| Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Cash and Cash Equivalents Cash equivalents consist of highly liquid investments, generally including money market funds, term deposits and marketable securities, with maturities of three months or less at the time of acquisition. Accounts Receivable and Allowance for Expected Credit Losses Accounts receivable are recognized when the right to consideration becomes unconditional and are recorded net of an allowance for expected credit losses. Tripadvisor records accounts receivable at the invoiced amount, and its customer invoices are generally due 30 days from the time of invoicing. Tripadvisor uses the “expected credit loss” methodology, allowed under GAAP, in estimating its allowance for credit losses. Tripadvisor applies the “expected credit loss” methodology by first assessing its historical losses based on credit sales and then adding in an assessment of expected changes in the foreseeable future, whether positive or negative, to Tripadvisor’s ability to collect its outstanding accounts receivables, or the expectation for future losses. Tripadvisor 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 its customers’ ability to pay their obligations. Where appropriate, Tripadvisor performs this analysis using a portfolio approach. Portfolios comprise customers with similar characteristics and payment history, and Tripadvisor has concluded that the aggregation of these customers into various portfolios does not produce a result that is materially different from considering the affected customers individually. Customers are assigned internal credit ratings, as determined by Tripadvisor, based on its collection profiles. Customers whose outstanding obligations are less likely to experience a credit loss are assigned a higher internal credit rating, and those customers whose outstanding obligations are more likely to experience a credit loss are assigned a lower credit rating. Tripadvisor recognizes a greater credit loss allowance on the accounts receivable due from those customers in the lower credit rating tranche, as determined by Tripadvisor. When Tripadvisor 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. Tripadvisor's exposure to credit losses may increase if its customers are adversely affected by changes in macroeconomic pressures or uncertainty associated with local or global economic recessions, or other customer-specific factors. The following table presents the changes in the allowance for credit losses for the periods presented: Years ended December 31, 2024 2023 2022 amounts in millions Balance, beginning of period $ 21 28 28 Provision charged to expense 8 6 6 Write-offs, net of recoveries and other adjustments (4) (13) (6) Balance, end of period $ 25 21 28 Derivative Instruments All of the Company’s derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive earnings and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. If the derivative is not designated as a hedge, changes in the fair value of the derivative are recognized in earnings. None of the Company’s derivatives are currently designated as hedges. The fair value of certain of the Company’s derivative instruments are estimated using the Black-Scholes-Merton model. The Black-Scholes-Merton model incorporates a number of variables in determining such fair values, including expected volatility of the underlying security and an appropriate discount rate. The Company obtains volatility rates from pricing services based on the expected volatility of the underlying security over the remaining term of the derivative instrument. A discount rate is obtained at the inception of the derivative instrument and updated each reporting period, based on the Company’s estimate of the discount rate at which it could currently settle the derivative instrument. The Company considers its own credit risk as well as the credit risk of its counterparties in estimating the discount rate. Management judgment is required in estimating the Black-Scholes-Merton model variables. Property and Equipment Property and equipment, at cost consists of the following: December 31, 2024 2023 amounts in millions Finance lease right-of-use asset $ 114 114 Leasehold improvements 24 37 Computer equipment and purchased software 56 64 Furniture, office equipment and other 15 17 Total property and equipment, at cost $ 209 232 Property and equipment is recorded at cost, net of accumulated depreciation, less impairments, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is three Leases The Company, through its consolidated companies, leases facilities in several countries around the world and certain equipment under non-cancelable lease agreements. Refer to note 6 for a discussion on accounting for leases and other financial disclosures. Intangible Assets Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment upon certain triggering events. Goodwill and other intangible assets with indefinite useful lives (collectively, "indefinite lived intangible assets") are not amortized, but instead are tested for impairment at least annually. Our annual impairment assessment of our indefinite-lived intangible assets is performed during the fourth quarter of each year. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. The accounting guidance also allows entities the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test. The entity may resume performing the qualitative assessment in any subsequent period. In evaluating goodwill on a qualitative basis, the Company reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it was more likely than not that an indicated impairment exists for any of our reporting units. The Company considers whether there are any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, the legal environments and how these factors might impact company specific performance in future periods. As part of the analysis, the Company also considers fair value determinations for certain reporting units that have been made at various points throughout the current year and prior year for other purposes. If, based on the qualitative analysis, it is more likely than not that an impairment exists, the Company performs the quantitative impairment test. The quantitative goodwill impairment test compares the estimated fair value of a reporting unit to its carrying value. Developing estimates of fair value requires significant judgments, including making assumptions about appropriate discount rates, perpetual growth rates, relevant comparable market multiples, public trading prices and the amount and timing of expected future cash flows. The cash flows employed in TripCo's valuation analyses, where applicable, are based on management's best estimates considering current marketplace factors and risks as well as assumptions of growth rates in future years. There can be no assurance that actual results will approximate these forecasts. The accounting guidance also permits entities to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. The accounting guidance also allows entities the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to the quantitative impairment test. The entity may resume performing the qualitative assessment in any subsequent period. If the qualitative assessment supports that it is more likely than not that the carrying value of the Company’s indefinite-lived intangible assets, other than goodwill, exceeds its fair value, then a quantitative assessment is performed. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. See note 4 for discussion of goodwill and trademark impairments. Website Development Costs Certain costs incurred during the application development stage related to the development of websites are capitalized and included in other intangible assets subject to amortization. Capitalized costs include internal and external costs, if direct and incremental, and deemed by management to be significant. Costs related to the planning and post-implementation phases of software and website development are expensed as these costs are incurred. Maintenance and enhancement costs (including those costs in the post-implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software resulting in added functionality, in which case the costs are capitalized. Impairment of Long-lived Assets The Company periodically reviews the carrying amounts of its property and equipment and its intangible assets (other than goodwill and indefinite-lived intangibles) to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. If the carrying amount of the asset group is greater than the expected undiscounted cash flows to be generated by such asset group, including its ultimate disposition, an impairment adjustment is recognized. Such adjustment is measured by the amount that the carrying value of such asset groups exceeds their fair value. The Company generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows using an appropriate discount rate. Considerable management judgment is necessary to estimate the fair value of asset groups. Accordingly, actual results could vary significantly from such estimates. Asset groups to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. Noncontrolling Interests Noncontrolling interest relates to the equity ownership interest in Tripadvisor that the Company does not own. The Company reports noncontrolling interests of consolidated companies within equity in the consolidated balance sheets and the amount of net earnings (loss) attributable to the parent and to the noncontrolling interest is presented in the consolidated statements of operations. Also, changes in ownership interests in consolidated companies in which the Company maintains a controlling interest are recorded in equity. Foreign Currency Translation and Transaction Gains and Losses The functional currency of the Company is the U.S. dollar. The functional currency of the Company’s foreign operations generally is the applicable local currency for each foreign subsidiary. Assets and liabilities of 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 period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is recorded as a component of accumulated other comprehensive earnings (loss) in equity. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses which are reflected in the accompanying consolidated statements of operations and comprehensive earnings (loss) as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions. Accordingly, we have recorded foreign currency exchange losses of $3 million, $5 million and $9 million for the years ended December 31, 2024, 2023, and 2022, respectively, in other, net on our consolidated statements of operations. Revenue Recognition (1) Identification of the contract, or contracts, with a customer (2) Identification of the performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, Tripadvisor satisfies a performance obligation 31, 2024 and 2023, there were $3 million of unamortized contract costs in other long-term assets on the consolidated balance sheet. Tripadvisor amortizes 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 personnel expense on the consolidated statements of operations duri e. No impairments were recognized during the years ended December 31, 2024, 2023 and 2022. Brand Tripadvisor Segment Tripadvisor-branded Hotels Revenue specific click. CPC rates for hotel sponsored placements that Tripadvisor’s travel partners pay are generally based on bids submitted as part of an auction by its travel partners or a pre-determined contractual CPC rate. The travel partner agrees to pay Tripadvisor the CPC rate amount each time a traveler clicks on a link to the travel partner’s website. Tripadvisor records this click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner as its performance obligation is fulfilled at that time. Hotel sponsored placements revenue is generally billed to Tripadvisor’s travel partners monthly, consistent with the timing of the service. Media and Advertising Revenue Tripadvisor-Experiences and Dining Revenue illed by Viator and TheFork, respectively, which are eliminated on a consolidated basis. es and dining transactions, and methods of revenue recognition are consistent with the Viator and TheFork segments, as described below. In addition, Tripadvisor offers restaurant partners the opportunity to advertise and promote their business through restaurant media advertising placements on its platform. This servic Other Prior to the fourth quarter of 2024, Tripadvisor As of the beginning of the fourth quarter of 2024, Tripadvisor’s performance obligation display and promote rentals inventory from partners on its platform, including contextually-relevant booking links to third-party booking partners, Tripadvisor’s customers, in exchange for a commission when travelers complete a booking on the third-party booking partner's website. The third-party booking partner is responsible for completing the booking, payment processing and Tripadvisor does not control the service or have inventory risk, and therefore acts as an agent for these transactions under GAAP. Accordingly, Tripadvisor’s performance obligation is satisfied and revenue is recognized at the time of the booking, as it has no post-booking obligations to the traveler. Tripadvisor recognizes this revenue net of an estimate of the impact of cancellations, which is not material, using historical cancellation rates and current trends. Tripadvisor generally invoices and receives commissions directly from third-party bookings partners upon the completion of a traveler's stay. Therefore, contract assets are recognized at the time of booking for commissions earned that are billable upon the completion of a traveler's stay. Viator Segment TheFork Segment Practical Expedients and Exemptions one one Disaggregation of Revenue Years ended December 31, 2024 2023 2022 amounts in millions Brand Tripadvisor Tripadvisor-branded hotels $ 585 659 650 Media and advertising 150 145 130 Tripadvisor experiences and dining 169 176 134 Other 45 51 52 Total Brand Tripadvisor 949 1,031 966 Viator 840 737 493 TheFork 181 154 126 Intersegment eliminations (135) (134) (93) Total Revenue $ 1,835 1,788 1,492 The following table provides information about the opening and closing balances of accounts receivable and contract assets from contracts with customers: December 31, 2024 2023 amounts in millions Accounts receivable $ 187 177 Contract assets 20 15 Total $ 207 192 Accounts receivable are recognized when the right to consideration becomes unconditional. Contract assets are rights to consideration in exchange for services that Tripadvisor has transferred to a customer when that right is conditional on something other than the passage of time, such as commission payments that are contingent upon the completion of the service by the principal in the transaction. The difference between the opening and closing balances of Tripadvisor’s contract assets primarily results from the timing difference between when Tripadvisor satisfies its performance obligations and the time when the principal completes the service in the transaction. Advertising Costs Tripadvisor’s advertising costs are reported as “Marketing expenses” in the consolidated statement of operations. Tripadvisor incurs advertising expense consisting of paid online advertising expense, traffic acquisition costs (including search engine marketing (“SEM”) and other online traffic acquisition costs), syndication costs and affiliate marketing commissions, social media costs, brand advertising (including connected television, traditional television and other offline advertising), promotions and public relations, to promote its brands. Costs associated with communicating the advertisements are expensed in the period in which the advertisement takes place. Production costs associated with advertisements are expensed in the period in which the advertisement first takes place. Advertising expense was $729 million, $705 million and $576 million for the years ended December 31, 2024, 2023 and 2022, respectively. Stock-Based Compensation As more fully described in note 10, TripCo grants to its directors, employees and employees of its subsidiaries restricted stock (“RSUs”) and options (collectively, “Awards”) to purchase shares of TripCo common stock. TripCo measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock) based on the grant-date fair value of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). TripCo measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date. Certain outstanding awards that were previously granted by Qurate Retail were assumed by TripCo upon the completion of the TripCo Spin-Off. Additionally, Tripadvisor is a consolidated company and has issued stock-based compensation to its employees related to its common stock. The consolidated statements of operations include stock-based compensation related to TripCo Awards and Tripadvisor equity awards. Included in the accompanying consolidated statements of operations are the following amounts of stock-based compensation for the years ended December 31, 2024, 2023 and 2022: December 31, 2024 2023 2022 amounts in millions Personnel $ 120 96 88 General and administrative 1 3 5 $ 121 99 93 During the years ended December 31, 2024, 2023 and 2022, Tripadvisor capitalized $13 million, $10 million and $10 million, respectively, of stock-based compensation expense as website development costs. Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts and income tax bases of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards. The deferred tax assets and liabilities are calculated using enacted income tax rates in effect for each taxing jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are then reduced by a valuation allowance if the Company believes it more likely than not that such net deferred tax assets will not be realized. 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. The effect on deferred tax assets and liabilities of an enacted change in tax rates is recognized in income in the period that includes the enactment date. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. Such interest expense is included in income tax (expense) benefit in the accompanying consolidated statements of operations. Any accrual of penalties related to underpayment of income taxes on uncertain tax positions is included in income tax (expense) benefit in the accompanying consolidated statements of operations. We recognize in our consolidated financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. Deferred Merchant Payables In Tripadvisor’s experiences offerings, Tripadvisor receives payment from travelers at the time of booking or prior to the experience, and records these amounts, net of Tripadvisor’s commissions, on its consolidated balance sheet as deferred merchant payables. Tripadvisor pays experience operators after the travelers’ use. Therefore, it receives payment from the traveler prior to paying the experience operator and this operating cycle represents a working capital source or use of cash to Tripadvisor. Tripadvisor’s deferred merchant payables balance was $255 million and $237 million for the years ended December 31, 2024 and 2023, respectively. Certain Risks and Concentrations Tripadvisor’s business is subject to certain risks and concentrations, including a concentration related to dependence on relationships with its customers. For the year ended December 31, 2024, Booking Holdings Inc. (“Booking”), and its subsidiaries accounted for 10% or more of consolidated revenue, and together with Expedia Group Inc., and its subsidiaries (“Expedia”), Tripadvisor’s two most significant travel partners, accounted for approximately 22% of consolidated revenue. For the years ended December 31, 2023 and 2022, Expedia and Booking each accounted for 10% or more of Tripadvisor’s consolidated revenue, and together accounted for approximately 25% and 31%, respectively, of its total revenue. Additionally, Tripadvisor’s business is dependent on relationships with third-party service providers it relies on to fulfill service obligations to Tripadvisor’s customers where Tripadvisor is the merchant of record, such as Tripadvisor’s experience operators. However, no one operator’s inventory resulted in more than 10% of Tripadvisor’s revenue on a consolidated basis in any period presented. As of both December 31, 2024 and 2023, Expedia accounted for approximately 10% of Tripadvisor’s consolidated accounts receivable, net. Contingent Liabilities Periodically, the Company reviews 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 and is material, we record the estimated loss in our consolidated statement of operations. The Company provides 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 is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. Accruals are based on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. Comprehensive Income (Loss) Comprehensive income (loss) consists of net earnings (loss), cumulative foreign currency translation adjustments and comprehensive earnings (loss) attributable to debt credit risk adjustments. Earnings (Loss) per Common Share (EPS) Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) available to common shareholders by the weighted average number of common shares outstanding (“WASO”) for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. Excluded from EPS for the years ended December 31, 2024, 2023 and 2022 are 1 million, 2 million and 3 million potential common shares, respectively, because their inclusion would be antidilutive. Years ended December 31, 2024 2023 2022 in millions Basic WASO 77 76 76 Potentially dilutive shares (a) 1 2 1 Diluted WASO 78 78 77 (a) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers (i) recoverability and recognition of goodwill, intangible and long-lived assets and (ii) accounting for income taxes to be its most significant estimates. New Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20) Induced conversions of convertible debt instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. This guidance is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures Revised Operating Expense Presentation During the fourth quarter of 2024, TripCo revised its operating expense captions on its consolidated statements of operations to better align Tripadvisor’s financial presentation with how management assesses performance and makes strategic decisions in its business operations, and to provide additional clarity and understanding of its operating expenses for investors. Prior year amounts have been reclassified to conform to the current period presentation. The revised presentation did not result in a change to previously reported revenue, total costs and expenses, operating income (loss), earnings (loss) before income taxes, or net earnings (loss). Below is a brief description of the major cost components within the revised operating expense captions presented on the consolidated statements of operations: ● Cost of Sales ● Marketing ● Personnel ● Technology ● General and administrative The table below shows the reclassification adjustments amongst costs and expenses on the consolidated statements of operations for the periods presented: As Reported December 31, 2023 Adjustments As Adjusted December 31, 2023 As Reported December 31, 2022 Adjustments As Adjusted December 31, 2022 (in millions) (in millions) Cost of Sales $ — $ 119 1 $ 119 $ — $ 78 1 $ 78 Marketing — 705 2 705 — 576 2 576 Personnel, including stock-based compensation — 570 3 570 — 503 3 503 Technology — 80 4 80 — 63 4 63 General and administrative, including stock-based compensation (formerly Selling general and administrative, including stock-based compensation) 1,144 (1,052) 5 92 969 (882) 5 87 Operating expense, including stock based compensation 422 (422) — 338 (338) — Total $ 1,566 $ — $ 1,566 $ 1,307 $ — $ 1,307 (1) Reclass of the costs related to revenue generating activities, from operating expense to Costs of Sales (2) (3) Reclass of people costs from SG&A to Personnel. 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