10-KPeriod: FY2011

Expedia Group, Inc. Annual Report, Year Ended Dec 31, 2011

Filed February 10, 2012For Securities:EXPE

Summary

Expedia Group, Inc. (EXPE) filed its 2011 10-K report, detailing its business operations as a leading online travel company. A significant event for investors during this period was the spin-off of TripAdvisor, Inc. on December 20, 2011, which separated the travel transaction brands from the travel media businesses. This strategic move aimed to create two distinct, publicly traded entities, allowing each to focus on its respective growth strategies. The company's primary revenue streams come from its Leisure segment, which includes brands like Expedia.com and Hotels.com, and its Egencia segment, focused on corporate travel management. Expedia's business model relies on both merchant and agency transaction types, offering a broad portfolio of travel products and services globally. The filing highlights the company's ongoing investments in product innovation and global expansion as key growth drivers, alongside efforts to penetrate new channels like mobile devices and daily deal platforms.

Financial Highlights

55 data points
Beta

Revenue

$3.45B

77.9% Gross Margin

Net Income

$472.29M

13.7% Net Margin

EPS (Diluted)

$3.41

Total Assets

$6.51B

Cash & Equivalents

$689.13M

Free Cash Flow

$617.89M

Financial Statements
Beta
Revenue$3.45B
Cost of Revenue$761.27M
Gross Profit$2.69B
Operating Income$479.61M
Interest Expense$90.72M
Net Income$472.29M
EPS (Basic)$3.48
EPS (Diluted)$3.41
Shares Outstanding (Basic)135.89M
Shares Outstanding (Diluted)138.70M

Key Highlights

  • 1Completion of the spin-off of TripAdvisor, Inc. on December 20, 2011, creating two independent publicly traded companies.
  • 2Expedia Group operates through two main segments: Leisure and Egencia, serving both leisure and corporate travelers globally.
  • 3The company utilizes both merchant and agency business models to facilitate travel bookings, with the majority of revenue derived from hotel bookings.
  • 4Key growth strategies include ongoing investment in technology and product innovation, global expansion, and penetration of new channels like mobile.
  • 5Significant legal proceedings related to hotel occupancy taxes are ongoing in various jurisdictions, representing a material risk factor.
  • 6Expedia's financial results are sensitive to the overall health of the travel industry, economic conditions, and competitive pressures from online and offline travel companies, as well as direct supplier channels.
  • 7Barry Diller, through his holdings and proxy control, held significant voting power over the company's stock as of December 31, 2011.

Frequently Asked Questions

The most significant strategic event was the spin-off of TripAdvisor, Inc. on December 20, 2011. This separated Expedia's travel transaction businesses from its travel media businesses, creating two independent, publicly traded companies.

Expedia generates revenue primarily from its Leisure segment (including brands like Expedia.com and Hotels.com) and its Egencia segment (corporate travel). The majority of revenue comes from hotel bookings, facilitated through both merchant and agency models.

Key risks include intense competition from online and traditional travel companies, potential declines in the travel industry due to economic conditions or global events, reliance on relationships with travel suppliers, increasing marketing costs, technological disruptions, and significant ongoing litigation regarding hotel occupancy taxes in numerous jurisdictions.

Expedia expands globally by operating its key brands in various international points of sale, including Europe and Asia Pacific. The company has a majority stake in eLong (China) and partners with AirAsia in a joint venture. International revenue accounted for approximately 42% of total revenue in 2011, with a strategic goal to increase this further.