Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 12, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2019 | |
Entity File Number | 001-37429 | |
Entity Registrant Name | EXPEDIA GROUP, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-2705720 | |
Entity Address, Address Line One | 333 108th Avenue NE | |
Entity Address, City or Town | Bellevue | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98004 | |
City Area Code | (425) | |
Local Phone Number | 679-7200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Expedia Group, Inc. 2.500% Senior Notes due 2022 | |
Trading Symbol | EXPE22 | |
Security Exchange Name | NYSE | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001324424 | |
Current Fiscal Year End Date | --12-31 | |
Common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 136,832,712 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,799,999 | |
The Nasdaq Global Select Market | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock, $0.0001 par value | |
Trading Symbol | EXPE | |
Security Exchange Name | NASDAQ |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Income Statement [Abstract] | |||||
Revenue | $ 3,153 | $ 2,880 | $ 5,762 | $ 5,388 | |
Costs and expenses: | |||||
Cost of revenue | [1] | 522 | 498 | 1,035 | 985 |
Selling and marketing | [1] | 1,657 | 1,541 | 3,192 | 3,057 |
Technology and content | [1] | 435 | 400 | 864 | 796 |
General and administrative | [1] | 214 | 196 | 405 | 395 |
Amortization of intangible assets | 52 | 72 | 104 | 144 | |
Impairment of goodwill | 0 | 61 | 0 | 61 | |
Legal reserves, occupancy tax and other | 4 | 1 | 14 | 4 | |
Restructuring and related reorganization charges | 4 | 0 | 14 | 0 | |
Operating income (loss) | 265 | 111 | 134 | (54) | |
Other income (expense): | |||||
Interest income | 17 | 16 | 28 | 27 | |
Interest expense | (39) | (51) | (80) | (102) | |
Other, net | (8) | (90) | 12 | (54) | |
Total other expense, net | (30) | (125) | (40) | (129) | |
Income (loss) before income taxes | 235 | (14) | 94 | (183) | |
Provision for income taxes | (48) | 5 | (7) | 25 | |
Net income (loss) | 187 | (9) | 87 | (158) | |
Net (income) loss attributable to non-controlling interests | (4) | 10 | (7) | 22 | |
Net income (loss) attributable to Expedia Group, Inc. | $ 183 | $ 1 | $ 80 | $ (136) | |
Earnings (loss) per share attributable to Expedia Group, Inc. available to common stockholders | |||||
Basic (in dollars per share) | $ 1.23 | $ 0.01 | $ 0.54 | $ (0.90) | |
Diluted (in dollars per share) | $ 1.21 | $ 0.01 | $ 0.53 | $ (0.90) | |
Shares used in computing earnings (loss) per share (000's): | |||||
Basic (in shares) | 149,049 | 150,076 | 148,468 | 150,942 | |
Diluted (in shares) | 151,561 | 152,617 | 151,057 | 150,942 | |
[1] | (1) Includes stock-based compensation as follows: Cost of revenue $ 3 $ 3 $ 6 $ 5 Selling and marketing 12 12 23 23 Technology and content 19 16 38 31 General and administrative 25 19 48 41 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Cost of revenue | ||||
Stock-based compensation | $ 3 | $ 3 | $ 6 | $ 5 |
Selling and marketing | ||||
Stock-based compensation | 12 | 12 | 23 | 23 |
Technology and content | ||||
Stock-based compensation | 19 | 16 | 38 | 31 |
General and administrative | ||||
Stock-based compensation | $ 25 | $ 19 | $ 48 | $ 41 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | $ 187 | $ (9) | $ 87 | $ (158) | |
Currency translation adjustments, net of tax | [1] | 7 | (87) | 2 | (49) |
Comprehensive income (loss) | 194 | (96) | 89 | (207) | |
Less: Comprehensive income (loss) attributable to non-controlling interests | 10 | (31) | 5 | (32) | |
Comprehensive income (loss) attributable to Expedia Group, Inc. | $ 184 | $ (65) | $ 84 | $ (175) | |
[1] | Currency translation adjustments include a tax benefit of $2 million and tax expense of $1 million associated with net investment hedges for the three and six months ended June 30, 2019 and tax expense of $10 million and $5 million for the three and six months ended June 30, 2018 . |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Currency translation adjustments, tax expense (benefit) | $ (2) | $ 10 | $ 1 | $ 5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 4,258 | $ 2,443 |
Restricted cash and cash equivalents | 619 | 259 |
Short-term investments | 631 | 28 |
Accounts receivable, net of allowance of $41 and $34 | 2,893 | 2,151 |
Income taxes receivable | 128 | 24 |
Prepaid expenses and other current assets | 295 | 292 |
Total current assets | 8,824 | 5,197 |
Property and equipment, net | 1,953 | 1,877 |
Operating lease right-of-use assets | 524 | |
Long-term investments and other assets | 815 | 778 |
Deferred income taxes | 80 | 69 |
Intangible assets, net | 1,887 | 1,992 |
Goodwill | 8,118 | 8,120 |
TOTAL ASSETS | 22,201 | 18,033 |
Current liabilities: | ||
Accounts payable, merchant | 1,970 | 1,699 |
Accounts payable, other | 1,153 | 788 |
Deferred merchant bookings | 7,053 | 4,327 |
Deferred revenue | 522 | 364 |
Income taxes payable | 28 | 74 |
Accrued expenses and other current liabilities | 950 | 808 |
Total current liabilities | 11,676 | 8,060 |
Long-term debt | 3,715 | 3,717 |
Deferred income taxes | 65 | 69 |
Operating lease liabilities | 466 | |
Other long-term liabilities | 343 | 506 |
Redeemable non-controlling interests | 29 | 30 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Additional paid-in capital | 9,821 | 9,549 |
Treasury stock - Common stock, at cost; Shares: 97,384 and 97,159 | (5,771) | (5,742) |
Retained earnings | 508 | 517 |
Accumulated other comprehensive income (loss) | (216) | (220) |
Total Expedia Group, Inc. stockholders’ equity | 4,342 | 4,104 |
Non-redeemable non-controlling interests | 1,565 | 1,547 |
Total stockholders’ equity | 5,907 | 5,651 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 22,201 | 18,033 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Common stock | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Total stockholders’ equity | 0 | 0 |
Common stock | Class B Common Stock | ||
Stockholders’ equity: | ||
Total stockholders’ equity | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts receivable, allowance | $ 41 | $ 34 |
Treasury stock - Common stock, Shares | 97,384,000 | 97,159,000 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, Authorized shares | 1,600,000,000 | 1,600,000,000 |
Common stock, Shares issued | 234,102,000 | 231,493,000 |
Common stock, Shares outstanding | 136,718,000 | 134,334,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, Authorized shares | 400,000,000 | 400,000,000 |
Common stock, Shares issued | 12,800,000 | 12,800,000 |
Common stock, Shares outstanding | 12,800,000 | 12,800,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities: | ||
Net income (loss) | $ 87 | $ (158) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation of property and equipment, including internal-use software and website development | 352 | 336 |
Amortization of stock-based compensation | 115 | 100 |
Amortization of intangible assets | 104 | 144 |
Impairment of goodwill | 0 | 61 |
Deferred income taxes | (15) | (6) |
Foreign exchange (gain) loss on cash, restricted cash and short-term investments, net | (13) | 85 |
Realized gain on foreign currency forwards | (16) | (16) |
(Gain) loss on minority equity investments, net | (12) | 61 |
Other | (13) | 21 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (742) | (476) |
Prepaid expenses and other assets | (7) | (96) |
Accounts payable, merchant | 271 | (25) |
Accounts payable, other, accrued expenses and other liabilities | 436 | 216 |
Tax payable/receivable, net | (143) | (159) |
Deferred merchant bookings | 2,726 | 2,268 |
Deferred revenue | 157 | 135 |
Net cash provided by operating activities | 3,287 | 2,491 |
Investing activities: | ||
Capital expenditures, including internal-use software and website development | (573) | (411) |
Purchases of investments | (636) | (1,669) |
Sales and maturities of investments | 27 | 624 |
Other, net | 16 | 22 |
Net cash used in investing activities | (1,166) | (1,434) |
Financing activities: | ||
Purchases of treasury stock | (29) | (426) |
Payment of dividends to stockholders | (95) | (91) |
Proceeds from exercise of equity awards and employee stock purchase plan | 156 | 67 |
Other, net | 2 | (6) |
Net cash provided by (used in) financing activities | 34 | (456) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | 20 | (106) |
Net increase in cash, cash equivalents and restricted cash and cash equivalents | 2,175 | 495 |
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 2,705 | 2,917 |
Cash, cash equivalents and restricted cash and cash equivalents at end of period | 4,880 | 3,412 |
Supplemental cash flow information | ||
Cash paid for interest | 87 | 106 |
Income tax payments, net | $ 157 | $ 136 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common stock | Common stockClass B common stock | Additional paid-in capital | Treasury stock | Retained earnings (deficit) | Accumulated other comprehensive income (loss) | Non-redeemable non-controlling interest |
Beginning balance (in shares) at Dec. 31, 2017 | 228,467,355 | 12,799,999 | 89,528,255 | |||||
Beginning balance at Dec. 31, 2017 | $ 6,129 | $ 0 | $ 0 | $ 9,163 | $ (4,822) | $ 331 | $ (149) | $ 1,606 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (159) | (136) | (23) | |||||
Other comprehensive income (loss), net of taxes | (49) | (38) | (11) | |||||
Payment of dividends to stockholders | (91) | (91) | ||||||
Proceeds from exercise of equity instruments and employee stock purchase plans (in shares) | 1,516,247 | |||||||
Proceeds from exercise of equity instruments and employee stock purchase plans | 67 | 67 | ||||||
Treasury stock activity related to vesting of equity instruments (in shares) | 150,262 | |||||||
Treasury stock activity related to vesting of equity instruments | (17) | $ (17) | ||||||
Common stock repurchases (in shares) | 3,701,273 | |||||||
Common stock repurchases | (409) | $ (409) | ||||||
Other changes in ownership of non-controlling interests | 13 | 13 | ||||||
Impact of adoption of new accounting guidance | (34) | (31) | (3) | |||||
Stock-based compensation expense | 103 | 103 | ||||||
Withholding taxes for stock options | (2) | (2) | ||||||
Issuance of common stock in connection with acquisitions (in shares) | 175,040 | |||||||
Issuance of common stock in connection with acquisitions | 0 | |||||||
Other | 1 | 1 | ||||||
Ending balance (in shares) at Jun. 30, 2018 | 230,158,642 | 12,799,999 | 93,379,790 | |||||
Ending balance at Jun. 30, 2018 | 5,552 | $ 0 | $ 0 | 9,331 | $ (5,248) | 74 | (190) | 1,585 |
Beginning balance (in shares) at Mar. 31, 2018 | 229,437,027 | 12,799,999 | 91,428,003 | |||||
Beginning balance at Mar. 31, 2018 | 5,808 | $ 0 | $ 0 | 9,228 | $ (5,025) | 117 | (125) | 1,613 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (10) | 1 | (11) | |||||
Other comprehensive income (loss), net of taxes | (87) | (65) | (22) | |||||
Payment of dividends to stockholders | (45) | (45) | ||||||
Proceeds from exercise of equity instruments and employee stock purchase plans (in shares) | 721,615 | |||||||
Proceeds from exercise of equity instruments and employee stock purchase plans | 47 | 47 | ||||||
Treasury stock activity related to vesting of equity instruments (in shares) | 37,314 | |||||||
Treasury stock activity related to vesting of equity instruments | (5) | $ (5) | ||||||
Common stock repurchases (in shares) | 1,914,473 | |||||||
Common stock repurchases | (218) | $ (218) | ||||||
Other changes in ownership of non-controlling interests | 7 | 2 | 5 | |||||
Stock-based compensation expense | 54 | 54 | ||||||
Other | 1 | 1 | ||||||
Ending balance (in shares) at Jun. 30, 2018 | 230,158,642 | 12,799,999 | 93,379,790 | |||||
Ending balance at Jun. 30, 2018 | 5,552 | $ 0 | $ 0 | 9,331 | $ (5,248) | 74 | (190) | 1,585 |
Beginning balance (in shares) at Dec. 31, 2018 | 231,492,986 | 12,799,999 | 97,158,586 | |||||
Beginning balance at Dec. 31, 2018 | 5,651 | $ 0 | $ 0 | 9,549 | $ (5,742) | 517 | (220) | 1,547 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 87 | 80 | 7 | |||||
Other comprehensive income (loss), net of taxes | 2 | 4 | (2) | |||||
Payment of dividends to stockholders | (95) | (95) | ||||||
Proceeds from exercise of equity instruments and employee stock purchase plans (in shares) | 2,609,200 | |||||||
Proceeds from exercise of equity instruments and employee stock purchase plans | 156 | 156 | ||||||
Treasury stock activity related to vesting of equity instruments (in shares) | 225,626 | |||||||
Treasury stock activity related to vesting of equity instruments | (29) | $ (29) | ||||||
Other changes in ownership of non-controlling interests | 10 | (3) | 13 | |||||
Stock-based compensation expense | 119 | 119 | ||||||
Withholding taxes for stock options | (2) | (2) | ||||||
Impact of adoption of new accounting guidance | 6 | 6 | ||||||
Other | 2 | 2 | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 234,102,186 | 12,799,999 | 97,384,212 | |||||
Ending balance at Jun. 30, 2019 | 5,907 | $ 0 | $ 0 | 9,821 | $ (5,771) | 508 | (216) | 1,565 |
Beginning balance (in shares) at Mar. 31, 2019 | 233,294,034 | 12,799,999 | 97,355,708 | |||||
Beginning balance at Mar. 31, 2019 | 5,634 | $ 0 | $ 0 | 9,694 | $ (5,767) | 373 | (217) | 1,551 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 187 | 183 | 4 | |||||
Other comprehensive income (loss), net of taxes | 7 | 1 | 6 | |||||
Payment of dividends to stockholders | (48) | (48) | ||||||
Proceeds from exercise of equity instruments and employee stock purchase plans (in shares) | 808,152 | |||||||
Proceeds from exercise of equity instruments and employee stock purchase plans | 65 | 65 | ||||||
Treasury stock activity related to vesting of equity instruments (in shares) | 28,504 | |||||||
Treasury stock activity related to vesting of equity instruments | (4) | $ (4) | ||||||
Other changes in ownership of non-controlling interests | 4 | 4 | ||||||
Stock-based compensation expense | 63 | 63 | ||||||
Withholding taxes for stock options | (2) | (2) | ||||||
Other | 1 | 1 | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 234,102,186 | 12,799,999 | 97,384,212 | |||||
Ending balance at Jun. 30, 2019 | $ 5,907 | $ 0 | $ 0 | $ 9,821 | $ (5,771) | $ 508 | $ (216) | $ 1,565 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Net income (loss) attributable to redeemable noncontrolling interest | $ 0 | $ 1 | $ 0 | $ 1 |
Dividends declared per common share (in dollars per share) | $ 0.32 | $ 0.30 | $ 0.64 | $ 0.60 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Description of Business Expedia Group, Inc. and its subsidiaries provide travel 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. These travel services are offered through a diversified portfolio of brands including: Brand Expedia ® , Hotels.com ® , Expedia ® Partner Solutions, Vrbo ®, Egencia ® , trivago ® , HomeAway ®, Orbitz ® , Travelocity ® , Hotwire ® , Wotif ® , ebookers ®, CheapTickets ®, Expedia Group™ Media Solutions, Expedia Local Expert ® , CarRentals.com TM , Expedia ® CruiseShipCenters ® , Classic Vacations ® , Traveldoo ®, VacationRentals.com and SilverRail TM . In addition, many of these brands have related international points of sale. In the first quarter of 2019, we renamed the HomeAway segment Vrbo. We refer to Expedia Group, Inc. and its subsidiaries collectively as “Expedia Group,” the “Company,” “us,” “we” and “our” in these consolidated financial statements. Basis of Presentation These accompanying financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited consolidated financial statements include Expedia Group, Inc., our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. We have eliminated significant intercompany transactions and accounts. We have prepared the accompanying unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting. We have included all adjustments necessary for a fair presentation of the results of the interim period. These adjustments consist of normal recurring items. Our interim unaudited consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018 , previously filed with the Securities and Exchange Commission. trivago is a separately listed company on the Nasdaq Global Select Market and, therefore is subject to its own reporting and filing requirements, which could result in possible differences that are not expected to be material to Expedia Group. Accounting Estimates We use estimates and assumptions in the preparation of our interim unaudited consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our interim unaudited consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our interim unaudited consolidated financial statements include revenue recognition; recoverability of current and long-lived assets, intangible assets and goodwill; income and transactional taxes, such as potential settlements related to occupancy and excise taxes; loss contingencies; deferred loyalty rewards; acquisition purchase price allocations; stock-based compensation and accounting for derivative instruments. Reclassifications We have reclassified certain amounts related to our prior period results to conform to our current period presentation. Seasonality We generally experience seasonal fluctuations in the demand for our travel services. For example, traditional leisure travel bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The number of bookings typically decreases in the fourth quarter. Because revenue for most of our travel services, including merchant and agency hotel, is recognized as the travel takes place rather than when it is booked, revenue typically lags bookings by several weeks for our hotel business and can be several months or more for our alternative accommodations business. Historically, Vrbo has seen seasonally stronger bookings in the first quarter of the year, with the relevant stays occurring during the peak summer travel months. The seasonal revenue impact is exacerbated with respect to income by the nature of our variable cost of revenue and direct sales and marketing costs, which we typically realize in closer alignment to booking volumes, and the more stable nature of our fixed costs. Furthermore, operating profits for our primary advertising business, trivago, have typically been experienced in the second half of the year, particularly the fourth quarter, as |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Recently Adopted Accounting Policies Leases. As of January 1, 2019, we adopted the Accounting Standards Updates (“ASU”) amending the guidance related to accounting and reporting guidelines for leasing arrangements using the optional transition method that allowed for a cumulative-effect adjustment in the period of adoption. Results for reporting periods beginning after January 1, 2019 are presented under the new guidance, while prior period amounts were not adjusted and continue to be reported under the accounting standards in effect for those periods. The new guidance required entities that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases regardless of whether they are classified as finance or operating leases. In addition, new disclosures are required to meet the objective of enabling users of financial statements to better understand the amount, timing and uncertainty of cash flows arising from leases. We elected certain of the available transition practical expedients, including those that permit us to not reassess 1) whether any expired or existing contracts are or contain leases, 2) the lease classification for any expired or exiting leases, and 3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment. The standard had a material impact on our consolidated balance sheets, but did not have a material impact on our consolidated statements of operations or statements of cash flows. The most significant impact was the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases. Additionally, we removed the assets and liabilities previously recorded pursuant to build-to-suit lease guidance resulting in an increase to retained earnings of approximately $6 million . Hedge Accounting. As of January 1, 2019, we adopted the new guidance amending the accounting guidance for hedge accounting. The new guidance requires expanded hedge accounting for both non-financial and financial risk components and refines the measurement of hedge results to better reflect an entity’s hedging strategies. The new guidance also amends the presentation and disclosure requirements on a prospective basis as well as changes how entities assess hedge effectiveness. The adoption of this new guidance had no impact on our consolidated financial statements. Recent Accounting Policies Not Yet Adopted Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued new guidance on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, and available-for-sale debt securities. The new guidance replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. This update is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods within those annual periods. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements. Cloud Computing Arrangements. In August 2018, the FASB issued new guidance on the accounting for implementation costs incurred for a cloud computing arrangement that is a service contract. The update conforms the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the accounting guidance that provides for capitalization of costs incurred to develop or obtain internal-use-software. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements. Fair Value Measurements. In August 2018, the FASB issued new guidance related to the disclosure requirements on fair value measurements, which removes, modifies or adds certain disclosures. The guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements disclosures. Significant Accounting Policies Below are the significant accounting policies updated during 2019 as a result of the recently adopted accounting policies noted above as well as certain other accounting policies with interim disclosure requirements. For a comprehensive description of our accounting policies, refer to our Annual Report on Form 10-K for the year ended December 31, 2018. Revenue Deferred Merchant Bookings. We classify cash payments received in advance of our performance obligations as deferred merchant bookings. At December 31, 2018, $3.627 billion of cash advance cash payments was reported within deferred merchant bookings, $3.110 billion of which was recognized resulting in $436 million of revenue during the six months ended June 30, 2019 . At June 30, 2019 , the related balance was $6.331 billion . At December 31, 2018, $700 million of deferred loyalty rewards was reported within deferred merchant bookings, $391 million of which was recognized within revenue during the six months ended June 30, 2019 . At June 30, 2019 , the related balance was $722 million . Deferred Revenue. At December 31, 2018, $364 million was recorded as deferred revenue, $263 million of which was recognized as revenue during the six months ended June 30, 2019 . At June 30, 2019 , the related balance was $522 million . Practical Expedients and Exemptions. We have used the portfolio approach to account for our loyalty points as the rewards programs share similar characteristics within each program in relation to the value provided to the traveler and their breakage patterns. Using this portfolio approach is not expected to differ materially from applying the guidance to individual contracts. However, we will continue to assess and refine, if necessary, how a portfolio within each rewards program is defined. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Cash, Restricted Cash and Cash Equivalents Restricted cash includes cash and cash equivalents that is restricted through legal contracts, regulations or our intention to use the cash for a specific purpose. Our restricted cash primarily relates to certain traveler deposits and to a lesser extent collateral for office leases. The following table reconciles cash, cash equivalents and restricted cash reported in our consolidated balance sheets to the total amount presented in our consolidated statements of cash flows: June 30, December 31, (in millions) Cash and cash equivalents $ 4,258 $ 2,443 Restricted cash and cash equivalents 619 259 Restricted cash included within long-term investments and other assets 3 3 Total cash, cash equivalents and restricted cash and cash equivalents in the consolidated statement of cash flow $ 4,880 $ 2,705 Leases We determine if an arrangement is a lease at inception. Operating leases are primarily for office space and data centers and are included in operating lease ROU assets, accrued expenses and other current liabilities, and operating lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For operating leases with a term of one year or less, we have elected to not recognize a lease liability or ROU asset on our consolidated balance sheet. Instead, we recognize the lease payments as expense on a straight-line basis over the lease term. Short-term lease costs are immaterial to our consolidated statements of operations and cash flows. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3 – Fair Value Measurements Financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 are classified using the fair value hierarchy in the table below: Total Level 1 Level 2 (In millions) Assets Cash equivalents: Money market funds $ 61 $ 61 $ — Time deposits 1,378 — 1,378 Investments: Time deposits 631 — 631 Marketable equity securities 133 133 — Total assets $ 2,203 $ 194 $ 2,009 Liabilities Derivatives: Foreign currency forward contracts $ 6 $ — $ 6 Financial assets measured at fair value on a recurring basis as of December 31, 2018 are classified using the fair value hierarchy in the table below: Total Level 1 Level 2 (In millions) Assets Cash equivalents: Money market funds $ 35 $ 35 $ — Time deposits 624 — 624 Derivatives: Foreign currency forward contracts 22 — 22 Investments: Time deposits 28 — 28 Marketable equity securities 119 119 — Total assets $ 828 $ 154 $ 674 We classify our cash equivalents and investments within Level 1 and Level 2 as we value our cash equivalents and investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Valuation of the foreign currency forward contracts is based on foreign currency exchange rates in active markets, a Level 2 input. As of June 30, 2019 and December 31, 2018 , our cash and cash equivalents consisted primarily of prime institutional money market funds with maturities of three months or less, time deposits as well as bank account balances. We also hold time deposit investments with financial institutions. Time deposits with original maturities of less than three months are classified as cash equivalents and those with remaining maturities of less than one year are classified within short-term investments. Our marketable equity securities consist of our investment in Despegar, a publicly traded company, which is included in long-term investments and other assets in our consolidated balance sheets. During the six months ended June 30, 2019 and 2018, we recognized a gain (loss) of approximately $14 million and $(62) million within other, net in our consolidated statements of operations related to the fair value changes of this equity investment. Derivative instruments are carried at fair value on our consolidated balance sheets. We use foreign currency forward contracts to economically hedge certain merchant revenue exposures, foreign denominated liabilities related to certain of our loyalty programs and our other foreign currency-denominated operating liabilities. Our goal in managing our foreign exchange risk is to reduce, to the extent practicable, our potential exposure to the changes that exchange rates might have on our earnings, cash flows and financial position. Our foreign currency forward contracts are typically short-term and, as they do not qualify for hedge accounting treatment, we classify the changes in their fair value in other, net. As of June 30, 2019 , we were party to outstanding forward contracts hedging our liability and revenue exposures with a total net notional value of $3.8 billion . We had a net forward liability of $6 million recorded in accrued expenses and other current liabilities as of June 30, 2019 and a net forward asset of $22 million recorded in prepaid expenses and other current assets as of December 31, 2018 . We recorded $(6) million and $33 million in net gains (losses) from foreign currency forward contracts during the three months ended June 30, 2019 and 2018 as well as $(12) million and $48 million in net gains (losses) during the six months ended June 30, 2019 and 2018 . Assets Measured at Fair Value on a Non-recurring Basis Our non-financial assets, such as goodwill, intangible assets and property and equipment, as well as equity method investments, 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. We measure our minority investments that do not have readily determinable fair values at cost less impairment, adjusted by observable price changes with changes recorded within other, net on our consolidated statements of operations. Goodwill. During the three months ended June 30, 2018 , we recognized a goodwill impairment charge of $61 million related to our Core OTA segment, which resulted from sustained under-performance and a less optimistic outlook related to one of our reporting units. As a result, we concluded that sufficient indicators existed to require us to perform an interim quantitative assessment of goodwill for that reporting unit as of June 30, 2018 in which we compared the fair value of the reporting unit to its carrying value. The fair value was estimated based on a blended analysis of the present value of future discounted cash flows and market value approach, Level 3 inputs. The significant estimates used in the discounted cash flows model included our weighted average cost of capital, projected cash flows and the long-term rate of growth. Our assumptions were based on the actual historical performance of the reporting unit and took into account a recent weakening of operating results and implied risk premiums based on market prices of our equity and debt as of the assessment date. Our significant estimates in the market approach model included identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and earnings multiples in estimating the fair value of the reporting unit. The excess of the reporting unit's carrying value over our estimate of the fair value was recorded as the goodwill impairment charge in the three months ended June 30, 2018 . As of December 31, 2018, the applicable reporting unit had no remaining goodwill. Minority Investments without Readily Determinable Fair Values. As of June 30, 2019 and December 31, 2018 , the carrying values of our minority investments without readily determinable fair values totaled $474 million and $476 million . During the three and six months ended June 30, 2019 and 2018 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 4 – Debt The following table sets forth our outstanding debt: June 30, December 31, (In millions) 5.95% senior notes due 2020 $ 749 $ 748 2.5% (€650 million) senior notes due 2022 736 740 4.5% senior notes due 2024 496 496 5.0% senior notes due 2026 743 742 3.8% senior notes due 2028 991 991 Long-term debt (1) $ 3,715 $ 3,717 _______________ (1) Net of applicable discounts and debt issuance costs. Long-term Debt Our $750 million in registered senior unsecured notes outstanding at June 30, 2019 are due in August 2020 and bear interest at 5.95% (the “ 5.95% Notes”). The 5.95% Notes were issued at 99.893% of par resulting in a discount, which is being amortized over their life. Interest is payable semi-annually in February and August of each year. We may redeem the 5.95% Notes at a redemption price of 100% of the principal plus accrued interest, plus a “make-whole” premium, in whole or in part. Our Euro 650 million in registered senior unsecured notes outstanding at June 30, 2019 are due in June 2022 and bear interest at 2.5% (the “ 2.5% Notes”). The 2.5% Notes were issued at 99.525% of par resulting in a discount, which is being amortized over their life. Interest is payable annually in arrears in June of each year. We may redeem the 2.5% Notes at our option, at whole or in part, at any time or from time to time. If we elect to redeem the 2.5% Notes prior to March 3, 2022, we may redeem them at a specified “make-whole” premium. If we elect to redeem the 2.5% Notes on or after March 3, 2022, we may redeem them at a redemption price of 100% of the principal plus accrued and unpaid interest. Subject to certain limited exceptions, all payments of interest and principal for the 2.5% Notes will be made in Euros. The aggregate principal value of the 2.5% Notes is designated as a hedge of our net investment in certain Euro functional currency subsidiaries. The notes are measured at Euro to U.S. Dollar exchange rates at each balance sheet date and transaction gains or losses due to changes in rates are recorded in accumulated other comprehensive income (loss) (“AOCI”). The Euro-denominated net assets of these subsidiaries are translated into U.S. Dollars at each balance sheet date, with effects of foreign currency changes also reported in AOCI. Since the notional amount of the recorded Euro-denominated debt is less than the notional amount of our net investment, we do not expect to incur any ineffectiveness on this hedge. Our $500 million in registered senior unsecured notes outstanding at June 30, 2019 are due in August 2024 and bear interest at 4.5% (the “ 4.5% Notes”). The 4.5% Notes were issued at 99.444% of par resulting in a discount, which is being amortized over their life. Interest is payable semi-annually in February and August of each year. We may redeem the 4.5% Notes at our option at any time in whole or from time to time in part. If we elect to redeem the 4.5% Notes prior to May 15, 2024, we may redeem them at a redemption price of 100% of the principal plus accrued interest, plus a “make-whole” premium. If we elect to redeem the 4.5% Notes on or after May 15, 2024, we may redeem them at a redemption price of 100% of the principal plus accrued interest. Our $750 million in registered senior unsecured notes outstanding at June 30, 2019 are due in February 2026 and bear interest at 5.0% (the “ 5.0% Notes”). The 5.0% Notes were issued at 99.535% of par resulting in a discount, which is being amortized over their life. Interest is payable semi-annually in arrears in February and August of each year. We may redeem the 5.0% Notes at our option at any time in whole or from time to time in part. If we elect to redeem the 5.0% Notes prior to November 12, 2025, we may redeem them at a redemption price of 100% of the principal plus accrued interest, plus a “make-whole” premium. If we elect to redeem the 5.0% Notes on or after November 12, 2025, we may redeem them at a redemption price of 100% of the principal plus accrued interest. Our $1 billion in registered senior unsecured notes outstanding at June 30, 2019 are due in February 2028 and bear interest at 3.8% (the “3.8% Notes”). The 3.8% Notes were issued at 99.747% of par resulting in a discount, which is being amortized over their life. Interest is payable semi-annually in arrears in February and August of each year. We may redeem the 3.8% Notes at our option at any time in whole or from time to time in part. If we elect to redeem the 3.8% Notes prior to November 15, 2027, we may redeem them at a redemption price of 100% of the principal plus accrued interest, plus a “make-whole” premium. If we elect to redeem the 3.8% Notes on or after November 15, 2027, we may redeem them at a redemption price of 100% of the principal plus accrued interest. The 5.95% , 2.5% , 4.5% , 5.0% and 3.8% Notes (collectively the “Notes”) are senior unsecured obligations issued by Expedia Group and guaranteed by certain domestic Expedia Group subsidiaries. The Notes rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations of Expedia Group and the guarantor subsidiaries. For further information, see Note 13 – Guarantor and Non-Guarantor Supplemental Financial Information . In addition, the Notes include covenants that limit our ability to (i) create certain liens, (ii) enter into sale/leaseback transactions and (iii) merge or consolidate with or into another entity or transfer substantially all of our assets. Accrued interest related to the Notes was $55 million and $65 million as of June 30, 2019 and December 31, 2018 . The Notes are redeemable in whole or in part, at the option of the holders thereof, upon the occurrence of certain change of control triggering events at a purchase price in cash equal to 101% of the principal plus accrued and unpaid interest. The following table sets forth the approximate fair value of our outstanding debt, which is based on quoted market prices in less active markets (Level 2 inputs): June 30, December 31, (In millions) 5.95% senior notes due 2020 $ 778 $ 778 2.5% (€650 million) senior notes due 2022 (1) 781 771 4.5% senior notes due 2024 533 504 5.0% senior notes due 2026 819 760 3.8% senior notes due 2028 1,017 915 _______________ (1) Approximately 687 million Euro as of June 30, 2019 and 674 million Euro as of December 31, 2018 . Credit Facility Expedia Group maintains a $2 billion unsecured revolving credit facility with a group of lenders, which is unconditionally guaranteed by certain domestic Expedia Group subsidiaries that are the same as under the Notes and expires in May 2023. As of June 30, 2019 and December 31, 2018 , we had no revolving credit facility borrowings outstanding. The facility bears interest based on the Company’s credit ratings, with drawn amounts bearing interest at LIBOR plus 125 basis points and the commitment fee on undrawn amounts at 17.5 basis points as of June 30, 2019 . The facility contains covenants including maximum leverage and minimum interest coverage ratios. The amount of stand-by letters of credit (“LOC”) issued under the facility reduces the credit amount available. As of June 30, 2019 and December 31, 2018 , there was $15 million of outstanding stand-by LOCs issued under the facility. In addition, one of our international subsidiaries maintains a Euro 50 million uncommitted credit facility, which is guaranteed by Expedia Group, that may be terminated at any time by the lender. As of June 30, 2019 and December 31, 2018 , there were no |
Leases (Notes)
Leases (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases We have operating leases for office space and data centers. Our leases have remaining lease terms of one year to 19 years , some of which include options to extend the leases for up to ten years , and some of which include options to terminate the leases within one year . Operating lease costs were $38 million and $76 million for the three and six months ended June 30, 2019 . Supplemental cash flow information related to leases were as follows: Three months ended Six months ended 2019 2019 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 34 $ 73 Right-of-use assets obtained in exchange for lease obligations: Operating leases 21 27 Supplemental consolidated balance sheet information related to leases were as follows: June 30, 2019 (in millions) Operating lease right-of-use assets $ 524 Current lease liabilities included within Accrued expenses and other current liabilities $ 110 Long-term lease liabilities included within Operating lease liabilities 466 Total operating lease liabilities $ 576 Weighted average remaining lease term 8.8 years Weighted average discount rate 3.8 % Maturities of lease liabilities are as follows: Operating Leases (in millions) Year ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 71 2020 111 2021 94 2022 75 2023 55 2024 and thereafter 281 Total lease payments 687 Less: imputed interest (111 ) Total $ 576 As of June 30, 2019 , we have additional operating lease payments, primarily for corporate offices, that have not yet commenced of approximately $195 million . These operating leases will commence between July 2019 and April 2021 with lease terms of 1 year to 11 years . |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Dividends on our Common Stock The Executive Committee, acting on behalf of the Board of Directors, declared the following dividends during the periods presented: Declaration Date Dividend Per Share Record Date Total Amount (in millions) Payment Date Six Months Ended June 30, 2019 February 6, 2019 $ 0.32 March 7, 2019 $ 47 March 27, 2019 May 1, 2019 0.32 May 23, 2019 $ 48 June 13, 2019 Six Months Ended June 30, 2018 February 7, 2018 0.30 March 8, 2018 46 March 28, 2018 April 24, 2018 0.30 May 24, 2018 45 June 14, 2018 In addition, in July 2019 , the Executive Committee, acting on behalf of the Board of Directors, declared a quarterly cash dividend of $0.34 per share of outstanding common stock payable on September 12, 2019 to stockholders of record as of the close of business on August 22, 2019 . Future declarations of dividends are subject to final determination by our Board of Directors. Accumulated Other Comprehensive Loss The balance of accumulated other comprehensive loss as of June 30, 2019 and December 31, 2018 was comprised of foreign currency translation adjustments. These translation adjustments include foreign currency transaction losses at June 30, 2019 of $23 million ( $30 million before tax) and $27 million ( $35 million before tax) at December 31, 2018 associated with our 2.5% Notes. The 2.5% Notes are Euro-denominated debt designated as hedges of certain of our Euro-denominated net assets. See Note 4 – Debt |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The following table presents our basic and diluted earnings (loss) per share: Three months ended Six months ended 2019 2018 2019 2018 (In millions, except share and per share data) Net income (loss) attributable to Expedia Group, Inc. $ 183 $ 1 $ 80 $ (136 ) Earnings (loss) per share attributable to Expedia Group, Inc. available to common stockholders: Basic $ 1.23 $ 0.01 $ 0.54 $ (0.90 ) Diluted 1.21 0.01 0.53 (0.90 ) Weighted average number of shares outstanding (000's): Basic 149,049 150,076 148,468 150,942 Dilutive effect of: Options to purchase common stock 1,893 2,058 1,944 — Other dilutive securities 619 483 645 — Diluted 151,561 152,617 151,057 150,942 Basic earnings per share is calculated using our weighted-average outstanding common shares. The earnings per share amounts are the same for common stock and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we recognize a net loss, we exclude the impact of outstanding stock awards from the diluted loss per share calculation as their inclusion would have an antidilutive effect. For the three and six months ended June 30, 2019 , approximately 5 million of outstanding stock awards have been excluded from the calculations of diluted earnings per share attributable to common stockholders because their effect would have been antidilutive. For the three and six ended June 30, 2018 , approximately 13 million and 22 million |
Restructuring and Related Reorg
Restructuring and Related Reorganization Charges (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Reorganization Charges | Restructuring and Related Reorganization Charges In connection with the centralization and migration of certain operational functions and systems, we recognized $4 million and $14 million in restructuring and related reorganization charges during the three and six months ended June 30, 2019. The charges primarily related to severance and benefits and approximately $12 million were unpaid as of June 30, 2019. Based on current plans, which are subject to change, we expect total reorganization charges in 2019 of up to $25 million . These costs could be higher or lower should we make additional decisions in future periods that impact our reorganization efforts and exclude any possible future acquisition, or other, integrations. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We determine our provision for income taxes for interim periods using an estimate of our annual effective tax rate. We record any changes affecting the estimated annual effective tax rate in the interim period in which the change occurs, including discrete tax items. For the three months ended June 30, 2019 , the effective tax rate was a 20.4% expense on a pre-tax income, compared to a 33.8% benefit on pre-tax loss for the three months ended June 30, 2018 . The decrease in the effective rate was primarily due to the impact from a non-deductible goodwill impairment in the prior year quarter and the current year discrete tax benefits, partially offset by an increase in U.S. taxable income. For the six months ended June 30, 2019 , the effective tax rate was a 7.2% expense on a pre-tax income, compared to a 13.7% benefit on a pre-tax loss for the six months ended June 30, 2018 . The decrease in the effective tax rate was primarily driven by discrete tax benefits recognized during 2019. We are subject to taxation in the United States and various other state and foreign jurisdictions. During 2017, the Internal Revenue Service (“IRS”) issued proposed adjustments related to transfer pricing with our foreign subsidiaries for our 2009 to 2010 audit cycle. On July 12, 2019, we settled the audit for an immaterial impact to the consolidated financial statements. In addition, we are under examination by the IRS for our 2011 through 2013 tax years. Subsequent years remain open to examination by the IRS. We do not anticipate a significant impact to our gross unrecognized tax benefits within the next 12 months related to these years. During the second quarter of 2019, the IRS issued proposed adjustments related to transfer pricing with our foreign subsidiaries for our 2011 to 2013 audit cycle. The proposed adjustments would increase our U.S. taxable income by $751 million , which would result in federal tax of approximately $263 million . We do not agree with the position of the IRS and are formally protesting the IRS position. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 – Commitments and Contingencies Legal Proceedings In the ordinary course of business, we are a party to various lawsuits. Management does not expect these lawsuits to have a material impact on the liquidity, results of operations, or financial condition of Expedia Group. We also evaluate other potential contingent matters, including value-added tax, excise tax, sales tax, transient occupancy or accommodation tax and similar matters. We do not believe that the aggregate amount of liability that could be reasonably possible with respect to these matters would have a material adverse effect on our financial results; however, litigation is inherently uncertain and the actual losses incurred in the event that our legal proceedings were to result in unfavorable outcomes could have a material adverse effect on our business and financial performance. Litigation Relating to Occupancy Taxes. One hundred one lawsuits have been filed by or against cities, counties and states involving hotel occupancy and other taxes. Eleven lawsuits are currently active. These lawsuits are in various stages and we continue to defend against the claims made in them vigorously. With respect to the principal claims in these matters, we believe that the statutes or ordinances at issue do not apply to us or the services we provide and, therefore, that we do not owe the taxes that are claimed to be owed. We believe that the statutes or ordinances at issue generally impose occupancy and other taxes on entities that own, operate or control hotels (or similar businesses) or furnish or provide hotel rooms or similar accommodations. To date, forty-seven of these lawsuits have been dismissed. Some of these dismissals have been without prejudice and, generally, allow the governmental entity or entities to seek administrative remedies prior to pursuing further litigation. Thirty-three dismissals were based on a finding that we and the other defendants were not subject to the local tax ordinance or that the local government lacked standing to pursue its claims. As a result of this litigation and other attempts by certain jurisdictions to levy such taxes, we have established a reserve for the potential settlement of issues related to hotel occupancy and other taxes, consistent with applicable accounting principles and in light of all current facts and circumstances, in the amount of $54 million and $46 million as of June 30, 2019 and December 31, 2018 , respectively. Our settlement reserve is based on our best estimate of probable losses and the ultimate resolution of these contingencies may be greater or less than the liabilities recorded. An estimate for a reasonably possible loss or range of loss in excess of the amount reserved cannot be made. Changes to the settlement reserve are included within legal reserves, occupancy tax and other in the consolidated statements of operations. Pay-to-Play. Certain jurisdictions may assert that we are required to pay any assessed taxes prior to being allowed to contest or litigate the applicability of the ordinances. This prepayment of contested taxes is referred to as “pay-to-play.” Payment of these amounts is not an admission that we believe we are subject to such taxes and, even when such payments are made, we continue to defend our position vigorously. If we prevail in the litigation, for which a pay-to-play payment was made, the jurisdiction collecting the payment will be required to repay such amounts and also may be required to pay interest. Hawaii (General Excise Tax). During 2013, the Expedia Group companies were required to “pay-to-play” and paid a total of $171 million in advance of litigation relating to general excise taxes for merchant model hotel reservations in the State of Hawaii. In September 2015, following a ruling by the Hawaii Supreme Court, the State of Hawaii refunded the Expedia Group companies $132 million of the original “pay-to-play” amount. Orbitz also received a similar refund of $22 million from the State of Hawaii in September 2015. The amount paid, net of refunds, by the Expedia Group companies and Orbitz to the State of Hawaii in satisfaction of past general excise taxes on their services for merchant model hotel reservations was $44 million . The parties reached a settlement relating to Orbitz merchant model hotel tax liabilities, and on October 5, 2016, the Expedia Group companies paid the State of Hawaii for the tax years 2012 through 2015. The Expedia Group companies and Orbitz have now resolved all assessments by the State of Hawaii for merchant model hotel taxes through 2015. The Department of Taxation also issued final assessments for general excise taxes against certain Expedia Group companies, including Orbitz, dated December 23, 2015 for the time period 2000 to 2014 for hotel and car rental revenue for “agency model” transactions. Those assessments were under review in the Hawaii tax court but the parties reached a settlement of their dispute. On June 3, 2019, the parties filed a stipulated dismissal of all claims relating to agency hotel and car as to the Expedia Group companies, thereby ending the agency hotel and car rental case. Final assessments by the Hawaii Department of Taxation for general exercise taxes against certain Expedia Group companies, including Orbitz, relating to merchant car rental transactions during the years 2000 to 2014 were also under review. With respect to merchant model car rental transactions at issue for the tax years 2000 through 2013, the Hawaii tax court held on August 5, 2016 that general excise tax is due on the online travel companies’ services to facilitate car rentals. The court further ruled that for merchant model car rentals in Hawaii, the online travel companies are required to pay general excise tax on the total amount paid by consumers, with no credit for tax amounts already remitted by car rental companies to the State of Hawaii for tax years 2000 through 2013, thus resulting in a double tax on the amount paid by consumers to car rental companies for the rental of the vehicle. The court, however, ruled that when car rentals are paid for as part of a vacation package, tax is only due once on the amount paid by consumers to the car rental company for the rental of the vehicle. In addition, the court ruled that the online travel companies are required to pay interest and certain penalties on the amounts due. On April 25, 2017, the court entered a stipulated order and final judgment. On May 15, 2017, the Expedia Group companies paid under protest the full amount claimed due, or approximately $16.7 million , as a condition of appeal. The parties filed notices of cross-appeal from the order. On March 4, 2019, the Hawaii Supreme Court affirmed the tax court in part and reversed in part, finding that the defendant online travel companies are not obligated to pay tax on the amount paid by consumers to the car rental company for the rental of the vehicle; instead, for both package and standalone merchant model car rentals, they need only pay the tax on the amounts they charge for their services. Thereafter, during the second quarter of 2019, the State of Hawaii refunded to the Expedia Group companies $10 million of the amounts previously paid by those companies under protest as a condition of appeal. On June 3, 2019, the parties filed a stipulated dismissal of all claims relating to merchant car as to the Expedia Group companies, thereby ending the merchant car case. Other Jurisdictions. We are also in various stages of inquiry or audit with domestic and foreign tax authorities, some of which, including in the City of Los Angeles regarding hotel occupancy taxes and in the United Kingdom regarding the application of value added tax (“VAT”) to our European Union related transactions as discussed below, may impose a pay-to-play requirement to challenge an adverse inquiry or audit result in court. The ultimate resolution of these contingencies may be greater or less than the pay-to-play payments made and our estimates of additional assessments mentioned above. Matters Relating to International VAT . We are in various stages of inquiry or audit in multiple European Union jurisdictions, including in the United Kingdom, regarding the application of VAT to our European Union related transactions. While we believe we comply with applicable VAT laws, rules and regulations in the relevant jurisdictions, the tax authorities may determine that we owe additional taxes. In certain jurisdictions, including the United Kingdom, we may be required to “pay-to-play” any VAT assessment prior to contesting its validity. While we believe that we will be successful based on the merits of our positions with regard to the United Kingdom and other VAT audits in pay-to-play jurisdictions, it is nevertheless reasonably possible that we could be required to pay any assessed amounts in order to contest or litigate the applicability of any assessments and an estimate for a reasonably possible amount of any such payments cannot be made. Competition and Consumer Matters . Over the last several years, the online travel industry has become the subject of investigations by various national competition authorities (“NCAs”), particularly in Europe. Expedia Group companies are or have been involved in investigations predominately related to whether certain parity clauses in contracts between Expedia Group entities and accommodation providers, sometimes also referred to as “most favored nation” or “MFN” provisions, are anti-competitive. In Europe, investigations or inquiries into contractual parity provisions between hotels and online travel companies, including Expedia Group companies, were initiated in 2012, 2013 and 2014 by NCAs in Austria, Belgium, Czech Republic, Denmark, France, Germany, Greece, Hungary, Ireland, Italy, Poland, Sweden and Switzerland. While the ultimate outcome of some of these investigations or inquiries remains uncertain, and the Expedia Group companies’ circumstances are distinguishable from other online travel companies subject to similar investigations and inquiries, we note in this context that on April 21, 2015, the French, Italian and Swedish NCAs, working in close cooperation with the European Commission, announced that they had accepted formal commitments offered by Booking.com to resolve and close the investigations against Booking.com in France, Italy and Sweden by Booking.com removing and/or modifying certain rate, conditions and availability parity provisions in its contracts with accommodation providers in France, Italy and Sweden as of July 1, 2015, among other commitments. Booking.com voluntarily extended the geographic scope of these commitments to accommodation providers throughout Europe as of the same date. With effect from August 1, 2015, Expedia Group companies waived certain rate, conditions and availability parity clauses in agreements with European hotel partners for a period of five years. While the Expedia Group companies maintain that their parity clauses have always been lawful and in compliance with competition law, these waivers were nevertheless implemented as a positive step towards facilitating the closure of the open investigations into such clauses on a harmonized pan-European basis. Following the implementation of the Expedia Group companies' waivers, nearly all NCAs in Europe have announced either the closure of their investigation or inquiries involving Expedia Group companies or a decision not to open an investigation or inquiry involving Expedia Group companies. Below are descriptions of additional rate parity-related matters of note in Europe. The German Federal Cartel Office (“FCO”) has required another online travel company, Hotel Reservation Service (“HRS”), to remove certain clauses from its contracts with hotels. HRS’ appeal of this decision was rejected by the Higher Regional Court Düsseldorf on January 9, 2015. On December 23, 2015, the FCO announced that it had also required Booking.com by way of an infringement decision to remove certain clauses from its contracts with German hotels. Booking.com has appealed the decision and the appeal was heard by the Higher Regional Court Düsseldorf on February 8, 2017. On June 4, 2019, the Higher Regional Court Düsseldorf issued its judgment in this matter and ruled that certain parity clauses are in compliance with applicable German and European competition rules and the FCO’s prohibition order against Booking.com was annulled. The decision is not yet final as the FCO has applied to the German Federal Supreme Court to admit an appeal from the decision. The Italian competition authority's case closure decision against Booking.com and Expedia Group companies has subsequently been appealed by two Italian hotel trade associations, i.e. Federalberghi and AICA. These appeals remain at an early stage and no hearing date has been fixed. On November 6, 2015, the Swiss competition authority announced that it had issued a final decision finding certain parity terms existing in previous versions of agreements between Swiss hotels and each of certain Expedia Group companies, Booking.com and HRS to be prohibited under Swiss law. The decision explicitly notes that the Expedia Group companies' current contract terms with Swiss hotels are not subject to this prohibition. The Swiss competition authority imposed no fines or other sanctions against the Expedia Group companies and did not find an abuse of a dominant market position by the Expedia Group companies. The FCO’s case against the Expedia Group companies’ contractual parity provisions with accommodation providers in Germany remains open but is still at a preliminary stage with no formal allegations of wrong-doing having been communicated to the Expedia Group companies to date. The Directorate General for Competition, Consumer Affairs and Repression of Fraud (the “DGCCRF”), a directorate of the French Ministry of Economy and Finance with authority over unfair trading practices, brought a lawsuit in France against Expedia Group companies objecting to certain parity clauses in contracts between Expedia Group companies and French hotels. In May 2015, the French court ruled that certain of the parity provisions in certain contracts that were the subject of the lawsuit were not in compliance with French commercial law, but imposed no fine and no injunction. The DGCCRF appealed the decision and, on June 21, 2017, the Paris Court of Appeal published a judgment overturning the decision. The court annulled parity clauses contained in the agreements at issue, ordered the Expedia Group companies to amend their contracts, and imposed a fine. The Expedia Group companies have appealed the decision. The appeal will not stay payment of the fine. Hotelverband Deutschland (“IHA”) e.V. (a German hotel association) brought proceedings before the Cologne regional court against Expedia, Inc., Expedia.com GmbH and Expedia Lodging Partner Services Sàrl. IHA applied for a ‘cease and desist’ order against these companies in relation to the enforcement of certain rate and availability parity clauses contained in contracts with hotels in Germany. On or around February 16, 2017, the court dismissed IHA’s action and declared the claimant liable for the Expedia Group defendants’ statutory costs. IHA appealed the decision and, on December 4, 2017, the Court of Appeals rejected IHA’s appeal. The Court of Appeals expressly confirmed that Expedia Group’s MFNs are in compliance both with European and German competition law. While IHA had indicated an intention to appeal the decision to the Federal Supreme Court, it has not lodged an appeal within the applicable deadline, with the consequence that the Court of Appeals judgment has now become final. A working group of 10 European NCAs (Belgium, Czech Republic, Denmark, France, Hungary, Ireland, Italy, Netherlands, Sweden and the United Kingdom) and the European Commission has been established by the European Competition Network (“ECN”) at the end of 2015 to monitor the functioning of the online hotel booking sector, following amendments made by a number of online travel companies (including Booking.com and Expedia Group companies) in relation to certain parity provisions in their contracts with hotels. The working group issued questionnaires to online travel agencies including Expedia Group companies, metasearch sites and hotels in 2016. The underlying results of the ECN monitoring exercise were published on April 6, 2017. Legislative bodies in France (July 2015), Austria (December 2016), Italy (August 2017) and Belgium (August 2018) have also adopted new domestic anti-parity clause legislation. Expedia Group believes each of these pieces of legislation violates both EU and national legal principles and therefore, Expedia Group companies have challenged these laws at the European Commission. A motion requesting the Swiss government to take action on narrow price parity has been adopted in the Swiss parliament. The Swiss government is now required to draft legislation implementing the motion. The Company is unable to predict whether and with what content legislation will ultimately be adopted and, if so, when this might be the case. It is not yet clear how any adopted domestic anti-parity clause legislations and/or any possible future legislation in this area may affect Expedia Group's business. Outside of Europe, a number of NCAs have also opened investigations or inquired about contractual parity provisions in contracts between hotels and online travel companies in their respective territories, including Expedia Group companies. A Brazilian hotel sector association -- Forum de Operadores Hoteleiros do Brasil -- filed a complaint with the Brazilian Administrative Council for Economic Defence (“CADE”) against a number of online travel companies, including Booking.com, Decolar.com and Expedia Group companies, on July 27, 2016 with respect to parity provisions in contracts between hotels and online travel companies. On September 13, 2016, the Expedia Group companies submitted a response to the complaint to CADE. On March 27, 2018, the Expedia Group companies resolved CADE’s concerns based on a settlement implementing waivers substantially similar to those provided to accommodation providers in Europe. In late 2016, Expedia Group companies resolved the concerns of the Australia and New Zealand NCAs based on implementation of the waivers substantially similar to those provided to accommodation providers in Europe (on September 1, 2016 in Australia and on October 28, 2016 in New Zealand). More recently, however, the Australian NCA has reopened its investigation. On and with effect from March 22, 2019, Expedia Group voluntarily and unilaterally waived certain additional rate parity provisions in agreements with Australian hotel partners. Expedia Group companies are in ongoing discussions with a limited number of NCAs in other countries in relation to their contracts with hotels. In April 2019, the Japan Fair Trade Commission (“JFTC”) launched an investigation into certain practices of a number of online travel companies, including Expedia Group companies. Expedia Group is cooperating with the JFTC in this investigation. Expedia Group is currently unable to predict the impact the implementation of the waivers both in Europe and elsewhere will have on Expedia Group's business, on investigations or inquiries by NCAs in other countries, or on industry practice more generally. In addition, regulatory authorities in Europe (including the UK Competition and Markets Authority, or “CMA”), Australia, and elsewhere have initiated legal proceedings and/or undertaken market studies, inquiries or investigations relating to online marketplaces and how information is presented to consumers using those marketplaces, including practices such as search results rankings and algorithms, discount claims , disclosure of charges, and availability and similar messaging. On June 28, 2018, the CMA announced that it will be requiring hotel booking websites to take action to address concerns identified in the course of its ongoing investigation. After consulting with the CMA, on January 31, 2019, we agreed to offer certain voluntary undertakings with respect to the presentation of information on certain of our UK consumer-facing websites in order to address the CMA’s concerns. On February 4, 2019, the CMA confirmed that, as a result of the undertakings offered, it has closed its investigation without any admission or finding of liability. The undertakings become effective on September 1, 2019. On August 23, 2018, the Australian Competition and Consumer Commission, or "ACCC", instituted proceedings in the Australian Federal Court against trivago. The ACCC alleged breaches of Australian consumer law relating to trivago’s advertisements in Australia concerning the hotel prices available on trivago’s Australian site and trivago’s strike-through pricing practice. A trial date is set for September 9, 2019 and an appropriate reserve has been accrued in respect of this matter. We are cooperating with regulators in the investigations described above where applicable, but we are unable to predict what, if any, effect such actions will have on our business, industry practices or online commerce more generally. Other than described above, we have not accrued a reserve in connection with the market studies, investigations, inquiries or legal proceedings described above either because the likelihood of an unfavorable outcome is not probable or the amount of any loss is not estimable. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11 – Related Party Transactions Mr. Diller is the Chairman and Senior Executive of Expedia Group. Subject to the terms of an Amended and Restated Stockholders Agreement between Liberty Expedia Holdings, Inc. (“Liberty Expedia Holdings”) and Mr. Diller, as amended as of November 4, 2016 (the “Stockholders Agreement”), Mr. Diller also holds an irrevocable proxy to vote shares of Expedia common stock and Class B common stock beneficially owned by Liberty Expedia Holdings (the “Diller Proxy”), which proxy as of March 31, 2018 has been assigned by Mr. Diller to Liberty Expedia Holdings as described below. On November 4, 2016, Qurate Retail, Inc. (f/k/a Liberty Interactive Corporation) (“Qurate”) redeemed a portion of the outstanding shares of its Liberty Ventures common stock in exchange for all of the outstanding shares of Liberty Expedia Holdings, which at that time was a wholly owned subsidiary of Liberty Interactive (the “Liberty Split-Off”). At the time of the Liberty Split-Off, Liberty Expedia Holdings’ assets included all of Liberty Interactive’s interest in Expedia Group. Pursuant to a Transaction Agreement among Mr. Diller, Liberty Interactive, Liberty Expedia Holdings, John C. Malone and Leslie Malone (collectively, the “Malone Group”), dated as of March 24, 2016 and amended and restated effective on September 22, 2016 and as of March 6, 2018 (the “Transaction Agreement”), at the time of the Liberty Split-Off, for a period ending not later than May 4, 2019 (i) Mr. Diller assigned the Diller Proxy to Liberty Expedia Holdings (the “Diller Assignment”) and (ii) the Malone Group granted Mr. Diller an irrevocable proxy to vote all shares of Liberty Expedia Holdings Series A common stock and Series B common stock beneficially owned by them upon completion of the Liberty Split-Off or thereafter (the “Malone Proxy”), in each case, subject to certain limitations. As a result, by virtue of the voting power associated with the Malone Proxy, the governance structure at Liberty Expedia Holdings and Mr. Diller’s continuing position as Chairman of Expedia Group’s Board of Directors, as of March 31, 2018 Mr. Diller indirectly controls Expedia Group until the termination or expiration of the Diller Assignment and Malone Proxy, at which point (and by virtue of the termination of the Diller Assignment), unless the Diller Assignment and Malone Proxy terminate as a result of Mr. Diller’s death or disability, Mr. Diller will have the power to vote directly all shares of Expedia Common Stock and Class B Common Stock beneficially owned by Liberty Expedia Holdings. On April 15, 2019 and prior to the Company’s entry into the Merger Agreement as described below, Mr. Diller, Liberty Expedia Holdings, Qurate and the Malone Group entered into Amendment No. 2 to Amended and Restated Transaction Agreement, providing for the immediate termination of the Transaction Agreement, which automatically resulted in the termination of the Diller Assignment and the Malone Proxy. Merger Agreement On April 16, 2019, Expedia Group announced that, on April 15, 2019, it entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Liberty Expedia Holdings, LEMS I LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Merger LLC”), and LEMS II Inc., a Delaware corporation and a wholly owned subsidiary of Merger LLC (“Merger Sub”) and certain other related agreements (the “Proposed Liberty Expedia Transaction”). The Merger Agreement provides for, among other things and subject to the satisfaction or waiver of certain specified conditions set forth therein, (i) the merger of Merger Sub with and into Liberty Expedia Holdings (the “Merger”), with Liberty Expedia Holdings surviving the Merger as a wholly owned subsidiary of Merger LLC, and (ii) immediately following the Merger, the merger of Liberty Expedia Holdings (as the surviving corporation in the Merger) with and into Merger LLC (the “Upstream Merger”, and together with the Merger, the “Combination”), with Merger LLC surviving the Upstream Merger as a wholly owned subsidiary of the Company. Pursuant to the Merger Agreement, each share of Series A common stock, par value $0.01 per share, of Liberty Expedia Holdings and Series B common stock, par value $0.01 per share, of Liberty Expedia Holdings (together, the “Liberty Expedia Holdings common stock”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (except for shares held by Liberty Expedia Holdings as treasury stock or held directly by the Company) will be converted into the right to receive 0.36 of a share of Company common stock plus cash (without interest) in lieu of any fractional shares of Company common stock (the “Merger Consideration”). At the closing of the Combination, former holders of Liberty Expedia Holdings common stock are expected to own in the aggregate shares of Company common stock representing approximately 14% of the total number of outstanding shares of Company common stock and Class B common stock, based on approximately 141 million shares of Company common stock and approximately 5.5 million shares of Class B common stock currently expected to be outstanding at the closing of the Combination. As of the Effective Time, each then-outstanding stock option with respect to shares of Liberty Expedia Holdings common stock will be cancelled and converted into the right to receive the Merger Consideration in respect of each share subject to such option (after deducting a number of shares sufficient to cover the aggregate option exercise price), less applicable tax withholding. As of the Effective Time, each then-outstanding restricted stock award and restricted stock unit award with respect to shares of Liberty Expedia Holdings common stock will be cancelled and converted into the right to receive the Merger Consideration in respect of each share of Liberty Expedia Holdings common stock subject to such award, less applicable tax withholding. The closing of the Combination is subject to certain mutual conditions, including (1) the adoption of the Merger Agreement by the holders of at least a majority of the aggregate voting power of the outstanding shares of Liberty Expedia Holdings common stock, voting together as a single class; (2) the absence of any order or law that has the effect of enjoining or otherwise prohibiting the closing of the Combination or any of the other transactions contemplated by the Merger Agreement and related transaction documents; (3) the approval for listing of the shares of Company common stock to be issued as Merger Consideration on the Nasdaq Global Select Market; and (4) the delivery of an opinion by Skadden, Arps, Slate, Meagher & Flom LLP to Liberty Expedia Holdings to the effect that the Combination will not impact the tax treatment of the split off of Liberty Expedia Holdings by Qurate on November 4, 2016. The respective obligation of each party to consummate the Combination is also conditioned upon (x) the delivery of an opinion from such party’s tax counsel to the effect that the Combination will qualify as a “reorganization” for U.S. federal income tax purposes and (y) the other party’s representations and warranties being true and correct (subject to certain materiality and material adverse effect qualifications), and the other party having performed in all material respects its obligations under the Merger Agreement. The Company’s obligation to consummate the Combination is further conditioned upon the satisfaction of certain conditions to the completion of the exchange pursuant to the Exchange Agreement as described below. The Combination does not require the approval of the Company’s stockholders. At the closing of the Combination, pursuant to the Merger Agreement, each of the three directors serving on the Expedia Group Board of Directors who were nominated by Liberty Expedia Holdings is expected to resign from the Expedia Group Board of Directors. The Expedia Group Board of Directors approved the Merger Agreement and the transactions contemplated thereby following the recommendation of a special committee (the “Expedia Group Special Committee”) consisting solely of independent and disinterested directors, each of whom had been elected by the holders of Company common stock voting together as a class (without the vote of the Class B common stock), to which the Expedia Group Board of Directors had delegated exclusive authority to consider and negotiate the Merger Agreement and the transactions contemplated thereby (including, without limitation, the Exchange Agreement, the Voting Agreement and the New Governance Agreement and the transactions contemplated thereby, as described below). Voting Agreement In connection with the transactions contemplated by the Merger Agreement and following the termination of the Malone Proxy as described below, the Malone Group entered into a voting agreement (the “Voting Agreement”) with the Company on April 15, 2019, pursuant to which the Malone Group has committed, subject to certain conditions, to vote shares of Liberty Expedia Holdings common stock representing approximately 32% of the total voting power of the issued and outstanding shares of Liberty Expedia Holdings common stock as of April 30, 2019, as reported in Liberty Expedia Holdings’ Definitive Proxy Statement on Schedule 14A filed on June 26, 2019, in favor of the Merger Agreement and the transactions contemplated thereby at any meeting of the stockholders of Liberty Expedia Holdings called to vote upon the Merger. A special meeting of stockholders of Liberty Expedia Holdings is scheduled to be held on July 26, 2019, at which Liberty Expedia Holdings stockholders will consider and vote upon the Merger. Exchange Agreement Simultaneously with the entry into the Merger Agreement, Barry Diller, The Diller Foundation d/b/a The Diller - von Furstenberg Family Foundation (the “Family Foundation”), Liberty Expedia Holdings and the Company entered into an Exchange Agreement (the “Exchange Agreement”) pursuant to which (and agreed by Mr. Diller to be deemed to be in recognition and in lieu of Mr. Diller’s existing rights under the Existing Governance Agreement (as defined below) and the Stockholders Agreement (as defined above)), immediately prior to and conditioned upon the closing of the Combination, Mr. Diller and the Family Foundation are expected to exchange with Liberty Expedia Holdings up to approximately 5.5 million shares of Company common stock, for the same number of shares of Class B common stock held by Liberty Expedia Holdings (the shares of Class B common stock acquired by Mr. Diller and the Family Foundation pursuant to the Exchange Agreement, collectively referred to as the “Original Shares”). Assuming the exchange by Mr. Diller and the Family Foundation of a total of approximately 5.5 million shares of Company common stock for an equal number of shares of Class B common stock, the Original Shares would represent approximately 28% of the total voting power of all shares of Company common stock and Class B common stock, based on approximately 141 million shares of Company common stock and approximately 5.5 million shares of Class B common stock currently expected to be outstanding at the closing of the Combination. New Governance Agreement Simultaneously with the entry into the Merger Agreement, the Company and Mr. Diller entered into a Second Amended and Restated Governance Agreement (the “New Governance Agreement”), which provides, among other things, that Mr. Diller may exercise a right (the “Purchase/Exchange Right”) during the nine month period following the closing of the Combination (and agreed by Mr. Diller to be deemed to be in recognition and in lieu of Mr. Diller’s existing rights under the Existing Governance Agreement (as defined below) and the Stockholders Agreement (as defined above)), to (1) exchange with the Company (or its wholly owned subsidiary) an equivalent number of shares of Company common stock for, or (2) purchase from the Company (or its wholly owned subsidiary), at a price per share equal to the average closing price of Company common stock for the five trading days immediately preceding notice of exercise, up to a number of shares of Class B common stock equal to (1) 12,799,999 minus (2) the number of Original Shares (the shares acquired pursuant to the Purchase/Exchange Right, the “Additional Shares”). The Purchase/Exchange Right may be exercised from time to time in whole or in part. Assuming the exercise in full by Mr. Diller of the Purchase/Exchange Right, the Original Shares and Additional Shares would collectively represent approximately 49% of the total voting power of all outstanding shares of Company common stock and Class B common stock, assuming a total of approximately 134 million shares of Company common stock and 12,799,999 shares of Class B common stock outstanding immediately following the exercise of the Purchase/Exchange Right. The foregoing assumes that Mr. Diller exercises his right to acquire the Additional Shares solely by exchanging shares of Company common stock acquired in the open market (or otherwise, other than from the Company). If Mr. Diller acquires the Additional Shares through cash purchases directly from the Company (or its wholly owned subsidiary), the Original Shares and Additional Shares would collectively represent approximately 48% of the total voting power of all outstanding shares of Company common stock and Class B common stock. Prior to the transfer of any Additional Shares, a transferee must deliver a proxy granting Mr. Diller sole voting control over such shares and deliver a joinder agreement agreeing to be bound by certain terms of the New Governance Agreement. Subject to limited exceptions, any transferred Additional Shares over which Mr. Diller does not maintain sole voting control will be automatically converted into shares of Company common stock. All Additional Shares will be automatically converted into shares of Company common stock immediately following the earliest of (a) Mr. Diller’s death or disability; (b) such time as Mr. Diller no longer serves as Chairman or Senior Executive of the Company, other than as a result of his removal (other than for “cause” as defined in the New Governance Agreement) or failure to be nominated or elected when he is willing to serve in such position; and (c) aggregate transfers by Mr. Diller (or certain limited permitted transferees of Mr. Diller) of Original Shares exceeding 5% of the outstanding voting power of the Company. The automatic conversion features described above negotiated by the Expedia Group Special Committee and agreed to by Mr. Diller under the New Governance Agreement do not exist under the Existing Governance Agreement. Additionally, subject to limited exception, no current or future holder of Original Shares or Additional Shares may participate in, or vote in favor of, or tender shares into, any change of control transaction involving at least 50% of the outstanding shares or voting power of capital stock of the Company, unless such transaction provides for the same per share consideration and mix of consideration (or election right) and the same participation rights for shares of Class B common stock and shares of Company common stock. These requirements negotiated by the Expedia Group Special Committee and agreed to by Mr. Diller under the New Governance Agreement do not exist under the Existing Governance Agreement. At the first annual meeting of the Company’s stockholders following the closing of the Combination and for which a preliminary proxy statement has not yet been filed prior to the Effective Time, the Company intends to propose, and Mr. Diller has agreed to vote in favor of, a proposal to amend its Certificate of Incorporation to reflect the aforementioned transfer restrictions, automatic conversion provisions and change-of-control restrictions reflected in the New Governance Agreement. Other Agreements As described above, pursuant to Diller Proxy under the Stockholders Agreement, Mr. Diller generally has the right to vote the shares of Company common stock and Class B common stock held by Liberty Expedia Holdings and its subsidiaries, which shares represent approximately 53% of the total voting power of all shares of Company common stock and Class B common stock, based on a total of 136,717,974 shares of Company common stock and 12,799,999 shares of Class B common stock outstanding as of June 30, 2019. Pursuant to the Diller Assignment (as defined above), Mr. Diller assigned the Diller Proxy (as defined above) to Liberty Expedia Holdings, and, pursuant to the Malone Proxy (as defined above, and, collectively with the “Diller Assignment,” the “Proxy Swap Arrangements”), the Malone Group granted to Mr. Diller a proxy over the shares of Liberty Expedia Holdings common stock owned by it. On April 15, 2019 and prior to the Company’s entry into the Merger Agreement, Mr. Diller, Liberty Expedia Holdings, Qurate and the Malone Group entered into Amendment No. 2 to Amended and Restated Transaction Agreement, providing for the immediate termination of the Transaction Agreement, which automatically resulted in the termination of the Diller Assignment and the Malone Proxy. Simultaneously with the Company’s entry into the Merger Agreement, certain additional related agreements were entered into, including: • A Stockholders Agreement Termination Agreement, by and among Mr. Diller, Liberty Expedia Holdings and certain wholly owned subsidiaries of Liberty Expedia Holdings, pursuant to which the Stockholders Agreement (including the Diller Proxy) will terminate at the closing of the Combination; • A Governance Agreement Termination Agreement, by and among Mr. Diller, the Company, Liberty Expedia Holdings and certain wholly owned subsidiaries of Liberty Expedia Holdings, pursuant to which the Amended and Restated Governance Agreement, dated as of December 20, 2011, as amended, among the Company, Liberty Expedia Holdings and Mr. Diller (the “Existing Governance Agreement”), will terminate at the closing of the Combination; • An Assumption and Joinder Agreement to Tax Sharing Agreement by and among the Company, Liberty Expedia Holdings and Qurate, pursuant to which the Company agrees to assume, effective at the closing of the Combination, Liberty Expedia Holdings’ rights and obligations under the Tax Sharing Agreement, dated as of November 4, 2016, by and between Qurate and Liberty Expedia Holdings; • An Assumption Agreement Concerning Transaction Agreement Obligations by and among the Company, Liberty Expedia Holdings, Qurate and the Malone Group, pursuant to which the Company agrees to assume, effective at the closing of the Combination, certain of Liberty Expedia Holdings’ rights and obligations under the Transaction Agreement which survive the termination of the Transaction Agreement; and • An Assumption and Joinder Agreement to Reorganization Agreement by and among the Company, Liberty Expedia Holdings and Qurate, pursuant to which the Company agrees to assume, effective at the closing of the Combination, Liberty Expedia Holdings’ rights and obligations under the Reorganization Agreement, dated as of October 26, 2016, by and between Qurate and Liberty Expedia Holdings. Upon the closing of the Combination, it is expected that the Company will no longer be a controlled company under the Nasdaq Stock Market Listing Rules. Accordingly, following permitted phase-in periods, the Company will be required, among other things, to have to have a majority of independent directors on its Board of Directors, a compensation committee consisting solely of independent directors and a director nominations process whereby directors are selected by a nominations committee consisting solely of independent directors or by a vote of the Board of Directors in which only independent directors participate. Additionally, all additional shares will be automatically converted into shares of Company common stock immediately following the earliest of (a) Mr. Diller’s death or disability, (b) such time as Mr. Diller no longer serves as chairman or senior executive of Expedia Group, other than as a result of his removal (other than for “cause” as defined in the New Governance Agreement), or failure to be nominated or elected when he is willing to serve in such position, and (c) aggregate transfers by Mr. Diller (or certain limited permitted transferees of Mr. Diller) of original shares exceeding 5% of the outstanding voting power of the Company. Therefore, while it is possible that Mr. Diller may at some point in the future beneficially own more than 50% of the outstanding voting power of the Company, the provisions of the New Governance Agreement provide that following one of the triggers mentioned above, the number of shares of Class B common stock acquired by Mr. Diller in the transaction will not exceed approximately 5.5 million shares of Class B common stock, or approximately 28% of the total voting power of Expedia Group based on approximately 141 million shares of Company common stock and approximately 5.5 million shares of Class B common stock currently expected to be outstanding at the closing of the Combination. Further, as described above, the New Governance Agreement provides that, subject to limited exception, no current or future holder of Original Shares or Additional Shares may participate in, or vote or tender in favor of, any change of control transaction involving at least 50% of the outstanding shares of capital stock of the Company, unless such transaction provides for the same per share consideration and mix of consideration (or election right) and the same participation rights for shares of Class B common stock and shares of Company common stock. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Note 12 – Segment Information We have four reportable segments: Core OTA, trivago, Vrbo (previously referred to as our “HomeAway” segment) and Egencia. Our Core OTA 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 Partner Solutions, Orbitz, Travelocity, Wotif Group, ebookers, CheapTickets, Hotwire.com, CarRentals.com, Classic Vacations and SilverRail Technologies, Inc. Our trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its hotel metasearch websites. Our Vrbo segment operates an online marketplace for the alternative accommodations industry. Our Egencia segment provides managed travel services to corporate customers worldwide. 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 Core OTA and Egencia segments includes allocations of certain expenses, primarily cost of revenue and facilities, and our Core OTA segment includes the total costs of our global supply organizations and Core OTA and Vrbo include the realized foreign currency gains or losses related to the forward contracts hedging a component of our net merchant lodging 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 and Eliminations. Our allocation methodology is periodically evaluated and may change. Our segment disclosure includes intersegment revenues, which primarily consist of advertising and media services provided by our trivago segment to our Core OTA segment. These intersegment transactions are recorded by each segment at amounts that approximate fair value as if the transactions were between third parties, and therefore, impact segment 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. In addition, when Vrbo properties are booked through our Core OTA websites and vice versa, the segments split the third-party revenue for management and segment reporting purposes with the majority of the third-party revenue residing with the website marketing the property or room. Corporate and Eliminations 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 and Eliminations. Such amounts are detailed in our segment reconciliation below. The following tables present our segment information for the three and six months ended June 30, 2019 and 2018 . 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. Three months ended June 30, 2019 Core OTA trivago Vrbo Egencia Corporate & Total (In millions) Third-party revenue $ 2,480 $ 163 $ 347 $ 163 $ — $ 3,153 Intersegment revenue — 88 — — (88 ) — Revenue $ 2,480 $ 251 $ 347 $ 163 $ (88 ) $ 3,153 Adjusted EBITDA $ 623 $ 20 $ 84 $ 37 $ (196 ) $ 568 Depreciation (94 ) (3 ) (24 ) (13 ) (42 ) (176 ) Amortization of intangible assets — — — — (52 ) (52 ) Stock-based compensation — — — — (59 ) (59 ) Legal reserves, occupancy tax and other — — — — (4 ) (4 ) Restructuring and related reorganization charges — — — — (4 ) (4 ) Realized (gain) loss on revenue hedges (8 ) — — — — (8 ) Operating income (loss) $ 521 $ 17 $ 60 $ 24 $ (357 ) 265 Other expense, net (30 ) Income before income taxes 235 Provision for income taxes (48 ) Net income 187 Net income attributable to non-controlling interests (4 ) Net income attributable to Expedia Group, Inc. $ 183 Three months ended June 30, 2018 Core OTA trivago Vrbo Egencia Corporate & Total (In millions) Third-party revenue $ 2,253 $ 174 $ 297 $ 156 $ — $ 2,880 Intersegment revenue — 106 — — (106 ) — Revenue $ 2,253 $ 280 $ 297 $ 156 $ (106 ) $ 2,880 Adjusted EBITDA $ 561 $ (20 ) $ 78 $ 30 $ (186 ) $ 463 Depreciation (85 ) (4 ) (15 ) (12 ) (53 ) (169 ) Amortization of intangible assets — — — — (72 ) (72 ) Impairment of goodwill — — — — (61 ) (61 ) Stock-based compensation — — — — (50 ) (50 ) Legal reserves, occupancy tax and other — — — — (1 ) (1 ) Realized (gain) loss on revenue hedges 1 — — — — 1 Operating income (loss) $ 477 $ (24 ) $ 63 $ 18 $ (423 ) 111 Other expense, net (125 ) Loss before income taxes (14 ) Provision for income taxes 5 Net loss (9 ) Net loss attributable to non-controlling interests 10 Net income attributable to Expedia Group, Inc. $ 1 Six months ended June 30, 2019 Core OTA trivago Vrbo Egencia Corporate & Total (In millions) Third-party revenue $ 4,517 $ 315 $ 614 $ 316 $ — $ 5,762 Intersegment revenue — 173 — — (173 ) — Revenue $ 4,517 $ 488 $ 614 $ 316 $ (173 ) $ 5,762 Adjusted EBITDA $ 967 $ 44 $ 44 $ 66 $ (377 ) $ 744 Depreciation (186 ) (6 ) (47 ) (26 ) (87 ) (352 ) Amortization of intangible assets — — — — (104 ) (104 ) Stock-based compensation — — — — (115 ) (115 ) Legal reserves, occupancy tax and other — — — — (14 ) (14 ) Restructuring and related reorganization charges — — — — (14 ) (14 ) Realized (gain) loss on revenue hedges (11 ) — — — — (11 ) Operating income (loss) $ 770 $ 38 $ (3 ) $ 40 $ (711 ) 134 Other expense, net (40 ) Income before income taxes 94 Provision for income taxes (7 ) Net income 87 Net income attributable to non-controlling interests (7 ) Net income attributable to Expedia Group, Inc. $ 80 Six months ended June 30, 2018 Core OTA trivago Vrbo Egencia Corporate & Total (In millions) Third-party revenue $ 4,179 $ 371 $ 531 $ 307 $ — $ 5,388 Intersegment revenue — 228 — — (228 ) — Revenue $ 4,179 $ 599 $ 531 $ 307 $ (228 ) $ 5,388 Adjusted EBITDA $ 884 $ (48 ) $ 57 $ 57 $ (363 ) $ 587 Depreciation (168 ) (7 ) (29 ) (23 ) (109 ) (336 ) Amortization of intangible assets — — — — (144 ) (144 ) Impairment of goodwill — — — — (61 ) (61 ) Stock-based compensation — — — — (100 ) (100 ) Legal reserves, occupancy tax and other — — — — (4 ) (4 ) Realized (gain) loss on revenue hedges 4 — — — — 4 Operating income (loss) $ 720 $ (55 ) $ 28 $ 34 $ (781 ) (54 ) Other expense, net (129 ) Loss before income taxes (183 ) Provision for income taxes 25 Net loss (158 ) Net loss attributable to non-controlling interests 22 Net loss attributable to Expedia Group, Inc. $ (136 ) Revenue by Business Model and Service Type The following table presents revenue by business model and service type: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (in millions) Business Model: Merchant $ 1,680 $ 1,532 $ 3,072 $ 2,866 Agency 841 777 1,527 1,435 Advertising and media 285 274 549 556 Vrbo 347 297 614 531 Total revenue $ 3,153 $ 2,880 $ 5,762 $ 5,388 Service Type: Lodging $ 2,231 $ 1,992 $ 3,956 $ 3,604 Air 228 223 476 465 Advertising and media 285 274 549 556 Other (1) 409 391 781 763 Total revenue $ 3,153 $ 2,880 $ 5,762 $ 5,388 ___________________________________ (1) Other includes car rental, insurance, destination services, cruise and fee revenue related to our corporate travel business, among other revenue streams, none of which are individually material. |
Guarantor and Non-Guarantor Sup
Guarantor and Non-Guarantor Supplemental Financial Information | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Guarantor and Non-Guarantor Supplemental Financial Information | Note 13 – Guarantor and Non-Guarantor Supplemental Financial Information Condensed consolidating financial information of Expedia Group, Inc. (the “Parent”), our subsidiaries that are guarantors of our debt facility and instruments (the “Guarantor Subsidiaries”), and our subsidiaries that are not guarantors of our debt facility and instruments (the “Non-Guarantor Subsidiaries”) is shown below. The debt facility and instruments are guaranteed by certain of our wholly-owned domestic subsidiaries and rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations. The guarantees are full, unconditional, and joint and several with the exception of certain customary automatic subsidiary release provisions. In this financial information, the Parent and Guarantor Subsidiaries account for investments in their wholly-owned subsidiaries using the equity method. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Three months ended June 30, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) Revenue $ — $ 2,483 $ 759 $ (89 ) $ 3,153 Costs and expenses: Cost of revenue — 378 150 (6 ) 522 Selling and marketing — 1,267 473 (83 ) 1,657 Technology and content — 311 124 — 435 General and administrative — 153 61 — 214 Amortization of intangible assets — 32 20 — 52 Legal reserves, occupancy tax and other — 3 1 — 4 Restructuring and related reorganization charges — — 4 — 4 Intercompany (income) expense, net — 199 (199 ) — — Operating income — 140 125 — 265 Other income (expense): Equity in pre-tax earnings of consolidated subsidiaries 215 116 — (331 ) — Other, net (42 ) (14 ) 26 — (30 ) Total other income (expense), net 173 102 26 (331 ) (30 ) Income before income taxes 173 242 151 (331 ) 235 Provision for income taxes 10 (25 ) (33 ) — (48 ) Net income 183 217 118 (331 ) 187 Net income attributable to non-controlling interests — — (4 ) — (4 ) Net income attributable to Expedia Group, Inc. $ 183 $ 217 $ 114 $ (331 ) $ 183 Comprehensive income attributable to Expedia Group, Inc. $ 184 $ 226 $ 122 $ (348 ) $ 184 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Three months ended June 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) Revenue $ — $ 2,229 $ 758 $ (107 ) $ 2,880 Costs and expenses: Cost of revenue — 366 137 (5 ) 498 Selling and marketing — 1,112 531 (102 ) 1,541 Technology and content — 280 120 — 400 General and administrative — 128 68 — 196 Amortization of intangible assets — 45 27 — 72 Impairment of goodwill — — 61 — 61 Legal reserves, occupancy tax and other — — 1 — 1 Intercompany (income) expense, net — 231 (231 ) — — Operating income — 67 44 — 111 Other income (expense): Equity in pre-tax earnings of consolidated subsidiaries 38 35 — (73 ) — Other, net (48 ) (61 ) (16 ) — (125 ) Total other expense, net (10 ) (26 ) (16 ) (73 ) (125 ) Income (loss) before income taxes (10 ) 41 28 (73 ) (14 ) Provision for income taxes 11 (2 ) (4 ) — 5 Net income (loss) 1 39 24 (73 ) (9 ) Net loss attributable to non-controlling interests — — 10 — 10 Net income attributable to Expedia Group, Inc. $ 1 $ 39 $ 34 $ (73 ) $ 1 Comprehensive loss attributable to Expedia Group, Inc. $ (65 ) $ (59 ) $ (63 ) $ 122 $ (65 ) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Six months ended June 30, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) Revenue $ — $ 4,541 $ 1,397 $ (176 ) $ 5,762 Costs and expenses: Cost of revenue — 754 293 (12 ) 1,035 Selling and marketing — 2,417 939 (164 ) 3,192 Technology and content — 605 259 — 864 General and administrative — 260 145 — 405 Amortization of intangible assets — 62 42 — 104 Legal reserves, occupancy tax and other — 14 — — 14 Restructuring and related reorganization charges — — 14 — 14 Intercompany (income) expense, net — 411 (411 ) — — Operating income — 18 116 — 134 Other income (expense): Equity in pre-tax earnings of consolidated subsidiaries 143 87 — (230 ) — Other, net (82 ) 38 4 — (40 ) Total other income (expense), net 61 125 4 (230 ) (40 ) Income before income taxes 61 143 120 (230 ) 94 Provision for income taxes 19 2 (28 ) — (7 ) Net income 80 145 92 (230 ) 87 Net (income) loss attributable to non-controlling interests — 1 (8 ) — (7 ) Net income attributable to Expedia Group, Inc. $ 80 $ 146 $ 84 $ (230 ) $ 80 Comprehensive income attributable to Expedia Group, Inc. $ 84 $ 146 $ 84 $ (230 ) $ 84 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Six months ended June 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) Revenue $ — $ 4,140 $ 1,479 $ (231 ) $ 5,388 Costs and expenses: Cost of revenue — 732 263 (10 ) 985 Selling and marketing — 2,160 1,118 (221 ) 3,057 Technology and content — 560 236 — 796 General and administrative — 246 149 — 395 Amortization of intangible assets — 90 54 — 144 Impairment of goodwill — — 61 — 61 Legal reserves, occupancy tax and other — 3 1 — 4 Intercompany (income) expense, net — 415 (415 ) — — Operating income (loss) — (66 ) 12 — (54 ) Other income (expense): Equity in pre-tax earnings (losses) of consolidated subsidiaries (59 ) 19 — 40 — Other, net (100 ) (9 ) (20 ) — (129 ) Total other income (expense), net (159 ) 10 (20 ) 40 (129 ) Loss before income taxes (159 ) (56 ) (8 ) 40 (183 ) Provision for income taxes 23 1 1 — 25 Net loss (136 ) (55 ) (7 ) 40 (158 ) Net loss attributable to non-controlling interests — 1 21 — 22 Net income (loss) attributable to Expedia Group, Inc. $ (136 ) $ (54 ) $ 14 $ 40 $ (136 ) Comprehensive loss attributable to Expedia Group, Inc. $ (175 ) $ (110 ) $ (39 ) $ 149 $ (175 ) CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) ASSETS Total current assets $ 422 $ 7,291 $ 2,658 $ (1,547 ) $ 8,824 Investment in subsidiaries 10,780 3,530 — (14,310 ) — Intangible assets, net — 1,459 428 — 1,887 Goodwill — 6,367 1,751 — 8,118 Other assets, net — 2,255 1,146 (29 ) 3,372 TOTAL ASSETS $ 11,202 $ 20,902 $ 5,983 $ (15,886 ) $ 22,201 LIABILITIES AND STOCKHOLDERS’ EQUITY Total current liabilities $ 1,580 $ 9,569 $ 2,074 $ (1,547 ) $ 11,676 Long-term debt 3,715 — — — 3,715 Other long-term liabilities — 470 433 (29 ) 874 Redeemable non-controlling interests — 16 13 — 29 Stockholders’ equity 5,907 10,847 3,463 (14,310 ) 5,907 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 11,202 $ 20,902 $ 5,983 $ (15,886 ) $ 22,201 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) ASSETS Total current assets $ 402 $ 5,261 $ 2,137 $ (2,603 ) $ 5,197 Investment in subsidiaries 10,615 3,425 — (14,040 ) — Intangible assets, net — 1,520 472 — 1,992 Goodwill — 6,366 1,754 — 8,120 Other assets, net — 1,840 913 (29 ) 2,724 TOTAL ASSETS $ 11,017 $ 18,412 $ 5,276 $ (16,672 ) $ 18,033 LIABILITIES AND STOCKHOLDERS’ EQUITY Total current liabilities $ 1,649 $ 7,396 $ 1,618 $ (2,603 ) $ 8,060 Long-term debt 3,717 — — — 3,717 Other long-term liabilities — 320 284 (29 ) 575 Redeemable non-controlling interests — 17 13 — 30 Stockholders’ equity 5,651 10,679 3,361 (14,040 ) 5,651 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 11,017 $ 18,412 $ 5,276 $ (16,672 ) $ 18,033 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six months ended June 30, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidated (In millions) Operating activities: Net cash provided by operating activities $ — $ 2,845 $ 442 $ 3,287 Investing activities: Capital expenditures, including internal-use software and website development — (529 ) (44 ) (573 ) Purchases of investments — (623 ) (13 ) (636 ) Sales and maturities of investments — 14 13 27 Other, net — 16 — 16 Net cash used in investing activities — (1,122 ) (44 ) (1,166 ) Financing activities: Purchases of treasury stock (29 ) — — (29 ) Payment of dividends to stockholders (95 ) — — (95 ) Proceeds from exercise of equity awards and employee stock purchase plan 156 — — 156 Transfers (to) from related parties (30 ) 91 (61 ) — Other, net (2 ) 4 — 2 Net cash provided by (used in) financing activities — 95 (61 ) 34 Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents — 21 (1 ) 20 Net increase in cash, cash equivalents and restricted cash and cash equivalents — 1,839 336 2,175 Cash, cash equivalents and restricted cash and cash equivalents at beginning of the period — 1,190 1,515 2,705 Cash, cash equivalents and restricted cash and cash equivalents at end of the period $ — $ 3,029 $ 1,851 $ 4,880 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six months ended June 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidated (In millions) Operating activities: Net cash provided by operating activities $ — $ 2,047 $ 444 $ 2,491 Investing activities: Capital expenditures, including internal-use software and website development — (338 ) (73 ) (411 ) Purchases of investments — (1,669 ) — (1,669 ) Sales and maturities of investments — 550 74 624 Transfers (to) from related parties — (60 ) 60 — Other, net — 19 3 22 Net cash provided by (used in) investing activities — (1,498 ) 64 (1,434 ) Financing activities: Purchases of treasury stock (426 ) — — (426 ) Payment of dividends to stockholders (91 ) — — (91 ) Proceeds from exercise of equity awards and employee stock purchase plan 67 — — 67 Transfers (to) from related parties 452 (26 ) (426 ) — Other, net (2 ) (3 ) (1 ) (6 ) Net cash used in financing activities — (29 ) (427 ) (456 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents — (56 ) (50 ) (106 ) Net increase in cash, cash equivalents and restricted cash and cash equivalents — 464 31 495 Cash, cash equivalents and restricted cash and cash equivalents at beginning of period — 1,321 1,596 2,917 Cash, cash equivalents and restricted cash and cash equivalents at end of period $ — $ 1,785 $ 1,627 $ 3,412 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These accompanying financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited consolidated financial statements include Expedia Group, Inc., our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. We have eliminated significant intercompany transactions and accounts. We have prepared the accompanying unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting. We have included all adjustments necessary for a fair presentation of the results of the interim period. These adjustments consist of normal recurring items. Our interim unaudited consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018 |
Accounting Estimates | Accounting Estimates We use estimates and assumptions in the preparation of our interim unaudited consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our interim unaudited consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our interim unaudited consolidated financial statements include revenue recognition; recoverability of current and long-lived assets, intangible assets and goodwill; income and transactional taxes, such as potential settlements related to occupancy and excise taxes; loss contingencies; deferred loyalty rewards; acquisition purchase price allocations; stock-based compensation and accounting for derivative instruments. |
Reclassifications | Reclassifications |
Seasonality | Seasonality We generally experience seasonal fluctuations in the demand for our travel services. For example, traditional leisure travel bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The number of bookings typically decreases in the fourth quarter. Because revenue for most of our travel services, including merchant and agency hotel, is recognized as the travel takes place rather than when it is booked, revenue typically lags bookings by several weeks for our hotel business and can be several months or more for our alternative accommodations business. Historically, Vrbo has seen seasonally stronger bookings in the first quarter of the year, with the relevant stays occurring during the peak summer travel months. The seasonal revenue impact is exacerbated with respect to income by the nature of our variable cost of revenue and direct sales and marketing costs, which we typically realize in closer alignment to booking volumes, and the more stable nature of our fixed costs. Furthermore, operating profits for our primary advertising business, trivago, have typically been experienced in the second half of the year, particularly the fourth quarter, as |
Recent Accounting Policies | Recently Adopted Accounting Policies Leases. As of January 1, 2019, we adopted the Accounting Standards Updates (“ASU”) amending the guidance related to accounting and reporting guidelines for leasing arrangements using the optional transition method that allowed for a cumulative-effect adjustment in the period of adoption. Results for reporting periods beginning after January 1, 2019 are presented under the new guidance, while prior period amounts were not adjusted and continue to be reported under the accounting standards in effect for those periods. The new guidance required entities that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases regardless of whether they are classified as finance or operating leases. In addition, new disclosures are required to meet the objective of enabling users of financial statements to better understand the amount, timing and uncertainty of cash flows arising from leases. We elected certain of the available transition practical expedients, including those that permit us to not reassess 1) whether any expired or existing contracts are or contain leases, 2) the lease classification for any expired or exiting leases, and 3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment. The standard had a material impact on our consolidated balance sheets, but did not have a material impact on our consolidated statements of operations or statements of cash flows. The most significant impact was the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases. Additionally, we removed the assets and liabilities previously recorded pursuant to build-to-suit lease guidance resulting in an increase to retained earnings of approximately $6 million . Hedge Accounting. As of January 1, 2019, we adopted the new guidance amending the accounting guidance for hedge accounting. The new guidance requires expanded hedge accounting for both non-financial and financial risk components and refines the measurement of hedge results to better reflect an entity’s hedging strategies. The new guidance also amends the presentation and disclosure requirements on a prospective basis as well as changes how entities assess hedge effectiveness. The adoption of this new guidance had no impact on our consolidated financial statements. Recent Accounting Policies Not Yet Adopted Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued new guidance on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, and available-for-sale debt securities. The new guidance replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. This update is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods within those annual periods. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements. Cloud Computing Arrangements. In August 2018, the FASB issued new guidance on the accounting for implementation costs incurred for a cloud computing arrangement that is a service contract. The update conforms the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the accounting guidance that provides for capitalization of costs incurred to develop or obtain internal-use-software. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements. Fair Value Measurements. In August 2018, the FASB issued new guidance related to the disclosure requirements on fair value measurements, which removes, modifies or adds certain disclosures. The guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements disclosures. |
Revenue | Revenue Deferred Merchant Bookings. We classify cash payments received in advance of our performance obligations as deferred merchant bookings. At December 31, 2018, $3.627 billion of cash advance cash payments was reported within deferred merchant bookings, $3.110 billion of which was recognized resulting in $436 million of revenue during the six months ended June 30, 2019 . At June 30, 2019 , the related balance was $6.331 billion . At December 31, 2018, $700 million of deferred loyalty rewards was reported within deferred merchant bookings, $391 million of which was recognized within revenue during the six months ended June 30, 2019 . At June 30, 2019 , the related balance was $722 million . Deferred Revenue. At December 31, 2018, $364 million was recorded as deferred revenue, $263 million of which was recognized as revenue during the six months ended June 30, 2019 . At June 30, 2019 , the related balance was $522 million . Practical Expedients and Exemptions. We have used the portfolio approach to account for our loyalty points as the rewards programs share similar characteristics within each program in relation to the value provided to the traveler and their breakage patterns. Using this portfolio approach is not expected to differ materially from applying the guidance to individual contracts. However, we will continue to assess and refine, if necessary, how a portfolio within each rewards program is defined. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
Restricted Cash and Cash Equivalents | Cash, Restricted Cash and Cash Equivalents |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are primarily for office space and data centers and are included in operating lease ROU assets, accrued expenses and other current liabilities, and operating lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For operating leases with a term of one year or less, we have elected to not recognize a lease liability or ROU asset on our consolidated balance sheet. Instead, we recognize the lease payments as expense on a straight-line basis over the lease term. Short-term lease costs are immaterial to our consolidated statements of operations and cash flows. We have office space and data center lease agreements with insignificant non-lease components and have elected the practical expedient to combine and account for lease and non-lease components as a single lease component. |
Fair Value Measurements | Derivative instruments are carried at fair value on our consolidated balance sheets. We use foreign currency forward contracts to economically hedge certain merchant revenue exposures, foreign denominated liabilities related to certain of our loyalty programs and our other foreign currency-denominated operating liabilities. Our goal in managing our foreign exchange risk is to reduce, to the extent practicable, our potential exposure to the changes that exchange rates might have on our earnings, cash flows and financial position. Our foreign currency forward contracts are typically short-term and, as they do not qualify for hedge accounting treatment, we classify the changes in their fair value in other, net. We classify our cash equivalents and investments within Level 1 and Level 2 as we value our cash equivalents and investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Valuation of the foreign currency forward contracts is based on foreign currency exchange rates in active markets, a Level 2 input. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table reconciles cash, cash equivalents and restricted cash reported in our consolidated balance sheets to the total amount presented in our consolidated statements of cash flows: June 30, December 31, (in millions) Cash and cash equivalents $ 4,258 $ 2,443 Restricted cash and cash equivalents 619 259 Restricted cash included within long-term investments and other assets 3 3 Total cash, cash equivalents and restricted cash and cash equivalents in the consolidated statement of cash flow $ 4,880 $ 2,705 |
Schedule of Restrictions on Cash and Cash Equivalents | The following table reconciles cash, cash equivalents and restricted cash reported in our consolidated balance sheets to the total amount presented in our consolidated statements of cash flows: June 30, December 31, (in millions) Cash and cash equivalents $ 4,258 $ 2,443 Restricted cash and cash equivalents 619 259 Restricted cash included within long-term investments and other assets 3 3 Total cash, cash equivalents and restricted cash and cash equivalents in the consolidated statement of cash flow $ 4,880 $ 2,705 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 are classified using the fair value hierarchy in the table below: Total Level 1 Level 2 (In millions) Assets Cash equivalents: Money market funds $ 61 $ 61 $ — Time deposits 1,378 — 1,378 Investments: Time deposits 631 — 631 Marketable equity securities 133 133 — Total assets $ 2,203 $ 194 $ 2,009 Liabilities Derivatives: Foreign currency forward contracts $ 6 $ — $ 6 Financial assets measured at fair value on a recurring basis as of December 31, 2018 are classified using the fair value hierarchy in the table below: Total Level 1 Level 2 (In millions) Assets Cash equivalents: Money market funds $ 35 $ 35 $ — Time deposits 624 — 624 Derivatives: Foreign currency forward contracts 22 — 22 Investments: Time deposits 28 — 28 Marketable equity securities 119 119 — Total assets $ 828 $ 154 $ 674 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Long Term Debt Outstanding | The following table sets forth our outstanding debt: June 30, December 31, (In millions) 5.95% senior notes due 2020 $ 749 $ 748 2.5% (€650 million) senior notes due 2022 736 740 4.5% senior notes due 2024 496 496 5.0% senior notes due 2026 743 742 3.8% senior notes due 2028 991 991 Long-term debt (1) $ 3,715 $ 3,717 _______________ (1) Net of applicable discounts and debt issuance costs. |
Level 2 | |
Long Term Debt Outstanding | The following table sets forth the approximate fair value of our outstanding debt, which is based on quoted market prices in less active markets (Level 2 inputs): June 30, December 31, (In millions) 5.95% senior notes due 2020 $ 778 $ 778 2.5% (€650 million) senior notes due 2022 (1) 781 771 4.5% senior notes due 2024 533 504 5.0% senior notes due 2026 819 760 3.8% senior notes due 2028 1,017 915 _______________ (1) Approximately 687 million Euro as of June 30, 2019 and 674 million Euro as of December 31, 2018 . |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Cash Flow Information for Operating Leases | Supplemental cash flow information related to leases were as follows: Three months ended Six months ended 2019 2019 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 34 $ 73 Right-of-use assets obtained in exchange for lease obligations: Operating leases 21 27 |
Schedule of Supplemental Balance Sheet Information for Operating Leases | Supplemental consolidated balance sheet information related to leases were as follows: June 30, 2019 (in millions) Operating lease right-of-use assets $ 524 Current lease liabilities included within Accrued expenses and other current liabilities $ 110 Long-term lease liabilities included within Operating lease liabilities 466 Total operating lease liabilities $ 576 Weighted average remaining lease term 8.8 years Weighted average discount rate 3.8 % |
Schedule of Future Minimum Rental Payments for Operating Leases | Maturities of lease liabilities are as follows: Operating Leases (in millions) Year ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 71 2020 111 2021 94 2022 75 2023 55 2024 and thereafter 281 Total lease payments 687 Less: imputed interest (111 ) Total $ 576 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Summary Of Dividends Declared | The Executive Committee, acting on behalf of the Board of Directors, declared the following dividends during the periods presented: Declaration Date Dividend Per Share Record Date Total Amount (in millions) Payment Date Six Months Ended June 30, 2019 February 6, 2019 $ 0.32 March 7, 2019 $ 47 March 27, 2019 May 1, 2019 0.32 May 23, 2019 $ 48 June 13, 2019 Six Months Ended June 30, 2018 February 7, 2018 0.30 March 8, 2018 46 March 28, 2018 April 24, 2018 0.30 May 24, 2018 45 June 14, 2018 |
Earnings (Loss) Per Share - (Ta
Earnings (Loss) Per Share - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table presents our basic and diluted earnings (loss) per share: Three months ended Six months ended 2019 2018 2019 2018 (In millions, except share and per share data) Net income (loss) attributable to Expedia Group, Inc. $ 183 $ 1 $ 80 $ (136 ) Earnings (loss) per share attributable to Expedia Group, Inc. available to common stockholders: Basic $ 1.23 $ 0.01 $ 0.54 $ (0.90 ) Diluted 1.21 0.01 0.53 (0.90 ) Weighted average number of shares outstanding (000's): Basic 149,049 150,076 148,468 150,942 Dilutive effect of: Options to purchase common stock 1,893 2,058 1,944 — Other dilutive securities 619 483 645 — Diluted 151,561 152,617 151,057 150,942 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Operating Segment Information | The following tables present our segment information for the three and six months ended June 30, 2019 and 2018 . 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. Three months ended June 30, 2019 Core OTA trivago Vrbo Egencia Corporate & Total (In millions) Third-party revenue $ 2,480 $ 163 $ 347 $ 163 $ — $ 3,153 Intersegment revenue — 88 — — (88 ) — Revenue $ 2,480 $ 251 $ 347 $ 163 $ (88 ) $ 3,153 Adjusted EBITDA $ 623 $ 20 $ 84 $ 37 $ (196 ) $ 568 Depreciation (94 ) (3 ) (24 ) (13 ) (42 ) (176 ) Amortization of intangible assets — — — — (52 ) (52 ) Stock-based compensation — — — — (59 ) (59 ) Legal reserves, occupancy tax and other — — — — (4 ) (4 ) Restructuring and related reorganization charges — — — — (4 ) (4 ) Realized (gain) loss on revenue hedges (8 ) — — — — (8 ) Operating income (loss) $ 521 $ 17 $ 60 $ 24 $ (357 ) 265 Other expense, net (30 ) Income before income taxes 235 Provision for income taxes (48 ) Net income 187 Net income attributable to non-controlling interests (4 ) Net income attributable to Expedia Group, Inc. $ 183 Three months ended June 30, 2018 Core OTA trivago Vrbo Egencia Corporate & Total (In millions) Third-party revenue $ 2,253 $ 174 $ 297 $ 156 $ — $ 2,880 Intersegment revenue — 106 — — (106 ) — Revenue $ 2,253 $ 280 $ 297 $ 156 $ (106 ) $ 2,880 Adjusted EBITDA $ 561 $ (20 ) $ 78 $ 30 $ (186 ) $ 463 Depreciation (85 ) (4 ) (15 ) (12 ) (53 ) (169 ) Amortization of intangible assets — — — — (72 ) (72 ) Impairment of goodwill — — — — (61 ) (61 ) Stock-based compensation — — — — (50 ) (50 ) Legal reserves, occupancy tax and other — — — — (1 ) (1 ) Realized (gain) loss on revenue hedges 1 — — — — 1 Operating income (loss) $ 477 $ (24 ) $ 63 $ 18 $ (423 ) 111 Other expense, net (125 ) Loss before income taxes (14 ) Provision for income taxes 5 Net loss (9 ) Net loss attributable to non-controlling interests 10 Net income attributable to Expedia Group, Inc. $ 1 Six months ended June 30, 2019 Core OTA trivago Vrbo Egencia Corporate & Total (In millions) Third-party revenue $ 4,517 $ 315 $ 614 $ 316 $ — $ 5,762 Intersegment revenue — 173 — — (173 ) — Revenue $ 4,517 $ 488 $ 614 $ 316 $ (173 ) $ 5,762 Adjusted EBITDA $ 967 $ 44 $ 44 $ 66 $ (377 ) $ 744 Depreciation (186 ) (6 ) (47 ) (26 ) (87 ) (352 ) Amortization of intangible assets — — — — (104 ) (104 ) Stock-based compensation — — — — (115 ) (115 ) Legal reserves, occupancy tax and other — — — — (14 ) (14 ) Restructuring and related reorganization charges — — — — (14 ) (14 ) Realized (gain) loss on revenue hedges (11 ) — — — — (11 ) Operating income (loss) $ 770 $ 38 $ (3 ) $ 40 $ (711 ) 134 Other expense, net (40 ) Income before income taxes 94 Provision for income taxes (7 ) Net income 87 Net income attributable to non-controlling interests (7 ) Net income attributable to Expedia Group, Inc. $ 80 Six months ended June 30, 2018 Core OTA trivago Vrbo Egencia Corporate & Total (In millions) Third-party revenue $ 4,179 $ 371 $ 531 $ 307 $ — $ 5,388 Intersegment revenue — 228 — — (228 ) — Revenue $ 4,179 $ 599 $ 531 $ 307 $ (228 ) $ 5,388 Adjusted EBITDA $ 884 $ (48 ) $ 57 $ 57 $ (363 ) $ 587 Depreciation (168 ) (7 ) (29 ) (23 ) (109 ) (336 ) Amortization of intangible assets — — — — (144 ) (144 ) Impairment of goodwill — — — — (61 ) (61 ) Stock-based compensation — — — — (100 ) (100 ) Legal reserves, occupancy tax and other — — — — (4 ) (4 ) Realized (gain) loss on revenue hedges 4 — — — — 4 Operating income (loss) $ 720 $ (55 ) $ 28 $ 34 $ (781 ) (54 ) Other expense, net (129 ) Loss before income taxes (183 ) Provision for income taxes 25 Net loss (158 ) Net loss attributable to non-controlling interests 22 Net loss attributable to Expedia Group, Inc. $ (136 ) |
Schedule of Revenue by Services | The following table presents revenue by business model and service type: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (in millions) Business Model: Merchant $ 1,680 $ 1,532 $ 3,072 $ 2,866 Agency 841 777 1,527 1,435 Advertising and media 285 274 549 556 Vrbo 347 297 614 531 Total revenue $ 3,153 $ 2,880 $ 5,762 $ 5,388 Service Type: Lodging $ 2,231 $ 1,992 $ 3,956 $ 3,604 Air 228 223 476 465 Advertising and media 285 274 549 556 Other (1) 409 391 781 763 Total revenue $ 3,153 $ 2,880 $ 5,762 $ 5,388 ___________________________________ (1) Other includes car rental, insurance, destination services, cruise and fee revenue related to our corporate travel business, among other revenue streams, none of which are individually material. |
Guarantor and Non-Guarantor S_2
Guarantor and Non-Guarantor Supplemental Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Statement of Operations | Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) Revenue $ — $ 2,483 $ 759 $ (89 ) $ 3,153 Costs and expenses: Cost of revenue — 378 150 (6 ) 522 Selling and marketing — 1,267 473 (83 ) 1,657 Technology and content — 311 124 — 435 General and administrative — 153 61 — 214 Amortization of intangible assets — 32 20 — 52 Legal reserves, occupancy tax and other — 3 1 — 4 Restructuring and related reorganization charges — — 4 — 4 Intercompany (income) expense, net — 199 (199 ) — — Operating income — 140 125 — 265 Other income (expense): Equity in pre-tax earnings of consolidated subsidiaries 215 116 — (331 ) — Other, net (42 ) (14 ) 26 — (30 ) Total other income (expense), net 173 102 26 (331 ) (30 ) Income before income taxes 173 242 151 (331 ) 235 Provision for income taxes 10 (25 ) (33 ) — (48 ) Net income 183 217 118 (331 ) 187 Net income attributable to non-controlling interests — — (4 ) — (4 ) Net income attributable to Expedia Group, Inc. $ 183 $ 217 $ 114 $ (331 ) $ 183 Comprehensive income attributable to Expedia Group, Inc. $ 184 $ 226 $ 122 $ (348 ) $ 184 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Three months ended June 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) Revenue $ — $ 2,229 $ 758 $ (107 ) $ 2,880 Costs and expenses: Cost of revenue — 366 137 (5 ) 498 Selling and marketing — 1,112 531 (102 ) 1,541 Technology and content — 280 120 — 400 General and administrative — 128 68 — 196 Amortization of intangible assets — 45 27 — 72 Impairment of goodwill — — 61 — 61 Legal reserves, occupancy tax and other — — 1 — 1 Intercompany (income) expense, net — 231 (231 ) — — Operating income — 67 44 — 111 Other income (expense): Equity in pre-tax earnings of consolidated subsidiaries 38 35 — (73 ) — Other, net (48 ) (61 ) (16 ) — (125 ) Total other expense, net (10 ) (26 ) (16 ) (73 ) (125 ) Income (loss) before income taxes (10 ) 41 28 (73 ) (14 ) Provision for income taxes 11 (2 ) (4 ) — 5 Net income (loss) 1 39 24 (73 ) (9 ) Net loss attributable to non-controlling interests — — 10 — 10 Net income attributable to Expedia Group, Inc. $ 1 $ 39 $ 34 $ (73 ) $ 1 Comprehensive loss attributable to Expedia Group, Inc. $ (65 ) $ (59 ) $ (63 ) $ 122 $ (65 ) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Six months ended June 30, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) Revenue $ — $ 4,541 $ 1,397 $ (176 ) $ 5,762 Costs and expenses: Cost of revenue — 754 293 (12 ) 1,035 Selling and marketing — 2,417 939 (164 ) 3,192 Technology and content — 605 259 — 864 General and administrative — 260 145 — 405 Amortization of intangible assets — 62 42 — 104 Legal reserves, occupancy tax and other — 14 — — 14 Restructuring and related reorganization charges — — 14 — 14 Intercompany (income) expense, net — 411 (411 ) — — Operating income — 18 116 — 134 Other income (expense): Equity in pre-tax earnings of consolidated subsidiaries 143 87 — (230 ) — Other, net (82 ) 38 4 — (40 ) Total other income (expense), net 61 125 4 (230 ) (40 ) Income before income taxes 61 143 120 (230 ) 94 Provision for income taxes 19 2 (28 ) — (7 ) Net income 80 145 92 (230 ) 87 Net (income) loss attributable to non-controlling interests — 1 (8 ) — (7 ) Net income attributable to Expedia Group, Inc. $ 80 $ 146 $ 84 $ (230 ) $ 80 Comprehensive income attributable to Expedia Group, Inc. $ 84 $ 146 $ 84 $ (230 ) $ 84 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Six months ended June 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) Revenue $ — $ 4,140 $ 1,479 $ (231 ) $ 5,388 Costs and expenses: Cost of revenue — 732 263 (10 ) 985 Selling and marketing — 2,160 1,118 (221 ) 3,057 Technology and content — 560 236 — 796 General and administrative — 246 149 — 395 Amortization of intangible assets — 90 54 — 144 Impairment of goodwill — — 61 — 61 Legal reserves, occupancy tax and other — 3 1 — 4 Intercompany (income) expense, net — 415 (415 ) — — Operating income (loss) — (66 ) 12 — (54 ) Other income (expense): Equity in pre-tax earnings (losses) of consolidated subsidiaries (59 ) 19 — 40 — Other, net (100 ) (9 ) (20 ) — (129 ) Total other income (expense), net (159 ) 10 (20 ) 40 (129 ) Loss before income taxes (159 ) (56 ) (8 ) 40 (183 ) Provision for income taxes 23 1 1 — 25 Net loss (136 ) (55 ) (7 ) 40 (158 ) Net loss attributable to non-controlling interests — 1 21 — 22 Net income (loss) attributable to Expedia Group, Inc. $ (136 ) $ (54 ) $ 14 $ 40 $ (136 ) Comprehensive loss attributable to Expedia Group, Inc. $ (175 ) $ (110 ) $ (39 ) $ 149 $ (175 ) |
Schedule of Balance Sheet Information | CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) ASSETS Total current assets $ 422 $ 7,291 $ 2,658 $ (1,547 ) $ 8,824 Investment in subsidiaries 10,780 3,530 — (14,310 ) — Intangible assets, net — 1,459 428 — 1,887 Goodwill — 6,367 1,751 — 8,118 Other assets, net — 2,255 1,146 (29 ) 3,372 TOTAL ASSETS $ 11,202 $ 20,902 $ 5,983 $ (15,886 ) $ 22,201 LIABILITIES AND STOCKHOLDERS’ EQUITY Total current liabilities $ 1,580 $ 9,569 $ 2,074 $ (1,547 ) $ 11,676 Long-term debt 3,715 — — — 3,715 Other long-term liabilities — 470 433 (29 ) 874 Redeemable non-controlling interests — 16 13 — 29 Stockholders’ equity 5,907 10,847 3,463 (14,310 ) 5,907 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 11,202 $ 20,902 $ 5,983 $ (15,886 ) $ 22,201 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In millions) ASSETS Total current assets $ 402 $ 5,261 $ 2,137 $ (2,603 ) $ 5,197 Investment in subsidiaries 10,615 3,425 — (14,040 ) — Intangible assets, net — 1,520 472 — 1,992 Goodwill — 6,366 1,754 — 8,120 Other assets, net — 1,840 913 (29 ) 2,724 TOTAL ASSETS $ 11,017 $ 18,412 $ 5,276 $ (16,672 ) $ 18,033 LIABILITIES AND STOCKHOLDERS’ EQUITY Total current liabilities $ 1,649 $ 7,396 $ 1,618 $ (2,603 ) $ 8,060 Long-term debt 3,717 — — — 3,717 Other long-term liabilities — 320 284 (29 ) 575 Redeemable non-controlling interests — 17 13 — 30 Stockholders’ equity 5,651 10,679 3,361 (14,040 ) 5,651 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 11,017 $ 18,412 $ 5,276 $ (16,672 ) $ 18,033 |
Schedule of Cash Flow Statement Information | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six months ended June 30, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidated (In millions) Operating activities: Net cash provided by operating activities $ — $ 2,845 $ 442 $ 3,287 Investing activities: Capital expenditures, including internal-use software and website development — (529 ) (44 ) (573 ) Purchases of investments — (623 ) (13 ) (636 ) Sales and maturities of investments — 14 13 27 Other, net — 16 — 16 Net cash used in investing activities — (1,122 ) (44 ) (1,166 ) Financing activities: Purchases of treasury stock (29 ) — — (29 ) Payment of dividends to stockholders (95 ) — — (95 ) Proceeds from exercise of equity awards and employee stock purchase plan 156 — — 156 Transfers (to) from related parties (30 ) 91 (61 ) — Other, net (2 ) 4 — 2 Net cash provided by (used in) financing activities — 95 (61 ) 34 Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents — 21 (1 ) 20 Net increase in cash, cash equivalents and restricted cash and cash equivalents — 1,839 336 2,175 Cash, cash equivalents and restricted cash and cash equivalents at beginning of the period — 1,190 1,515 2,705 Cash, cash equivalents and restricted cash and cash equivalents at end of the period $ — $ 3,029 $ 1,851 $ 4,880 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six months ended June 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidated (In millions) Operating activities: Net cash provided by operating activities $ — $ 2,047 $ 444 $ 2,491 Investing activities: Capital expenditures, including internal-use software and website development — (338 ) (73 ) (411 ) Purchases of investments — (1,669 ) — (1,669 ) Sales and maturities of investments — 550 74 624 Transfers (to) from related parties — (60 ) 60 — Other, net — 19 3 22 Net cash provided by (used in) investing activities — (1,498 ) 64 (1,434 ) Financing activities: Purchases of treasury stock (426 ) — — (426 ) Payment of dividends to stockholders (91 ) — — (91 ) Proceeds from exercise of equity awards and employee stock purchase plan 67 — — 67 Transfers (to) from related parties 452 (26 ) (426 ) — Other, net (2 ) (3 ) (1 ) (6 ) Net cash used in financing activities — (29 ) (427 ) (456 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents — (56 ) (50 ) (106 ) Net increase in cash, cash equivalents and restricted cash and cash equivalents — 464 31 495 Cash, cash equivalents and restricted cash and cash equivalents at beginning of period — 1,321 1,596 2,917 Cash, cash equivalents and restricted cash and cash equivalents at end of period $ — $ 1,785 $ 1,627 $ 3,412 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Recently Adopted Accounting Policies Narrative (Details) $ in Millions | Jan. 01, 2019USD ($) |
ASU 2016-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Effect on retained earnings | $ 6 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Deferred merchant bookings | $ 7,053 | $ 4,327 |
Deferred revenue | 522 | 364 |
Deferred Merchant Bookings | ||
Disaggregation of Revenue [Line Items] | ||
Deferred merchant bookings | 6,331 | 3,627 |
Deferred merchant bookings recognized during period | 3,110 | |
Revenue recognized during period | 436 | |
Deferred Loyalty Rewards | ||
Disaggregation of Revenue [Line Items] | ||
Deferred merchant bookings | 722 | 700 |
Revenue recognized during period | 391 | |
Deferred Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue recognized during period | 263 | |
Deferred revenue | $ 522 | $ 364 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 4,258 | $ 2,443 | ||
Restricted cash and cash equivalents | 619 | 259 | ||
Restricted cash included within long-term investments and other assets | 3 | 3 | ||
Total cash, cash equivalents and restricted cash and cash equivalents in the consolidated statement of cash flow | $ 4,880 | $ 2,705 | $ 3,412 | $ 2,917 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring Basis - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative Asset: | ||
Total assets | $ 2,203 | $ 828 |
Time deposits | ||
Investments: | ||
Investments: | 631 | 28 |
Marketable equity securities | ||
Investments: | ||
Investments: | 133 | 119 |
Foreign currency forward contracts | ||
Derivative Asset: | ||
Foreign currency forward contracts | 22 | |
Derivative Liability: | ||
Foreign currency forward contracts | 6 | |
Money market funds | ||
Cash equivalents: | ||
Cash equivalents: | 61 | 35 |
Time deposits | ||
Cash equivalents: | ||
Cash equivalents: | 1,378 | 624 |
Level 1 | ||
Derivative Asset: | ||
Total assets | 194 | 154 |
Level 1 | Time deposits | ||
Investments: | ||
Investments: | 0 | 0 |
Level 1 | Marketable equity securities | ||
Investments: | ||
Investments: | 133 | 119 |
Level 1 | Foreign currency forward contracts | ||
Derivative Asset: | ||
Foreign currency forward contracts | 0 | |
Derivative Liability: | ||
Foreign currency forward contracts | 0 | |
Level 1 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents: | 61 | 35 |
Level 1 | Time deposits | ||
Cash equivalents: | ||
Cash equivalents: | 0 | 0 |
Level 2 | ||
Derivative Asset: | ||
Total assets | 2,009 | 674 |
Level 2 | Time deposits | ||
Investments: | ||
Investments: | 631 | 28 |
Level 2 | Marketable equity securities | ||
Investments: | ||
Investments: | 0 | 0 |
Level 2 | Foreign currency forward contracts | ||
Derivative Asset: | ||
Foreign currency forward contracts | 22 | |
Derivative Liability: | ||
Foreign currency forward contracts | 6 | |
Level 2 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents: | 0 | 0 |
Level 2 | Time deposits | ||
Cash equivalents: | ||
Cash equivalents: | $ 1,378 | $ 624 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Gain (loss) on minority equity investments, net | $ 12 | $ (61) | |||
Net gains (losses) from foreign currency forward contracts | $ (6) | $ 33 | (12) | 48 | |
Impairment of goodwill | 0 | $ 61 | 0 | 61 | |
Carrying value of cost method investments | 474 | 474 | $ 476 | ||
Foreign currency forward contracts | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Notional amount of foreign currency derivatives | 3,800 | 3,800 | |||
Recurring Basis | Foreign currency forward contracts | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Net forward liability | $ 6 | 6 | |||
Net forward asset | $ 22 | ||||
Despegar.com | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Gain (loss) on minority equity investments, net | $ 14 | $ (62) |
Debt - Long Term Debt Outstandi
Debt - Long Term Debt Outstanding (Details) | Jun. 30, 2019USD ($) | Jun. 30, 2019EUR (€) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||
Total debt | $ 3,715,000,000 | $ 3,717,000,000 | |
5.95% senior notes due 2020 | |||
Debt Instrument [Line Items] | |||
Total debt | $ 749,000,000 | 748,000,000 | |
Debt, interest rate (percentage) | 5.95% | 5.95% | |
Senior unsecured notes principal amount | $ 750,000,000 | ||
2.5% (€650 million) senior notes due 2022 | |||
Debt Instrument [Line Items] | |||
Total debt | $ 736,000,000 | 740,000,000 | |
Debt, interest rate (percentage) | 2.50% | 2.50% | |
Senior unsecured notes principal amount | € | € 650,000,000 | ||
4.5% senior notes due 2024 | |||
Debt Instrument [Line Items] | |||
Total debt | $ 496,000,000 | 496,000,000 | |
Debt, interest rate (percentage) | 4.50% | 4.50% | |
Senior unsecured notes principal amount | $ 500,000,000 | ||
5.0% senior notes due 2026 | |||
Debt Instrument [Line Items] | |||
Total debt | $ 743,000,000 | 742,000,000 | |
Debt, interest rate (percentage) | 5.00% | 5.00% | |
Senior unsecured notes principal amount | $ 750,000,000 | ||
3.8% senior notes due 2028 | |||
Debt Instrument [Line Items] | |||
Total debt | $ 991,000,000 | $ 991,000,000 | |
Debt, interest rate (percentage) | 3.80% | 3.80% | |
Senior unsecured notes principal amount | $ 1,000,000,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2019EUR (€) | Dec. 31, 2018USD ($) | |
Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 2,000,000,000 | ||
Credit facility borrowings outstanding | $ 0 | $ 0 | |
Commitment fee on undrawn amounts | 0.175% | ||
Letters of credit issued under the credit facility | $ 15,000,000 | 15,000,000 | |
Uncommitted Credit Facility | International Subsidiary One | |||
Debt Instrument [Line Items] | |||
Credit facility | € | € 50,000,000 | ||
Credit facility borrowings outstanding | € 0 | 0 | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Accrued interest related to senior notes | 55,000,000 | $ 65,000,000 | |
5.95% senior notes due 2020 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes principal amount | $ 750,000,000 | ||
Debt, interest rate (percentage) | 5.95% | 5.95% | |
Senior notes issued price percentage | 99.893% | 99.893% | |
Debt instrument redemption price percentage | 100.00% | ||
5.95% senior notes due 2020 | Upon the occurrence of certain change of control triggering events | |||
Debt Instrument [Line Items] | |||
Debt instrument redemption price percentage | 101.00% | ||
2.5% (€650 million) senior notes due 2022 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes principal amount | € | € 650,000,000 | ||
Debt, interest rate (percentage) | 2.50% | 2.50% | |
Senior notes issued price percentage | 99.525% | 99.525% | |
Debt instrument redemption price percentage | 100.00% | ||
2.5% (€650 million) senior notes due 2022 | Upon the occurrence of certain change of control triggering events | |||
Debt Instrument [Line Items] | |||
Debt instrument redemption price percentage | 101.00% | ||
4.5% senior notes due 2024 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes principal amount | $ 500,000,000 | ||
Debt, interest rate (percentage) | 4.50% | 4.50% | |
Senior notes issued price percentage | 99.444% | 99.444% | |
Debt instrument redemption price percentage | 100.00% | ||
4.5% senior notes due 2024 | Upon the occurrence of certain change of control triggering events | |||
Debt Instrument [Line Items] | |||
Debt instrument redemption price percentage | 101.00% | ||
5.0% senior notes due 2026 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes principal amount | $ 750,000,000 | ||
Debt, interest rate (percentage) | 5.00% | 5.00% | |
Senior notes issued price percentage | 99.535% | 99.535% | |
Debt instrument redemption price percentage | 100.00% | ||
5.0% senior notes due 2026 | Upon the occurrence of certain change of control triggering events | |||
Debt Instrument [Line Items] | |||
Debt instrument redemption price percentage | 101.00% | ||
3.8% senior notes due 2028 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes principal amount | $ 1,000,000,000 | ||
Debt, interest rate (percentage) | 3.80% | 3.80% | |
Senior notes issued price percentage | 99.747% | 99.747% | |
Debt instrument redemption price percentage | 100.00% | ||
3.8% senior notes due 2028 | Upon the occurrence of certain change of control triggering events | |||
Debt Instrument [Line Items] | |||
Debt instrument redemption price percentage | 101.00% | ||
LIBOR | Credit Facility | |||
Debt Instrument [Line Items] | |||
Basis points added to LIBOR rate | 1.25% |
Debt - Fair Value of Outstandin
Debt - Fair Value of Outstanding Debt (Details) | Jun. 30, 2019USD ($) | Jun. 30, 2019EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) |
5.95% senior notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Fair value of senior notes | $ 778,000,000 | $ 778,000,000 | ||
Debt, interest rate (percentage) | 5.95% | 5.95% | ||
Senior unsecured notes principal amount | $ 750,000,000 | |||
2.5% (€650 million) senior notes due 2022 | ||||
Debt Instrument [Line Items] | ||||
Fair value of senior notes | $ 781,000,000 | € 687,000,000 | 771,000,000 | € 674,000,000 |
Debt, interest rate (percentage) | 2.50% | 2.50% | ||
Senior unsecured notes principal amount | € | € 650,000,000 | |||
4.5% senior notes due 2024 | ||||
Debt Instrument [Line Items] | ||||
Fair value of senior notes | $ 533,000,000 | 504,000,000 | ||
Debt, interest rate (percentage) | 4.50% | 4.50% | ||
Senior unsecured notes principal amount | $ 500,000,000 | |||
5.0% senior notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Fair value of senior notes | $ 819,000,000 | 760,000,000 | ||
Debt, interest rate (percentage) | 5.00% | 5.00% | ||
Senior unsecured notes principal amount | $ 750,000,000 | |||
3.8% senior notes due 2028 | ||||
Debt Instrument [Line Items] | ||||
Fair value of senior notes | $ 1,017,000,000 | $ 915,000,000 | ||
Debt, interest rate (percentage) | 3.80% | 3.80% | ||
Senior unsecured notes principal amount | $ 1,000,000,000 |
Leases (Details)
Leases (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Lessor, operating lease, renewal term | 10 years | 10 years |
Lessor, operating lease, option to terminate | 1 year | |
Operating lease costs | $ 38 | $ 76 |
Operating lease, lease not yet commenced, assumption and judgment, value of underlying asset, amount | $ 195 | $ 195 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 1 year | 1 year |
Lessee, operating lease, lease not yet commenced, term of contract | 1 year | 1 year |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 19 years | 19 years |
Lessee, operating lease, lease not yet commenced, term of contract | 11 years | 11 years |
Leases Supplemental Cash Flow I
Leases Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities: | $ 34 | $ 73 |
Right-of-use assets obtained in exchange for lease obligations: | $ 21 | $ 27 |
Leases Supplemental Balance She
Leases Supplemental Balance Sheet Information (Details) $ in Millions | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Operating lease right-of-use assets | $ 524 |
Accrued expenses and other current liabilities | 110 |
Long-term lease liabilities included within Operating lease liabilities | 466 |
Total operating lease liabilities | $ 576 |
Weighted average remaining lease term | 8 years 9 months 18 days |
Weighted average discount rate | 3.80% |
Leases Maturities of lease liab
Leases Maturities of lease liabilities (Details) $ in Millions | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (excluding the six months ended June 30, 2019) | $ 71 |
2020 | 111 |
2021 | 94 |
2022 | 75 |
2023 | 55 |
2024 and thereafter | 281 |
Total lease payments | 687 |
Less: imputed interest | (111) |
Total operating lease liabilities | $ 576 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 12, 2019 | Aug. 22, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Dividends Payable [Line Items] | |||||||
Dividends declared per common share (in dollars per share) | $ 0.32 | $ 0.30 | $ 0.64 | $ 0.60 | |||
Payment of dividends to stockholders | $ 95 | $ 91 | |||||
Subsequent Event | |||||||
Dividends Payable [Line Items] | |||||||
Dividends declared per common share (in dollars per share) | $ 0.34 | ||||||
Record Date | Aug. 22, 2019 | ||||||
Payment Date | Sep. 12, 2019 | ||||||
February 6, 2019 | |||||||
Dividends Payable [Line Items] | |||||||
Declaration Date | Feb. 6, 2019 | ||||||
Dividends declared per common share (in dollars per share) | $ 0.32 | ||||||
Record Date | Mar. 7, 2019 | ||||||
Payment of dividends to stockholders | $ 47 | ||||||
Payment Date | Mar. 27, 2019 | ||||||
May 1, 2019 | |||||||
Dividends Payable [Line Items] | |||||||
Declaration Date | May 1, 2019 | ||||||
Dividends declared per common share (in dollars per share) | $ 0.32 | ||||||
Record Date | May 23, 2019 | ||||||
Payment of dividends to stockholders | $ 48 | ||||||
Payment Date | Jun. 13, 2019 | ||||||
February 7, 2018 | |||||||
Dividends Payable [Line Items] | |||||||
Declaration Date | Feb. 7, 2018 | ||||||
Dividends declared per common share (in dollars per share) | $ 0.30 | ||||||
Record Date | Mar. 8, 2018 | ||||||
Payment of dividends to stockholders | $ 46 | ||||||
Payment Date | Mar. 28, 2018 | ||||||
April 24, 2018 | |||||||
Dividends Payable [Line Items] | |||||||
Declaration Date | Apr. 24, 2018 | ||||||
Dividends declared per common share (in dollars per share) | $ 0.30 | ||||||
Record Date | May 24, 2018 | ||||||
Payment of dividends to stockholders | $ 45 | ||||||
Payment Date | Jun. 14, 2018 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - 2.5% (€650 million) senior notes due 2022 - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Foreign currency translation gains (losses), net of tax | $ (23) | $ (27) |
Foreign currency translation gains (losses), before tax | $ (30) | $ (35) |
Debt, interest rate (percentage) | 2.50% |
Earnings (Loss) Per Share Basic
Earnings (Loss) Per Share Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to Expedia Group, Inc. | $ 183 | $ 1 | $ 80 | $ (136) |
Earnings (loss) per share attributable to Expedia Group, Inc. available to common stockholders: | ||||
Basic (in dollars per share) | $ 1.23 | $ 0.01 | $ 0.54 | $ (0.90) |
Diluted (in dollars per share) | $ 1.21 | $ 0.01 | $ 0.53 | $ (0.90) |
Weighted average number of shares outstanding (000's): | ||||
Basic (in shares) | 149,049 | 150,076 | 148,468 | 150,942 |
Dilutive effect of: | ||||
Options to purchase common stock (in shares) | 1,893 | 2,058 | 1,944 | 0 |
Other dilutive securities (in shares) | 619 | 483 | 645 | 0 |
Diluted (in shares) | 151,561 | 152,617 | 151,057 | 150,942 |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Outstanding stock awards excluded from calculation of diluted earnings per share | 5 | 13 | 5 | 22 |
Restructuring and Related Reo_2
Restructuring and Related Reorganization Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | ||||
Restructuring and related reorganization charges | $ 4 | $ 0 | $ 14 | $ 0 |
Restructuring reserve | 12 | 12 | ||
Maximum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, expected cost | $ 25 | $ 25 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 20.40% | 33.80% | 7.20% | 13.70% |
IRS | ||||
Income Tax Examination [Line Items] | ||||
Possible increase in U.S. taxable income | $ 751 | |||
Possible additional federal tax expense | $ 263 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | May 15, 2017USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2019USD ($)LegalMatter | Jun. 30, 2019USD ($)LegalMatter | Dec. 31, 2013USD ($) | Dec. 31, 2018USD ($) |
Litigation relating to occupancy tax | ||||||
Commitment And Contingencies [Line Items] | ||||||
Number of lawsuits filed | LegalMatter | 101 | 101 | ||||
Number of lawsuits currently active | LegalMatter | 11 | 11 | ||||
Number of lawsuits dismissed to date | LegalMatter | 47 | |||||
Number of dismissals based on finding that defendant was not subject to local hotel occupancy tax or the local government lacked standing to pursue claims | LegalMatter | 33 | |||||
Reserve for legal contingencies | $ 54 | $ 54 | $ 46 | |||
Litigation related to other taxes | Hawaii | ||||||
Commitment And Contingencies [Line Items] | ||||||
Pay-to-play occupancy and other tax payments | $ 171 | |||||
Tax refunds received | $ 132 | |||||
Tax paid, net of refunds | $ 44 | |||||
Litigation related to other taxes | Hawaii | Orbitz Worldwide, Inc. | ||||||
Commitment And Contingencies [Line Items] | ||||||
Tax refunds received | $ 22 | |||||
Hawaii Litigation Related to Other Taxes, Merchant Model Car | Hawaii | ||||||
Commitment And Contingencies [Line Items] | ||||||
Pay-to-play occupancy and other tax payments | $ 16.7 | |||||
Tax refunds received | $ 10 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - $ / shares | Apr. 16, 2019 | Jun. 30, 2019 | Apr. 30, 2019 | Apr. 15, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | |||||
Common stock, expected shares outstanding (in shares) | 141,000,000 | 136,717,974 | 134,000,000 | ||
Common stock, voting power, percentage | 50.00% | 53.00% | |||
Class B common stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||
Conversion of stock, shares issued (in shares) | 5,500,000 | ||||
Common stock, expected shares outstanding (in shares) | 5,500,000 | 12,799,999 | |||
Liberty Expedia Holdings, LEMS I LLC | |||||
Related Party Transaction [Line Items] | |||||
Common stock, voting power, percentage | 32.00% | ||||
Liberty Expedia Holdings, LEMS I LLC | Class A Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||
Liberty Expedia Holdings, LEMS I LLC | Class B common stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||
The Diller Foundation d/b/a The Diller - von Furstenberg Family Foundation | Class B common stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, voting power, percentage | 28.00% | ||||
Agreement And Plan Of Merger | |||||
Related Party Transaction [Line Items] | |||||
Conversion of stock, shares issued (in shares) | 0.36 | ||||
Exchange Agreement | The Diller Foundation d/b/a The Diller - von Furstenberg Family Foundation | |||||
Related Party Transaction [Line Items] | |||||
Conversion of stock, shares issued (in shares) | 5,500,000 | ||||
Second Amended And Restated Governance Agreement | The Diller Foundation d/b/a The Diller - von Furstenberg Family Foundation | |||||
Related Party Transaction [Line Items] | |||||
Common stock, voting power, percentage | 48.00% | ||||
Second Amended And Restated Governance Agreement | The Diller Foundation d/b/a The Diller - von Furstenberg Family Foundation | Class B common stock | |||||
Related Party Transaction [Line Items] | |||||
Conversion of stock, future exchange rights, maximum share amount | 12,799,999 | ||||
Common stock, voting power, percentage | 49.00% | ||||
Expedia Group | Liberty Expedia Holdings, LEMS I LLC | Class B common stock | |||||
Related Party Transaction [Line Items] | |||||
Sale of stock, percentage of ownership after transaction | 14.00% | ||||
Maximum | The Diller Foundation d/b/a The Diller - von Furstenberg Family Foundation | Class B common stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, voting power, percentage | 5.00% |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 3,153 | $ 2,880 | $ 5,762 | $ 5,388 |
Intersegment revenue | 0 | 0 | 0 | 0 |
Adjusted EBITDA | 568 | 463 | 744 | 587 |
Depreciation | (176) | (169) | (352) | (336) |
Amortization of intangible assets | (52) | (72) | (104) | (144) |
Goodwill, Impairment Loss | 0 | (61) | 0 | (61) |
Stock-based compensation | (59) | (50) | (115) | (100) |
Legal reserves, occupancy tax and other | (4) | (1) | (14) | (4) |
Restructuring and related reorganization charges | (4) | (14) | ||
Realized (gain) loss on revenue hedges | (8) | 1 | (11) | 4 |
Operating income (loss) | 265 | 111 | 134 | (54) |
Other expense, net | (30) | (125) | (40) | (129) |
Income before income taxes | 235 | (14) | 94 | (183) |
Provision for income taxes | (48) | 5 | (7) | 25 |
Net income (loss) | 187 | (9) | 87 | (158) |
Net (income) loss attributable to non-controlling interests | (4) | 10 | (7) | 22 |
Net income (loss) attributable to Expedia Group, Inc. | 183 | 1 | 80 | (136) |
Core OTA | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,480 | 2,253 | 4,517 | 4,179 |
trivago | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 163 | 174 | 315 | 371 |
Vrbo | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 347 | 297 | 614 | 531 |
Egencia | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 163 | 156 | 316 | 307 |
Reportable Segments | Core OTA | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,480 | 2,253 | 4,517 | 4,179 |
Intersegment revenue | 0 | 0 | 0 | 0 |
Adjusted EBITDA | 623 | 561 | 967 | 884 |
Depreciation | (94) | (85) | (186) | (168) |
Amortization of intangible assets | 0 | 0 | 0 | 0 |
Goodwill, Impairment Loss | 0 | 0 | ||
Stock-based compensation | 0 | 0 | 0 | 0 |
Legal reserves, occupancy tax and other | 0 | 0 | 0 | 0 |
Restructuring and related reorganization charges | 0 | 0 | ||
Realized (gain) loss on revenue hedges | (8) | 1 | (11) | 4 |
Operating income (loss) | 521 | 477 | 770 | 720 |
Reportable Segments | trivago | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 251 | 280 | 488 | 599 |
Intersegment revenue | 88 | 106 | 173 | 228 |
Adjusted EBITDA | 20 | (20) | 44 | (48) |
Depreciation | (3) | (4) | (6) | (7) |
Amortization of intangible assets | 0 | 0 | 0 | 0 |
Goodwill, Impairment Loss | 0 | 0 | ||
Stock-based compensation | 0 | 0 | 0 | 0 |
Legal reserves, occupancy tax and other | 0 | 0 | 0 | 0 |
Restructuring and related reorganization charges | 0 | 0 | ||
Realized (gain) loss on revenue hedges | 0 | 0 | 0 | 0 |
Operating income (loss) | 17 | (24) | 38 | (55) |
Reportable Segments | Vrbo | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 347 | 297 | 614 | 531 |
Intersegment revenue | 0 | 0 | 0 | 0 |
Adjusted EBITDA | 84 | 78 | 44 | 57 |
Depreciation | (24) | (15) | (47) | (29) |
Amortization of intangible assets | 0 | 0 | 0 | 0 |
Goodwill, Impairment Loss | 0 | 0 | ||
Stock-based compensation | 0 | 0 | 0 | 0 |
Legal reserves, occupancy tax and other | 0 | 0 | 0 | 0 |
Restructuring and related reorganization charges | 0 | 0 | ||
Realized (gain) loss on revenue hedges | 0 | 0 | 0 | 0 |
Operating income (loss) | 60 | 63 | (3) | 28 |
Reportable Segments | Egencia | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 163 | 156 | 316 | 307 |
Intersegment revenue | 0 | 0 | 0 | 0 |
Adjusted EBITDA | 37 | 30 | 66 | 57 |
Depreciation | (13) | (12) | (26) | (23) |
Amortization of intangible assets | 0 | 0 | 0 | 0 |
Goodwill, Impairment Loss | 0 | 0 | ||
Stock-based compensation | 0 | 0 | 0 | 0 |
Legal reserves, occupancy tax and other | 0 | 0 | 0 | 0 |
Restructuring and related reorganization charges | 0 | 0 | ||
Realized (gain) loss on revenue hedges | 0 | 0 | 0 | 0 |
Operating income (loss) | 24 | 18 | 40 | 34 |
Corporate & Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | (88) | (106) | (173) | (228) |
Intersegment revenue | (88) | (106) | (173) | (228) |
Adjusted EBITDA | (196) | (186) | (377) | (363) |
Depreciation | (42) | (53) | (87) | (109) |
Amortization of intangible assets | (52) | (72) | (104) | (144) |
Goodwill, Impairment Loss | (61) | (61) | ||
Stock-based compensation | (59) | (50) | (115) | (100) |
Legal reserves, occupancy tax and other | (4) | (1) | (14) | (4) |
Restructuring and related reorganization charges | (4) | (14) | ||
Realized (gain) loss on revenue hedges | 0 | 0 | 0 | 0 |
Operating income (loss) | $ (357) | $ (423) | $ (711) | $ (781) |
Segment Information - Revenue b
Segment Information - Revenue by Business Model and Service Type (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 3,153 | $ 2,880 | $ 5,762 | $ 5,388 |
Lodging | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,231 | 1,992 | 3,956 | 3,604 |
Air | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 228 | 223 | 476 | 465 |
Advertising and media | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 285 | 274 | 549 | 556 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 409 | 391 | 781 | 763 |
Sales Channel, Through Intermediary | Merchant | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,680 | 1,532 | 3,072 | 2,866 |
Sales Channel, Through Intermediary | Agency | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 841 | 777 | 1,527 | 1,435 |
Sales Channel, Through Intermediary | Advertising and media | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 285 | 274 | 549 | 556 |
Sales Channel, Through Intermediary | Vrbo | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 347 | $ 297 | $ 614 | $ 531 |
Guarantor and Non-Guarantor S_3
Guarantor and Non-Guarantor Supplemental Financial Information - Schedule of Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Condensed Income Statements, Captions [Line Items] | |||||
Revenue | $ 3,153 | $ 2,880 | $ 5,762 | $ 5,388 | |
Cost of revenue | [1] | 522 | 498 | 1,035 | 985 |
Selling and marketing | [1] | 1,657 | 1,541 | 3,192 | 3,057 |
Technology and content | [1] | 435 | 400 | 864 | 796 |
General and administrative | [1] | 214 | 196 | 405 | 395 |
Amortization of intangible assets | 52 | 72 | 104 | 144 | |
Impairment of goodwill | 0 | 61 | 0 | 61 | |
Legal reserves, occupancy tax and other | 4 | 1 | 14 | 4 | |
Restructuring and related reorganization charges | 4 | 0 | 14 | 0 | |
Intercompany (income) expense, net | 0 | 0 | 0 | 0 | |
Operating income (loss) | 265 | 111 | 134 | (54) | |
Equity in pre-tax earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 | |
Other, net | (30) | (125) | (40) | (129) | |
Total other expense, net | (30) | (125) | (40) | (129) | |
Income (loss) before income taxes | 235 | (14) | 94 | (183) | |
Provision for income taxes | (48) | 5 | (7) | 25 | |
Net income (loss) | 187 | (9) | 87 | (158) | |
Net (income) loss attributable to noncontrolling interests | (4) | 10 | (7) | 22 | |
Net income (loss) attributable to Expedia Group, Inc. | 183 | 1 | 80 | (136) | |
Comprehensive income (loss) attributable to Expedia, Inc. | 184 | (65) | 84 | (175) | |
Reportable Legal Entities | Parent | |||||
Condensed Income Statements, Captions [Line Items] | |||||
Revenue | 0 | 0 | 0 | 0 | |
Cost of revenue | 0 | 0 | 0 | 0 | |
Selling and marketing | 0 | 0 | 0 | 0 | |
Technology and content | 0 | 0 | 0 | 0 | |
General and administrative | 0 | 0 | 0 | 0 | |
Amortization of intangible assets | 0 | 0 | 0 | 0 | |
Impairment of goodwill | 0 | 0 | |||
Legal reserves, occupancy tax and other | 0 | 0 | 0 | 0 | |
Restructuring and related reorganization charges | 0 | 0 | |||
Intercompany (income) expense, net | 0 | 0 | 0 | 0 | |
Operating income (loss) | 0 | 0 | 0 | 0 | |
Equity in pre-tax earnings of consolidated subsidiaries | 215 | 38 | 143 | (59) | |
Other, net | (42) | (48) | (82) | (100) | |
Total other expense, net | 173 | (10) | 61 | (159) | |
Income (loss) before income taxes | 173 | (10) | 61 | (159) | |
Provision for income taxes | 10 | 11 | 19 | 23 | |
Net income (loss) | 183 | 1 | 80 | (136) | |
Net (income) loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |
Net income (loss) attributable to Expedia Group, Inc. | 183 | 1 | 80 | (136) | |
Comprehensive income (loss) attributable to Expedia, Inc. | 184 | (65) | 84 | (175) | |
Reportable Legal Entities | Guarantor Subsidiaries | |||||
Condensed Income Statements, Captions [Line Items] | |||||
Revenue | 2,483 | 2,229 | 4,541 | 4,140 | |
Cost of revenue | 378 | 366 | 754 | 732 | |
Selling and marketing | 1,267 | 1,112 | 2,417 | 2,160 | |
Technology and content | 311 | 280 | 605 | 560 | |
General and administrative | 153 | 128 | 260 | 246 | |
Amortization of intangible assets | 32 | 45 | 62 | 90 | |
Impairment of goodwill | 0 | 0 | |||
Legal reserves, occupancy tax and other | 3 | 0 | 14 | 3 | |
Restructuring and related reorganization charges | 0 | 0 | |||
Intercompany (income) expense, net | 199 | 231 | 411 | 415 | |
Operating income (loss) | 140 | 67 | 18 | (66) | |
Equity in pre-tax earnings of consolidated subsidiaries | 116 | 35 | 87 | 19 | |
Other, net | (14) | (61) | 38 | (9) | |
Total other expense, net | 102 | (26) | 125 | 10 | |
Income (loss) before income taxes | 242 | 41 | 143 | (56) | |
Provision for income taxes | (25) | (2) | 2 | 1 | |
Net income (loss) | 217 | 39 | 145 | (55) | |
Net (income) loss attributable to noncontrolling interests | 0 | 0 | 1 | 1 | |
Net income (loss) attributable to Expedia Group, Inc. | 217 | 39 | 146 | (54) | |
Comprehensive income (loss) attributable to Expedia, Inc. | 226 | (59) | 146 | (110) | |
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||
Condensed Income Statements, Captions [Line Items] | |||||
Revenue | 759 | 758 | 1,397 | 1,479 | |
Cost of revenue | 150 | 137 | 293 | 263 | |
Selling and marketing | 473 | 531 | 939 | 1,118 | |
Technology and content | 124 | 120 | 259 | 236 | |
General and administrative | 61 | 68 | 145 | 149 | |
Amortization of intangible assets | 20 | 27 | 42 | 54 | |
Impairment of goodwill | 61 | 61 | |||
Legal reserves, occupancy tax and other | 1 | 1 | 0 | 1 | |
Restructuring and related reorganization charges | 4 | 14 | |||
Intercompany (income) expense, net | (199) | (231) | (411) | (415) | |
Operating income (loss) | 125 | 44 | 116 | 12 | |
Equity in pre-tax earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 | |
Other, net | 26 | (16) | 4 | (20) | |
Total other expense, net | 26 | (16) | 4 | (20) | |
Income (loss) before income taxes | 151 | 28 | 120 | (8) | |
Provision for income taxes | (33) | (4) | (28) | 1 | |
Net income (loss) | 118 | 24 | 92 | (7) | |
Net (income) loss attributable to noncontrolling interests | (4) | 10 | (8) | 21 | |
Net income (loss) attributable to Expedia Group, Inc. | 114 | 34 | 84 | 14 | |
Comprehensive income (loss) attributable to Expedia, Inc. | 122 | (63) | 84 | (39) | |
Eliminations | |||||
Condensed Income Statements, Captions [Line Items] | |||||
Revenue | (89) | (107) | (176) | (231) | |
Cost of revenue | (6) | (5) | (12) | (10) | |
Selling and marketing | (83) | (102) | (164) | (221) | |
Technology and content | 0 | 0 | 0 | 0 | |
General and administrative | 0 | 0 | 0 | 0 | |
Amortization of intangible assets | 0 | 0 | 0 | 0 | |
Impairment of goodwill | 0 | 0 | |||
Legal reserves, occupancy tax and other | 0 | 0 | 0 | 0 | |
Restructuring and related reorganization charges | 0 | 0 | |||
Intercompany (income) expense, net | 0 | 0 | 0 | 0 | |
Operating income (loss) | 0 | 0 | 0 | 0 | |
Equity in pre-tax earnings of consolidated subsidiaries | (331) | (73) | (230) | 40 | |
Other, net | 0 | 0 | 0 | 0 | |
Total other expense, net | (331) | (73) | (230) | 40 | |
Income (loss) before income taxes | (331) | (73) | (230) | 40 | |
Provision for income taxes | 0 | 0 | 0 | 0 | |
Net income (loss) | (331) | (73) | (230) | 40 | |
Net (income) loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |
Net income (loss) attributable to Expedia Group, Inc. | (331) | (73) | (230) | 40 | |
Comprehensive income (loss) attributable to Expedia, Inc. | $ (348) | $ 122 | $ (230) | $ 149 | |
[1] | (1) Includes stock-based compensation as follows: Cost of revenue $ 3 $ 3 $ 6 $ 5 Selling and marketing 12 12 23 23 Technology and content 19 16 38 31 General and administrative 25 19 48 41 |
Guarantor and Non-Guarantor S_4
Guarantor and Non-Guarantor Supplemental Financial Information - Condensed Consolidating Balance Sheet Information (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||
Total current assets | $ 8,824 | $ 5,197 | ||||
Investment in subsidiaries | 0 | 0 | ||||
Intangible assets, net | 1,887 | 1,992 | ||||
Goodwill | 8,118 | 8,120 | ||||
Other assets, net | 3,372 | 2,724 | ||||
TOTAL ASSETS | 22,201 | 18,033 | ||||
Total current liabilities | 11,676 | 8,060 | ||||
Long-term debt | 3,715 | 3,717 | ||||
Other long-term liabilities | 874 | 575 | ||||
Redeemable non-controlling interests | 29 | 30 | ||||
Stockholders’ equity | 5,907 | $ 5,634 | 5,651 | $ 5,552 | $ 5,808 | $ 6,129 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 22,201 | 18,033 | ||||
Reportable Legal Entities | Parent | ||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||
Total current assets | 422 | 402 | ||||
Investment in subsidiaries | 10,780 | 10,615 | ||||
Intangible assets, net | 0 | 0 | ||||
Goodwill | 0 | 0 | ||||
Other assets, net | 0 | 0 | ||||
TOTAL ASSETS | 11,202 | 11,017 | ||||
Total current liabilities | 1,580 | 1,649 | ||||
Long-term debt | 3,715 | 3,717 | ||||
Other long-term liabilities | 0 | 0 | ||||
Redeemable non-controlling interests | 0 | 0 | ||||
Stockholders’ equity | 5,907 | 5,651 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 11,202 | 11,017 | ||||
Reportable Legal Entities | Guarantor Subsidiaries | ||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||
Total current assets | 7,291 | 5,261 | ||||
Investment in subsidiaries | 3,530 | 3,425 | ||||
Intangible assets, net | 1,459 | 1,520 | ||||
Goodwill | 6,367 | 6,366 | ||||
Other assets, net | 2,255 | 1,840 | ||||
TOTAL ASSETS | 20,902 | 18,412 | ||||
Total current liabilities | 9,569 | 7,396 | ||||
Long-term debt | 0 | 0 | ||||
Other long-term liabilities | 470 | 320 | ||||
Redeemable non-controlling interests | 16 | 17 | ||||
Stockholders’ equity | 10,847 | 10,679 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 20,902 | 18,412 | ||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||
Total current assets | 2,658 | 2,137 | ||||
Investment in subsidiaries | 0 | 0 | ||||
Intangible assets, net | 428 | 472 | ||||
Goodwill | 1,751 | 1,754 | ||||
Other assets, net | 1,146 | 913 | ||||
TOTAL ASSETS | 5,983 | 5,276 | ||||
Total current liabilities | 2,074 | 1,618 | ||||
Long-term debt | 0 | 0 | ||||
Other long-term liabilities | 433 | 284 | ||||
Redeemable non-controlling interests | 13 | 13 | ||||
Stockholders’ equity | 3,463 | 3,361 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 5,983 | 5,276 | ||||
Eliminations | ||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||
Total current assets | (1,547) | (2,603) | ||||
Investment in subsidiaries | (14,310) | (14,040) | ||||
Intangible assets, net | 0 | 0 | ||||
Goodwill | 0 | 0 | ||||
Other assets, net | (29) | (29) | ||||
TOTAL ASSETS | (15,886) | (16,672) | ||||
Total current liabilities | (1,547) | (2,603) | ||||
Long-term debt | 0 | 0 | ||||
Other long-term liabilities | (29) | (29) | ||||
Redeemable non-controlling interests | 0 | 0 | ||||
Stockholders’ equity | (14,310) | (14,040) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ (15,886) | $ (16,672) |
Guarantor and Non-Guarantor S_5
Guarantor and Non-Guarantor Supplemental Financial Information - Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities: | ||
Net cash provided by operating activities | $ 3,287 | $ 2,491 |
Investing activities: | ||
Capital expenditures, including internal-use software and website development | (573) | (411) |
Purchases of investments | (636) | (1,669) |
Sales and maturities of investments | 27 | 624 |
Other, net | 16 | 22 |
Transfers (to) from related parties | 0 | |
Net cash used in investing activities | (1,166) | (1,434) |
Financing activities: | ||
Purchases of treasury stock | (29) | (426) |
Payment of dividends to stockholders | (95) | (91) |
Proceeds from exercise of equity awards and employee stock purchase plan | 156 | 67 |
Transfers (to) from related parties | 0 | 0 |
Other, net | 2 | (6) |
Net cash provided by (used in) financing activities | 34 | (456) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | 20 | (106) |
Net increase in cash, cash equivalents and restricted cash and cash equivalents | 2,175 | 495 |
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 2,705 | 2,917 |
Cash, cash equivalents and restricted cash and cash equivalents at end of period | 4,880 | 3,412 |
Parent | ||
Operating activities: | ||
Net cash provided by operating activities | 0 | 0 |
Investing activities: | ||
Capital expenditures, including internal-use software and website development | 0 | 0 |
Purchases of investments | 0 | 0 |
Sales and maturities of investments | 0 | 0 |
Other, net | 0 | 0 |
Transfers (to) from related parties | 0 | |
Net cash used in investing activities | 0 | 0 |
Financing activities: | ||
Purchases of treasury stock | (29) | (426) |
Payment of dividends to stockholders | (95) | (91) |
Proceeds from exercise of equity awards and employee stock purchase plan | 156 | 67 |
Transfers (to) from related parties | (30) | 452 |
Other, net | (2) | (2) |
Net cash provided by (used in) financing activities | 0 | 0 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | 0 | 0 |
Net increase in cash, cash equivalents and restricted cash and cash equivalents | 0 | 0 |
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 0 | 0 |
Cash, cash equivalents and restricted cash and cash equivalents at end of period | 0 | 0 |
Guarantor Subsidiaries | ||
Operating activities: | ||
Net cash provided by operating activities | 2,845 | 2,047 |
Investing activities: | ||
Capital expenditures, including internal-use software and website development | (529) | (338) |
Purchases of investments | (623) | (1,669) |
Sales and maturities of investments | 14 | 550 |
Other, net | 16 | 19 |
Transfers (to) from related parties | (60) | |
Net cash used in investing activities | (1,122) | (1,498) |
Financing activities: | ||
Purchases of treasury stock | 0 | 0 |
Payment of dividends to stockholders | 0 | 0 |
Proceeds from exercise of equity awards and employee stock purchase plan | 0 | 0 |
Transfers (to) from related parties | 91 | (26) |
Other, net | 4 | (3) |
Net cash provided by (used in) financing activities | 95 | (29) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | 21 | (56) |
Net increase in cash, cash equivalents and restricted cash and cash equivalents | 1,839 | 464 |
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 1,190 | 1,321 |
Cash, cash equivalents and restricted cash and cash equivalents at end of period | 3,029 | 1,785 |
Non-Guarantor Subsidiaries | ||
Operating activities: | ||
Net cash provided by operating activities | 442 | 444 |
Investing activities: | ||
Capital expenditures, including internal-use software and website development | (44) | (73) |
Purchases of investments | (13) | 0 |
Sales and maturities of investments | 13 | 74 |
Other, net | 0 | 3 |
Transfers (to) from related parties | 60 | |
Net cash used in investing activities | (44) | 64 |
Financing activities: | ||
Purchases of treasury stock | 0 | 0 |
Payment of dividends to stockholders | 0 | 0 |
Proceeds from exercise of equity awards and employee stock purchase plan | 0 | 0 |
Transfers (to) from related parties | (61) | (426) |
Other, net | 0 | (1) |
Net cash provided by (used in) financing activities | (61) | (427) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | (1) | (50) |
Net increase in cash, cash equivalents and restricted cash and cash equivalents | 336 | 31 |
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 1,515 | 1,596 |
Cash, cash equivalents and restricted cash and cash equivalents at end of period | $ 1,851 | $ 1,627 |