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Segment Information
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Information
Note 15 – Segment Information
We have four reportable segments: Core Online Travel Companies (“Core OTA”), trivago, Egencia and HomeAway. In addition, eLong was a reportable segment through its disposal on May 22, 2015. 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, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Venere, Wotif Group, CarRentals.com, and Classic Vacations. Our trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its hotel metasearch websites. Our Egencia segment, which also includes Orbitz for Business, provides managed travel services to corporate customers worldwide. Our HomeAway segment, created by our acquisition of HomeAway on December 15, 2015, operates an online marketplace for the vacation rental industry.

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 as well as the realized foreign currency gains or losses related to the forward contracts hedging a component of our net merchant hotel revenue. We base the allocations primarily on transaction volumes and other usage metrics. We do not allocate certain shared expenses such as accounting, human resources, information technology and legal to our reportable segments. We include these expenses in Corporate 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.
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 nine months ended September 30, 2016 and September 30, 2015. 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 September 30, 2016
 
Core OTA
 
trivago
 
Egencia
 
HomeAway(1)
 
Corporate &
Eliminations
 
Total
 
(In thousands)
Third-party revenue
$
2,083,393

 
$
175,953

 
$
111,762

 
$
209,797

 
$
—

 
$
2,580,905

Intersegment revenue
—

 
100,520

 
—

 
—

 
(100,520
)
 
—

Revenue
$
2,083,393

 
$
276,473

 
$
111,762

 
$
209,797

 
$
(100,520
)
 
$
2,580,905

Adjusted EBITDA
$
713,849

 
$
5,725

 
$
18,155

 
$
77,342

 
$
(148,383
)
 
$
666,688

Depreciation
(65,251
)
 
(2,622
)
 
(8,342
)
 
(4,954
)
 
(42,386
)
 
(123,555
)
Amortization of intangible assets
—

 
—

 
—

 
—

 
(77,080
)
 
(77,080
)
Stock-based compensation
—

 
—

 
—

 
—

 
(48,263
)
 
(48,263
)
Legal reserves, occupancy tax and other
—

 
—

 
—

 
—

 
(22,332
)
 
(22,332
)
Restructuring and related reorganization charges
—

 
—

 
—

 
—

 
(5,591
)
 
(5,591
)
Realized (gain) loss on revenue hedges
(3,715
)
 
—

 
—

 
—

 
—

 
(3,715
)
Operating income (loss)
$
644,883

 
$
3,103

 
$
9,813

 
$
72,388

 
$
(344,035
)
 
386,152

Other expense, net
 
 
 
 
 
 
 
 
 
 
(46,597
)
Income before income taxes
 
 
 
 
 
 
 
 
 
 
339,555

Provision for income taxes
 
 
 
 
 
 
 
 
 
 
(60,627
)
Net income
 
 
 
 
 
 
 
 
 
 
278,928

Net loss attributable to noncontrolling interests
 
 
 
 
 
 
 
403

Net income attributable to Expedia, Inc.
 
 
 
 
 
 
 
 
 
$
279,331

 
Three months ended September 30, 2015
 
Core OTA
 
trivago
 
Egencia
 
eLong(2)
 
Corporate &
Eliminations
 
Total
 
(In thousands)
Third-party revenue
$
1,739,363

 
$
104,162

 
$
94,228

 
$
—

 
$
—

 
$
1,937,753

Intersegment revenue
—

 
71,439

 
—

 
—

 
(71,439
)
 
—

Revenue
$
1,739,363

 
$
175,601

 
$
94,228

 
$
—

 
$
(71,439
)
 
$
1,937,753

Adjusted EBITDA
$
589,433

 
$
(9,496
)
 
$
14,140

 
$
—

 
$
(125,023
)
 
$
469,054

Depreciation
(48,269
)
 
(574
)
 
(6,086
)
 
—

 
(32,227
)
 
(87,156
)
Amortization of intangible assets
—

 
—

 
—

 
—

 
(31,400
)
 
(31,400
)
Stock-based compensation
—

 
—

 
—

 
—

 
(63,656
)
 
(63,656
)
Legal reserves, occupancy tax and other
—

 
—

 
—

 
—

 
114,550

 
114,550

Restructuring and related reorganization charges
—

 
—

 
—

 
—

 
(42,449
)
 
(42,449
)
Realized (gain) loss on revenue hedges
(13,945
)
 
—

 
—

 
—

 
—

 
(13,945
)
Operating income (loss)
$
527,219

 
$
(10,070
)
 
$
8,054

 
$
—

 
$
(180,205
)
 
344,998

Other expense, net
 
 
 
 
 
 
 
 
 
 
(2,811
)
Income before income taxes
 
 
 
 
 
 
 
 
 
 
342,187

Provision for income taxes
 
 
 
 
 
 
 
 
 
 
(65,950
)
Net income
 
 
 
 
 
 
 
 
 
 
276,237

Net loss attributable to noncontrolling interests
 
 
 
 
 
 
 
6,979

Net income attributable to Expedia, Inc.
 
 
 
 
 
 
 
 
 
$
283,216


 
Nine months ended September 30, 2016
 
Core OTA
 
trivago
 
Egencia
 
HomeAway(1)
 
Corporate &
Eliminations
 
Total
 
(In thousands)
Third-party revenue
$
5,388,178

 
$
422,852

 
$
346,117

 
$
523,588

 
$
—

 
$
6,680,735

Intersegment revenue
—

 
230,314

 
—

 
—

 
(230,314
)
 
—

Revenue
$
5,388,178

 
$
653,166

 
$
346,117

 
$
523,588

 
$
(230,314
)
 
$
6,680,735

Adjusted EBITDA
$
1,434,424

 
$
20,466

 
$
59,986

 
$
132,926

 
$
(473,665
)
 
$
1,174,137

Depreciation
(186,308
)
 
(5,593
)
 
(23,267
)
 
(12,721
)
 
(116,944
)
 
(344,833
)
Amortization of intangible assets
—

 
—

 
—

 
—

 
(251,260
)
 
(251,260
)
Stock-based compensation
—

 
—

 
—

 
—

 
(197,602
)
 
(197,602
)
Legal reserves, occupancy tax and other
—

 
—

 
—

 
—

 
(28,650
)
 
(28,650
)
Restructuring and related reorganization charges
—

 
—

 
—

 
—

 
(33,584
)
 
(33,584
)
Realized (gain) loss on revenue hedges
(3,692
)
 
—

 
—

 
—

 
—

 
(3,692
)
Operating income (loss)
$
1,244,424

 
$
14,873

 
$
36,719

 
$
120,205

 
$
(1,101,705
)
 
314,516

Other expense, net
 
 
 
 
 
 
 
 
 
 
(153,042
)
Income before income taxes
 
 
 
 
 
 
 
 
 
 
161,474

Provision for income taxes
 
 
 
 
 
 
 
 
 
 
14,929

Net income
 
 
 
 
 
 
 
 
 
 
176,403

Net loss attributable to noncontrolling interests
 
 
 
 
 
 
 
25,988

Net income attributable to Expedia, Inc.
 
 
 
 
 
 
 
 
 
$
202,391


 
Nine months ended September 30, 2015
 
Core OTA
 
trivago
 
Egencia
 
eLong(2)
 
Corporate &
Eliminations
 
Total
 
(In thousands)
Third-party revenue
$
4,372,224

 
$
266,287

 
$
293,496

 
$
41,743

 
$
—

 
$
4,973,750

Intersegment revenue
—

 
170,984

 
—

 
—

 
(170,984
)
 
—

Revenue
$
4,372,224

 
$
437,271

 
$
293,496

 
$
41,743

 
$
(170,984
)
 
$
4,973,750

Adjusted EBITDA
$
1,193,228

 
$
(13,421
)
 
$
57,637

 
$
(62,167
)
 
$
(352,111
)
 
$
823,166

Depreciation
(134,527
)
 
(1,461
)
 
(17,874
)
 
(3,263
)
 
(83,753
)
 
(240,878
)
Amortization of intangible assets
—

 
—

 
—

 
—

 
(83,322
)
 
(83,322
)
Stock-based compensation
—

 
—

 
—

 
—

 
(134,036
)
 
(134,036
)
Legal reserves, occupancy tax and other
—

 
—

 
—

 
—

 
106,511

 
106,511

Restructuring and related reorganization charges
—

 
—

 
—

 
—

 
(52,771
)
 
(52,771
)
Realized (gain) loss on revenue hedges
(34,581
)
 
—

 
—

 
—

 
—

 
(34,581
)
Operating income (loss)
$
1,024,120

 
$
(14,882
)
 
$
39,763

 
$
(65,430
)
 
$
(599,482
)
 
384,089

Other income, net
 
 
 
 
 
 
 
 
 
 
547,806

Income before income taxes
 
 
 
 
 
 
 
 
 
 
931,895

Provision for income taxes
 
 
 
 
 
 
 
 
 
 
(196,261
)
Net income
 
 
 
 
 
 
 
 
 
 
735,634

Net loss attributable to noncontrolling interests
 
 
 
 
 
 
 
41,369

Net income attributable to Expedia, Inc.
 
 
 
 
 
 
 
 
 
$
777,003

 
(1)
Includes results since our acquisition of HomeAway on December 15, 2015.
(2)
Includes results of eLong through its disposal on May 22, 2015.