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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 001-37429
 
 
 
EXPEDIA GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
20-2705720
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer Identification No.)
333 108th Avenue NE
Bellevue, WA 98004
(Address of principal executive office) (Zip Code)
(425) 679-7200
(Registrant’s telephone number, including area code)
__________________________________ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes         No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
  
Accelerated filer
 
Non-accelerated filer
 
  
Smaller reporting company
 
Emerging growth company
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading symbol(s)
 
Name of each exchange on which registered
Common stock, $0.0001 par value
 
EXPE
 
The Nasdaq Global Select Market
Expedia Group, Inc. 2.500% Senior Notes due 2022
 
EXPE22
 
New York Stock Exchange
The number of shares outstanding of each of the registrant’s classes of common stock as of July 12, 2019 was:
 
Common stock, $0.0001 par value per share
 
136,832,712

shares
 
Class B common stock, $0.0001 par value per share
 
12,799,999

shares
 
 
 
 
 


Table of Contents

Expedia Group, Inc.
Form 10-Q
For the Quarter Ended June 30, 2019
Contents
 
 
 
 
Part I
 
 
 
 
Item 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2
 
 
 
Item 3
 
 
 
Item 4
 
 
 
Part II
 
 
 
 
Item 1
 
 
 
Item 1A
 
 
 
Item 6



Table of Contents

Part I. Item 1. Consolidated Financial Statements
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)
(Unaudited)
 
 
Three months ended
June 30,
 
Six months ended
June 30,
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
Revenue
$
3,153

 
$
2,880

 
$
5,762

 
$
5,388

Costs and expenses:
 
 
 
 
 
 
 
Cost of revenue (1)
522

 
498

 
1,035

 
985

Selling and marketing (1)
1,657

 
1,541

 
3,192

 
3,057

Technology and content (1)
435

 
400

 
864

 
796

General and administrative (1)
214

 
196

 
405

 
395

Amortization of intangible assets
52

 
72

 
104

 
144

Impairment of goodwill

 
61

 

 
61

Legal reserves, occupancy tax and other
4

 
1

 
14

 
4

Restructuring and related reorganization charges
4

 

 
14

 

Operating income (loss)
265

 
111

 
134

 
(54
)
Other income (expense):
 
 
 
 
 
 
 
Interest income
17

 
16

 
28

 
27

Interest expense
(39
)
 
(51
)
 
(80
)
 
(102
)
Other, net
(8
)
 
(90
)
 
12

 
(54
)
Total other expense, net
(30
)
 
(125
)
 
(40
)
 
(129
)
Income (loss) before income taxes
235

 
(14
)
 
94

 
(183
)
Provision for income taxes
(48
)
 
5

 
(7
)
 
25

Net income (loss)
187

 
(9
)
 
87

 
(158
)
Net (income) loss attributable to non-controlling interests
(4
)
 
10

 
(7
)
 
22

Net income (loss) attributable to Expedia Group, Inc.
$
183

 
$
1

 
$
80

 
$
(136
)
 
 
 
 
 
 
 
 
Earnings (loss) per share attributable to Expedia Group, Inc. available to common stockholders
 
 
 
 
 
 
 
Basic
$
1.23

 
$
0.01

 
$
0.54

 
$
(0.90
)
Diluted
1.21

 
0.01

 
0.53

 
(0.90
)
Shares used in computing earnings (loss) per share (000's):
 
 
 
 
 
 
 
Basic
149,049

 
150,076

 
148,468

 
150,942

Diluted
151,561

 
152,617

 
151,057

 
150,942

_______
(1) Includes stock-based compensation as follows:
 
 
 
 
 
 
 
Cost of revenue
$
3

 
$
3

 
$
6

 
$
5

Selling and marketing
12

 
12

 
23

 
23

Technology and content
19

 
16

 
38

 
31

General and administrative
25

 
19

 
48

 
41


See accompanying notes.

2

Table of Contents

EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
(Unaudited)
 
 
Three months ended
June 30,
 
Six months ended
June 30,
 
2019
 
2018
 
2019
 
2018
Net income (loss)
$
187

 
$
(9
)
 
$
87

 
$
(158
)
Currency translation adjustments, net of tax(1)
7

 
(87
)
 
2

 
(49
)
Comprehensive income (loss)
194

 
(96
)
 
89

 
(207
)
Less: Comprehensive income (loss) attributable to non-controlling interests
10

 
(31
)
 
5

 
(32
)
Comprehensive income (loss) attributable to Expedia Group, Inc.
$
184

 
$
(65
)
 
$
84

 
$
(175
)
 
(1)
Currency translation adjustments include a tax benefit of $2 million and tax expense of $1 million associated with net investment hedges for the three and six months ended June 30, 2019 and tax expense of $10 million and $5 million for the three and six months ended June 30, 2018.


See accompanying notes.

3

Table of Contents

EXPEDIA GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares which are reflected in thousands and par value)
 
June 30,
2019
 
December 31,
2018
 
(Unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
4,258

 
$
2,443

Restricted cash and cash equivalents
619

 
259

Short-term investments
631

 
28

Accounts receivable, net of allowance of $41 and $34
2,893

 
2,151

Income taxes receivable
128

 
24

Prepaid expenses and other current assets
295

 
292

Total current assets
8,824

 
5,197

Property and equipment, net
1,953

 
1,877

Operating lease right-of-use assets
524

 

Long-term investments and other assets
815

 
778

Deferred income taxes
80

 
69

Intangible assets, net
1,887

 
1,992

Goodwill
8,118

 
8,120

TOTAL ASSETS
$
22,201

 
$
18,033

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable, merchant
$
1,970

 
$
1,699

Accounts payable, other
1,153

 
788

Deferred merchant bookings
7,053

 
4,327

Deferred revenue
522

 
364

Income taxes payable
28

 
74

Accrued expenses and other current liabilities
950

 
808

Total current liabilities
11,676

 
8,060

Long-term debt
3,715

 
3,717

Deferred income taxes
65

 
69

Operating lease liabilities
466

 

Other long-term liabilities
343

 
506

Redeemable non-controlling interests
29

 
30

Commitments and contingencies

 

Stockholders’ equity:
 
 
 
Common stock $.0001 par value

 

Authorized shares: 1,600,000
 
 
 
Shares issued: 234,102 and 231,493; Shares outstanding: 136,718 and 134,334
 
 
 
Class B common stock $.0001 par value

 

Authorized shares: 400,000
 
 
 
Shares issued and outstanding: 12,800 and 12,800
 
 
 
Additional paid-in capital
9,821

 
9,549

Treasury stock - Common stock, at cost
(5,771
)
 
(5,742
)
Shares: 97,384 and 97,159

 

Retained earnings
508

 
517

Accumulated other comprehensive income (loss)
(216
)
 
(220
)
Total Expedia Group, Inc. stockholders’ equity
4,342

 
4,104

Non-redeemable non-controlling interests
1,565

 
1,547

Total stockholders’ equity
5,907

 
5,651

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
22,201

 
$
18,033

See accompanying notes.

4

Table of Contents

EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
Six months ended
June 30,
 
2019
 
2018
Operating activities:
 
 
 
Net income (loss)
$
87

 
$
(158
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation of property and equipment, including internal-use software and website development
352

 
336

Amortization of stock-based compensation
115

 
100

Amortization of intangible assets
104

 
144

Impairment of goodwill

 
61

Deferred income taxes
(15
)
 
(6
)
Foreign exchange (gain) loss on cash, restricted cash and short-term investments, net
(13
)
 
85

Realized gain on foreign currency forwards
(16
)
 
(16
)
(Gain) loss on minority equity investments, net
(12
)
 
61

Other
(13
)
 
21

Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
 
Accounts receivable
(742
)
 
(476
)
Prepaid expenses and other assets
(7
)
 
(96
)
Accounts payable, merchant
271

 
(25
)
Accounts payable, other, accrued expenses and other liabilities
436

 
216

Tax payable/receivable, net
(143
)
 
(159
)
Deferred merchant bookings
2,726

 
2,268

Deferred revenue
157

 
135

Net cash provided by operating activities
3,287

 
2,491

Investing activities:
 
 
 
Capital expenditures, including internal-use software and website development
(573
)
 
(411
)
Purchases of investments
(636
)
 
(1,669
)
Sales and maturities of investments
27

 
624

Other, net
16

 
22

Net cash used in investing activities
(1,166
)
 
(1,434
)
Financing activities:
 
 
 
Purchases of treasury stock
(29
)
 
(426
)
Payment of dividends to stockholders
(95
)
 
(91
)
Proceeds from exercise of equity awards and employee stock purchase plan
156

 
67

Other, net
2

 
(6
)
Net cash provided by (used in) financing activities
34

 
(456
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents
20

 
(106
)
Net increase in cash, cash equivalents and restricted cash and cash equivalents
2,175

 
495

Cash, cash equivalents and restricted cash and cash equivalents at beginning of period
2,705

 
2,917

Cash, cash equivalents and restricted cash and cash equivalents at end of period
$
4,880

 
$
3,412

Supplemental cash flow information
 
 
 
Cash paid for interest
$
87

 
$
106

Income tax payments, net
157

 
136

See accompanying notes.

5

Table of Contents

EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In millions, except share and per share data)
(Unaudited)
Three months ended June 30, 2018
 
Common stock
 
Class B
common stock
 
Additional
paid-in
capital
 
Treasury stock
 
Retained
earnings
(deficit)
 
Accumulated
other
comprehensive
income (loss)
 
Non-redeemable
non-controlling
interest
 
Total
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Balance as of March 31, 2018
 
229,437,027

 
$

 
12,799,999

 
$

 
$
9,228

 
91,428,003

 
$
(5,025
)
 
$
117

 
$
(125
)
 
$
1,613

 
5,808

Net income (loss) (excludes $1 of net income attributable to redeemable non-controlling interest)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1

 
 
 
(11
)
 
(10
)
Other comprehensive income (loss), net of taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(65
)
 
(22
)
 
(87
)
Payment of dividends to stockholders (declared at $0.30 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(45
)
 
 
 
 
 
(45
)
Proceeds from exercise of equity instruments and employee stock purchase plans
 
721,615

 

 
 
 
 
 
47

 
 
 
 
 
 
 
 
 
 
 
47

Treasury stock activity related to vesting of equity instruments
 
 
 
 
 
 
 
 
 
 
 
37,314

 
(5
)
 
 
 
 
 
 
 
(5
)
Common stock repurchases
 
 
 
 
 
 
 
 
 
 
 
1,914,473

 
(218
)
 
 
 
 
 
 
 
(218
)
Other changes in ownership of non-controlling interests
 
 
 
 
 
 
 
 
 
2

 
 
 
 
 
 
 
 
 
5

 
7

Stock-based compensation expense
 
 
 
 
 
 
 
 
 
54

 
 
 
 
 
 
 
 
 
 
 
54

Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1

 
 
 
 
 
1

Balance as of June 30, 2018
 
230,158,642

 
$

 
12,799,999

 
$

 
$
9,331

 
93,379,790

 
$
(5,248
)
 
$
74

 
$
(190
)
 
$
1,585

 
$
5,552


Six months ended June 30, 2018
 
Common stock
 
Class B
common stock
 
Additional
paid-in
capital
 
Treasury stock
 
Retained
earnings
(deficit)
 
Accumulated
other
comprehensive
income (loss)
 
Non-redeemable
non-controlling
interest
 
Total
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Balance as of December 31, 2017
 
228,467,355

 
$

 
12,799,999

 
$

 
$
9,163

 
89,528,255

 
$
(4,822
)
 
$
331

 
$
(149
)
 
$
1,606

 
6,129

Net income (loss) (excludes $1 of net income attributable to redeemable non-controlling interest)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(136
)
 
 
 
(23
)
 
(159
)
Other comprehensive income (loss), net of taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(38
)
 
(11
)
 
(49
)
Payment of dividends to stockholders (declared at $0.60 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(91
)
 
 
 
 
 
(91
)
Proceeds from exercise of equity instruments and employee stock purchase plans
 
1,516,247

 

 
 
 
 
 
67

 
 
 
 
 
 
 
 
 
 
 
67

Withholding taxes for stock options
 
 
 
 
 
 
 
 
 
(2
)
 
 
 
 
 
 
 
 
 
 
 
(2
)
Issuance of common stock in connection with acquisitions
 
175,040

 

 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

Treasury stock activity related to vesting of equity instruments
 
 
 
 
 
 
 
 
 
 
 
150,262

 
(17
)
 
 
 
 
 
 
 
(17
)
Common stock repurchases
 
 
 
 
 
 
 
 
 
 
 
3,701,273

 
(409
)
 
 
 
 
 
 
 
(409
)
Other changes in ownership of non-controlling interests
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
13

 
13

Impact of adoption of new accounting guidance
 
 
 
 
 
 
 
 
 

 
 
 
 
 
(31
)
 
(3
)
 
 
 
(34
)
Stock-based compensation expense
 
 
 
 
 
 
 
 
 
103

 
 
 
 
 
 
 
 
 
 
 
103

Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1

 
 
 
 
 
1

Balance as of June 30, 2018
 
230,158,642

 
$

 
12,799,999

 
$

 
$
9,331

 
93,379,790

 
$
(5,248
)
 
$
74

 
$
(190
)
 
$
1,585

 
$
5,552







6

Table of Contents



EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In millions, except share and per share data)
(Unaudited)
Three months ended June 30, 2019
 
Common stock
 
Class B
common stock
 
Additional
paid-in
capital
 
Treasury stock
 
Retained
earnings
(deficit)
 
Accumulated
other
comprehensive
income (loss)
 
Non-redeemable
non-controlling
interest
 
Total
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Balance as of March 31, 2019
 
233,294,034

 
$

 
12,799,999

 
$

 
$
9,694

 
97,355,708

 
$
(5,767
)
 
$
373

 
$
(217
)
 
$
1,551

 
$
5,634

Net income (loss) (excludes $0 of net income attributable to redeemable non-controlling interest)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
183

 
 
 
4

 
187

Other comprehensive income (loss), net of taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1

 
6

 
7

Payment of dividends to stockholders (declared at $0.32 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(48
)
 
 
 
 
 
(48
)
Proceeds from exercise of equity instruments and employee stock purchase plans
 
808,152

 

 
 
 
 
 
65

 
 
 
 
 
 
 
 
 
 
 
65

Withholding taxes for stock options
 
 
 
 
 
 
 
 
 
(2
)
 
 
 
 
 
 
 
 
 
 
 
(2
)
Treasury stock activity related to vesting of equity instruments
 
 
 
 
 
 
 
 
 
 
 
28,504

 
(4
)
 
 
 
 
 
 
 
(4
)
Other changes in ownership of non-controlling interests
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
4

 
4

Stock-based compensation expense
 
 
 
 
 
 
 
 
 
63

 
 
 
 
 
 
 
 
 
 
 
63

Other
 
 
 
 
 
 
 
 
 
1

 
 
 
 
 
 
 
 
 
 
 
1

Balance as of June 30, 2019
 
234,102,186

 
$

 
12,799,999

 
$

 
$
9,821

 
97,384,212

 
$
(5,771
)
 
$
508

 
$
(216
)
 
$
1,565

 
$
5,907


Six months ended June 30, 2019
 
Common stock
 
Class B
common stock
 
Additional
paid-in
capital
 
Treasury stock
 
Retained
earnings
(deficit)
 
Accumulated
other
comprehensive
income (loss)
 
Non-redeemable
non-controlling
interest
 
Total
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Balance as of December 31, 2018
 
231,492,986

 
$

 
12,799,999

 
$

 
$
9,549

 
97,158,586

 
$
(5,742
)
 
$
517

 
$
(220
)
 
$
1,547

 
5,651

Net income (loss) (excludes $0 of net income attributable to redeemable non-controlling interest)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
80

 
 
 
7

 
87

Other comprehensive income (loss), net of taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4

 
(2
)
 
2

Payment of dividends to stockholders (declared at $0.64 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(95
)
 
 
 
 
 
(95
)
Proceeds from exercise of equity instruments and employee stock purchase plans
 
2,609,200

 

 
 
 
 
 
156

 
 
 
 
 
 
 
 
 
 
 
156

Withholding taxes for stock options
 
 
 
 
 
 
 
 
 
(2
)
 
 
 
 
 
 
 
 
 
 
 
(2
)
Treasury stock activity related to vesting of equity instruments
 
 
 
 
 
 
 
 
 
 
 
225,626

 
(29
)
 
 
 
 
 
 
 
(29
)
Other changes in ownership of non-controlling interests
 
 
 
 
 
 
 
 
 
(3
)
 
 
 
 
 
 
 
 
 
13

 
10

Impact of adoption of new accounting guidance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6

 
 
 
 
 
6

Stock-based compensation expense
 
 
 
 
 
 
 
 
 
119

 
 
 
 
 
 
 
 
 
 
 
119

Other
 
 
 
 
 
 
 
 
 
2

 
 
 
 
 
 
 
 
 
 
 
2

Balance as of June 30, 2019
 
234,102,186

 
$

 
12,799,999

 
$

 
$
9,821

 
97,384,212

 
$
(5,771
)
 
$
508

 
$
(216
)
 
$
1,565

 
$
5,907


See accompanying notes.

7

Table of Contents

Notes to Consolidated Financial Statements
June 30, 2019
(Unaudited)
Note 1 – Basis of Presentation
Description of Business
Expedia Group, Inc. and its subsidiaries provide travel services to leisure and corporate travelers in the United States and abroad as well as various media and advertising offerings to travel and non-travel advertisers. These travel services are offered through a diversified portfolio of brands including: Brand Expedia®, Hotels.com®, Expedia® Partner Solutions, Vrbo®, Egencia®, trivago®, HomeAway®, Orbitz®, Travelocity®, Hotwire®, Wotif®, ebookers®, CheapTickets®, Expedia Group™ Media Solutions, Expedia Local Expert®, CarRentals.comTM, Expedia® CruiseShipCenters®, Classic Vacations®, Traveldoo®, VacationRentals.com and SilverRailTM. In addition, many of these brands have related international points of sale. In the first quarter of 2019, we renamed the HomeAway segment Vrbo. We refer to Expedia Group, Inc. and its subsidiaries collectively as “Expedia Group,” the “Company,” “us,” “we” and “our” in these consolidated financial statements.
Basis of Presentation
These accompanying financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited consolidated financial statements include Expedia Group, Inc., our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. We have eliminated significant intercompany transactions and accounts.
We have prepared the accompanying unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting. We have included all adjustments necessary for a fair presentation of the results of the interim period. These adjustments consist of normal recurring items. Our interim unaudited consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018, previously filed with the Securities and Exchange Commission. trivago is a separately listed company on the Nasdaq Global Select Market and, therefore is subject to its own reporting and filing requirements, which could result in possible differences that are not expected to be material to Expedia Group.
Accounting Estimates
We use estimates and assumptions in the preparation of our interim unaudited consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our interim unaudited consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our interim unaudited consolidated financial statements include revenue recognition; recoverability of current and long-lived assets, intangible assets and goodwill; income and transactional taxes, such as potential settlements related to occupancy and excise taxes; loss contingencies; deferred loyalty rewards; acquisition purchase price allocations; stock-based compensation and accounting for derivative instruments.
Reclassifications
We have reclassified certain amounts related to our prior period results to conform to our current period presentation.
Seasonality
We generally experience seasonal fluctuations in the demand for our travel services. For example, traditional leisure travel bookings are ge