Expedia Group Inc. (NASDAQ:EXPE)

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Expedia Group Inc., effective income tax rate (EITR) reconciliation

		Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	U.S. federal statutory income tax rate	21.00%	21.00%	21.00%	21.00%	35.00%
	Effective income tax rate	139.47%	13.42%	26.19%	17.94%	10.89%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The relationship between the U.S. federal statutory income tax rate and the effective income tax rate (EITR) reveals significant volatility and divergence over the five-year period from 2017 to 2021.

U.S. Federal Statutory Income Tax Rate: A structural reduction occurred between 2017 and 2018, where the statutory rate decreased from 35.00% to 21.00%. This rate remained constant at 21.00% for the remainder of the period, establishing a stable benchmark for the analysis of the effective tax burden.
Effective Income Tax Rate Trends (2017–2019): From 2017 to 2019, the EITR exhibited a consistent upward trajectory, rising from 10.89% to 17.94%, and reaching 26.19% by 2019. In 2019, the EITR exceeded the statutory rate by 5.19 percentage points, indicating that the tax burden during that year was higher than the standard federal corporate rate.
Recent Volatility and Anomalies (2020–2021): A contraction in the EITR to 13.42% was observed in 2020, falling well below the statutory benchmark. This was followed by an extreme surge to 139.47% in 2021. Such a significant deviation suggests the influence of substantial non-recurring tax items, the reversal of deferred tax assets, or a very low pre-tax income base relative to the total tax expense incurred during that fiscal year.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Expedia Group Inc., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Provision for accrued expenses	85)	91)	100)	87)	50)
Deferred loyalty rewards	186)	180)	183)	166)	131)
Net operating loss and tax credit carryforwards	939)	654)	100)	123)	122)
Stock-based compensation	25)	70)	86)	67)	52)
Property and equipment	19)	54)	102)	55)	—)
Operating lease liabilities	96)	135)	136)	—)	—)
Long-term investments	106)	—)	—)	—)	—)
Other	62)	172)	72)	68)	47)
Deferred tax assets	1,518)	1,356)	779)	566)	402)
Valuation allowance	(171)	(216)	(77)	(80)	(76)
Deferred tax assets, less valuation allowance	1,347)	1,140)	702)	486)	325)
Goodwill and intangible assets	(418)	(422)	(485)	(486)	(499)
Anticipatory foreign tax credits	(113)	—)	—)	—)	—)
Operating lease ROU assets	(93)	(126)	(128)	—)	—)
Property and equipment	—)	—)	—)	—)	(131)
Other	(15)	—)	—)	—)	(6)
Deferred tax liabilities	(639)	(548)	(613)	(486)	(636)
Net deferred tax assets (liabilities)	708)	592)	89)	—)	(311)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The net deferred tax position transitioned from a net liability of 311 million US dollars in 2017 to a net asset of 708 million US dollars by 2021. This shift indicates a significant accumulation of future tax benefits that outweigh future tax obligations.

Analysis of Deferred Tax Assets: Total deferred tax assets experienced substantial growth, rising from 402 million US dollars in 2017 to 1,518 million US dollars in 2021. The primary driver of this expansion was the surge in net operating loss and tax credit carryforwards, which increased from 122 million US dollars in 2017 to 939 million US dollars in 2021. A particularly sharp increase occurred between 2019 and 2020, where the value jumped from 100 million US dollars to 654 million US dollars. Other contributors include deferred loyalty rewards, which remained relatively stable with a gradual increase from 131 million US dollars to 186 million US dollars over the period.
Valuation Allowance Trends: The valuation allowance, used to offset deferred tax assets that may not be realized, fluctuated between 2017 and 2021. The allowance expanded from 76 million US dollars in 2017 to a peak of 216 million US dollars in 2020, before moderating to 171 million US dollars in 2021. Despite these allowances, the net deferred tax assets, less valuation allowance, grew consistently from 325 million US dollars in 2017 to 1,347 million US dollars in 2021.
Analysis of Deferred Tax Liabilities: Deferred tax liabilities remained relatively range-bound, ending at 639 million US dollars in 2021 compared to 636 million US dollars in 2017. Goodwill and intangible assets constituted the largest component of these liabilities, although they showed a gradual declining trend from 499 million US dollars in 2017 to 418 million US dollars in 2021. New liability components emerged in later years, including operating lease right-of-use assets, which appeared in 2019 at 128 million US dollars and decreased to 93 million US dollars by 2021, and anticipatory foreign tax credits, which reached 113 million US dollars in 2021.
Net Position Evolution: The net deferred tax position moved from a deficit to a surplus during the analyzed period. The company transitioned from a net liability position in 2017 and 2018 to a net asset position starting in 2019. This positive trajectory accelerated through 2020 and 2021, driven predominantly by the accumulation of tax loss carryforwards, which fundamentally altered the balance between deferred tax assets and liabilities.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Expedia Group Inc., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	Deferred tax assets	766)	659)	145)	69)	18)
	Deferred tax liabilities	58)	67)	56)	69)	329)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Between 2017 and 2021, a significant reversal in the deferred tax position is observed, characterized by a substantial increase in deferred tax assets and a corresponding reduction in deferred tax liabilities.

Deferred Tax Assets Trend: Deferred tax assets exhibited an aggressive upward trajectory, increasing from 18 million USD in 2017 to 766 million USD by the end of 2021. The growth was most pronounced between 2019 and 2020, where the balance rose from 145 million USD to 659 million USD, indicating a substantial accumulation of future tax benefits.
Deferred Tax Liabilities Trend: A sharp contraction in deferred tax liabilities is observed during the early part of the period, falling from 329 million USD in 2017 to 69 million USD in 2018. Following this initial decline, the liabilities remained relatively stable and low, concluding the period at 58 million USD in 2021.
Net Deferred Tax Position Shift: The company transitioned from a significant net deferred tax liability position in 2017 to a dominant net deferred tax asset position by 2021. This shift suggests a fundamental change in the timing of taxable and deductible differences, resulting in a strengthened position for future tax offsets.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Expedia Group Inc., Financial Data: Reported vs. Adjusted

Expedia Group Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)	21,548)	18,690)	21,416)	18,033)	18,516)
Less: Noncurrent deferred tax assets, net	766)	659)	145)	69)	18)
Total assets (adjusted)	20,782)	18,031)	21,271)	17,964)	18,498)
Adjustment to Total Liabilities
Total liabilities (as reported)	17,996)	14,651)	15,865)	12,352)	12,365)
Less: Noncurrent deferred tax liabilities, net	58)	67)	56)	69)	329)
Total liabilities (adjusted)	17,938)	14,584)	15,809)	12,283)	12,036)
Adjustment to Total Expedia Group, Inc. Stockholders’ Equity
Total Expedia Group, Inc. stockholders’ equity (as reported)	2,057)	2,532)	3,967)	4,104)	4,522)
Less: Net deferred tax assets (liabilities)	708)	592)	89)	—)	(311)
Total Expedia Group, Inc. stockholders’ equity (adjusted)	1,349)	1,940)	3,878)	4,104)	4,833)
Adjustment to Net Income (loss) Attributable To Expedia Group, Inc.
Net income (loss) attributable to Expedia Group, Inc. (as reported)	12)	(2,612)	565)	406)	378)
Add: Deferred income tax expense (benefit)	(145)	(488)	(91)	(308)	(103)
Net income (loss) attributable to Expedia Group, Inc. (adjusted)	(133)	(3,100)	474)	98)	275)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The removal of deferred taxes results in a consistent downward adjustment of the company's financial position and performance across the analyzed period from 2017 to 2021. While reported figures indicate a level of resilience in total assets, the adjusted figures reveal a more conservative valuation of the balance sheet and a more severe impact on profitability and equity.

Asset and Liability Adjustments: A consistent gap is observed between reported and adjusted total assets, with adjusted assets remaining lower than reported values in every period. This discrepancy peaked in 2021, where adjusted assets were approximately 766 million US$ lower than reported assets. Total liabilities also show a downward adjustment, though the margin is narrower than that of the assets. The combined effect of these adjustments suggests that deferred tax assets exceed deferred tax liabilities, meaning their removal reduces the overall net asset position.
Equity Erosion and Valuation: Stockholders' equity exhibits a significant downward trend over the five-year period. Reported equity declined from 4,522 million US$ in 2017 to 2,057 million US$ in 2021. The adjustment for deferred taxes exacerbates this decline in later years; by 2021, adjusted equity fell to 1,349 million US$, representing a reduction of approximately 34% compared to the reported equity for that year. This indicates that deferred tax accounts provided a substantial cushion to the reported equity balance during periods of financial stress.
Net Income and Profitability Impacts: The removal of deferred taxes negatively impacts net income across nearly all observed periods. From 2017 to 2019, adjusted net income remained lower than reported net income. The most critical divergence occurs in 2020 and 2021. In 2020, the reported loss of 2,612 million US$ deepened to an adjusted loss of 3,100 million US$. Notably, in 2021, while the company reported a slim net profit of 12 million US$, the adjusted figure reveals a net loss of 133 million US$. This suggests that the reported return to profitability in 2021 was primarily driven by deferred tax benefits rather than operational performance.

Overall, the analysis demonstrates that the inclusion of deferred taxes creates a more optimistic view of both the company's solvency and its bottom-line performance. The adjusted data reveals a more fragile equity base and a continued state of net losses through 2021.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Expedia Group Inc., Financial Ratios: Reported vs. Adjusted

Expedia Group Inc., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net Profit Margin
Reported net profit margin	0.14%	-50.24%	4.68%	3.62%	3.76%
Adjusted net profit margin	-1.55%	-59.63%	3.93%	0.87%	2.73%
Total Asset Turnover
Reported total asset turnover	0.40	0.28	0.56	0.62	0.54
Adjusted total asset turnover	0.41	0.29	0.57	0.62	0.54
Financial Leverage
Reported financial leverage	10.48	7.38	5.40	4.39	4.09
Adjusted financial leverage	15.41	9.29	5.49	4.38	3.83
Return on Equity (ROE)
Reported ROE	0.58%	-103.16%	14.24%	9.89%	8.36%
Adjusted ROE	-9.86%	-159.79%	12.22%	2.39%	5.68%
Return on Assets (ROA)
Reported ROA	0.06%	-13.98%	2.64%	2.25%	2.04%
Adjusted ROA	-0.64%	-17.19%	2.23%	0.55%	1.48%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The financial performance from 2017 to 2021 is characterized by a period of relative stability and growth through 2019, followed by a severe contraction in 2020 and a marginal recovery in 2021. A consistent divergence is observed between reported and adjusted metrics, indicating that the removal of deferred taxes negatively impacts the perceived profitability and solvency of the entity.

Profitability Margins and Returns: Reported net profit margins remained stable between 3.62% and 4.68% from 2017 to 2019 before collapsing to -50.24% in 2020. While the reported margin returned to a slightly positive 0.14% by 2021, the adjusted net profit margin remained negative at -1.55%, suggesting that deferred tax benefits artificially inflated the reported recovery. This trend is mirrored in the Return on Equity (ROE) and Return on Assets (ROA), where adjusted figures are consistently lower than reported figures. The volatility peaked in 2020, with adjusted ROE reaching -159.79% compared to a reported -103.16%.
Operational Efficiency: Total asset turnover showed minimal variance between reported and adjusted values, indicating that deferred tax adjustments have negligible impact on efficiency metrics. Turnover ratios were stable between 0.54 and 0.62 from 2017 to 2019, plummeted to 0.28 in 2020 due to a significant decline in revenue generation relative to the asset base, and recovered partially to 0.40 in 2021.
Financial Leverage and Capital Structure: A sustained upward trend in financial leverage is evident throughout the period. Reported leverage increased from 4.09 in 2017 to 10.48 in 2021. However, the adjusted financial leverage reveals a more aggressive risk profile, escalating from 3.83 in 2017 to 15.41 in 2021. The widening gap between reported and adjusted leverage, particularly from 2020 onwards, suggests that deferred tax assets significantly bolster the reported equity position, masking a higher degree of actual financial risk.

In summary, the adjustment for deferred taxes reveals a more fragile financial position than reported. The impact is most pronounced in the profitability and leverage ratios, where the removal of these tax accounting elements leads to lower returns and substantially higher leverage, particularly during the recovery phase in 2021.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Expedia Group, Inc.	12)	(2,612)	565)	406)	378)
Revenue	8,598)	5,199)	12,067)	11,223)	10,060)
Profitability Ratio
Net profit margin¹	0.14%	-50.24%	4.68%	3.62%	3.76%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Expedia Group, Inc.	(133)	(3,100)	474)	98)	275)
Revenue	8,598)	5,199)	12,067)	11,223)	10,060)
Profitability Ratio
Adjusted net profit margin²	-1.55%	-59.63%	3.93%	0.87%	2.73%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Net profit margin = 100 × Net income (loss) attributable to Expedia Group, Inc. ÷ Revenue
= 100 × 12 ÷ 8,598 = 0.14%

² Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to Expedia Group, Inc. ÷ Revenue
= 100 × -133 ÷ 8,598 = -1.55%

Analysis of financial performance from 2017 to 2021 reveals a period of relative stability followed by a severe contraction and a subsequent partial recovery. The metrics indicate a significant disruption in profitability occurring in 2020, which profoundly impacted both reported and adjusted figures.

Net Income Trends: Reported net income experienced a steady increase from 2017 to 2019, rising from US$ 378 million to US$ 565 million. This growth was followed by a precipitous decline in 2020, resulting in a reported net loss of US$ 2,612 million. By 2021, a recovery was evident as reported net income returned to a positive value of US$ 12 million, although this level remained significantly below pre-2020 benchmarks.
Adjusted Net Profit Margin Analysis: The adjusted net profit margin fluctuated between 2.73% in 2017 and 3.93% in 2019. A critical collapse occurred in 2020, where the margin dropped to -59.63%, reflecting a severe erosion of profitability. In 2021, the adjusted margin improved to -1.55%, signaling a trend toward recovery, although it failed to return to positive territory within the observed timeframe.
Comparative Variance Between Reported and Adjusted Metrics: A consistent divergence is observed between reported and adjusted results. Between 2017 and 2019, adjusted net income remained lower than reported net income. During the 2020 downturn, adjusted losses were more severe than reported losses, reaching US$ 3,100 million compared to the reported loss of US$ 2,612 million. This divergence persisted into 2021, where reported net income was positive while adjusted net income remained negative at US$ -133 million, suggesting that specific non-GAAP adjustments continued to weigh on the adjusted performance.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Revenue	8,598)	5,199)	12,067)	11,223)	10,060)
Total assets	21,548)	18,690)	21,416)	18,033)	18,516)
Activity Ratio
Total asset turnover¹	0.40	0.28	0.56	0.62	0.54
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue	8,598)	5,199)	12,067)	11,223)	10,060)
Adjusted total assets	20,782)	18,031)	21,271)	17,964)	18,498)
Activity Ratio
Adjusted total asset turnover²	0.41	0.29	0.57	0.62	0.54

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 8,598 ÷ 21,548 = 0.40

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 8,598 ÷ 20,782 = 0.41

The operational efficiency of the asset base experienced significant volatility between 2017 and 2021. An initial increase in asset utilization was followed by a severe contraction in 2020, with a subsequent partial recovery observed in 2021.

Asset Base Fluctuations: Reported total assets exhibited a fluctuating trajectory, increasing from 18,516 million US$ in 2017 to a peak of 21,416 million US$ in 2019. A notable contraction occurred in 2020, where assets decreased to 18,690 million US$, before rebounding to 21,548 million US$ by the end of 2021.
Total Asset Turnover Trends: Asset turnover ratios indicate a peak in efficiency in 2018, reaching 0.62. This was followed by a moderate decline to 0.56 in 2019 and a sharp drop to 0.28 in 2020, marking the lowest point of asset productivity in the period analyzed. By 2021, the ratio improved to 0.40, indicating a recovery in the capacity to generate revenue from assets, although efficiency remained below 2017-2019 levels.
Analysis of Adjusted Metrics: Adjusted total assets were consistently lower than reported total assets, with the variance becoming more pronounced in 2020 and 2021. Consequently, the adjusted total asset turnover ratio remained slightly higher than the reported ratio in the latter years, such as the 0.41 adjusted versus 0.40 reported ratio in 2021. This indicates that the removal of specific asset components marginally enhances the measured efficiency of the remaining asset base.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets	21,548)	18,690)	21,416)	18,033)	18,516)
Total Expedia Group, Inc. stockholders’ equity	2,057)	2,532)	3,967)	4,104)	4,522)
Solvency Ratio
Financial leverage¹	10.48	7.38	5.40	4.39	4.09
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	20,782)	18,031)	21,271)	17,964)	18,498)
Adjusted total Expedia Group, Inc. stockholders’ equity	1,349)	1,940)	3,878)	4,104)	4,833)
Solvency Ratio
Adjusted financial leverage²	15.41	9.29	5.49	4.38	3.83

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Financial leverage = Total assets ÷ Total Expedia Group, Inc. stockholders’ equity
= 21,548 ÷ 2,057 = 10.48

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Expedia Group, Inc. stockholders’ equity
= 20,782 ÷ 1,349 = 15.41

A significant escalation in financial leverage is observed between 2017 and 2021, primarily driven by a substantial and sustained contraction in stockholders' equity. While total assets remained relatively stable with some fluctuation, the erosion of the equity base led to a marked increase in the company's risk profile as measured by leverage ratios.

Asset Trends: Total assets exhibited a fluctuating but generally stable trend. Reported assets moved from 18,516 million USD in 2017 to 21,548 million USD in 2021. A notable peak occurred in 2019 at 21,416 million USD, followed by a dip in 2020 to 18,690 million USD, and a subsequent recovery in 2021. Adjusted total assets mirrored this pattern closely, ending the period at 20,782 million USD.
Equity Erosion: A consistent downward trend is evident in stockholders' equity. Reported equity declined from 4,522 million USD in 2017 to 2,057 million USD in 2021. The adjusted equity figures show an even more pronounced decline, dropping from 4,833 million USD in 2017 to 1,349 million USD in 2021. The most acute reductions occurred between 2019 and 2021, where adjusted equity fell from 3,878 million USD to 1,349 million USD.
Financial Leverage Analysis: Financial leverage ratios increased sharply throughout the analyzed period. Reported financial leverage rose from 4.09 in 2017 to 10.48 in 2021. The adjusted financial leverage shows a more aggressive trajectory, beginning at 3.83 in 2017 and accelerating to 15.41 by 2021. The divergence between reported and adjusted leverage became particularly extreme in 2020 and 2021, indicating that adjustments to the financial statements significantly amplified the perceived leverage of the organization during these years.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Expedia Group, Inc.	12)	(2,612)	565)	406)	378)
Total Expedia Group, Inc. stockholders’ equity	2,057)	2,532)	3,967)	4,104)	4,522)
Profitability Ratio
ROE¹	0.58%	-103.16%	14.24%	9.89%	8.36%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Expedia Group, Inc.	(133)	(3,100)	474)	98)	275)
Adjusted total Expedia Group, Inc. stockholders’ equity	1,349)	1,940)	3,878)	4,104)	4,833)
Profitability Ratio
Adjusted ROE²	-9.86%	-159.79%	12.22%	2.39%	5.68%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROE = 100 × Net income (loss) attributable to Expedia Group, Inc. ÷ Total Expedia Group, Inc. stockholders’ equity
= 100 × 12 ÷ 2,057 = 0.58%

² Adjusted ROE = 100 × Adjusted net income (loss) attributable to Expedia Group, Inc. ÷ Adjusted total Expedia Group, Inc. stockholders’ equity
= 100 × -133 ÷ 1,349 = -9.86%

The financial performance from 2017 to 2021 is characterized by a period of growth in profitability followed by a severe contraction in 2020 and a marginal, incomplete recovery in 2021. A consistent downward trend is observed in total stockholders' equity throughout the five-year period, which has intensified the volatility of return on equity metrics.

Net Income Trends: Reported net income grew steadily from US$ 378 million in 2017 to a peak of US$ 565 million in 2019. However, a significant reversal occurred in 2020, with a reported loss of US$ 2,612 million. By 2021, the company returned to a nominal profit of US$ 12 million. Adjusted net income exhibited higher volatility, dropping to a loss of US$ 3,100 million in 2020 and remaining negative at US$ 133 million in 2021.
Equity Erosion: There is a persistent decline in the capital base. Reported stockholders' equity decreased from US$ 4,522 million in 2017 to US$ 2,057 million in 2021. This contraction is even more pronounced in the adjusted equity figures, which fell from US$ 4,833 million in 2017 to US$ 1,349 million in 2021, representing a substantial reduction in the equity cushion over the analyzed period.
Analysis of Return on Equity (ROE): Reported ROE showed an upward trajectory from 8.36% in 2017 to 14.24% in 2019 before collapsing to -103.16% in 2020. The adjusted ROE demonstrated more extreme fluctuations, peaking at 12.22% in 2019 and plummeting to -159.79% in 2020. While reported ROE recovered to a positive 0.58% in 2021, the adjusted ROE remained negative at -9.86%, indicating that adjustments to the financial statements result in a more pessimistic view of the company's efficiency in generating returns from its adjusted equity base.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Expedia Group, Inc.	12)	(2,612)	565)	406)	378)
Total assets	21,548)	18,690)	21,416)	18,033)	18,516)
Profitability Ratio
ROA¹	0.06%	-13.98%	2.64%	2.25%	2.04%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Expedia Group, Inc.	(133)	(3,100)	474)	98)	275)
Adjusted total assets	20,782)	18,031)	21,271)	17,964)	18,498)
Profitability Ratio
Adjusted ROA²	-0.64%	-17.19%	2.23%	0.55%	1.48%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROA = 100 × Net income (loss) attributable to Expedia Group, Inc. ÷ Total assets
= 100 × 12 ÷ 21,548 = 0.06%

² Adjusted ROA = 100 × Adjusted net income (loss) attributable to Expedia Group, Inc. ÷ Adjusted total assets
= 100 × -133 ÷ 20,782 = -0.64%

The financial trajectory from 2017 through 2021 is characterized by a period of growth followed by a severe contraction in 2020 and a partial recovery in 2021. Net income, both reported and adjusted, exhibited an upward trend between 2017 and 2019, with reported net income peaking at 565 million US dollars in 2019. This growth was sharply reversed in 2020, where reported net losses reached 2,612 million US dollars and adjusted net losses expanded further to 3,100 million US dollars.

Reported Return on Assets (ROA): A positive trend was observed from 2017 to 2019, with the ratio increasing from 2.04% to 2.64%. A drastic decline occurred in 2020, with the ratio falling to -13.98%, before returning to a near-neutral position of 0.06% by the end of 2021.
Adjusted Return on Assets (ROA): The adjusted ROA demonstrated greater volatility and generally lower performance than the reported figures. After a dip to 0.55% in 2018, it recovered to 2.23% in 2019. The 2020 contraction was more pronounced in the adjusted figures, plummeting to -17.19%, and the recovery in 2021 remained incomplete, ending the period at -0.64%.
Asset Base Stability: Total assets remained relatively stable throughout the five-year period, fluctuating between approximately 18 billion and 21.5 billion US dollars. Reported total assets reached a peak of 21,548 million US dollars in 2021, indicating that the significant declines in ROA during 2020 and 2021 were driven by collapses in net income rather than a reduction in the asset base.

The divergence between reported and adjusted figures is most evident in 2020 and 2021. In 2021, while reported net income returned to a positive value of 12 million US dollars, the adjusted net income remained negative at 133 million US dollars. This discrepancy suggests that one-time gains or specific accounting adjustments supported the reported bottom line, while the underlying adjusted operational performance remained in negative territory.

AI Ask an analyst for more