QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
Common stock, $0.0001 par value per share | shares | ||||
Class B common stock, $0.0001 par value per share | shares | ||||
Part I | ||
Item 1 | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Part II | ||
Item 1 | ||
Item 1A | ||
Item 2 | ||
Item 6 | ||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
Revenue | $ | $ | |||||
Costs and expenses: | |||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) (1) | |||||||
Selling and marketing (1) | |||||||
Technology and content (1) | |||||||
General and administrative (1) | |||||||
Depreciation and amortization | |||||||
Impairment of goodwill | |||||||
Impairment of intangible assets | |||||||
Legal reserves, occupancy tax and other | ( | ) | |||||
Restructuring and related reorganization charges | |||||||
Operating loss | ( | ) | ( | ) | |||
Other income (expense): | |||||||
Interest income | |||||||
Interest expense | ( | ) | ( | ) | |||
Other, net | ( | ) | |||||
Total other expense, net | ( | ) | ( | ) | |||
Loss before income taxes | ( | ) | ( | ) | |||
Provision for income taxes | |||||||
Net loss | ( | ) | ( | ) | |||
Net (income) loss attributable to non-controlling interests | ( | ) | |||||
Net loss attributable to Expedia Group, Inc. | $ | ( | ) | $ | ( | ) | |
Loss per share attributable to Expedia Group, Inc. available to common stockholders | |||||||
Basic | $ | ( | ) | $ | ( | ) | |
Diluted | ( | ) | ( | ) | |||
Shares used in computing earnings (loss) per share (000's): | |||||||
Basic | |||||||
Diluted |
(1) Includes stock-based compensation as follows: | |||||||
Cost of revenue | $ | $ | |||||
Selling and marketing | |||||||
Technology and content | |||||||
General and administrative |
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Currency translation adjustments, net of tax(1) | ( | ) | ( | ) | |||
Comprehensive loss | ( | ) | ( | ) | |||
Less: Comprehensive loss attributable to non-controlling interests | ( | ) | ( | ) | |||
Comprehensive loss attributable to Expedia Group, Inc. | $ | ( | ) | $ | ( | ) |
(1) | Currency translation adjustments include tax expense of $ |
March 31, 2020 | December 31, 2019 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash and cash equivalents | |||||||
Short-term investments | |||||||
Accounts receivable, net of allowance of $95 and $41 | |||||||
Income taxes receivable | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Operating lease right-of-use assets | |||||||
Long-term investments and other assets | |||||||
Deferred income taxes | |||||||
Intangible assets, net | |||||||
Goodwill | |||||||
TOTAL ASSETS | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable, merchant | $ | $ | |||||
Accounts payable, other | |||||||
Deferred merchant bookings | |||||||
Deferred revenue | |||||||
Income taxes payable | |||||||
Accrued expenses and other current liabilities | |||||||
Current maturities of long-term debt | |||||||
Total current liabilities | |||||||
Long-term debt, excluding current maturities | |||||||
Revolving credit facility | |||||||
Deferred income taxes | |||||||
Operating lease liabilities | |||||||
Other long-term liabilities | |||||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock $.0001 par value | |||||||
Authorized shares: 1,600,000 | |||||||
Shares issued: 258,770 and 256,692; Shares outstanding: 135,454 and 137,076 | |||||||
Class B common stock $.0001 par value | |||||||
Authorized shares: 400,000 | |||||||
Shares issued: 12,800 and 12,800; Shares outstanding: 5,523 and 5,523 | |||||||
Additional paid-in capital | |||||||
Treasury stock - Common stock and Class B, at cost | ( | ) | ( | ) | |||
Shares: 130,592 and 126,893 | |||||||
Retained earnings (deficit) | ( | ) | |||||
Accumulated other comprehensive income (loss) | ( | ) | ( | ) | |||
Total Expedia Group, Inc. stockholders’ equity | |||||||
Non-redeemable non-controlling interests | |||||||
Total stockholders’ equity | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Three months ended March 31, 2019 | Common stock | Class B common stock | Additional paid-in capital | Treasury stock | Retained earnings (deficit) | Accumulated other comprehensive income (loss) | Non-redeemable non-controlling interest | Total | |||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||
Net income (loss) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
Payment of dividends to stockholders (declared at $0.32 per share) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
Proceeds from exercise of equity instruments and employee stock purchase plans | — | ||||||||||||||||||||||||||||||||||||||||
Treasury stock activity related to vesting of equity instruments | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
Other changes in ownership of non-controlling interests | ( | ) | |||||||||||||||||||||||||||||||||||||||
Impact of adoption of new accounting guidance | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ |
Three months ended March 31, 2020 | Common stock | Class B common stock | Additional paid-in capital | Treasury stock - Common and Class B | Retained earnings (deficit) | Accumulated other comprehensive income (loss) | Non-redeemable non-controlling interest | Total | |||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||
Balance as of December, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||
Net income (loss) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
Payment of dividends to stockholders (declared at $0.34 per share) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
Proceeds from exercise of equity instruments and employee stock purchase plans | — | ||||||||||||||||||||||||||||||||||||||||
Treasury stock activity related to vesting of equity instruments | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
Common stock repurchases | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
Other changes in ownership of non-controlling interests | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ |
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
Operating activities: | |||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation of property and equipment, including internal-use software and website development | |||||||
Amortization of intangible assets | |||||||
Impairment of goodwill and intangible assets | |||||||
Amortization of stock-based compensation | |||||||
Deferred income taxes | ( | ) | |||||
Foreign exchange loss on cash, restricted cash and short-term investments, net | |||||||
Realized gain on foreign currency forwards | ( | ) | ( | ) | |||
(Gain) loss on minority equity investments, net | ( | ) | |||||
Provision for credit losses and other, net | ( | ) | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | ( | ) | |||||
Prepaid expenses and other assets | ( | ) | ( | ) | |||
Accounts payable, merchant | ( | ) | |||||
Accounts payable, other, accrued expenses and other liabilities | ( | ) | |||||
Tax payable/receivable, net | ( | ) | ( | ) | |||
Deferred merchant bookings | |||||||
Deferred revenue | ( | ) | |||||
Net cash provided by (used in) operating activities | ( | ) | |||||
Investing activities: | |||||||
Capital expenditures, including internal-use software and website development | ( | ) | ( | ) | |||
Purchases of investments | ( | ) | ( | ) | |||
Sales and maturities of investments | |||||||
Other, net | |||||||
Net cash provided by (used in) investing activities | ( | ) | |||||
Financing activities: | |||||||
Revolving credit facility borrowings | |||||||
Purchases of treasury stock | ( | ) | ( | ) | |||
Payment of dividends to stockholders | ( | ) | ( | ) | |||
Proceeds from exercise of equity awards and employee stock purchase plan | |||||||
Other, net | ( | ) | |||||
Net cash provided by financing activities | |||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | ( | ) | ( | ) | |||
Net increase in cash, cash equivalents and restricted cash and cash equivalents | |||||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | |||||||
Cash, cash equivalents and restricted cash and cash equivalents at end of period | $ | $ | |||||
Supplemental cash flow information | |||||||
Cash paid for interest | $ | $ | |||||
Income tax payments, net |
Three months ended March 31, 2019 | |||||||
As reported | As reclassified | ||||||
(In millions) | |||||||
Cost of revenue | $ | $ | |||||
Selling and marketing | |||||||
Technology and content | |||||||
General and administrative | |||||||
Depreciation and amortization |
March 31, 2020 | December 31, 2019 | ||||||
(in millions) | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash and cash equivalents | |||||||
Restricted cash included within long-term investments and other assets | |||||||
Total cash, cash equivalents and restricted cash and cash equivalents in the consolidated statement of cash flow | $ | $ |
Total | Level 1 | Level 2 | |||||||||
(In millions) | |||||||||||
Assets | |||||||||||
Cash equivalents: | |||||||||||
Money market funds | $ | $ | $ | ||||||||
Term deposits | |||||||||||
Derivatives: | |||||||||||
Foreign currency forward contracts | |||||||||||
Investments: | |||||||||||
Term deposits | |||||||||||
Marketable equity securities | |||||||||||
U.S. treasury securities | |||||||||||
Total assets | $ | $ | $ |
Total | Level 1 | Level 2 | |||||||||
(In millions) | |||||||||||
Assets | |||||||||||
Cash equivalents: | |||||||||||
Money market funds | $ | $ | $ | ||||||||
Term deposits | |||||||||||
U.S. treasury securities | |||||||||||
Investments: | |||||||||||
Term deposits | |||||||||||
Marketable equity securities | |||||||||||
Total assets | $ | $ | $ | ||||||||
Liabilities | |||||||||||
Derivatives: | |||||||||||
Foreign currency forward contracts | $ | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||
(In millions) | |||||||
5.95% senior notes due 2020 | $ | $ | |||||
2.5% (€650 million) senior notes due 2022 | |||||||
4.5% senior notes due 2024 | |||||||
5.0% senior notes due 2026 | |||||||
3.8% senior notes due 2028 | |||||||
3.25% senior notes due 2030 | |||||||
Long-term debt(1) | |||||||
Current maturities of long-term debt | ( | ) | ( | ) | |||
Long-term debt, excluding current maturities | $ | $ | |||||
Revolving credit facility | $ | $ |
(1) | Net of applicable discounts and debt issuance costs. |
March 31, 2020 | December 31, 2019 | ||||||
(In millions) | |||||||
5.95% senior notes due 2020 | $ | $ | |||||
2.5% (€650 million) senior notes due 2022 (1) | |||||||
4.5% senior notes due 2024 | |||||||
5.0% senior notes due 2026 | |||||||
3.8% senior notes due 2028 | |||||||
3.25% senior notes due 2030 |
(1) | Approximately |
Declaration Date | Dividend Per Share | Record Date | Total Amount (in millions) | Payment Date | |||||||
Three Months Ended March 31, 2020 | |||||||||||
$ | $ | ||||||||||
Three Months Ended March 31, 2019 | |||||||||||
Employee Severance and Benefits | Other | Total | |||||||||
(In millions) | |||||||||||
Accrued liability as of January 1, 2020 | $ | $ | $ | ||||||||
Charges | |||||||||||
Payments | ( | ) | ( | ) | ( | ) | |||||
Accrued liability as of March 31, 2020 | $ | $ | $ |
Three months ended March 31, 2020 | |||||||||||||||||||
Retail | B2B | trivago | Corporate & Eliminations | Total | |||||||||||||||
(In millions) | |||||||||||||||||||
Third-party revenue | $ | $ | $ | $ | $ | ||||||||||||||
Intersegment revenue | ( | ) | |||||||||||||||||
Revenue | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Adjusted EBITDA | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||
Depreciation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Amortization of intangible assets | ( | ) | ( | ) | |||||||||||||||
Impairment of goodwill | ( | ) | ( | ) | |||||||||||||||
Impairment of intangible assets | ( | ) | ( | ) | |||||||||||||||
Stock-based compensation | ( | ) | ( | ) | |||||||||||||||
Legal reserves, occupancy tax and other | |||||||||||||||||||
Restructuring and related reorganization charges | ( | ) | ( | ) | |||||||||||||||
Realized (gain) loss on revenue hedges | ( | ) | |||||||||||||||||
Operating loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ( | ) | |||||
Other expense, net | ( | ) | |||||||||||||||||
Loss before income taxes | ( | ) | |||||||||||||||||
Provision for income taxes | |||||||||||||||||||
Net loss | ( | ) | |||||||||||||||||
Net loss attributable to non-controlling interests | |||||||||||||||||||
Net loss attributable to Expedia Group, Inc. | $ | ( | ) |
Three months ended March 31, 2019 | |||||||||||||||||||
Retail | B2B | trivago | Corporate & Eliminations | Total | |||||||||||||||
(In millions) | |||||||||||||||||||
Third-party revenue | $ | $ | $ | $ | |||||||||||||||
Intersegment revenue | ( | ) | |||||||||||||||||
Revenue | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Adjusted EBITDA | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Depreciation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Amortization of intangible assets | ( | ) | ( | ) | |||||||||||||||
Stock-based compensation | ( | ) | ( | ) | |||||||||||||||
Legal reserves, occupancy tax and other | ( | ) | ( | ) | |||||||||||||||
Restructuring and related reorganization charges | ( | ) | ( | ) | |||||||||||||||
Realized (gain) loss on revenue hedges | ( | ) | ( | ) | ( | ) | |||||||||||||
Operating income (loss) | $ | $ | $ | $ | ( | ) | ( | ) | |||||||||||
Other expense, net | ( | ) | |||||||||||||||||
Loss before income taxes | ( | ) | |||||||||||||||||
Provision for income taxes | |||||||||||||||||||
Net loss | ( | ) | |||||||||||||||||
Net income attributable to non-controlling interests | ( | ) | |||||||||||||||||
Net loss attributable to Expedia Group, Inc. | $ | ( | ) |
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(in millions) | |||||||
Business Model: | |||||||
Merchant | $ | $ | |||||
Agency | |||||||
Advertising, media and other | |||||||
Total revenue | $ | $ | |||||
Service Type: | |||||||
Lodging | $ | $ | |||||
Air | |||||||
Advertising and media | |||||||
Other(1) | |||||||
Total revenue | $ | $ |
(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. Other also includes product revenue of $ |
• | It requires us to make an assumption because information was not available at the time or it included matters that were highly uncertain at the time we were making the estimate; and |
• | Changes in the estimate or different estimates that we could have selected may have had a material impact on our financial condition or results of operations. |
• | City of San Antonio, Texas Litigation. On May 11, 2020, the United States Fifth Circuit Court of Appeals affirmed the district court’s award of over $2 million in appeal bond costs against the city. |
• | Palm Beach, Florida Litigation. On March 25, 2020, the Florida Fourth District Court of Appeals affirmed the trial court’s decision that defendants are not subject to tax. |
• | Miami Dade County, Florida Litigation. The parties reached a settlement and on April 7, 2020, the county filed a notice of voluntary dismissal without prejudice, thereby ending the matter. |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Gross bookings | $ | 17,885 | $ | 29,409 | (39 | )% | ||||
Revenue margin (1) | 12.4 | % | 8.9 | % |
(1) | trivago, which is comprised of a hotel metasearch business that differs from our transaction-based websites, does not have associated gross bookings or revenue margin. However, third-party revenue from trivago is included in revenue used to calculate total revenue margin. |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Revenue by Segment | ||||||||||
Retail | $ | 1,582 | $ | 1,901 | (17 | )% | ||||
B2B | 485 | 556 | (13 | )% | ||||||
trivago (Third-party revenue) | 103 | 152 | (32 | )% | ||||||
Corporate (Bodybuilding.com) | 39 | — | N/A | |||||||
Total revenue | $ | 2,209 | $ | 2,609 | (15 | )% |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Revenue by Service Type | ||||||||||
Lodging | $ | 1,518 | $ | 1,687 | (10 | )% | ||||
Air | 109 | 248 | (56 | )% | ||||||
Advertising and media(1) | 203 | 265 | (23 | )% | ||||||
Other | 379 | 409 | (7 | )% | ||||||
Total revenue | $ | 2,209 | $ | 2,609 | (15 | )% |
(1) | Includes third-party revenue from trivago as well as our transaction-based websites. |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Revenue by Business Model | ||||||||||
Merchant | $ | 1,340 | $ | 1,435 | (7 | )% | ||||
Agency | 562 | 842 | (33 | )% | ||||||
Advertising, media and other | 307 | 332 | (7 | )% | ||||||
Total revenue | $ | 2,209 | $ | 2,609 | (15 | )% |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Direct costs | $ | 468 | $ | 335 | 40 | % | ||||
Personnel and overhead | 161 | 155 | 3 | % | ||||||
Total cost of revenue | $ | 629 | $ | 490 | 28 | % | ||||
% of revenue | 28.5 | % | 18.8 | % |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Direct costs | $ | 959 | $ | 1,261 | (24 | )% | ||||
Indirect costs | 251 | 260 | (3 | )% | ||||||
Total selling and marketing | $ | 1,210 | $ | 1,521 | (20 | )% | ||||
% of revenue | 54.8 | % | 58.3 | % |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Personnel and overhead | $ | 219 | $ | 228 | (4 | )% | ||||
Other | 89 | 69 | 29 | % | ||||||
Total technology and content | $ | 308 | $ | 297 | 4 | % | ||||
% of revenue | 13.9 | % | 11.4 | % |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Personnel and overhead | $ | 133 | $ | 138 | (3 | )% | ||||
Professional fees and other | 54 | 46 | 17 | % | ||||||
Total general and administrative | $ | 187 | $ | 184 | 2 | % | ||||
% of revenue | 8.5 | % | 7.0 | % |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Depreciation | $ | 185 | $ | 176 | 5 | % | ||||
Amortization of intangible assets | 44 | 52 | (16 | )% | ||||||
Total depreciation and amortization | $ | 229 | $ | 228 | — | % |
Three months ended March 31, | |||||||||
2020 | 2019 | % Change | |||||||
($ in millions) | |||||||||
Legal reserves, occupancy tax and other | $ | (21 | ) | $ | 10 | N/A | |||
% of revenue | (0.9 | )% | 0.4 | % |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Operating loss | $ | (1,294 | ) | $ | (131 | ) | 888 | % | ||
% of revenue | (58.6 | )% | (5.0 | )% |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Retail | $ | 22 | $ | 195 | (88 | )% | ||||
B2B | 26 | 72 | (65 | )% | ||||||
trivago | (1 | ) | 24 | N/A | ||||||
Unallocated overhead costs (Corporate) (1) | (123 | ) | (115 | ) | 7 | % | ||||
Total Adjusted EBITDA (2) | $ | (76 | ) | $ | 176 | N/A |
(1) | Includes immaterial operating results of Bodybuilding.com subsequent to our acquisition on July 26, 2019. |
(2) | Adjusted EBITDA is a non-GAAP measure. See “Definition and Reconciliation of Adjusted EBITDA” below for more information. |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Interest income | $ | 10 | $ | 11 | (11 | )% | ||||
Interest expense | (50 | ) | (41 | ) | 22 | % |
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
($ in millions) | |||||||
Foreign exchange rate gains (losses), net | $ | 45 | $ | (14 | ) | ||
Gains (losses) on minority equity investments, net | (188 | ) | 22 | ||||
Other | (2 | ) | 12 | ||||
Total other, net | $ | (145 | ) | $ | 20 |
Three months ended March 31, | ||||||||||
2020 | 2019 | % Change | ||||||||
($ in millions) | ||||||||||
Provision for income taxes | $ | (82 | ) | $ | (41 | ) | 100 | % | ||
Effective tax rate | 5.6 | % | 29.2 | % |
Three months ended March 31, | ||||||||
2020 | 2019 | |||||||
(In millions) | ||||||||
Net loss attributable to Expedia Group, Inc. | $ | (1,301 | ) | $ | (103 | ) | ||
Net income (loss) attributable to non-controlling interests | (96 | ) | 3 | |||||
Provision for income taxes | (82 | ) | (41 | ) | ||||
Total other expense, net | 185 | 10 | ||||||
Operating loss | (1,294 | ) | (131 | ) | ||||
Gain (loss) on revenue hedges related to revenue recognized | (6 | ) | 3 | |||||
Restructuring and related reorganization charges | 75 | 10 | ||||||
Legal reserves, occupancy tax and other | (21 | ) | 10 | |||||
Stock-based compensation | 55 | 56 | ||||||
Depreciation and amortization | 229 | 228 | ||||||
Impairment of goodwill | 765 | — | ||||||
Impairment of intangible assets | 121 | — | ||||||
Adjusted EBITDA | $ | (76 | ) | $ | 176 |
• | Suspension of Share Repurchases. We have not repurchased any shares since our last earnings call on February 13, 2020, and have suspended future share repurchases. |
• | Suspension of Quarterly Dividends. We do not expect to declare quarterly dividends on our common stock, at least until the current economic and operating environment improves. |
• | Credit Facility Draw. On March 18, 2020, we increased our cash on hand by borrowing $1.9 billion under our $2 billion revolving credit facility. The revolving credit facility bore interest based on the Company’s credit ratings with the applicable interest rate on drawn amounts at LIBOR plus 112.5 basis points, or 2.01%, and the commitment fee on undrawn amounts at 15 basis points as of March 31, 2020. The proceeds from the draw are available to be used for general corporate purposes, including working capital. This existing revolving credit facility was subsequently amended in May 2020 as discussed below. |
• | Private Equity Investment. On April 23, 2020, we entered into an investment agreement with AP Fort Holdings, L.P., an affiliate of Apollo Global Management, Inc., and an investment agreement with SLP Fort Aggregator II, L.P. and SLP V Fort Holdings II, L.P., affiliates of Silver Lake Group, L.L.C., to raise approximately $1.2 billion in gross proceeds in a private placement of shares of a newly created series of preferred stock and warrants to purchase our common stock. The transaction was completed on May 5, 2020. |
• | Senior Notes Issuance. On May 5, 2020, we privately placed $2 billion of unsecured 6.250% senior notes that are due in May 2025 (the “6.25% Notes”) and $750 million of unsecured 7.000% senior notes due May 2025 (the “7.0% Notes”, and, together with the 6.25% Notes, the “6.25% and 7.0% Notes”). The 7.0% notes have certain redemption provisions starting with the second anniversary of the issuance. The 6.25% and 7.0 % Notes were issued at a price of 100% of the aggregate principal amount. Interest is payable semi-annually in arrears in May and November of each year, beginning November 1, 2020. We expect to use the net proceeds of this offering for general corporate purposes, which may include, but are not limited to, the repayment or redemption of our 5.95% senior notes due 2020. |
• | Credit Facility Amendment. In connection with the issuance of the Notes and private placement transaction, on May 4, 2020, we executed a restatement agreement, which amends and restates our existing revolving credit facility (as amended and restated, the “Amended Credit Facility”) to, among other things, provide additional flexibility under pliable covenant provisions. |
Three months ended March 31, | ||||||||||||
2020 | 2019 | $ Change | ||||||||||
(In millions) | ||||||||||||
Cash provided by (used in): | ||||||||||||
Operating activities | $ | (784 | ) | $ | 2,149 | $ | (2,933 | ) | ||||
Investing activities | 32 | (706 | ) | 738 | ||||||||
Financing activities | 1,517 | 21 | 1,496 | |||||||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | (141 | ) | (11 | ) | (130 | ) |
Declaration Date | Dividend Per Share | Record Date | Total Amount (in millions) | Payment Date | ||||||||
Three Months Ended March 31, 2020 | ||||||||||||
February 13, 2020 | $ | 0.34 | March 10, 2020 | $ | 48 | March 26, 2020 | ||||||
Three Months Ended March 31, 2019 | ||||||||||||
February 6, 2019 | 0.32 | March 7, 2019 | 47 | March 27, 2019 |
December 31, 2019 | March 31, 2020 | ||||||
(In millions) | |||||||
Combined Balance Sheets Information: | |||||||
Current Assets (1) | $ | 6,185 | $ | 6,291 | |||
Non-Current Assets | 10,320 | 9,783 | |||||
Current Liabilities | 9,486 | 8,366 | |||||
Non-Current Liabilities | 4,710 | 6,609 | |||||
Year Ended December 31, 2019 | Three Months Ended March 31, 2020 | ||||||
Combined Statements of Operations Information: | |||||||
Revenue | $ | 9,463 | $ | 1,782 | |||
Operating income (loss) (2) | 420 | (1,031 | ) | ||||
Net income (loss) | 195 | (1,044 | ) | ||||
Net income (loss) attributable to Obligors | 198 | (1,043 | ) |
(1) | Current assets include intercompany receivables with non-guarantors of $1.0 billion as of December 31, 2019 and $640 million as of March 31, 2020. |
(2) | Operating income (loss) includes intercompany expenses with non-guarantors of 1.2 billion for the year ended December 31, 2019 and $313 million for the three months ended March 31, 2020. |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under Plans or Programs | |||||||||
(In thousands, expect per share data) | |||||||||||||
January 1-31, 2020 | 2,683 | $ | 110.16 | 2,683 | 23,977 | ||||||||
February 1-29, 2020 | 681 | 108.75 | 681 | 23,296 | |||||||||
March 1-31, 2020 | — | — | — | 23,296 | |||||||||
Total | 3,364 | 3,364 |
Exhibit No. | Exhibit Description | Filed Herewith | Incorporated by Reference | |||
Form | SEC File No. | Exhibit | Filing Date | |||
3.1 | Certificate of Designations with respect to Series A Preferred Stock | 8-K | 001-3749 | 3.1 | 5/5/2020 | |
4.1 | Investment Agreement by and between Expedia Group, Inc. and AP Fort Holdings, L.P., dated as of April 23, 2020 | 8-K | 001-3749 | 4.1 | 4/23/2020 | |
4.2 | Investment Agreement by and between Expedia Group, Inc., SLP Fort Aggregator II, L.P. and SLP V Fort Holdings II, L.P., dated as of April 23, 2020 | 8-K | 001-3749 | 4.2 | 4/23/2020 | |
4.3 | Indenture, dated as of May 5, 2020, among Expedia Group, Inc., the guarantors party thereto and U.S. Bank National Association relating to the 6.250% Notes | 8-K | 001-3749 | 4.1 | 5/5/2020 | |
4.4 | Indenture, dated as of May 5, 2020, among Expedia Group, Inc., the guarantors party thereto and U.S. Bank National Association relating to the 7.000% Notes | 8-K | 001-3749 | 4.2 | 5/5/2020 | |
10.1 | Amendment No. 1 to Second Amended and Restated Governance Agreement by and between Expedia Group, Inc. and Barry Diller, dated as of April 10, 2020 | 8-K | 001-3749 | 10.1 | 4/10/2020 | |
10.2 | Restatement Agreement, dated as of May 4, 2020, among Expedia Group, Inc., the borrowing subsidiaries party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and London agent | 8-K | 001-3749 | 10.1 | 5/5/2020 | |
10.3 | Registration Rights Agreement, dated as of May 5, 2020, by and among Expedia Group, Inc., AP Fort Holdings, L.P., SLP Fort Aggregator II, L.P. and SLP V Fort Holdings II, L.P. | 8-K | 001-3749 | 10.2 | 5/5/2020 | |
10.4* | X | |||||
22 | X | |||||
31.1 | X | |||||
31.2 | X | |||||
31.3 | X | |||||
32.1 | X | |||||
32.2 | X | |||||
32.3 | X | |||||
101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. | X |
May 20, 2020 | Expedia Group, Inc. | |
By: | /s/ Eric Hart | |
Eric Hart | ||
Chief Financial Officer |
(a) | the Plan is established voluntarily by the Corporation, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Corporation at any time, to the extent permitted in the Plan; |
(b) | the Award of the PSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future awards of PSUs, benefits in lieu of PSUs or other Awards, even if PSUs have been awarded in the past; |
(c) | all decisions with respect to future awards of PSUs or other Awards, if any, will be at the sole discretion of the Corporation; |
(d) | the Award of the PSUs and the Participant's participation in the Plan will not create a right to employment or service or be interpreted as forming or amending an employment or service contract with the Corporation, the Employer or any other Subsidiary or Affiliate and shall not interfere with the ability of the Employer to terminate the Participant's employment or service relationship (if any); |
(e) | the Participant is voluntarily participating in the Plan; |
(f) | the Award of the PSUs and the Shares subject to the PSUs, and the income from and value of same, are not intended to replace any pension rights or compensation; |
(g) | unless otherwise agreed in writing with the Corporation, the PSUs and the Shares subject to the PSUs, and the income from and value of same, are not granted as consideration for, or in connection with, the service the Participant may provide as a director of a Subsidiary or an Affiliate; |
(h) | the Award of the PSUs and the Shares subject to the PSUs, and the income from and value of same, are not part of normal or expected compensation or salary for any purpose, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of |
(i) | no claim or entitlement to compensation or damages shall arise from forfeiture of the Award of the PSUs resulting from (i) the application of any recoupment as described in Section 7(b) herein or (ii) the Participant's Termination of Employment (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or providing services or the terms of the Participant's employment or service agreement, if any); |
(j) | the future value of the Shares subject to the PSUs is unknown and cannot be predicted with certainty; |
(k) | if the Participant vests in the PSUs and acquires Shares, the value of such Shares may increase or decrease in value; and |
(l) | neither the Corporation, the Employer nor any other Subsidiary or Affiliate will be liable for any foreign exchange rate fluctuation between the Participant's local currency (if not the United States dollar) and the United States Dollar that may affect the value of the PSUs or of any amounts due to the Participant pursuant to the vesting of the PSUs or the subsequent sale of any Shares acquired upon vesting. |
(1) | verifying the Participant's identity and implementing, administering and managing the Participant's participation in the Plan; |
(2) | administration and management of the Plan, including purchase, transfer, disposal or other transactions relating to any Shares acquired under the Plan and all purposes incidental thereto; |
(3) | the archival of documents and records in both electronic and physical form for record keeping purposes; |
(4) | conducting financial reporting and analysis related to the Plan's operations; |
(5) | complying with the Group's policies and procedures; |
(6) | preventing, detecting and investigating crime, including fraud and any form of financial crime, and analyzing and managing other commercial risks; |
(7) | compliance with any applicable rules, laws and regulations, codes of practice or guidelines, including, without limitation, compliance with laws and regulations (local and foreign) which may apply to the Plan, the Group, or to assist in law enforcement and investigations by relevant authorities; and |
(8) | subject to applicable law, any other purposes set out in this Agreement. |
EXPEDIA GROUP, INC. | ||
/s/ Robert Dzielak | ||
Name: | Robert Dzielak | |
Title: | Chief Legal Officer and Secretary | |
PARTICIPANT | ||
/s/ Peter Kern |
Performance Goal | Performance Attainment Factor |
Minimum Performance - Stock Price CAGR less than 5.00% | 0.00% |
Threshold Performance - Stock Price CAGR equal to 5.00% | 50.00% |
Target Performance - Stock Price CAGR equal to 10.00% | 100.00% |
Maximum Performance - Stock Price CAGR greater than or equal to 15.00% | 150.00% |
Guarantor | Jurisdiction of Formation |
BedandBreakfast.com, Inc. | United States – CO |
CarRentals.com, Inc. | United States – NV |
Cruise, LLC | United States - WA |
EAN.com, LP | United States - DE |
Egencia LLC | United States - NV |
Expedia Group Commerce, Inc. | United States – DE |
Expedia, Inc. | United States - WA |
Expedia LX Partner Business, Inc. | United States – DE |
Higher Power Nutrition Common Holdings, LLC | United States - DE |
HomeAway Software, Inc. | United States - DE |
HomeAway.com, Inc. | United States - DE |
Hotels.com GP, LLC | United States - TX |
Hotels.com, L.P. | United States - TX |
Hotwire, Inc. | United States - DE |
HRN 99 Holdings, LLC | United States - NY |
Interactive Affiliate Network, LLC | United States - DE |
LEMS I LLC | United States - DE |
LEXE Marginco, LLC | United States - DE |
LEXEB, LLC | United States - DE |
Liberty Protein, Inc. | United States - DE |
Neat Group Corporation | United States – DE |
O Holdings Inc. | United States – DE |
Orbitz Financial Corp. | United States – DE |
Orbitz for Business, Inc. | United States – DE |
Orbitz, Inc. | United States - DE |
Orbitz, LLC | United States - DE |
Orbitz Travel Insurance Services, LLC | United States - DE |
Orbitz Worldwide, Inc. | United States - DE |
Orbitz Worldwide, LLC | United States - DE |
OWW Fulfillment Services, Inc. | United States – TN |
Travelscape, LLC | United States - NV |
Trip Network, Inc. | United States - DE |
Vitalize, LLC | United States - DE |
VRBO Holdings, Inc. | United States - DE |
WWTE, Inc. | United States – NV |
1. | I have reviewed this quarterly report on Form 10-Q of Expedia Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 20, 2020 | /s/ BARRY DILLER | |
Barry Diller | |||
Chairman and Senior Executive |
1. | I have reviewed this quarterly report on Form 10-Q of Expedia Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 20, 2020 | /s/ PETER M. KERN | |
Peter M. Kern | |||
Vice Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Expedia Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 20, 2020 | /s/ ERIC HART | |
Eric Hart | |||
Chief Financial Officer |
1. | the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2020 (the “Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 20, 2020 | /s/ BARRY DILLER | |
Barry Diller | |||
Chairman and Senior Executive |
1. | the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2020 (the “Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 20, 2020 | /s/ PETER M. KERN | |
Peter M. Kern | |||
Vice Chairman and Chief Executive Officer |
1. | the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2020 (the “Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 20, 2020 | /s/ ERIC HART | |
Eric Hart | |||
Chief Financial Officer |
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - 2.5% (€650 million) senior notes due 2022 - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Foreign currency translation gains (losses), net of tax | $ (7) | $ (15) |
Foreign currency translation gains (losses), before tax | $ (9) | $ (19) |
Debt, interest rate (percentage) | 2.50% |
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 5.60% | 29.20% |
IRS | ||
Income Tax Examination [Line Items] | ||
Possible increase in U.S. taxable income | $ 696 | |
Possible additional federal tax expense | $ 244 |
Segment Information - Revenue by Business Model and Service Type (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Segment Reporting Information [Line Items] | ||
Revenue | $ 2,209 | $ 2,609 |
Lodging | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,518 | 1,687 |
Air | ||
Segment Reporting Information [Line Items] | ||
Revenue | 109 | 248 |
Advertising and media | ||
Segment Reporting Information [Line Items] | ||
Revenue | 203 | 265 |
Other | ||
Segment Reporting Information [Line Items] | ||
Revenue | 379 | 409 |
Sales Channel, Through Intermediary | Merchant | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,340 | 1,435 |
Sales Channel, Through Intermediary | Agency | ||
Segment Reporting Information [Line Items] | ||
Revenue | 562 | 842 |
Sales Channel, Through Intermediary | Advertising, media and other | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 307 | $ 332 |
Restructuring and Related Reorganization Charges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the restructuring and related reorganization activity for the three months ended March 31, 2020:
|
Summary of Significant Accounting Policies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
|
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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:
|
Segment Information |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Note 10 – Segment Information Beginning in the first quarter of 2020, we have the following reportable segments: Retail, B2B, and trivago. The change from our previous reportable segments, Core OTA, trivago, Vrbo and Egencia, reflect Expedia Group’s efforts to simplify our organization into a platform operating model by aligning our retail brand operations, combining our business focused brands and centralizing our platform and supply organizations to support all of our businesses. Our Retail 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 consumer brands including: Expedia.com and Hotels.com in the United States and localized Expedia and Hotels.com websites throughout the world, Vrbo, Orbitz, Travelocity, Wotif Group, ebookers, CheapTickets, Hotwire.com, CarRentals.com, CruiseShipCenters, Classic Vacations and SilverRail Technologies, Inc. Our B2B segment is comprised of our Expedia Business Services organization including Expedia Partner Solutions, which operates private label and co-branded programs to make travel services available to leisure travelers through third-party company branded websites, and Egencia, a full-service travel management company that provides travel services to businesses and their corporate customers. Our trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its hotel metasearch websites. There were no changes to our reporting units for goodwill testing as a result of these current year segment changes. 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 Retail and B2B segments includes allocations of certain expenses, primarily related to our global travel supply organization and the majority of costs from our product and technology platform, as well as facility costs and 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, certain 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 Retail 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 as well as Bodybuilding.com subsequent to our acquisition on July 26, 2019. 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 months ended March 31, 2020 and 2019. 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.
Revenue by Business Model and Service Type The following table presents revenue by business model and service type:
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Earnings (Loss) Per Share |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share 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 months ended March 31, 2020 and 2019, approximately 18 million and 21 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.
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Summary of Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Recently Adopted Accounting Policies Measurement of Credit Losses on Financial Instruments. As of January 1, 2020, we adopted the Accounting Standards Updates (“ASU”) guidance on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, and available-for-sale debt securities, using the modified retrospective method. The new guidance replaced the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, this new guidance did not have a material impact on our consolidated financial statements and no cumulative-effect adjustment to retained earnings was made. Cloud Computing Arrangements. As of January 1, 2020, we adopted the new ASU guidance on the accounting for implementation costs incurred for a cloud computing arrangement that is a service contract using the prospective method. The update conformed 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 adoption of this new guidance did not have a material impact on our consolidated financial statements. Fair Value Measurements. As of January 1, 2020, we adopted the new ASU guidance related to the disclosure requirements on fair value measurements, which removed, modified or added certain disclosures using the prospective method. The adoption of this new guidance did not have a material impact on our consolidated financial statements. Guarantor Financial Information. In March 2020, the SEC amended Rule 3-10 of Regulation S-X regarding financial disclosure requirements for registered debt offerings involving subsidiaries as either issuers or guarantors and affiliates whose securities are pledged as collateral. This new guidance narrows the circumstances that require separate financial statements of subsidiary issuers and guarantors and streamlines the alternative disclosures required in lieu of those statements. We adopted these amendments for the quarter ended March 31, 2020. Accordingly, combined summarized financial information has been presented only for the issuer and guarantors of our senior notes for the most recent fiscal year and the year-to-date interim period, and the location of the required disclosures has been removed from the Notes to the Consolidated Financial Statements and moved to Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Recent Accounting Policies Not Yet Adopted Simplifying the Accounting for Income Taxes. In December 2019, the Financial Accounting Standards Board issued new guidance to simplify the accounting for income taxes. This new standard eliminates certain exceptions in current guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. For public business entities, this guidance is effective for interim or annual periods beginning after December 15, 2020, with early adoption permitted in any interim period within that year. We are currently evaluating the impact of this guidance on our consolidated financial statements and the timing of adoption Investments - equity securities; Investments - Equity Method and Joint Ventures; Derivatives and Hedging. In January 2020, the FASB issued an accounting standards update which clarifies the interaction between the accounting for investments in equity securities, equity method investments and certain derivative instruments. The new standard is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The standards update is effective for interim or annual periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements and the timing of adoption. Significant Accounting Policies Below are the significant accounting policies updated during 2020 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, 2019. Revenue Prepaid Merchant Bookings. We classify payments made to suppliers in advance of our performance obligations as prepaid merchant bookings included within prepaid and other current assets. Prepaid merchant bookings was $533 million as of March 31, 2020, which is net of a $23 million reserve for future collectibility risk in consideration of the impact of the COVID-19 pandemic on the economy, and $226 million as of December 31, 2019. Deferred Merchant Bookings. We classify cash payments received in advance of our performance obligations as deferred merchant bookings. At December 31, 2019, $4.898 billion of cash advance cash payments was reported within deferred merchant bookings, $2.880 billion of which was recognized resulting in $442 million of revenue during the three months ended March 31, 2020. At March 31, 2020, the related balance was $5.116 billion. At December 31, 2019, $781 million of deferred loyalty rewards was reported within deferred merchant bookings, $158 million of which was recognized within revenue during the three months ended March 31, 2020. At March 31, 2020, the related balance was $789 million. Deferred Revenue. At December 31, 2019, $321 million was recorded as deferred revenue, $109 million of which was recognized as revenue during the three months ended March 31, 2020. At March 31, 2020, the related balance was $221 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 Our cash and cash equivalents include cash and liquid financial instruments, including money market funds and term deposit investments, with maturities of three months or less when purchased. 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:
Accounts Receivable and Allowances Accounts receivable are generally due within thirty days and are recorded net of an allowance for expected uncollectible amounts. We consider accounts outstanding longer than the contractual payment terms as past due. The risk characteristics we generally review when analyzing our accounts receivable pools primarily include the type of receivable (for example, credit card vs hotel collect), collection terms and historical or expected credit loss patterns. For each pool, we make estimates of expected credit losses for our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded as cost of revenue in our consolidated statements of operations. During the three months ended March 31, 2020, we recorded approximately $59 million of incremental allowance for expected uncollectible amounts, including estimated future losses in consideration of the impact of COVID-19 pandemic on the economy and the Company, partially offset by $5 million of other adjustments. Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and severity of the impact of the COVID-19 pandemic.
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Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
|
Disaggregation of Revenue [Line Items] | ||
Prepaid merchant bookings | $ 533 | $ 226 |
Deferred merchant bookings | 5,905 | 5,679 |
Deferred revenue | 221 | 321 |
Deferred Merchant Bookings | ||
Disaggregation of Revenue [Line Items] | ||
Deferred merchant bookings | 5,116 | 4,898 |
Deferred merchant bookings recognized during period | 2,880 | |
Revenue recognized during period | 442 | |
Deferred Loyalty Rewards | ||
Disaggregation of Revenue [Line Items] | ||
Deferred merchant bookings | 789 | 781 |
Revenue recognized during period | 158 | |
Deferred Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue recognized during period | 109 | |
Deferred revenue | $ 221 | $ 321 |
Fair Value Measurements - Additional Information (Detail) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Gain (loss) on minority equity investments, net | $ (188,000,000) | $ 22,000,000 | |
Net gains (losses) from foreign currency forward contracts | 106,000,000 | (6,000,000) | |
Impairment of goodwill | 765,000,000 | 0 | |
Goodwill | 7,330,000,000 | $ 8,127,000,000 | |
Impairment of intangible assets | 121,000,000 | 0 | |
Foreign currency forward contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Notional amount of foreign currency derivatives | 3,700,000,000 | ||
Net forward asset | 79,000,000 | ||
Gross forward asset | 131,000,000 | ||
Net forward liability | 8,000,000 | ||
Gross forward liability | 30,000,000 | ||
Nonrecurring Basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of goodwill | 765,000,000 | ||
Impairment of intangible assets | 121,000,000 | ||
Carrying value of cost method investments | 352,000,000 | $ 467,000,000 | |
Impairment losses related to a minority investment | 113,000,000 | ||
Total cumulative adjustments made to the initial costs bases of investments | 82,000,000 | ||
Nonrecurring Basis | Retail | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of goodwill | 539,000,000 | ||
Goodwill | 2,300,000,000 | ||
Nonrecurring Basis | trivago | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of goodwill | 226,000,000 | ||
Goodwill | 316,000,000 | ||
Despegar.com | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Gain (loss) on minority equity investments, net | (75,000,000) | $ 24,000,000 | |
Level 3 | Nonrecurring Basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Indefinite-lived intangible assets (excluding goodwill), fair value disclosure | $ 237,000,000 |
Stockholders' Equity - Summary of Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Dividends Payable [Line Items] | ||
Dividends declared per common share (in dollars per share) | $ 0.34 | $ 0.32 |
Payment of dividends to stockholders | $ 48 | $ 47 |
February 13, 2020 | ||
Dividends Payable [Line Items] | ||
Declaration Date | Feb. 13, 2020 | |
Dividends declared per common share (in dollars per share) | $ 0.34 | |
Record Date | Mar. 10, 2020 | |
Payment of dividends to stockholders | $ 48 | |
Payment Date | Mar. 26, 2020 | |
February 6, 2019 | ||
Dividends Payable [Line Items] | ||
Declaration Date | Feb. 06, 2019 | |
Dividends declared per common share (in dollars per share) | $ 0.32 | |
Record Date | Mar. 07, 2019 | |
Payment of dividends to stockholders | $ 47 | |
Payment Date | Mar. 27, 2019 |
Subsequent Events (Details) |
3 Months Ended | |||||
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May 05, 2020
USD ($)
$ / shares
shares
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May 04, 2020
USD ($)
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Mar. 31, 2020
EUR (€)
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May 06, 2020 |
Mar. 31, 2020
USD ($)
$ / shares
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Dec. 31, 2019
$ / shares
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Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Closing fees, paid | $ 12,000,000 | |||||
Unsecured Senior Notes | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Senior unsecured notes principal amount | 2,750,000,000 | |||||
6.25% Unsecured Senior Notes Due May 2025 | Unsecured Senior Notes | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Senior unsecured notes principal amount | $ 2,000,000,000 | |||||
Debt, interest rate (percentage) | 6.25% | |||||
7.0% Unsecured Senior Notes Due May 2025 | Unsecured Senior Notes | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Senior unsecured notes principal amount | $ 750,000,000 | |||||
Debt, interest rate (percentage) | 7.00% | |||||
Debt instrument redemption price percentage | 100.00% | |||||
5.95% senior notes due 2020 | ||||||
Subsequent Event [Line Items] | ||||||
Senior unsecured notes principal amount | $ 750,000,000 | |||||
Debt, interest rate (percentage) | 5.95% | 5.95% | ||||
Debt instrument redemption price percentage | 100.00% | |||||
2.5% (€650 million) senior notes due 2022 | ||||||
Subsequent Event [Line Items] | ||||||
Senior unsecured notes principal amount | € | € 650,000,000 | |||||
Debt, interest rate (percentage) | 2.50% | 2.50% | ||||
Debt instrument redemption price percentage | 100.00% | |||||
4.5% senior notes due 2024 | ||||||
Subsequent Event [Line Items] | ||||||
Senior unsecured notes principal amount | $ 500,000,000 | |||||
Debt, interest rate (percentage) | 4.50% | 4.50% | ||||
Debt instrument redemption price percentage | 100.00% | |||||
5.0% senior notes due 2026 | ||||||
Subsequent Event [Line Items] | ||||||
Senior unsecured notes principal amount | $ 750,000,000 | |||||
Debt, interest rate (percentage) | 5.00% | 5.00% | ||||
Debt instrument redemption price percentage | 100.00% | |||||
3.8% senior notes due 2028 | ||||||
Subsequent Event [Line Items] | ||||||
Senior unsecured notes principal amount | $ 1,000,000,000 | |||||
Debt, interest rate (percentage) | 3.80% | 3.80% | ||||
Debt instrument redemption price percentage | 100.00% | |||||
3.25% senior notes due 2030 | ||||||
Subsequent Event [Line Items] | ||||||
Senior unsecured notes principal amount | $ 1,250,000,000 | |||||
Debt, interest rate (percentage) | 3.25% | 3.25% | ||||
Amended Credit Facility Maturing on May 31, 2023 | ||||||
Subsequent Event [Line Items] | ||||||
Credit facility | $ 2,000,000,000 | |||||
Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Additional credit facility, excess amount | $ 1,145,000,000 | |||||
Commitment fee on undrawn amounts | 2.25% | |||||
Apollo Purchaser | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from issuance of private placement | $ 588,000,000 | |||||
Silver Lake Purchaser | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from issuance of private placement | $ 588,000,000 | |||||
Debt Instrument, Redemption, Period One | 6.25% Unsecured Senior Notes Due May 2025 | Unsecured Senior Notes | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument redemption price percentage | 101.00% | |||||
Debt Instrument, Redemption, Period One | 5.95% senior notes due 2020 | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument redemption price percentage | 101.00% | |||||
Debt Instrument, Redemption, Period One | 2.5% (€650 million) senior notes due 2022 | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument redemption price percentage | 101.00% | |||||
Debt Instrument, Redemption, Period One | 4.5% senior notes due 2024 | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument redemption price percentage | 101.00% | |||||
Debt Instrument, Redemption, Period One | 5.0% senior notes due 2026 | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument redemption price percentage | 101.00% | |||||
Debt Instrument, Redemption, Period One | 3.8% senior notes due 2028 | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument redemption price percentage | 101.00% | |||||
Debt Instrument, Redemption, Period One | 3.25% senior notes due 2030 | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument redemption price percentage | 101.00% | |||||
Debt Instrument, Redemption, Period One | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Additional credit facility, excess amount | $ 1,145,000,000 | |||||
Debt instrument, covenant, leverage ratio, maximum | 5.00 | |||||
Debt Instrument, Redemption, Period Two | 3.25% senior notes due 2030 | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument redemption price percentage | 100.00% | |||||
Debt Instrument, Redemption, Period Two | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Additional credit facility, excess amount | $ 1,145,000,000 | |||||
Commitment fee on undrawn amounts | 1.25% | |||||
Debt Instrument, Redemption, Period Three | 3.25% senior notes due 2030 | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument redemption price percentage | 100.00% | |||||
Debt Instrument, Redemption, Period Three | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Additional credit facility, excess amount | $ 1,145,000,000 | |||||
Eurodollar | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 2.35% | |||||
Base Rate | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 1.35% | |||||
Minimum | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 0.10% | |||||
Minimum | Debt Instrument, Redemption, Period One | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 1.10% | |||||
Minimum | Debt Instrument, Redemption, Period Two | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 1.00% | |||||
Minimum | Debt Instrument, Redemption, Period Three | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 0.00% | |||||
Minimum | Eurodollar | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||
Minimum | Base Rate | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.00% | |||||
Maximum | 7.0% Unsecured Senior Notes Due May 2025 | Unsecured Senior Notes | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Percentage of principal amount redeemed | 40.00% | |||||
Maximum | Additional Credit Facility [Member] | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Additional borrowing capacity | $ 855,000,000 | |||||
Maximum | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 0.85% | |||||
Maximum | Debt Instrument, Redemption, Period One | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 1.85% | |||||
Maximum | Debt Instrument, Redemption, Period Two | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 1.75% | |||||
Maximum | Debt Instrument, Redemption, Period Three | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 0.75% | |||||
Maximum | Eurodollar | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||
Maximum | Base Rate | Amended Credit Facility Maturing on May 31, 2023 | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||
Series A Preferred Stock | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, voting power, percentage | 50.00% | 20.00% | ||||
Preferred stock, dividend rate, percentage | 9.50% | |||||
Preferred stock, liquidation preference, percent | 105.00% | |||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 1,000 | |||||
Series A Preferred Stock | Apollo Purchaser | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 600,000 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||
Series A Preferred Stock | Silver Lake Purchaser | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 600,000 | |||||
Series A Preferred Stock | 5th, 6th and 7th Anniversaries | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, dividend rate annual increase, percentage | 1.00% | |||||
Series A Preferred Stock | 8th and 9th Anniversaries | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, dividend rate annual increase, percentage | 1.50% | |||||
Series A Preferred Stock | Debt Instrument, Redemption, Period One | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, liquidation preference, percent | 103.00% | |||||
Series A Preferred Stock | Debt Instrument, Redemption, Period Two | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, liquidation preference, percent | 102.00% | |||||
Series A Preferred Stock | Debt Instrument, Redemption, Period Three | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, liquidation preference, percent | 101.00% | |||||
Warrant | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Warrants purchased (in shares) | shares | 4,200,000 | |||||
Common stock, voting power, percentage | 50.00% | |||||
Class of warrant or right, expiration period | 10 years | |||||
Warrant | Apollo Purchaser | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Warrants purchased (in shares) | shares | 4,200,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
Class of warrant or right, exercise price of warrants or rights | $ / shares | $ 72.00 | |||||
Warrant | Silver Lake Purchaser | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Warrants purchased (in shares) | shares | 4,200,000 | |||||
Class of warrant or right, exercise price of warrants or rights | $ / shares | $ 72.00 | |||||
Class B Common Stock | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Class B Common Stock | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
Revolving Credit Facility | ||||||
Subsequent Event [Line Items] | ||||||
Debt, interest rate (percentage) | 2.01% | 2.01% | ||||
Credit facility | $ 2,000,000,000 | |||||
Commitment fee on undrawn amounts | 0.15% |
Restructuring and Related Reorganization Charges |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Reorganization Charges | Restructuring and Related Reorganization Charges In late February 2020, we committed to restructuring actions intended to simplify our businesses and improve operational efficiencies, which have resulted in headcount reductions. As a result, we recognized $75 million in restructuring and related reorganization charges during the three months ended March 31, 2020. Based on current plans, which are subject to change, we expect total reorganization charges in the remainder of 2020 in the range of $60 million to $115 million. These costs could be higher or lower should we make additional decisions in future periods that impact our reorganization efforts. We also engaged in certain smaller scale restructure actions in 2019 to centralize and migrate certain operational functions and systems, for which we recognized $10 million in restructuring and related reorganization charges during the three months ended March 31, 2019, which were primarily related to severance and benefits. The following table summarizes the restructuring and related reorganization activity for the three months ended March 31, 2020:
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Fair Value Measurements |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 March 31, 2020 are classified using the fair value hierarchy in the table below:
Financial assets measured at fair value on a recurring basis as of December 31, 2019 are classified using the fair value hierarchy in the table below:
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 March 31, 2020 and December 31, 2019, our cash and cash equivalents consisted primarily of term deposits with maturities of three months or less and bank account balances. We hold term deposit investments with financial institutions. Term 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 three months ended March 31, 2020 and 2019, we recognized a gain (loss) of approximately $(75) million and $24 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 March 31, 2020, we were party to outstanding forward contracts hedging our liability and revenue exposures with a total net notional value of $3.7 billion. We had a net forward asset of $79 million ($131 million gross forward asset) as of March 31, 2020 recorded in prepaid expenses and other current assets and a net forward liability of $8 million ($30 million gross forward liability) as of December 31, 2019 recorded in accrued expenses and other current liabilities. We recorded $106 million and $(6) million in net gains (losses) from foreign currency forward contracts during the three months ended March 31, 2020 and 2019. 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 first quarter of 2020, we recognized goodwill impairment charges of $765 million, of which $539 million related to our Retail segment, primarily our Vrbo reporting unit, and $226 million related to our trivago segment. These impairment charges resulted from the significant negative impact related to COVID-19, which has had a severe effect on the entire global travel industry. As a result, we concluded that sufficient indicators existed to require us to perform an interim quantitative assessment of goodwill as of March 31, 2020 in which we compared the fair value of the reporting units to their carrying value. The fair value estimates for all reporting units except trivago were 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 the recent severe and continued weakening of operating results as well as the anticipated rate of recovery, and implied risk premiums based on market prices of our equity and debt as of the assessment dates. 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 fair value estimate for the trivago reporting unit was based on trivago’s stock price, a Level 1 input, adjusted for an estimated control premium. 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 first quarter of 2020. As of March 31, 2020, the applicable reporting units within our Retail segment had $2.3 billion goodwill remaining and our trivago segment had $316 million goodwill remaining. Intangible Assets. During the first quarter of 2020, also as a result of the significant negative impact related to COVID-19, which has had a severe effect on the entire global travel industry, we recognized intangible asset impairment charges of $121 million. The impairment charges were primarily related to indefinite-lived trade names within our Retail segment and resulted from changes in estimated future revenues of the related brands. The assets, classified as Level 3 measurements, were written down to $237 million based on valuation using the relief-from-royalty method, which includes unobservable inputs, including royalty rates and projected revenues. We may continue to record impairment charges in the future due to the long-term economic impact and near-term financial impacts of the COVID-19 pandemic. Minority Investments without Readily Determinable Fair Values. As of March 31, 2020 and December 31, 2019, the carrying values of our minority investments without readily determinable fair values totaled $352 million and $467 million. During the three months ended March 31, 2020, we recorded $113 million of impairment losses related to a minority investment, which had a recent observable and orderly transaction for similar investments, using an option pricing model that utilizes judgmental inputs such as discounts for lack of marketability and estimated exit event timing. As of March 31, 2020, total cumulative adjustments made to the initial cost bases of these investments included $82 million in unrealized downward adjustments (including impairments). During the three months ended March 31, 2019, we had no material gains or losses recognized related to these minority investments.
|
Debt - Fair Value of Outstanding Debt (Details) |
Mar. 31, 2020
EUR (€)
|
Mar. 31, 2020
USD ($)
|
Dec. 31, 2019
EUR (€)
|
Dec. 31, 2019
USD ($)
|
---|---|---|---|---|
5.95% senior notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Fair value of senior notes | $ 747,000,000 | $ 767,000,000 | ||
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 | € 625,000,000 | $ 691,000,000 | € 682,000,000 | 764,000,000 |
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 | $ 457,000,000 | 536,000,000 | ||
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 | $ 691,000,000 | 825,000,000 | ||
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 | $ 875,000,000 | 1,021,000,000 | ||
Debt, interest rate (percentage) | 3.80% | 3.80% | ||
Senior unsecured notes principal amount | $ 1,000,000,000 | |||
3.25% senior notes due 2030 | ||||
Debt Instrument [Line Items] | ||||
Fair value of senior notes | $ 1,150,000,000 | $ 1,206,000,000 | ||
Debt, interest rate (percentage) | 3.25% | 3.25% | ||
Senior unsecured notes principal amount | $ 1,250,000,000 |
Basis of Presentation - Reclassifications (Details) - USD ($) $ in Millions |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 |
Mar. 31, 2019 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) | [1] | $ 629 | $ 490 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling and marketing | [1] | 1,210 | 1,521 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Technology and content | [1] | 308 | 297 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | [1] | 187 | 184 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating loss | $ (1,294) | (131) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As reported | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) | [1] | 513 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling and marketing | [1] | 1,535 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Technology and content | [1] | 429 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | [1] | 191 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 52 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As reclassified | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 490 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling and marketing | 1,521 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Technology and content | 297 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | 184 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ 228 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Foreign currency forward contracts | ||
Derivative Asset: | ||
Foreign currency forward contracts | $ 79 | |
Liabilities | ||
Foreign currency forward contracts | $ 8 | |
Recurring Basis | ||
Investments: | ||
Total assets | 1,512 | 1,566 |
Recurring Basis | Foreign currency forward contracts | ||
Derivative Asset: | ||
Foreign currency forward contracts | 79 | |
Liabilities | ||
Foreign currency forward contracts | 8 | |
Recurring Basis | Money market funds | ||
Cash equivalents: | ||
Cash equivalents: | 322 | 36 |
Recurring Basis | Term deposits | ||
Cash equivalents: | ||
Cash equivalents: | 863 | 865 |
Investments: | ||
Investments: | 184 | 526 |
Recurring Basis | U.S. treasury securities | ||
Cash equivalents: | ||
Cash equivalents: | 10 | |
Investments: | ||
Investments: | 10 | |
Recurring Basis | Marketable equity securities | ||
Investments: | ||
Investments: | 54 | 129 |
Recurring Basis | Level 1 | ||
Investments: | ||
Total assets | 386 | 175 |
Recurring Basis | Level 1 | Foreign currency forward contracts | ||
Derivative Asset: | ||
Foreign currency forward contracts | 0 | |
Liabilities | ||
Foreign currency forward contracts | 0 | |
Recurring Basis | Level 1 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents: | 322 | 36 |
Recurring Basis | Level 1 | Term deposits | ||
Cash equivalents: | ||
Cash equivalents: | 0 | 0 |
Investments: | ||
Investments: | 0 | 0 |
Recurring Basis | Level 1 | U.S. treasury securities | ||
Cash equivalents: | ||
Cash equivalents: | 10 | |
Investments: | ||
Investments: | 10 | |
Recurring Basis | Level 1 | Marketable equity securities | ||
Investments: | ||
Investments: | 54 | 129 |
Recurring Basis | Level 2 | ||
Investments: | ||
Total assets | 1,126 | 1,391 |
Recurring Basis | Level 2 | Foreign currency forward contracts | ||
Derivative Asset: | ||
Foreign currency forward contracts | 79 | |
Liabilities | ||
Foreign currency forward contracts | 8 | |
Recurring Basis | Level 2 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents: | 0 | 0 |
Recurring Basis | Level 2 | Term deposits | ||
Cash equivalents: | ||
Cash equivalents: | 863 | 865 |
Investments: | ||
Investments: | 184 | 526 |
Recurring Basis | Level 2 | U.S. treasury securities | ||
Cash equivalents: | ||
Cash equivalents: | 0 | |
Recurring Basis | Level 2 | Marketable equity securities | ||
Investments: | ||
Investments: | $ 0 | $ 0 |
Segment Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Segment Reporting Information [Line Items] | ||
Revenue | $ 2,209 | $ 2,609 |
Intersegment revenue | 0 | 0 |
Adjusted EBITDA | (76) | 176 |
Depreciation | (185) | (176) |
Amortization of intangible assets | (44) | (52) |
Impairment of goodwill | (765) | 0 |
Impairment of intangible assets | (121) | 0 |
Stock-based compensation | (55) | (56) |
Legal reserves, occupancy tax and other | 21 | (10) |
Restructuring and related reorganization charges | (75) | (10) |
Realized (gain) loss on revenue hedges | 6 | (3) |
Operating income (loss) | (1,294) | (131) |
Other expense, net | (185) | (10) |
Income before income taxes | (1,479) | (141) |
Provision for income taxes | 82 | 41 |
Net loss | (1,397) | (100) |
Net (income) loss attributable to non-controlling interests | 96 | (3) |
Net income attributable to Expedia Group, Inc. | (1,301) | (103) |
Corporate & Eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenue | (12) | (85) |
Intersegment revenue | (51) | (85) |
Adjusted EBITDA | (123) | (115) |
Depreciation | (22) | (18) |
Amortization of intangible assets | (44) | (52) |
Impairment of goodwill | (765) | |
Impairment of intangible assets | (121) | |
Stock-based compensation | (55) | (56) |
Legal reserves, occupancy tax and other | 21 | (10) |
Restructuring and related reorganization charges | (75) | (10) |
Realized (gain) loss on revenue hedges | 0 | 0 |
Operating income (loss) | (1,184) | (261) |
Corporate & Eliminations | Bodybuilding.com | ||
Segment Reporting Information [Line Items] | ||
Revenue | 39 | |
Retail | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,582 | 1,901 |
Retail | Reportable Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,582 | 1,901 |
Intersegment revenue | 0 | |
Adjusted EBITDA | 22 | 195 |
Depreciation | (128) | (128) |
Amortization of intangible assets | 0 | 0 |
Impairment of goodwill | 0 | |
Impairment of intangible assets | 0 | |
Stock-based compensation | 0 | 0 |
Legal reserves, occupancy tax and other | 0 | 0 |
Restructuring and related reorganization charges | 0 | 0 |
Realized (gain) loss on revenue hedges | 9 | (2) |
Operating income (loss) | (97) | 65 |
B2B | ||
Segment Reporting Information [Line Items] | ||
Revenue | 485 | 556 |
B2B | Reportable Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 485 | 556 |
Intersegment revenue | 0 | 0 |
Adjusted EBITDA | 26 | 72 |
Depreciation | (32) | (27) |
Amortization of intangible assets | 0 | 0 |
Impairment of goodwill | 0 | |
Impairment of intangible assets | 0 | |
Stock-based compensation | 0 | 0 |
Legal reserves, occupancy tax and other | 0 | 0 |
Restructuring and related reorganization charges | 0 | 0 |
Realized (gain) loss on revenue hedges | (3) | (1) |
Operating income (loss) | (9) | 44 |
trivago | ||
Segment Reporting Information [Line Items] | ||
Revenue | 103 | 152 |
trivago | Reportable Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 154 | 237 |
Intersegment revenue | 51 | 85 |
Adjusted EBITDA | (1) | 24 |
Depreciation | (3) | (3) |
Amortization of intangible assets | 0 | 0 |
Impairment of goodwill | 0 | |
Impairment of intangible assets | 0 | |
Stock-based compensation | 0 | 0 |
Legal reserves, occupancy tax and other | 0 | 0 |
Restructuring and related reorganization charges | 0 | 0 |
Realized (gain) loss on revenue hedges | 0 | 0 |
Operating income (loss) | $ (4) | $ 21 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounts receivable, allowance | $ 95 | $ 41 |
Treasury stock - Common stock, Shares | 130,592,000 | 126,893,000 |
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 | 258,770,000 | 256,692,000 |
Common stock, Shares outstanding | 135,454,000 | 137,076,000 |
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 | 5,523,000 | 5,523,000 |
Treasury stock - Common stock, Shares | 7,300,000 | 7,300,000 |
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |
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Mar. 31, 2020 |
Dec. 31, 2019 |
Apr. 26, 2018 |
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Equity, Class of Treasury Stock [Line Items] | |||
Treasury stock (in shares) | 130,592,000 | 126,893,000 | |
Authorized share repurchase | 20,000,000 | 15,000,000 | |
Stock repurchases (in shares) | 3,400,000 | ||
Stock repurchased, value | $ 370 | ||
Average repurchase price per share (in dollars per share) | $ 109.88 | ||
Shares authorized and remaining under the repurchase program | 23,300,000 | ||
Share-based compensation arrangement by share-based payment award, options and equity instruments other than options, outstanding (in shares) | 18,000,000 | ||
Share-based compensation arrangement by share-based payment award, options, outstanding (in shares) | 12,000,000 | ||
Weighted average exercise price (in dollars per share) | $ 104.82 | ||
Options, weighted average remaining contractual term | 3 years 2 months 12 days | ||
Common stock | |||
Equity, Class of Treasury Stock [Line Items] | |||
Treasury stock (in shares) | 123,300,000 | 119,600,000 | |
Class B Common Stock | |||
Equity, Class of Treasury Stock [Line Items] | |||
Treasury stock (in shares) | 7,300,000 | 7,300,000 | |
Restricted Stock Units (RSUs) | |||
Equity, Class of Treasury Stock [Line Items] | |||
Equity instruments other than options, outstanding (in shares) | 6,000,000 | ||
Grants in period (in shares) | 3,000,000 | ||
Employee Stock | |||
Equity, Class of Treasury Stock [Line Items] | |||
Award vesting period | 4 years | ||
Share-based Payment Arrangement, Tranche One | Restricted Stock Units (RSUs) | |||
Equity, Class of Treasury Stock [Line Items] | |||
Award vesting rights, percentage | 25.00% | 25.00% | |
Award vesting period | 1 year | 1 year | |
Share-based Payment Arrangement, Tranche Two | Restricted Stock Units (RSUs) | |||
Equity, Class of Treasury Stock [Line Items] | |||
Award vesting period | 3 years | 3 years |
Restructuring and Related Reorganization Charges - Summary of the Restructuring and Related Reorganization Activity (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Restructuring Reserve [Roll Forward] | ||
Accrued liability as of January 1, 2020 | $ 17 | |
Charges | 75 | $ 10 |
Payments | (22) | |
Accrued liability as of March 31, 2020 | 70 | |
Employee Severance and Benefits | ||
Restructuring Reserve [Roll Forward] | ||
Accrued liability as of January 1, 2020 | 11 | |
Charges | 69 | |
Payments | (17) | |
Accrued liability as of March 31, 2020 | 63 | |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Accrued liability as of January 1, 2020 | 6 | |
Charges | 6 | |
Payments | (5) | |
Accrued liability as of March 31, 2020 | $ 7 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Cost of revenue | ||
Stock-based compensation | $ 3 | $ 3 |
Selling and marketing | ||
Stock-based compensation | 12 | 11 |
Technology and content | ||
Stock-based compensation | 20 | 19 |
General and administrative | ||
Stock-based compensation | $ 20 | $ 23 |
Fair Value Measurements (Tables) |
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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 March 31, 2020 are classified using the fair value hierarchy in the table below:
Financial assets measured at fair value on a recurring basis as of December 31, 2019 are classified using the fair value hierarchy in the table below:
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events As a part of Expedia Group’s overall efforts aimed at strengthening our liquidity position in the current environment, we entered into the following transactions subsequent to the end of the first quarter of 2020: Issuance of Notes On May 5, 2020, we privately placed $2 billion of unsecured 6.250% senior notes that are due in May 2025 (the “6.25% Notes”) and $750 million of unsecured 7.000% senior notes due May 2025 (the “7.0% Notes”, and, together with the 6.25% Notes, the “6.25% and 7.0% Notes”). The 6.25% and 7.0% Notes were issued at a price of 100% of the aggregate principal amount. Interest is payable semi-annually in arrears in May and November of each year, beginning November 1, 2020. We expect to use the net proceeds of this offering for general corporate purposes, which may include, but are not limited to, the repayment or redemption of our 5.95% senior notes due 2020. We may redeem some or all of the 6.25% Notes at any time prior to February 1, 2025 by paying a “make-whole” premium plus accrued and unpaid interest, if any. We may redeem some or all of the 6.250% Notes on or after February 1, 2025 at par plus accrued and unpaid interest, if any. We may redeem some or all of the 7.0% Notes at any time prior to May 1, 2022 at a redemption price equal to 100% of the principal amount of the 7.0% Notes to be redeemed, plus a “make-whole” premium, plus accrued and unpaid interest, if any. We may redeem some or all of the 7.0% Notes on or after May 1, 2022 at specified redemption prices set forth in the 7.0% Indenture, plus accrued and unpaid interest, if any. In addition, at any time or from time to time prior to May 1, 2022, we may redeem up to 40% of the aggregate principal amount of the 7.0% Notes with the net proceeds of certain equity offerings at the specified redemption price described in the 7.0% Indenture, plus accrued and unpaid interest, if any. The 6.25% and 7.0% Notes are senior unsecured obligations issued by Expedia Group and guaranteed by certain domestic Expedia Group subsidiaries. The 6.25% and 7.0% 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. The 6.25% and 7.0% 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. The 6.25% and 7.0% 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. Credit Facility Amendment On May 4, 2020, the Company, certain of the Company’s subsidiaries party thereto and the lenders party thereto (the “Consenting Lenders”) executed a restatement agreement, which amends and restates the Company’s existing revolving credit facility (as amended and restated, the “Amended Credit Facility”) to, among other things, suspend the maximum leverage ratio covenant until December 31, 2021, increase the maximum permissible leverage ratio (once such covenant is reinstated) until March 31, 2023 (at which time the maximum permissible leverage ratio will return to the level in effect immediately prior to effectiveness of the Amended Credit Facility), eliminate the covenant imposing a minimum permissible ratio of consolidated EBITDA to consolidated cash interest expense and add a covenant regarding minimum liquidity, as well as to make certain other amendments to the affirmative and negative covenants therein. The Amended Credit Facility became effective on May 5, 2020 (the “Amended Credit Facility Effective Date”), substantially concurrently with the completion of the Notes Offering and the completion of the transactions contemplated by the Investment Agreements (as defined below). Obligations under the Amended Credit Facility are secured by substantially all of the assets of the Company and its subsidiaries that guarantee the Amended Credit Facility (subject to certain exceptions, including for our new headquarters located in Seattle, WA) up to the maximum amount permitted under the indentures governing the Notes and the Company’s existing 5.95% Senior Notes due 2020, 2.500% Senior Notes due 2022, 4.500% Senior Notes due 2024, 5.000% Senior Notes due 2026, 3.800% Senior Notes due 2028 and 3.25% Senior Notes due 2030 (collectively, the “Existing Notes”) as of the Amended Credit Facility Effective Date without securing such notes. Aggregate commitments under the Amended Credit Facility will initially total $2 billion, and will mature on May 31, 2023. Pursuant to the terms of the Amended Credit Facility, the Company has agreed to use reasonable best efforts to enter into (and to cause certain of its subsidiaries, including certain of its subsidiaries that are not guarantors of the 6.25% and 7.0% Notes or the Existing Notes, to enter into), promptly after the Amended Credit Facility Effective Date, a new credit facility incurred by one or more of the Company’s subsidiaries that are not obligors with respect to the Amended Credit Facility, the 6.25% and 7.0% Notes or the Existing Notes and which will be guaranteed by the Company, its subsidiaries that guarantee the Amended Credit Facility, the 6.25% and 7.0% Notes and the Existing Notes and certain of the Company’s non-guarantor subsidiaries (the “Additional Credit Facility”), on specified terms in an aggregate principal amount up to approximately $855 million. Upon the establishment of the Additional Credit Facility, the Company will prepay indebtedness, and reduce commitments, under the Amended Credit Facility, in an amount equal to the aggregate commitments in respect of the Additional Credit Facility. Loans under the Amended Credit Facility held by Consenting Lenders will bear interest (A) in the case of eurocurrency loans, at rates ranging from (i) prior to December 31, 2021, 2.35% per annum for any day that the aggregate unused commitments and funded exposure under the Amended Credit Facility exceed $1.145 billion to 2.25% per annum otherwise and (ii) on and after December 31, 2021, or prior to such date for each quarter that the leverage ratio, as of the end of the most recently ended fiscal quarter for which financial statements have been delivered, calculated on an annualized basis using consolidated EBITDA for the two most recently ended fiscal quarters included in such financial statements multiplied by two, is not greater than 5.00:1.00, 1.10% to 1.85% per annum for any day that the aggregate unused commitments and funded exposure under the Amended Credit Facility exceed $1.145 billion and, otherwise, ranging from 1.00% to 1.75% per annum, in each case, depending on the Company’s credit ratings, and (B) in the case of base rate loans, at rates ranging from (i) prior to December 31, 2021, 1.35% per annum for any day that the aggregate unused commitments and funded exposure under the Amended Credit Facility exceed $1.145 billion to 1.25% per annum otherwise and (ii) on and after December 31, 2021, or prior to such date if the leverage ratio condition referred to above is satisfied, 0.10% to 0.85% per annum for any day that the aggregate unused commitments and funded exposure under the Amended Credit Facility exceed $1.145 billion, and, otherwise, ranging from 0.00% to 0.75% per annum, in each case, depending on the Company’s credit ratings. Under certain circumstances, loans under the Amended Credit Facility held by Consenting Lenders that do not participate in the Additional Credit Facility, if established, will bear interest at rates ranging from 1.00% to 1.75% per annum, in the case of eurocurrency loans, and ranging from 0.00% to 0.75% per annum, in the case of base rate loans, in each case, depending on the Company’s credit ratings. Investment Agreements On May 5, 2020, we completed the sale of Series A Preferred Stock (as defined below) and warrants (the “Warrants”) to purchase our common stock (“Common Stock”) to AP Fort Holdings, L.P., an affiliate of Apollo Global Management, Inc. (the “Apollo Purchaser”) and SLP Fort Aggregator II, L.P. and SLP V Fort Holdings II, L.P., affiliates of Silver Lake Group, L.L.C. (the “Silver Lake Purchasers”) pursuant to the Company’s previously announced Investment Agreements, dated as of April 23, 2020, with the Apollo Purchaser and the Silver Lake Purchasers (together, the “Investment Agreements”). We have agreed to issue and sell (1) to the Apollo Purchaser, pursuant to the Apollo Investment Agreement, 600,000 shares of the Company’s newly created Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”) and warrants (the “Warrants”) to purchase 4.2 million shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), for an aggregate purchase price of $588 million and (2) to the Silver Lake Purchaser, pursuant to the Silver Lake Investment Agreement, 600,000 shares of Series A Preferred Stock and Warrants to purchase 4.2 million shares of Common Stock, for an aggregate purchase price of $588 million. At closing, we paid certain fees in an aggregate amount of $12 million to affiliates of the Apollo Purchaser and the Silver Lake Purchaser. On the terms and subject to the conditions set forth in the Investment Agreements, from and after the closing, (1) each of the Apollo Purchaser and the Silver Lake Purchaser designated one representative who was appointed to the Board of Directors of the Company (the “Board”) and (2) the Apollo Purchaser appointed one non-voting observer to the Board, in each case until such time as the applicable Purchaser and its Permitted Transferees (as defined in the Investment Agreements) no longer beneficially own (a) at least 50% of the shares of Series A Preferred Stock purchased by the applicable Purchaser under the Investment Agreement (unless the applicable Purchaser holds less than 50% of the shares of Series A Preferred Stock as a result of redemptions by the Company, in which case the reference to 50% shall be replaced with a reference to 20%) and (b) Warrants and/or Common Stock for which the Warrants were exercised that represent in the aggregate and on an as exercised basis, at least 50% of the shares underlying the Warrants purchased by the applicable Purchaser under the Investment Agreement. The Investment Agreements (including the forms of Certificate of Designations, Warrants and Registration Rights Agreement) contain other customary covenants and agreements, including certain standstill provisions and customary preemptive rights. Certificate of Designations for Series A Preferred Stock. Dividends on each share of Series A Preferred Stock accrue daily on the Preference Amount (as defined below) at the then-applicable Dividend Rate (as defined below) and are payable semi-annually in arrears. As used herein, “Dividend Rate” with respect to the Series A Preferred Stock means (a) from the closing until the day immediately preceding the fifth anniversary of the closing, 9.5% per annum, (b) beginning on each of the fifth, sixth and seventh anniversaries of the closing, the then-applicable Dividend Rate shall be increased by 100 basis points on each such yearly anniversary, and (c) beginning on each of the eighth and ninth anniversaries of the closing date, the then-applicable Dividend Rate shall be increased by 150 basis points on each such yearly anniversary. The Dividend Rate is also subject to certain adjustments if the Company incurs indebtedness causing its leverage to exceed certain thresholds. Dividends are payable (a) until the third anniversary of the closing, either in cash or through an accrual of unpaid dividends (“Dividend Accrual”), at the Company’s option, (b) from the third anniversary of the closing until the sixth anniversary of the closing, either in cash or in a combination of cash and Dividend Accrual (with no more than 50% of the total amount of such Dividend being paid through a Dividend Accrual), at the Company’s option and (c) thereafter, in cash. The Series A Preferred Stock rank senior to the Common Stock and the Class B common stock, par value $0.0001 per share, of the Company (the “Class B Common Stock”) with respect to dividend rights, redemption rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. At any time on or before the first anniversary of the closing, we may redeem all or any portion of the Series A Preferred Stock in cash at a price equal to 105.0% of the sum of the original liquidation preference of $1,000 per share of Series A Preferred Stock plus any Dividend Accruals (the “Preference Amount”), plus accrued and unpaid distributions as of the redemption date. Any time after the first anniversary of the closing but on or prior to the second anniversary of the closing, we may redeem all or any portion of the Series A Preferred Stock in cash at a price equal to 103.0% of the Preference Amount, plus accrued and unpaid distributions as of the redemption date. Any time after the second anniversary of the closing but on or prior to the third anniversary of the closing, we may redeem all or any portion of the Series A Preferred Stock in cash at a price equal to 102.0% of the Preference Amount, plus accrued and unpaid distributions as of the redemption date. Any time after the third anniversary of the closing but on or prior to the fourth anniversary of the closing, we may redeem all or any portion of the Series A Preferred Stock in cash at a price equal to 101.0% of the Preference Amount, plus accrued and unpaid distributions as of the redemption date. At any time after the fourth anniversary of the closing, we may redeem all or any portion of the Series A Preferred Stock in cash at a price equal to the Preference Amount plus accrued and unpaid distributions as of the redemption date. In addition, upon the occurrence of a change of control, (i) we shall have the right, but not the obligation, to redeem any or all of the outstanding shares of Series A Preferred Stock at the then applicable redemption price, payable in cash and (ii) each holder will have the right, but not the obligation, to require the Company to redeem any or all of the outstanding shares of Series A Preferred Stock owned by such holder at the then applicable redemption price, payable in cash. The Series A Preferred Stock is not convertible into Common Stock or Class B Common Stock. Each holder of Series A Preferred Stock will have one vote per share on any matter on which holders of Series A Preferred are entitled to vote separately as a class (as described below), whether at a meeting or by written consent. The holders of shares of Series A Preferred Stock do not otherwise have any voting rights. The vote or consent of the holders of at least two-thirds of the shares of Series A Preferred Stock outstanding at such time, voting together as a separate class, is required in order for the Company to (i) amend, alter or repeal any provision of its Amended and Restated Certificate of Incorporation (including the certificates of designations relating to the Series A Preferred Stock) in a manner that would have an adverse effect on the rights, preferences or privileges of the Series A Preferred Stock, as applicable, (ii) issue, any capital stock ranking senior or pari passu to the Series A Preferred Stock, other than certain issuances to a governmental entity in connection with a financing transaction or (iii) liquidate, dissolve or wind up the Company. Warrants to Purchase Company Common Stock. Pursuant to the Investment Agreements, we issued to each of (1) the Silver Lake Purchasers (in the aggregate) and (2) the Apollo Purchaser, Warrants to purchase 4.2 million shares of Common Stock at an exercise price of $72.00 per share, subject to certain customary anti-dilution adjustments provided under the Warrants, including for stock splits, reclassifications, combinations and dividends or distributions made by the Company on the Common Stock. The Warrants are exercisable on a net share settlement basis. The Warrants expire ten years after the closing date. Registration Rights Agreement. In connection with and concurrently with the effective time of the transactions contemplated by the Investment Agreements, the Company, the Apollo Purchaser and the Silver Lake Purchasers entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Apollo Purchaser and the Silver Lake Purchasers are entitled to certain registration rights. Under the terms of the Registration Rights Agreement, the Apollo Purchaser and the Silver Lake Purchasers are entitled to customary registration rights with respect to the shares of Common Stock for which the Warrants may be exercised and, from and after the fifth anniversary of the closing, the Series A Preferred Stock. Bodybuilding.com Transaction In May 2020, we completed the sale of Bodybuilding.com.
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Segment Information (Tables) |
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Operating Segment Information | The following tables present our segment information for the three months ended March 31, 2020 and 2019. 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.
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Schedule of Revenue by Services | The following table presents revenue by business model and service type:
(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. Other also includes product revenue of $39 million during the three ended March 31, 2020 related to our acquisition of Bodybuilding.com.
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