Segment Information

12 Months Ended

Dec. 31, 2014

Segment Information

NOTE 19 — Segment Information

We have two reportable segments: Leisure and Egencia. Our Leisure segment, which consists of the aggregation of operating segments, provides a full range of travel and advertising services to our worldwide customers through a variety of brands including: Expedia.com and Hotels.com in the United States and localized Expedia and Hotels.com websites throughout the world, Expedia Affiliate Network, Hotwire.com, Venere, eLong, trivago, Wotif Group and Classic Vacations. Our Egencia segment provides managed travel services to corporate customers in North America, Europe, and the Asia Pacific region.

We determined our operating segments based on how our chief operating decision makers manage our business, make operating decisions and evaluate operating performance. Our primary operating metric is adjusted EBITDA. Adjusted EBITDA for our Leisure and Egencia segments includes allocations of certain expenses, primarily cost of revenue and facilities, and our Leisure segment includes the total costs of our global supply organizations as well as the realized foreign currency gains or losses related to the forward contracts hedging a component of our net merchant hotel revenue. We base the allocations primarily on transaction volumes and other usage metrics. We do not allocate certain shared expenses such as accounting, human resources, information technology and legal to our reportable segments. We include these expenses in Corporate. Our allocation methodology is periodically evaluated and may change.

Corporate also includes unallocated corporate functions and expenses. In addition, we record amortization of intangible assets and any related impairment, as well as stock-based compensation expense, restructuring and related reorganization charges, legal reserves, occupancy tax and other, and other items excluded from segment operating performance in Corporate. Such amounts are detailed in our segment reconciliation below.

The following tables present our segment information for the years ended December 31, 2014, 2013 and 2012. As a significant portion of our property and equipment is not allocated to our operating segments and depreciation is not included in our segment measure, we do not report the assets by segment as it would not be meaningful. We do not regularly provide such information to our chief operating decision makers.

	Year ended December 31, 2014
	Leisure			Egencia			Corporate			Total
	(In thousands)
Revenue	$	5,363,781		$	399,704		$	—		$	5,763,485
Adjusted EBITDA	$	1,363,944		$	59,777		$	(398,933	)	$	1,024,788
Depreciation		(136,121	)		(18,876	)		(110,820	)		(265,817	)
Amortization of intangible assets		—			—			(79,615	)		(79,615	)
Stock-based compensation		—			—			(85,011	)		(85,011	)
Legal reserves, occupancy tax and other		—			—			(41,539	)		(41,539	)
Restructuring and related reorganization charges								(25,630	)		(25,630	)
Realized gain on revenue hedges		(9,412	)		—			—			(9,412	)
Operating income (loss)	$	1,218,411		$	40,901		$	(741,548	)		517,764
Other expense, net											(53,123	)
Income from continuing operations before income taxes											464,641
Provision for income taxes											(91,691	)
Net income											372,950
Net loss attributable to noncontrolling interests											25,147
Net income attributable to Expedia, Inc.										$	398,097

	Year ended December 31, 2013
	Leisure			Egencia			Corporate			Total
	(In thousands)
Revenue	$	4,406,336		$	364,923		$	—		$	4,771,259
Adjusted EBITDA	$	1,177,298		$	58,953		$	(357,528	)	$	878,723
Depreciation		(104,632	)		(14,949	)		(92,163	)		(211,744	)
Amortization of intangible assets		—			—			(71,731	)		(71,731	)
Stock-based compensation		—			—			(130,173	)		(130,173	)
Acquisition-related and other		—			—			(9,829	)		(9,829	)
Legal reserves, occupancy tax and other		—			—			(77,919	)		(77,919	)
Realized gain on revenue hedges		(11,267	)		—			—			(11,267	)
Operating income (loss)	$	1,061,399		$	44,004		$	(739,343	)		366,060
Other expense, net											(65,367	)
Income from continuing operations before income taxes											300,693
Provision for income taxes											(84,335	)
Net income											216,358
Net loss attributable to noncontrolling interests											16,492
Net income attributable to Expedia, Inc.										$	232,850

	Year ended December 31, 2012
	Leisure			Egencia			Corporate			Total
	(In thousands)
Revenue	$	3,738,955		$	291,392		$	—		$	4,030,347
Adjusted EBITDA	$	1,073,226		$	53,207		$	(323,558	)	$	802,875
Depreciation		(74,982	)		(12,031	)		(77,234	)		(164,247	)
Amortization of intangible assets		—			—			(31,705	)		(31,705	)
Stock-based compensation		—			—			(64,596	)		(64,596	)
Legal reserves, occupancy tax and other		—			—			(117,025	)		(117,025	)
Realized loss on revenue hedges		6,422			—			—			6,422
Operating income (loss)	$	1,004,666		$	41,176		$	(614,118	)		431,724
Other expense, net											(81,667	)
Income from continuing operations before income taxes											350,057
Provision for income taxes											(47,078	)
Income from continuing operations											302,979
Discontinued operations, net of taxes											(22,539	)
Net income											280,440
Net income attributable to noncontrolling interests											(269	)
Net income attributable to Expedia, Inc.										$	280,171

Geographic Information

The following table presents revenue by geographic area, the United States and all other countries, based on the geographic location of our websites or points of sale for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
	2014		2013		2012
	(In thousands)
Revenue
United States	$	3,046,520	$	2,510,162	$	2,226,856
All other countries		2,716,965		2,261,097		1,803,491
	$	5,763,485	$	4,771,259	$	4,030,347

The following table presents property and equipment, net for the United States and all other countries, as of December 31, 2014 and 2013:

	As of December 31,
	2014		2013
	(In thousands)
Property and equipment, net
United States	$	446,044	$	398,384
All other countries		107,082		82,318
	$	553,126	$	480,702