Expedia Group (EXPE) risk factors, FY2024 10-K

Other

1. 01Definition and Reconciliation of Adjusted EBITDA
2. 02Financial Position, Liquidity and Capital Resources
3. 03As of December 31, 2024, we were in compliance with the covenants and conditions in our revolving credit facility and outstanding debt as detailed in NOTE 7 — Debt in the notes to the consolidated financial statements
4. 04Effect of foreign exchange rate changes on cash and cash equivalents (165) 16 (190) (181) 206
5. 05In 2024, we had net cash used in investing activities of $1.3 billion compared to $800 million in the prior year. The change was primarily due to net purchases of investments in 2024 compared to net sales and maturities of investments in the prior year, partially offset by lower current year capital expenditures
6. 06As of December 31, 2024, $3.2 billion remain authorized for repurchase under the 2023 Share Repurchase Program
7. 07In addition, we had $331 million of net unrecognized tax benefits recorded on our balance sheet as of December 31, 2024, for which we cannot make a reasonably reliable estimate of the amount and period of payment
8. 08Summarized Financial Information for Guarantors and the Issuer of Guaranteed Securities
9. 09Changes in Internal Control over Financial Reporting
10. 10Evaluation of Disclosure Controls and Procedures
11. 11Management’s Report on Internal Control over Financial Reporting
12. 12Opinion on Internal Control Over Financial Reporting
13. 13We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects
14. 14Definition and Limitations of Internal Control Over Financial Reporting
15. 15Rule 10b5-1 Plan Elections
16. 16Insider Trading Policy and Procedures
17. 17Description of Securities
18. 188-K 001-37429 4.1 12/8/2015
19. 198-K 001-37429 4.1 9/21/2017
20. 208-K 001-37429 4.1 5/5/2020
21. 218-K 001-37429 4.2 7/15/2020
22. 228-K 001-37429 4.1 2/19/2021
23. 23AM*† 333-210377 2.1 11/4/2016
24. 248-K 001-37429 10.1 4/18/2022
25. 25104 Cover page formatted as Inline XBRL and contained in Exhibit 101
26. 26Opinion on the Financial Statements
27. 27Description of the Matter
28. 28How We Addressed the Matter in Our Audit
29. 29Revenue $ 13,691 $ 12,839 $ 11,667
30. 30Operating income 1,319 1,033 1,085
31. 31Net income attributable to Expedia Group, Inc. $ 1,234 $ 797 $ 352
32. 32LIABILITIES AND STOCKHOLDERS’ EQUITY
33. 33Commitments and contingencies
34. 34Net income $ 1,224 $ 688 $ 343
35. 35Net cash provided by operating activities 3,085 2,690 3,440
36. 36Net cash used in investing activities (1,262) (800) (580)
37. 37We recognize revenue upon transfer of control of our promised services in an amount that reflects the consideration we expect to be entitled to in exchange for those services
38. 38Under the merchant model, we facilitate the booking of hotel rooms, alternative accommodations, airline seats, car rentals and destination services from our travel suppliers and we are the merchant of record for such bookings
39. 39In addition, Vrbo also provides subscription-based listing and other ancillary services to property owners and managers
40. 40Lodging. Our lodging revenue is comprised of revenue recognized under the merchant, agency and Vrbo subscription-based listing services model
41. 41Cash, Restricted Cash, and Cash Equivalents
42. 42Short-term and Long-term Investments
43. 43Recoverability of Goodwill and Indefinite-Lived Intangible Assets
44. 44Recoverability of Intangible Assets with Definite Lives and Other Long-Lived Assets
45. 45We recognize interest and penalties related to unrecognized tax benefits in the income tax expense line in our consolidated statement of operations. Accrued interest and penalties are included in other long-term liabilities on the consolidated balance sheet
46. 46Derivative instruments are carried at fair value on our consolidated balance sheets. The fair values of the derivative financial instruments generally represent the estimated amounts we would expect to receive or pay upon termination of the contracts as of the reporting date
47. 47Foreign Currency Translation and Transaction Gains and Losses
48. 48Fair Value Recognition, Measurement and Disclosure
49. 49Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets
50. 50Certain Risks and Concentrations
51. 51Occupancy and Other Taxes
52. 52Recently Adopted Accounting Policies
53. 53Recent Accounting Policies Not Yet Adopted
54. 54NOTE 3 — Fair Value Measurements
55. 55Cross-currency interest rate swaps 25 — 25
56. 56Foreign currency forward contracts $ 2 $ — $ 2
57. 57Cross-currency interest rate swaps 8 — 8
58. 58Foreign currency forward contracts $ 9 $ — $ 9
59. 59As of December 31, 2024 and 2023, our cash and cash equivalents consisted primarily of term deposits, certificates of deposits, and money market funds with maturities of three months or less and bank account balances
60. 60Assets Measured at Fair Value on a Non-recurring Basis
61. 61NOTE 4 — Property and Equipment, Net
62. 62Property and equipment, net $ 2,413 $ 2,359
63. 63Operating lease costs were $85 million, $97 million and $99 million for the years ended December 31, 2024, 2023 and 2022, respectively
64. 64Operating leases 22 86 75
65. 65Weighted average discount rate 4.2 % 4.1 %
66. 66NOTE 6 — Goodwill and Intangible Assets, Net
67. 67Impairment Assessments. We perform our annual assessment of possible impairment of goodwill and indefinite-lived intangible assets as of October 1, or more frequently if events and circumstances indicate that an impairment may have occurred
68. 68During 2022, we recognized intangible impairment charges of $81 million related to an indefinite-lived trade name within our trivago segment
69. 69Balance as of December 31, 2024 $ 6,433 $ 411 $ — $ 6,844
70. 70Total $ 1,669 $ (1,615) $ 54 $ 1,718 $ (1,607) $ 111
71. 71whole” premium. If we elect to redeem the 5.0% Notes on or after November 12, 2025, we may redeem them at a redemption price of 100% of the principal plus accrued interest
72. 72The Convertible Notes will mature on February 15, 2026, unless earlier converted, redeemed or repurchased. The Convertible Notes will not bear regular interest, and the principal amount of the Convertible Notes will not accrete
73. 73Redemption of Senior Notes
74. 74Expedia Group's credit ratings. The terms of the revolving credit facility require Expedia Group to not exceed a specified maximum consolidated leverage ratio as of the end of each fiscal quarter
75. 75NOTE 8 — Employee Benefit Plans
76. 76NOTE 9 — Stock-Based Awards and Other Equity Instruments
77. 77Balance as of December 31, 2024 6,712 124.31
78. 78___________________________________
79. 79Shares that could be issued if maximum performance thresholds are met 494 346 153 993 135.45
80. 80Exercisable as of December 31, 2024 2,392 154.61 1.6 76
81. 81There were no options granted during 2024, 2023 or 2022
82. 82Employee Stock Purchase Plan
83. 83Provision for Income Taxes
84. 84Current income tax expense 244 268 125
85. 85Net deferred tax assets $ 919 $ 1,041
86. 86Net deferred tax assets $ 477 $ 553
87. 87Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Income Tax Rate
88. 88Income tax expense $ 318 $ 330 $ 195
89. 89Unrecognized Tax Benefits and Interest
90. 90Balance, end of year $ 468 $ 425 $ 379
91. 91We recognize interest and penalties related to unrecognized tax benefits in the provision for income taxes in our consolidated statement of operations. Accrued interest and penalties of $117 million and $90 million were reflected in our consolidated balance sheets as of December 31, 2024 and 2023
92. 92Common Stock and Class B Common Stock
93. 93As of December 31, 2024, the Company's treasury stock was comprised of approximately 164.2 million shares of common stock and 7.3 million Class B shares. As of December 31, 2023, the Company's treasury stock was comprised of approximately 150.6 million shares of common stock and 7.3 million Class B shares
94. 94Accumulated Other Comprehensive Income (Loss)
95. 95As of December 31, 2024 and 2023, our ownership interest in trivago was approximately 59.5% and 60.0%
96. 96Diluted Earnings Per Share
97. 97Basic 131,432 144,967 156,672
98. 98Diluted 137,919 150,228 161,751
99. 99NOTE 13 — Restructuring and Related Reorganization Charges
100. 100Letters of Credit, Purchase Obligations and Guarantees
101. 101$ 581 $ 325 $ 241 $ 15 $ —
102. 102We are in various stages of inquiry or audit with various tax authorities, some of which may impose a pay-to-play requirement to challenge an adverse inquiry or audit result in court
103. 103In addition, we have agreements pursuant to which we may use additional aircraft owned by a subsidiary of IAC on a cost basis. Total payments made to this entity by the Company were not material
104. 104NOTE 17 — Segment Information
105. 105(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODMs, exclusive of stock-based compensation. Intersegment expenses are included within the amounts shown
106. 106Revenue by Business Model and Service Type
107. 107(1)Other includes car rental, insurance, activities, and cruise, among other revenue streams, none of which are individually material
108. 108$ 13,691 $ 12,839 $ 11,667
109. 109NOTE 18 — Valuation and Qualifying Accounts
110. 110On January 24, 2025, Expedia Group provided notice that we would redeem all of our approximately $1.0 billion in 6.25% Senior Notes due 2025 with a stated redemption date of February 8, 2025