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Related Party Transactions
12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions
NOTE 17 — Related Party Transactions
Liberty. 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, 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 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) 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, dated as of March 24, 2016 and amended and restated effective on September 22, 2016 and as of March 6, 2018, 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) Mr. and Mrs. Malone 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, 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.
In connection with the then-pending Liberty Split-Off, on March 24, 2016, Liberty Interactive and Liberty Expedia Holdings entered into a Reimbursement Agreement with Expedia pursuant to which Liberty Interactive and Liberty Expedia Holdings agreed to reimburse Expedia Group, up to a specified cap, for certain costs and expenses resulting from the Liberty Split-Off and the above-described proxy arrangements that may be incurred by Expedia Group with respect to Expedia Group’s previous $1.5 billion unsecured revolving credit facility, Expedia Group's 7.456% Notes that matured in 2018 and Expedia Group’s 5.95% Notes maturing in 2020 (as amended and restated as of September 22, 2016, the “Reimbursement Agreement”).
On September 30, 2016, Expedia Group received consents from the holders of more than a majority of the aggregate principal amount of its 5.95% Notes and entered into a supplemental indenture to amend the indenture governing its 5.95% Notes to conform the definition of “Permitted Holders” to the definition employed in Expedia Group’s 2.5% Notes, 4.5% Notes and 5.0% Notes, including by specifying that “Permitted Holders” include certain entities succeeding to the interest of Liberty Interactive in Expedia Group. During 2016, Liberty Interactive reimbursed Expedia Group approximately $4 million for the cost of the consent solicitation pursuant to the terms of the Reimbursement Agreement.
The Reimbursement Agreement constitutes Expedia Group’s sole and exclusive remedy with respect to any claim arising out of any potential change of control under any contract, debt instrument, agreement or other similar instrument resulting, directly or indirectly, from the Liberty Split-Off or the above-described proxy arrangements entered into in connection with the Liberty Split-Off. On January 3, 2017, other than those provisions relating to Expedia Group’s remedies described above and certain administrative provisions, the Reimbursement Agreement terminated in accordance with its terms upon the non-occurrence within the 60 day-period following the Liberty Split-Off of certain reimbursement triggers.
During 2018, we issued 269,646 shares of common stock from treasury stock to Liberty Expedia Holdings at a price per share of $113.32 and an aggregate value of approximately $31 million pursuant to and in accordance with the preemptive rights as detailed by the Amended and Restated Governance Agreement with Liberty Expedia Holdings dated as of December 20, 2011, as amended.
On February 4, 2019, Expedia Group filed a Current Report on Form 8-K (the “Form 8-K”) reporting that Liberty Expedia Holdings and Mr. Diller filed an amended statement on Schedule 13D/A that included a description of discussions that had taken place between a member of Expedia Group management (as authorized by a special committee of disinterested directors formed by the Expedia Group Board of Directors) and a member of Liberty Expedia Holdings management (as authorized by a committee of the Board of Directors of Liberty Expedia Holdings composed of all of Liberty Expedia Holdings’ Series A common stock directors) regarding a potential business combination transaction in which the outstanding shares of Liberty Expedia Holdings’ Series A common stock and Series B common stock would be exchanged for newly issued shares of Expedia Group common stock. The Form 8-K also described expectations regarding (i) the exchange, in connection with the consummation of any such transaction with Liberty Expedia Holdings, of Expedia Group common stock beneficially owned by Mr. Diller and a charitable foundation formed by Mr. Diller for shares of Expedia Group Class B common stock currently owned by Liberty Expedia Holdings, as would be permitted under certain circumstances by the governance and shareholder agreements relating to Expedia Group currently in effect and (ii) the entry, in connection with the consummation of any such transaction, into certain amendments to the Governance Agreement currently in effect relating to Mr. Diller’s ability to exchange for or purchase in the future additional shares of Expedia Group Class B common stock, as well as other governance arrangements and transfer restrictions.
IAC/InterActiveCorp. In addition to serving as our Chairman and Senior Executive, Mr. Diller also serves as Chairman of the Board of Directors and Senior Executive at IAC. The Company and IAC are related parties since they are under common control, given that Mr. Diller serves as Chairman and Senior Executive of both Expedia Group and IAC. Each of IAC and Expedia Group has a 50% ownership interest in two aircraft that may be used by both companies. We share equally in fixed and nonrecurring costs for the planes; direct operating costs are pro-rated based on actual usage. As of December 31, 2018 and 2017, the net basis in our ownership interest in the planes was $33 million and $40 million recorded in long-term investments and other assets. In 2018, 2017 and 2016, operating and maintenance costs paid directly to the jointly-owned subsidiary for the airplanes were nominal.