighted average common stock that we would issue upon the assumed exercise of outstanding common equivalent shares, primarily related to stock options and the vesting of restricted stock units using the treasury stock method, and (iii) if dilutive, performance-based and market-based awards based on the number of shares that would be issuable as of the end of the reporting period assuming the end of the reporting period was also the end of the contingency period.

We compute the weighted average number of common and common equivalent shares outstanding during the period using the sum of (i) the number of shares of common stock and Class B common stock used in the Basic EPS calculation as indicated above, (ii) if dilutive, the incremental weighted average common stock that we would issue upon the assumed exercise of outstanding common equivalent shares, primarily related to stock options and the vesting of restricted stock units using the treasury stock method, and (iii) if dilutive, performance-based and market-based awards based on the number of shares that would be issuable as of the end of the reporting period assuming the end of the reporting period was also the end of the contingency period.

Under the treasury stock method, the assumed proceeds calculation includes the actual proceeds to be received from the employee upon exercise of outstanding equity awards and the average unrecognized compensation cost during the period.

1 unchanged sentence

In periods of net income, shares of our common stock subject to the potential conversion of the 2026 Senior Notes outstanding during the period is also included in our weighted average number of shares outstanding used to calculate Diluted EPS using the if-converted method under GAAP, as share settlement is presumed.

When the convertible notes are dilutive, interest expense, net of tax, is added back to net income attributable to common stockholders to calculate diluted net income per share.

The Capped Calls are excluded from the calculation of Diluted EPS, as they would be antidilutive.

However, upon conversion of the 2026 Senior Notes, unless the market price of our common stock exceeds the cap price, an exercise of the Capped Calls would generally offset any dilution from the 2026 Senior Notes from the conversion price up to the cap price.

As of December 31, 2021, the market price of a share of our common stock did not exceed the $ 107.36 cap price.

As of December 31, 2022 and 2021, the market price of a share of our common stock did not exceed the $ 107.36 cap price.

In periods of a net loss, common equivalent shares are excluded from the calculation of Diluted EPS as their inclusion would have an antidilutive effect.

Accordingly, for periods in which we report a net loss, such as for both the years ended December 31, 2021 and 2020, respectively, Diluted EPS is the same as Basic EPS, since dilutive common equivalent shares are not assumed to have been issued if their effect is antidilutive.

Accordingly, for periods in which we report a net loss, such as for the years ended December 31, 2021 and 2020, Diluted EPS is the same as Basic EPS, since dilutive common equivalent shares are not assumed to have been issued if their effect is antidilutive.

Below is a reconciliation of the weighted average number of shares of common stock outstanding in calculating Diluted EPS (shares in thousands and dollars in millions, except per share amounts) for the periods presented:

Year ended December 31,

Net income (loss)

Weighted average shares used to compute

Weighted average effect of dilutive

Net income (loss) used to compute Basic EPS

Interest expense on 2026 Senior Notes, net of tax

Net income (loss) used to compute Diluted EPS

Weighted average shares used to compute Basic EPS

Weighted average effect of dilutive securities:

Stock options

Weighted average shares used to compute

2026 Senior Notes (Note 9)

Weighted average shares used to compute Diluted EPS

Potential common shares, consisting of outstanding stock options, RSUs, MSUs, and those issuable under the 2026 Senior Notes, totaling approximately 11.4 million, 16.1 million, and 13.7 million, for the years ended December 31, 2022, 2021 and 2020, respectively, have been excluded from the calculations of Diluted EPS because their effect would have been antidilutive.

10 unchanged sentences

Loss on sale/disposal of business (2)

(1) Foreign currency exchange gains (losses), net, are generally related to foreign exchange transaction gains and losses due to required conversion from transaction currency to functional currency, partially offset by the foreign currency forward contract gains and losses .

(1) Foreign currency exchange gains (losses), net, are generally related to foreign exchange transaction gains and losses due to required conversion from transaction currency to functional currency, partially offset by foreign currency forward contract gains and losses .

(2) Related to loss on disposal on the sale of our SmarterTravel business during June 2020 .

16 unchanged sentences

SEGMENT AND GEOGRAPHIC INFORMATION

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 hotel auction revenue, CPA revenue, subscription-based advertising revenue, and hotel sponsored placements revenue;

and (2) Tripadvisor-branded display and platform revenue –

consisting of display-based advertising revenue.

Our Experiences & Dining reportable segment includes an aggregation of our Experiences and Dining operating segments.

All remaining business units, including Rentals, Flights & Car, and Cruises have been combined into and reported as “Other”, which does not constitute a reportable segment, as none of these businesses meet the quantitative thresholds and/or other criteria to qualify as reportable segments.

The nature of the services provided and revenue recognition policies are summarized by reported segment in “Note 4:

In the second quarter of 2022, we revised our segment reporting structure.

We now measure our business within three operating segments, which are also our reportable segments:

(1) Tripadvisor Core;

and (3) TheFork.

Our Tripadvisor Core segment includes the following revenue sources:

(1) Tripadvisor-branded hotels –

consisting of hotel meta revenue, primarily click-based advertising revenue, and hotel B2B revenue, which includes primarily subscription-based advertising and hotel sponsored placements revenue;

(2) Tripadvisor-branded display and platform revenue –

consisting primarily of display-based advertising revenue;

(3) Tripadvisor experiences and dining revenue –

consisting of intercompany (intersegment) revenue related to affiliate marketing commissions earned primarily from experience bookings, and to a lesser extent, restaurant reservation bookings on Tripadvisor-branded websites and mobile apps, fulfilled by Viator and TheFork segments, respectively, which are eliminated on a consolidated basis, in addition to external revenue generated from Tripadvisor restaurant service offerings;

and (4) Other revenue –

consisting of cruises, alternative accommodation rentals, flights, and rental cars revenue.

The nature of the services provided and related revenue recognition policies are summarized by reportable segment in “Note 3:

Revenue Recognition .”

Our operating segments are determined based on how our chief operating decision maker manages our business, regularly accesses information and evaluates performance for operating decision-making purposes, including allocation of resources.

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), 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.

All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Form 10-K.

These reclassifications had no effect on our consolidated financial statements in any period.

Our segment profit measure (Adjusted EBITDA), including its definition, and other information provided to our CODM remain consistent with prior periods, except for certain segment expense allocations, which are described below.

Our operating segments are determined based on how our CODM manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of resources.

Adjusted EBITDA is our segment profit measure and a key measure used by our CODM 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:

3 unchanged sentences

(4) stock-based compensation and other stock-settled obligations;

(5) goodwill, intangible asset, and long-lived asset impairments;

(5) goodwill, long-lived asset, and intangible asset impairments;

(6) legal reserves and settlements;

1 unchanged sentence

and (8) non-recurring expenses and income.

The following tables present our segment information for the years ended December 31, 2021, 2020 and 2019 and includes a reconciliation of Adjusted EBITDA to Net Income (Loss).

We record depreciation and amortization, stock-based compensation and other stock-settled obligations, goodwill, intangible asset and other long-lived asset impairments, legal reserves and settlements, restructuring and other related reorganization costs, and other non-recurring expenses and income, net, 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.

Direct costs are included in the applicable operating segments, including certain corporate general and administrative personnel costs, which have been allocated to each segment.

We base these allocations on time-spent analyses, headcount, and other allocation methods we believe are reasonable.

We do not allocate certain shared expenses to our reportable segments, such as certain information system costs, technical infrastructure costs, and other costs supporting the Tripadvisor platform and operations, that we do not believe are a material driver of

individual segment performance, which is consistent with the financial information viewed by our CODM.

We include these expenses in our Tripadvisor Core segment.

Our allocation methodology is periodically evaluated and may change.

The following tables present our reportable segment information for the years ended December 31, 2022, 2021 and 2020 and includes a reconciliation of Adjusted EBITDA to Net income (loss).

We record depreciation and amortization, stock-based compensation and other stock-settled obligations, goodwill, long-lived asset and intangible asset impairments, legal reserves and settlements, restructuring and other related reorganization costs, and other non-recurring expenses and income, net, which are excluded from segment operating performance, in Corporate and Eliminations.

In addition, we do not report total assets, capital expenditures and related depreciation expense by segment as our CODM does not use this information to evaluate operating segment performance.

Accordingly, we do not regularly provide such information by segment to our CODM.

Intersegment revenue is not material and is included and eliminated in Other.

Our segment disclosure includes intersegment revenues, which consist of affiliate marketing fees for services provided by our Tripadvisor Core segment to both our Viator and TheFork segments.

These intersegment transactions are recorded by each segment at amounts that we believe approximate fair value as if the transactions were between third parties and, therefore, impact se gment performance.

However, the revenue and corresponding expense are eliminated in consolidation.

The elimination of such intersegment transactions is included within Corporate and Eliminations in the table below.

Year ended December 31, 2022

Hotels, Media

& Platform (1)

Tripadvisor Core (1)

(in millions)

External revenue

Intersegment revenue

Total Revenue

Adjusted EBITDA

1 unchanged sentence

Stock-based compensation

Legal reserves and settlements

Non-recurring expenses (income) (4)

Operating income (loss)

4 unchanged sentences

Year ended December 31, 2021

Hotels, Media

& Platform (1)

Tripadvisor Core (1)

(in millions)

External revenue

Intersegment revenue

Total Revenue

Adjusted EBITDA

1 unchanged sentence

Stock-based compensation

Restructuring and other related reorganization costs

Impairment of goodwill

Operating income (loss)

4 unchanged sentences

Year ended December 31, 2020

Hotels, Media

& Platform (1)

Tripadvisor Core (1)

(in millions)

External revenue

Intersegment revenue

Total Revenue

Adjusted EBITDA

2 unchanged sentences

Restructuring and other related reorganization costs

Impairment of goodwill

Operating income (loss)

3 unchanged sentences

Net income (loss)

(1) Includes allocated corporate general and administrative costs of $ 74 million, $ 70 million and $ 69 million and Tripadvisor-branded advertising expenses of $ 5 million, $ 10 million and $ 77 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Tripadvisor-branded advertising expenses have decreased significantly since the year ended December 31, 2019, as the Company shifted from television advertising to leverage other advertising mediums.

(1) Corporate general and administrative personnel cost s of $ 5 million, $ 6 million and $ 4 million for the years ended December 31, 2022, 2021 and 2020, respectively, were allocated to the Viator and TheFork segments.

(2) Includes allocated corporate general and administrative personnel costs from our Tripadvisor Core segment of $ 2 million, $ 3 million and $ 2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

(3) Includes allocated corporate general and administrative personnel costs from our Tripadvisor Core segment of $ 3 million, $ 3 million and $ 2 million for the years ended December 31, 2022, 2021 and 2020, respectively .

(4) The Company incurred a loss of approximately $8 million during the fourth quarter of 2022, as the result of external fraud.

This loss was recorded to general and administrative expenses on the consolidated statement of operations for December 31, 2022.

The Company considers such costs to be non-recurring in nature.

To the extent the Company recovers any losses in future periods related to this incident, the Company plans to reduce Adjusted EBITDA by the recovery amount in that same period.

Product and Geographic Information

Our revenue sources within our Hotels, Media & Platform segment, including Tripadvisor-branded hotels revenue and Tripadvisor-branded display and platform revenue;

which along with our Experience & Dining and Other revenue sources, comprise our products.

Our revenue sources within our Tripadvisor Core segment, including Tripadvisor-branded hotels revenue, Tripadvisor-branded display and platform revenue, Tripadvisor experiences and dining revenue, and Other revenue;

which along with the Viator and TheFork revenue sources, comprise our products.

Refer to “Note 3:

22 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity