01—Abstract
Summary
Summary of the 10-K filed February 10, 2012. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- Completion of the spin-off of TripAdvisor, Inc. on December 20, 2011, creating two independent publicly traded companies.
- Expedia Group operates through two main segments: Leisure and Egencia, serving both leisure and corporate travelers globally.
- The company utilizes both merchant and agency business models to facilitate travel bookings, with the majority of revenue derived from hotel bookings.
- Key growth strategies include ongoing investment in technology and product innovation, global expansion, and penetration of new channels like mobile.
- Significant legal proceedings related to hotel occupancy taxes are ongoing in various jurisdictions, representing a material risk factor.
- Expedia'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.
- Barry Diller, through his holdings and proxy control, held significant voting power over the company's stock as of December 31, 2011.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Expedia Group, Inc. kept $0.14.
- Revenue$3.45B100.0%
- Cost of revenue−$761.3M22.1%
- Gross profit$2.69B77.9%
- Operating costs−$2.21B64.0%
- Operating income$479.6M13.9%
- Interest, other & tax−$7.3M0.2%
- Net income$472.3M13.7%
Where FY2011 revenue went
$3.45B- Operating costs: $2.21B, 64% of revenue
- Cost of revenue: $761.3M, 22% of revenue
- Net income: $472.3M, 14% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 10, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $3.45B$3.03B | +13.7% |
| Cost of Revenue | $761.27M$685.49M | +11.1% |
| Gross Profit | $2.69B$2.35B | +14.5% |
| Operating Income | $479.61M$500.79M | −4.2% |
| Interest Expense | $90.72M$66.43M | +36.6% |
| Net Income | $472.29M$421.50M | +12.1% |
| EPS (Basic) | $3.48$2.98 | +16.8% |
| EPS (Diluted) | $3.41$2.93 | +16.4% |
| Shares Outstanding (Basic) | 135.89M141.23M | −3.8% |
| Shares Outstanding (Diluted) | 138.70M144.01M | −3.7% |
05—Questions
Frequently Asked Questions
What was the primary strategic event for Expedia in 2011?
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.
What are Expedia's main sources of revenue?
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.
What are the key risks facing Expedia as outlined in the filing?
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.
How does Expedia manage its international operations and expansion?
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.
06—Continue