8-KEarnings & ResultsExhibits & Filings

Expedia Group, Inc. 8-K Report, Financial Results (Aug 2, 2005)

Filed August 2, 2005For Securities:EXPE

Summary

This Form 8-K filing from Expedia, Inc., dated August 2, 2005, primarily serves to announce the company's financial results for the quarter ended June 30, 2005, and to detail the basis of presentation for these results in anticipation of its upcoming spin-off from IAC/InterActiveCorp. The most significant event for investors is the impending separation of Expedia and IAC into two independent publicly traded companies, scheduled to occur on August 9, 2005. This separation will result in Expedia, Inc. comprising all of IAC's travel and travel-related businesses, including TripAdvisor. The filing also introduces and defines several non-GAAP financial measures that management utilizes for evaluating performance, budgeting, and compensation. These include Operating Income Before Amortization, Adjusted Net Income, and Free Cash Flow. Investors should note that these measures exclude various non-cash expenses such as amortization of non-cash distribution and marketing, non-cash compensation, and intangible assets, as well as goodwill impairment. The company emphasizes that these non-GAAP metrics are supplementary to GAAP results and should be considered alongside them, not as a substitute.

Key Highlights

  • 1Expedia, Inc. announced its financial results for the quarter ended June 30, 2005.
  • 2Expedia, Inc. is set to spin off from IAC/InterActiveCorp and begin trading as an independent public company on August 9, 2005.
  • 3The spin-off will consolidate IAC's travel businesses, including TripAdvisor, under the Expedia, Inc. entity.
  • 4The company reports on a combined basis for the quarter, reflecting the impending separation.
  • 5Expedia, Inc. utilizes and defines key non-GAAP financial measures: Operating Income Before Amortization, Adjusted Net Income, and Free Cash Flow.
  • 6These non-GAAP measures are used by management for internal evaluation and compensation and are provided to investors for a more comprehensive view.
  • 7The filing includes definitions and explanations of why certain non-cash expenses (e.g., amortization of non-cash compensation, marketing, intangibles, goodwill impairment) are excluded from these non-GAAP metrics.

Frequently Asked Questions

The main purpose of this 8-K filing is to announce Expedia, Inc.'s financial results for the quarter ended June 30, 2005, and to provide context regarding the impending spin-off from IAC/InterActiveCorp, which is scheduled for August 9, 2005. It also details the basis of financial reporting for the combined Expedia businesses.

Expedia, Inc. is expected to begin trading as an independent public company on August 9, 2005, following its spin-off from IAC/InterActiveCorp.

The key non-GAAP measures are Operating Income Before Amortization, Adjusted Net Income, and Free Cash Flow. Management uses these metrics to evaluate performance, for budgeting, and for executive compensation. They are provided to investors as a supplemental view, excluding certain non-cash expenses and one-time items, to offer a clearer perspective on the recurring operational performance of Expedia's businesses.

After the spin-off, Expedia, Inc. will consist of all of IAC's travel and travel-related businesses, subsidiaries, and investments, with the exception of Interval International and TV Travel Shop, which IAC will retain. This also includes TripAdvisor.