01—Abstract
Summary
Summary of the 10-K/A filed February 14, 2018. Cited figures are marked; the original filing is the authoritative source.
Expedia Group, Inc. (EXPE) in its 2017 10-K filing reported that its management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2017.
Furthermore, an independent audit by Ernst & Young LLP confirmed that Expedia maintained effective internal control over financial reporting in all material respects as of the same date, based on the COSO framework. There were no changes in internal control over financial reporting during the fourth quarter of 2017 that materially affected or were likely to affect these controls.
These assurances regarding the effectiveness of internal controls and disclosure procedures are crucial for investors as they indicate a robust framework for reliable financial reporting. The independent auditor's unqualified opinion adds a layer of confidence in the company's financial statements and operational integrity, suggesting a lower risk of material misstatements or financial reporting irregularities.
02—Key points
Key Highlights
- Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of December 31, 2017.
- Ernst & Young LLP audited Expedia's internal control over financial reporting and issued an unqualified opinion.
- The company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.
- There were no changes in internal control over financial reporting during the quarter ended December 31, 2017, that materially affected these controls.
- The audit of internal controls was performed in accordance with PCAOB standards.
- The independent auditor's report confirms the reliability of Expedia's financial reporting processes for external purposes.
- The filing includes certifications from the Chairman and Senior Executive pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Expedia Group, Inc. kept $0.04.
- Revenue$10.06B100.0%
- Cost of revenue−$1.76B17.5%
- Gross profit$8.30B82.5%
- Operating costs−$7.68B76.3%
- Operating income$625.0M6.2%
- Interest, other & tax−$247.0M2.5%
- Net income$378.0M3.8%
Where FY2017 revenue went
$10.06B- Operating costs: $7.68B, 76% of revenue
- Cost of revenue: $1.76B, 17% of revenue
- Net income: $378.0M, 3.8% of revenue
- Interest, other & tax: $247.0M, 2.5% of revenue
Kept 3.8% as net incomeNet income $378.0M · 3.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2017filed February 14, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $10.06B$8.77B | +14.7% |
| Cost of Revenue | $1.76B$1.60B | +10.0% |
| Gross Profit | $8.30B$7.18B | +15.7% |
| Operating Income | $625.00M$462.00M | +35.3% |
| Interest Expense | $182.00M$173.00M | +5.2% |
| Net Income | $378.00M$282.00M | +34.0% |
| EPS (Basic) | $2.49$1.87 | +33.2% |
| EPS (Diluted) | $2.42$1.82 | +33.0% |
| Shares Outstanding (Basic) | 151.62M150.37M | +0.8% |
| Shares Outstanding (Diluted) | 156.38M154.52M | +1.2% |
05—Questions
Frequently Asked Questions
What is the significance of the 'Controls and Procedures' section for investors?
This section is critical for investors as it details the company's systems for ensuring the accuracy and reliability of its financial reporting. An effective internal control system reduces the risk of material errors or fraud in financial statements, thereby increasing investor confidence in the reported financial information.
What does it mean that management and the independent auditor found Expedia's internal controls to be 'effective'?
It means that management, after evaluating the company's internal control system against established criteria (COSO framework), concluded it was operating effectively. The independent auditor, Ernst & Young LLP, performed their own audit and concurred with management's assessment, providing reasonable assurance that the company's financial reporting is reliable and prepared in accordance with U.S. GAAP.
Are there any limitations to these 'effective' controls?
Yes, the filing explicitly states that internal controls are designed to provide reasonable, not absolute, assurance. They cannot guarantee that all errors or instances of fraud will be prevented or detected. Projections of effectiveness to future periods are also subject to the risk that controls may become inadequate due to changing conditions or a decline in compliance.
Were there any material changes to Expedia's internal controls during the reporting period?
No, the filing states that there were no changes to Expedia's internal control over financial reporting during the quarter ended December 31, 2017, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
06—Continue