01—Abstract
Summary
Summary of the 10-Q filed April 27, 2012. Cited figures are marked; the original filing is the authoritative source.
Expedia Group, Inc. reported a net loss of $3.3 milliona for the first quarter of 2012, a significant decrease from a net income of $52.0 million in the same period of the prior year.
This decline was heavily influenced by discontinued operations, primarily related to the spin-off of TripAdvisor and the extinguishment of debt associated with it, which resulted in a loss of $23.9 millionb. Despite the net loss, the company's core operations (income from continuing operations) showed improvement, with income increasing to $20.6 million from $5.8 million in Q1 2011.
Revenue for the quarter grew by 12% to $816.5 millionc, driven by strong performance in the Leisure segment, particularly in hotel bookings. The company also saw a notable increase in cash and cash equivalents, which rose to $1.27 billion from $689.1 million at the end of 2011, largely due to strong operating cash flows and working capital management.
02—Key points
Key Highlights
- Reported a net loss of $3.3 million, largely due to a $23.9 million loss from discontinued operations related to the TripAdvisor spin-off and debt extinguishment.
- Income from continuing operations significantly improved, reaching $20.6 million compared to $5.8 million in the prior year's quarter.
- Total revenue increased by 12% to $816.5 million, with the Leisure segment showing a 11% increase.
- Hotel room nights booked increased by 24%, driving revenue growth, though revenue per room night saw a slight decrease.
- Selling and marketing expenses increased by 7% to $377.1 million, reflecting investments in affiliate marketing and personnel.
- Cash and cash equivalents significantly increased to $1.27 billion as of March 31, 2012, up from $689.1 million at the end of 2011.
- The company repurchased approximately 5.8 million shares of common stock for $192 million during the quarter.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2012, Expedia Group, Inc. lost $0.00.
- Revenue$816.5M100.0%
- Cost of revenue−$200.1M24.5%
- Gross profit$616.4M75.5%
- Operating costs−$567.7M69.5%
- Operating income$48.7M6.0%
- Interest, other & tax−$52.0M6.4%
- Net income−$3.3M0.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2012filed April 27, 2012Financial Statements
Q1 FY2012 against Q1 FY2011
| Line item | Q1 FY2012Q1 FY2011 | Change |
|---|---|---|
| Revenue | $816.49M$727.84M | +12.2% |
| Cost of Revenue | $200.10M$175.61M | +13.9% |
| Gross Profit | $616.39M$552.23M | +11.6% |
| Operating Income | $48.68M$35.16M | +38.5% |
| Interest Expense | $21.39M$22.52M | −5.0% |
| Net Income | -$3.28M$52.04M | −106.3% |
| EPS (Basic) | $-0.02$0.38 | −105.3% |
| EPS (Diluted) | $-0.02$0.37 | −105.4% |
| Shares Outstanding (Basic) | 133.20M136.93M | −2.7% |
| Shares Outstanding (Diluted) | 139.31M139.08M | +0.2% |
05—Questions
Frequently Asked Questions
What caused the significant drop in net income compared to the prior year's quarter?
The significant drop in net income to a loss of $3.3 million was primarily due to a substantial loss of $23.9 million reported from discontinued operations. This loss is attributed to the spin-off of TripAdvisor and related costs, including the early extinguishment of $400 million in senior notes.
How did the company's core business perform in the first quarter of 2012?
Expedia's core business, represented by income from continuing operations, showed strong improvement. Income from continuing operations rose to $20.6 million for the first quarter of 2012, a significant increase from $5.8 million in the same period of 2011. This indicates a positive underlying operational performance.
What is the status of the legal proceedings related to hotel occupancy taxes?
Expedia is involved in numerous lawsuits regarding hotel occupancy taxes. While many are still active, the company has seen favorable rulings in several jurisdictions, with courts deciding that online travel companies are not subject to these taxes on their facilitation services. However, the company has maintained a reserve of $31 million for potential settlements as of March 31, 2012, acknowledging the ongoing uncertainty and potential for adverse outcomes.
What is the company's outlook on liquidity and cash position?
Expedia's liquidity position is strong, with cash and cash equivalents increasing significantly to $1.27 billion. The company also has access to a $750 million revolving credit facility. Management believes these resources, combined with operating cash flows, are sufficient to meet foreseeable liquidity needs.
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