Guarantor and Non-Guarantor Supplemental Financial Information

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Guarantor and Non-Guarantor Supplemental Financial Information

Note 14 – 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 September 30, 2019

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In millions)
Revenue	$	—		$	2,733		$	916		$	(91	)	$	3,558
Costs and expenses:
Cost of revenue	—			408			166			(5		)	569
Selling and marketing	—			1,258			488			(86		)	1,660
Technology and content	—			309			131			—			440
General and administrative	—			140			77			—			217
Amortization of intangible assets	—			30			20			—			50
Legal reserves, occupancy tax and other	—			3			8			—			11
Restructuring and related reorganization charges	—			—			2			—			2
Intercompany (income) expense, net	—			250			(250		)	—			—
Operating income	—			335			274			—			609
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries	439			170			—			(609		)	—
Other, net	(40		)	46			(54		)	—			(48		)
Total other income (expense), net	399			216			(54		)	(609		)	(48		)
Income before income taxes	399			551			220			(609		)	561
Provision for income taxes	10			(111		)	(53		)	—			(154		)
Net income	409			440			167			(609		)	407
Net loss attributable to non-controlling interests	—			1			1			—			2
Net income attributable to Expedia Group, Inc.	$	409		$	441		$	168		$	(609	)	$	409
Comprehensive income attributable to Expedia Group, Inc.	$	367		$	376		$	105		$	(481	)	$	367

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Three months ended September 30, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In millions)
Revenue	$	—		$	2,503		$	869		$	(96	)	$	3,276
Costs and expenses:
Cost of revenue	—			362			147			(5		)	504
Selling and marketing	—			1,096			496			(91		)	1,501
Technology and content	—			287			117			—			404
General and administrative	—			129			73			—			202
Amortization of intangible assets	—			44			27			—			71
Legal reserves, occupancy tax and other	—			(78		)	—			—			(78		)
Intercompany (income) expense, net	—			239			(239		)	—			—
Operating income	—			424			248			—			672
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries	560			204			—			(764		)	—
Other, net	(46		)	(13		)	(1		)	—			(60		)
Total other income (expense), net	514			191			(1		)	(764		)	(60		)
Income before income taxes	514			615			247			(764		)	612
Provision for income taxes	11			(55		)	(37		)	—			(81		)
Net income	525			560			210			(764		)	531
Net (income) loss attributable to non-controlling interests	—			1			(7		)	—			(6		)
Net income attributable to Expedia Group, Inc.	$	525		$	561		$	203		$	(764	)	$	525
Comprehensive income attributable to Expedia Group, Inc.	$	514		$	545		$	186		$	(731	)	$	514

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Nine months ended September 30, 2019

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In millions)
Revenue	$	—		$	7,274		$	2,313		$	(267	)	$	9,320
Costs and expenses:
Cost of revenue	—			1,162			459			(17		)	1,604
Selling and marketing	—			3,675			1,427			(250		)	4,852
Technology and content	—			914			390			—			1,304
General and administrative	—			400			222			—			622
Amortization of intangible assets	—			92			62			—			154
Legal reserves, occupancy tax and other	—			17			8			—			25
Restructuring and related reorganization charges	—			—			16			—			16
Intercompany (income) expense, net	—			661			(661		)	—			—
Operating income	—			353			390			—			743
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries	582			257			—			(839		)	—
Other, net	(122		)	84			(50		)	—			(88		)
Total other income (expense), net	460			341			(50		)	(839		)	(88		)
Income before income taxes	460			694			340			(839		)	655
Provision for income taxes	29			(109		)	(81		)	—			(161		)
Net income	489			585			259			(839		)	494
Net (income) loss attributable to non-controlling interests	—			2			(7		)	—			(5		)
Net income attributable to Expedia Group, Inc.	$	489		$	587		$	252		$	(839	)	$	489
Comprehensive income attributable to Expedia Group, Inc.	$	451		$	522		$	189		$	(711	)	$	451

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Nine months ended September 30, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In millions)
Revenue	$	—		$	6,643		$	2,348		$	(327	)	$	8,664
Costs and expenses:
Cost of revenue	—			1,094			410			(15		)	1,489
Selling and marketing	—			3,256			1,614			(312		)	4,558
Technology and content	—			847			353			—			1,200
General and administrative	—			375			222			—			597
Amortization of intangible assets	—			134			81			—			215
Impairment of goodwill	—			—			61			—			61
Legal reserves, occupancy tax and other	—			(75		)	1			—			(74		)
Intercompany (income) expense, net	—			654			(654		)	—			—
Operating income	—			358			260			—			618
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries	501			223			—			(724		)	—
Other, net	(146		)	(22		)	(21		)	—			(189		)
Total other income (expense), net	355			201			(21		)	(724		)	(189		)
Income before income taxes	355			559			239			(724		)	429
Provision for income taxes	34			(54		)	(36		)	—			(56		)
Net income	389			505			203			(724		)	373
Net loss attributable to non-controlling interests	—			2			14			—			16
Net income attributable to Expedia Group, Inc.	$	389		$	507		$	217		$	(724	)	$	389
Comprehensive income attributable to Expedia Group, Inc.	$	339		$	435		$	147		$	(582	)	$	339

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2019

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In millions)
ASSETS
Total current assets	$	431	$	6,685	$	2,581	$	(1,728	)	$	7,969
Investment in subsidiaries	10,795		3,041		—		(13,836		)	—
Intangible assets, net	—		1,438		405		—			1,843
Goodwill	—		6,367		1,737		—			8,104
Other assets, net	—		2,379		1,120		(34		)	3,465
TOTAL ASSETS	$	11,226	$	19,910	$	5,843	$	(15,598	)	$	21,381
LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities	$	1,317	$	8,537	$	2,456	$	(1,728	)	$	10,582
Long-term debt	4,170		—		—		—			4,170
Other long-term liabilities	—		477		414		(34		)	857
Redeemable non-controlling interests	—		33		—		—			33
Stockholders’ equity	5,739		10,863		2,973		(13,836		)	5,739
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	11,226	$	19,910	$	5,843	$	(15,598	)	$	21,381

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

Nine months ended September 30, 2019

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In millions)
Operating activities:
Net cash provided by operating activities	$	—		$	1,952		$	474		$	2,426
Investing activities:
Capital expenditures, including internal-use software and website development	—			(800		)	(64		)	(864		)
Purchases of investments	—			(1,217		)	(66		)	(1,283		)
Sales and maturities of investments	—			622			13			635
Acquisitions, net of cash and restricted cash acquired	—			80			—			80
Other, net	—			3			—			3
Net cash used in investing activities	—			(1,312		)	(117		)	(1,429		)
Financing activities:
Proceeds from issuance of long-term debt, net of issuance costs	1,235			—			—			1,235
Payment of Liberty Expedia Exchangeable Debentures	—			(400		)	—			(400		)
Purchases of treasury stock	(352		)	—			—			(352		)
Payment of dividends to stockholders	(145		)	—			—			(145		)
Proceeds from exercise of equity awards and employee stock purchase plan	277			—			—			277
Transfers (to) from related parties	(1,013		)	1,039			(26		)	—
Other, net	(2		)	6			(12		)	(8		)
Net cash provided by (used in) financing activities	—			645			(38		)	607
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents	—			(16		)	(46		)	(62		)
Net increase in cash, cash equivalents and restricted cash and cash equivalents	—			1,269			273			1,542
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	$	—		$	2,459		$	1,788		$	4,247

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine months ended September 30, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In millions)
Operating activities:
Net cash provided by operating activities	$	—		$	1,509		$	611		$	2,120
Investing activities:
Capital expenditures, including internal-use software and website development	—			(533		)	(101		)	(634		)
Purchases of investments	—			(1,714		)	—			(1,714		)
Sales and maturities of investments	—			1,618			74			1,692
Acquisitions, net of cash and restricted cash acquired	—			(40		)	—			(40		)
Transfers (to) from related parties	—			(60		)	60			—
Other, net	—			39			2			41
Net cash provided by (used in) investing activities	—			(690		)	35			(655		)
Financing activities:
Payment of long-term debt	(500		)	—			—			(500		)
Purchases of treasury stock	(620		)	—			—			(620		)
Payment of dividends to stockholders	(138		)	—			—			(138		)
Proceeds from exercise of equity awards and employee stock purchase plan	138			—			—			138
Transfers (to) from related parties	1,092			(666		)	(426		)	—
Other, net	28			1			(63		)	(34		)
Net cash used in financing activities	—			(665		)	(489		)	(1,154		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents	—			(55		)	(64		)	(119		)
Net increase in cash, cash equivalents and restricted cash and cash equivalents	—			99			93			192
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	$	—		$	1,420		$	1,689		$	3,109