Segment Information

12 Months Ended

Dec. 31, 2016

Segment Information

Segment Information

(12) Segment Information

Expedia Holdings identifies its reportable segments as (A) those consolidated companies that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA or total assets and (B) those equity method affiliates whose share of earnings or losses represent 10% or more of Expedia Holding's annual pre-tax earnings (losses).

Expedia Holdings evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue and Adjusted OIBDA. In addition, Expedia Holdings reviews nonfinancial measures such as unique visitors, customer acquisition and conversion rates.

Expedia Holdings defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock-based compensation). Expedia Holdings believes this measure is an important indicator of the operational strength and performance of its businesses, including each business's ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes costs such as legal reserves, occupancy tax and other, restructuring and related reorganization charges, depreciation and amortization, stock-based compensation, separately reported litigation settlements and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net earnings, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. Expedia Holdings generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.

For the year ended December 31, 2016, Expedia Holdings has identified Expedia and Vitalize as its reportable segments. Prior to obtaining a controlling interest in Expedia in connection with the Expedia Holdings Split-Off, the Company identified Expedia as a reportable segment, even though it was previously accounted for as an equity method investment. Beginning on the date of the Expedia Holdings Split-Off, the Company will only include the results of Expedia, as consolidated, in the segment information reported below.  Expedia is a consolidated subsidiary of the Company that provides travel and services to leisure and corporate travelers in the United States and abroad as well as various media and advertising offerings to travel and non-travel advertisers. Expedia's revenue primarily consists of sales of travel services. Vitalize is a wholly-owned subsidiary of the Company that is primarily an Internet retailer of sports, fitness and nutritional supplements. Vitalize also hosts an online health-and-fitness publication, offering free fitness content, workout programs, video trainers, recipes, health advice and motivational stories. Vitalize's revenue primarily consists of sales of health and wellness products.

It is not expected that Vitalize, will be a reportable segment subsequent to 2016 due to the overall size of the business in comparison to the consolidated results of Expedia Holdings. Vitalize has met the reportable segment quantitative thresholds for the periods presented due to the size of the business as compared to the consolidated results of the Company prior to consolidation of Expedia.

Expedia Holding's operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments that are also consolidated companies are the same as those described in the Company's summary of significant accounting policies in the Company's annual financial statements.

Performance Measures

	Year ended December 31,
	2016			2015		2014
	Revenue from			Revenue from		Revenue from
	external		Adjusted	external	Adjusted	external	Adjusted
	customers		OIBDA	customers	OIBDA	customers	OIBDA
	amounts in millions
Expedia	$	1,170	133	NA	NA	NA	NA
Vitalize		411	15	465	33	455	31
Corporate and Other		—	(2)	—	—	—	—
Consolidated Expedia Holdings	$	1,581	146	465	33	455	31

Other Information

	December 31, 2016			December 31, 2015
	Total		Capital	Total	Investment	Capital
	Assets		Expenditures	Assets	In Expedia	Expenditures
	amounts in millions
Expedia	$	33,746	111	NA	NA	NA
Vitalize		182	14	150	—	21
Corporate and other		54	—	976	927	—
Consolidated Expedia Holdings	$	33,982	125	1,126	927	21

Revenue by Geographic Area

	Year ended December 31,
	2016		2015	2014
	amounts in millions
United States	$	994	401	372
Other countries		587	64	83
Consolidated Expedia Holdings	$	1,581	465	455

Long-lived Assets by Geographic Area

	Year ended
	December 31,
	2016		2015
	amounts in
	millions
United States	$	739	28
Other countries		105	2
Consolidated Expedia Holdings	$	844	30

The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:

	Year ended December 31,
	2016		2015	2014
	amounts in millions
Consolidated segment Adjusted OIBDA	$	146	33	31
Legal reserves, occupancy tax and other		2	—	—
Restructuring and related reorganization charges		(9)	—	—
Stock-based compensation		(47)	(2)	(2)
Depreciation and amortization		(481)	(21)	(19)
Operating income (loss)		(389)	10	10
Interest expense		(19)	(1)	(1)
Related party interest expense		—	(1)	(2)
Share of earnings (loss) of affiliates, net		26	117	58
Gain (loss) on dilution of investment in affiliate		(2)	320	3
Gain on investment in Expedia		2,005	—	—
Other, net		—	—	(1)
Earnings (loss) before income taxes	$	1,621	445	67