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Segment Information | 12 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
Segment Information | NOTE 19 — Segment Information We have four reportable segments: Core OTA, trivago, HomeAway and Egencia. In addition, eLong was a reportable segment through its disposal on May 22, 2015. Our Core OTA segment, which consists of the aggregation of operating segments, provides a full range of travel and advertising services to our worldwide customers through a variety of brands including: Expedia.com and Hotels.com in the United States and localized Expedia and Hotels.com websites throughout the world, Orbitz, CheapTickets, ebookers, Expedia Affiliate Network, Hotwire.com, Travelocity, Wotif Group, CarRentals.com, Classic Vacations and SilverRail Technologies, Inc. Our trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its hotel metasearch websites. Our HomeAway segment operates an online marketplace for the vacation rental industry. Our Egencia segment provides managed travel services to corporate customers worldwide. We determined our operating segments based on how our chief operating decision makers manage our business, make operating decisions and evaluate operating performance. Our primary operating metric is adjusted EBITDA. Adjusted EBITDA for our Core OTA and Egencia segments includes allocations of certain expenses, primarily cost of revenue and facilities, and our Core OTA segment includes the total costs of our global supply organizations as well as the realized foreign currency gains or losses related to the forward contracts hedging a component of our net merchant hotel revenue. We base the allocations primarily on transaction volumes and other usage metrics. We do not allocate certain shared expenses such as accounting, human resources, information technology and legal to our reportable segments. We include these expenses in Corporate and Eliminations. Our allocation methodology is periodically evaluated and may change. Our segment disclosure includes intersegment revenues, which primarily consist of advertising and media services provided by our trivago segment to our Core OTA segment. These intersegment transactions are recorded by each segment at amounts that approximate fair value as if the transactions were between third parties, and therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within Corporate and Eliminations in the table below. In addition, when HomeAway properties are booked through our Core OTA websites and vice versa, the segments split the third-party revenue for management and segment reporting purposes with the majority of the third-party revenue residing with the website marketing the property or room. Corporate and Eliminations also includes unallocated corporate functions and expenses. In addition, we record amortization of intangible assets and any related impairment, as well as stock-based compensation expense, restructuring and related reorganization charges, legal reserves, occupancy tax and other, and other items excluded from segment operating performance in Corporate and Eliminations. Such amounts are detailed in our segment reconciliation below. Included with eLong’s standalone financial statements for 2015 (through its disposal on May 22, 2015) was approximately $20 million of stock-based compensation and intangible amortization. The following tables present our segment information for 2017, 2016 and 2015. As a significant portion of our property and equipment is not allocated to our operating segments and depreciation is not included in our segment measure, we do not report the assets by segment as it would not be meaningful. We do not regularly provide such information to our chief operating decision makers.
| Year ended December 31, 2017
| Core OTA |  | trivago |  | HomeAway |  | Egencia |  | Corporate & Eliminations |  | Total
| (In thousands)
Third-party revenue | $ | 7,880,597 |  |  | $ | 752,352 |  |  | $ | 906,469 |  |  | $ | 520,426 |  |  | $ | — |  |  | $ | 10,059,844 |
Intersegment revenue | — |  |  | 413,855 |  |  | — |  |  | — |  |  | (413,855 | ) |  | — |
Revenue | $ | 7,880,597 |  |  | $ | 1,166,207 |  |  | $ | 906,469 |  |  | $ | 520,426 |  |  | $ | (413,855 | ) |  | $ | 10,059,844 |
Adjusted EBITDA | $ | 2,068,405 |  |  | $ | 5,439 |  |  | $ | 201,810 |  |  | $ | 94,265 |  |  | $ | (657,414 | ) |  | $ | 1,712,505 |
Depreciation | (309,842 | ) |  | (9,182 | ) |  | (40,211 | ) |  | (41,077 | ) |  | (213,787 | ) |  | (614,099 | )
Amortization of intangible assets | — |  |  | — |  |  | — |  |  | — |  |  | (275,445 | ) |  | (275,445 | )
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | (149,350 | ) |  | (149,350 | )
Legal reserves, occupancy tax and other | — |  |  | — |  |  | — |  |  | — |  |  | (25,412 | ) |  | (25,412 | )
Restructuring and related reorganization charges | — |  |  | — |  |  | — |  |  | — |  |  | (16,738 | ) |  | (16,738 | )
Realized (gain) loss on revenue hedges | (6,323 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (6,323 | )
Operating income (loss) | $ | 1,752,240 |  |  | $ | (3,743 | ) |  | $ | 161,599 |  |  | $ | 53,188 |  |  | $ | (1,338,146 | ) |  | 625,138 |
Other expense, net |  |  |  |  |  |  |  |  |  |  | (208,374 | )
Income before income taxes |  |  |  |  |  |  |  |  |  |  | 416,764 |
Provision for income taxes |  |  |  |  |  |  |  |  |  |  | (45,405 | )
Net income |  |  |  |  |  |  |  |  |  |  | 371,359 |
Net loss attributable to non-controlling interests |  |  |  |  |  |  |  |  |  |  | 6,605 |
Net income attributable to Expedia, Inc. |  |  |  |  |  |  |  |  |  |  | $ | 377,964 |
| Year ended December 31, 2016
| Core OTA |  | trivago |  | HomeAway |  | Egencia |  | Corporate & Eliminations |  | Total
| (In thousands)
Third-party revenue | $ | 7,083,620 |  |  | $ | 538,479 |  |  | $ | 689,186 |  |  | $ | 462,279 |  |  | $ | — |  |  | $ | 8,773,564 |
Intersegment revenue | — |  |  | 297,318 |  |  | — |  |  | — |  |  | (297,318 | ) |  | — |
Revenue | $ | 7,083,620 |  |  | $ | 835,797 |  |  | $ | 689,186 |  |  | $ | 462,279 |  |  | $ | (297,318 | ) |  | $ | 8,773,564 |
Adjusted EBITDA | $ | 1,965,987 |  |  | $ | 34,826 |  |  | $ | 175,402 |  |  | $ | 80,625 |  |  | $ | (641,168 | ) |  | $ | 1,615,672 |
Depreciation | (255,778 | ) |  | (7,145 | ) |  | (17,842 | ) |  | (31,340 | ) |  | (164,956 | ) |  | (477,061 | )
Amortization of intangible assets | — |  |  | — |  |  | — |  |  | — |  |  | (317,141 | ) |  | (317,141 | )
Impairment of intangible assets | — |  |  | — |  |  | — |  |  | — |  |  | (34,890 | ) |  | (34,890 | )
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | (242,417 | ) |  | (242,417 | )
Legal reserves, occupancy tax and other | — |  |  | — |  |  | — |  |  | — |  |  | (26,498 | ) |  | (26,498 | )
Restructuring and related reorganization charges, excluding stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | (43,217 | ) |  | (43,217 | )
Realized (gain) loss on revenue hedges | (12,746 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (12,746 | )
Operating income (loss) | $ | 1,697,463 |  |  | $ | 27,681 |  |  | $ | 157,560 |  |  | $ | 49,285 |  |  | $ | (1,470,287 | ) |  | 461,702 |
Other expense, net |  |  |  |  |  |  |  |  |  |  | (185,102 | )
Income before income taxes |  |  |  |  |  |  |  |  |  |  | 276,600 |
Provision for income taxes |  |  |  |  |  |  |  |  |  |  | (15,315 | )
Net income |  |  |  |  |  |  |  |  |  |  | 261,285 |
Net loss attributable to non-controlling interests |  |  |  |  |  |  |  |  |  |  | 20,563 |
Net income attributable to Expedia, Inc. |  |  |  |  |  |  |  |  |  |  | $ | 281,848 |
| Year ended December 31, 2015 |  |
| Core OTA |  | trivago |  | HomeAway(1) |  | Egencia |  | eLong(2) |  | Corporate & Eliminations |  | Total
| (In thousands) |  |
Third-party revenue | $ | 5,877,213 |  |  | $ | 333,024 |  |  | $ | 20,222 |  |  | $ | 400,115 |  |  | $ | 41,743 |  |  | $ | — |  |  | $ | 6,672,317 |
Intersegment revenue | — |  |  | 214,632 |  |  | — |  |  | — |  |  | — |  |  | (214,632 | ) |  | — |
Revenue | $ | 5,877,213 |  |  | $ | 547,656 |  |  | $ | 20,222 |  |  | $ | 400,115 |  |  | $ | 41,743 |  |  | $ | (214,632 | ) |  | $ | 6,672,317 |
Adjusted EBITDA | $ | 1,600,042 |  |  | $ | 2,856 |  |  | $ | 4,011 |  |  | $ | 68,116 |  |  | $ | (62,167 | ) |  | $ | (509,747 | ) |  | $ | 1,103,111 |
Depreciation | (189,318 | ) |  | (2,113 | ) |  | (742 | ) |  | (24,394 | ) |  | (3,263 | ) |  | (116,850 | ) |  | (336,680 | )
Amortization of intangible assets | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (156,458 | ) |  | (156,458 | )
Impairment of intangible assets | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (7,207 | ) |  | (7,207 | )
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (178,068 | ) |  | (178,068 | )
Legal reserves, occupancy tax and other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 104,587 |  |  | 104,587 |
Restructuring and related reorganization charges, excluding stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (72,122 | ) |  | (72,122 | )
Realized (gain) loss on revenue hedges | (43,597 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (43,597 | )
Operating income (loss) | $ | 1,367,127 |  |  | $ | 743 |  |  | $ | 3,269 |  |  | $ | 43,722 |  |  | $ | (65,430 | ) |  | $ | (935,865 | ) |  | 413,566 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  | 512,396 |
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  | 925,962 |
Provision for income taxes |  |  |  |  |  |  |  |  |  |  |  |  | (203,214 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  | 722,748 |
Net loss attributable to non-controlling interests |  |  |  |  |  |  |  |  |  |  |  |  | 41,717 |
Net income attributable to Expedia, Inc. |  |  |  |  |  |  |  |  |  |  |  |  | $ | 764,465 |
___________________________________
(1) | Includes results since our acquisition of HomeAway on December 15, 2015.
(2) | Includes results through our disposal of eLong on May 22, 2015.
Revenue by Services The following table presents revenue by groups of services for the years ended December 31, 2017, 2016 and 2015.
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Lodging(1) | $ | 6,851,171 |  |  | $ | 6,020,668 |  |  | $ | 4,638,481 |
Advertising and media | 1,072,656 |  |  | 807,383 |  |  | 565,704 |
Air | 783,573 |  |  | 777,696 |  |  | 566,123 |
Other(2) | 1,352,444 |  |  | 1,167,817 |  |  | 902,009 |
Total revenue | $ | 10,059,844 |  |  | $ | 8,773,564 |  |  | $ | 6,672,317 |
___________________________________
(1) | During the first quarter of 2017, we began disclosing lodging revenue, which includes both hotel accommodations as well as alternative accommodations primarily made through HomeAway.
(2) | Other includes car rental, insurance, destination services, cruise and fee revenue related to our corporate travel business, among other revenue streams, none of which are individually material.
Geographic Information The following table presents revenue by geographic area, the United States and all other countries, based on the geographic location of our websites or points of sale with the exception of trivago, which has all been allocated to Germany, the location of its corporate headquarters, for the years ended December 31, 2017, 2016 and 2015. No sales to an individual country other than the United States accounted for more than 10% of revenue for the presented years.
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Revenue |  |  |  |  |
United States | $ | 5,534,466 |  |  | $ | 5,036,539 |  |  | $ | 3,703,302 |
All other countries | 4,525,378 |  |  | 3,737,025 |  |  | 2,969,015 |
| $ | 10,059,844 |  |  | $ | 8,773,564 |  |  | $ | 6,672,317 |
The following table presents property and equipment, net for the United States and all other countries, as of December 31, 2017 and 2016:
| As of December 31,
| 2017 |  | 2016
| (In thousands)
Property and equipment, net |  |  |
United States | $ | 1,330,808 |  |  | $ | 1,217,952 |
All other countries | 244,450 |  |  | 176,952 |
| $ | 1,575,258 |  |  | $ | 1,394,904 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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