Segment Information

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Information

Note 12 – 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.

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 in July 2019 through its sale in May 2020. In addition, we record amortization of intangible assets and any related impairment, as well as stock-based compensation expense, restructuring and related reorganization charges, legal reserves, occupancy tax and other, and other items excluded from segment operating performance in Corporate and Eliminations. Such amounts are detailed in our segment reconciliation below.

The following tables present our segment information for the three and nine months ended September 30, 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.

	Three months ended September 30, 2020
	Retail		B2B		trivago		Corporate & Eliminations		Total
	(In millions)
Third-party revenue	$	1,246	$	203	$	55	$	—	$	1,504
Intersegment revenue	—		—		15		(15)		—
Revenue	$	1,246	$	203	$	70	$	(15)	$	1,504
Adjusted EBITDA	$	429	$	(52)	$	7	$	(80)	$	304
Depreciation	(136)		(30)		(4)		(13)		(183)
Amortization of intangible assets	—		—		—		(37)		(37)
Impairment of goodwill	—		—		—		(14)		(14)
Impairment of intangible assets	—		—		—		(41)		(41)
Stock-based compensation	—		—		—		(47)		(47)
Legal reserves, occupancy tax and other	—		—		—		(2)		(2)
Restructuring and related reorganization charges	—		—		—		(78)		(78)
Realized (gain) loss on revenue hedges	(15)		—		—		—		(15)
Operating income (loss)	$	278	$	(82)	$	3	$	(312)	(113)
Other expense, net									(111)
Loss before income taxes									(224)
Provision for income taxes									24
Net loss									(200)
Net loss attributable to non-controlling interests									8
Net loss attributable to Expedia Group, Inc.									(192)
Preferred stock dividend									(29)
Net loss attributable to Expedia Group, Inc. common stockholders									$	(221)

	Three months ended September 30, 2019
	Retail		B2B		trivago		Corporate & Eliminations		Total
	(In millions)
Third-party revenue	$	2,613	$	731	$	190	$	24	$	3,558
Intersegment revenue	—		—		89		(89)		—
Revenue	$	2,613	$	731	$	279	$	(65)	$	3,558
Adjusted EBITDA	$	876	$	149	$	12	$	(125)	$	912
Depreciation	(128)		(27)		(3)		(20)		(178)
Amortization of intangible assets	—		—		—		(50)		(50)
Stock-based compensation	—		—		—		(60)		(60)
Legal reserves, occupancy tax and other	—		—		—		(11)		(11)
Restructuring and related reorganization charges	—		—		—		(2)		(2)
Realized (gain) loss on revenue hedges	4		(6)		—		—		(2)
Operating income (loss)	$	752	$	116	$	9	$	(268)	609
Other expense, net									(48)
Income before income taxes									561
Provision for income taxes									(154)
Net income									407
Net loss attributable to non-controlling interests									2
Net income attributable to Expedia Group, Inc.									$	409

	Nine months ended September 30, 2020
	Retail		B2B		trivago		Corporate & Eliminations		Total
	(In millions)
Third-party revenue	$	3,291	$	756	$	173	$	59	$	4,279
Intersegment revenue	—		—		69		(69)		—
Revenue	$	3,291	$	756	$	242	$	(10)	$	4,279
Adjusted EBITDA	$	248	$	(154)	$	(10)	$	(292)	$	(208)
Depreciation	(400)		(96)		(10)		(53)		(559)
Amortization of intangible assets	—		—		—		(122)		(122)
Impairment of goodwill	—		—		—		(799)		(799)
Impairment of intangible assets	—		—		—		(172)		(172)
Stock-based compensation	—		—		—		(156)		(156)
Legal reserves, occupancy tax and other	—		—		—		11		11
Restructuring and related reorganization charges	—		—		—		(206)		(206)
Realized (gain) loss on revenue hedges	(42)		(3)		—		—		(45)
Operating income (loss)	$	(194)	$	(253)	$	(20)	$	(1,789)	(2,256)
Other expense, net									(400)
Loss before income taxes									(2,656)
Provision for income taxes									319
Net loss									(2,337)
Net loss attributable to non-controlling interests									108
Net loss attributable to Expedia Group, Inc.									(2,229)
Preferred stock dividend									(46)
Net loss attributable to Expedia Group, Inc. common stockholders									$	(2,275)

	Nine months ended September 30, 2019
	Retail		B2B		trivago		Corporate & Eliminations		Total
	(In millions)
Third-party revenue	$	6,847	$	1,944	$	505	$	24	$	9,320
Intersegment revenue	—		—		262		(262)		—
Revenue	$	6,847	$	1,944	$	767	$	(238)	$	9,320
Adjusted EBITDA	$	1,619	$	351	$	56	$	(370)	$	1,656
Depreciation	(383)		(81)		(9)		(57)		(530)
Amortization of intangible assets	—		—		—		(154)		(154)
Stock-based compensation	—		—		—		(175)		(175)
Legal reserves, occupancy tax and other	—		—		—		(25)		(25)
Restructuring and related reorganization charges	—		—		—		(16)		(16)
Realized (gain) loss on revenue hedges	(2)		(11)		—		—		(13)
Operating income (loss)	$	1,234	$	259	$	47	$	(797)	743
Other expense, net									(88)
Income before income taxes									655
Provision for income taxes									(161)
Net income									494
Net income attributable to non-controlling interests									(5)
Net income attributable to Expedia Group, Inc.									$	489

Revenue by Business Model and Service Type

The following table presents revenue by business model and service type:

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
	(in millions)
Business Model:
Merchant	$	1,032	$	1,980	$	2,740	$	5,173
Agency	329		1,177		996		3,066
Advertising, media and other	143		401		543		1,081
Total revenue	$	1,504	$	3,558	$	4,279	$	9,320
Service Type:
Lodging	$	1,229	$	2,575	$	3,258	$	6,468
Air	27		202		67		678
Advertising and media	94		312		322		861
Other(1)	154		469		632		1,313
Total revenue	$	1,504	$	3,558	$	4,279	$	9,320

(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 $59 million during the nine months ended September 30, 2020 and $24 million during the three and nine months ended September 30, 2019 related to Bodybuilding.com, which was sold in May 2020.

Our Retail and B2B segments generate revenue from the merchant, agency and advertising, media and other business models as well as all service types. trivago segment revenue is generated through advertising and media.