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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Expedia Group Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net operating profit after taxes (NOPAT)¹	2,614)	(5,503)	1,922)	1,350)	1,026)
Cost of capital²	15.00%	13.87%	14.96%	15.99%	15.01%
Invested capital³	17,498)	15,765)	16,161)	14,424)	14,039)

Economic profit⁴	(10)	(7,690)	(495)	(956)	(1,082)

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).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2021 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,614 – 15.00% × 17,498 = -10

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Expedia Group Inc. economic profit decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Expedia Group Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income (loss) attributable to Expedia Group, Inc.	12)	(2,612)	565)	406)	378)
Deferred income tax expense (benefit)¹	(145)	(488)	(91)	(308)	(103)
Increase (decrease) in allowance for expected credit losses²	(36)	60)	7)	3)	5)
Increase (decrease) in deferred merchant bookings and deferred revenue³	2,575)	(2,721)	1,309)	1,146)	645)
Increase (decrease) in restructuring and related reorganization accrued liability⁴	(77)	86)	17)	(9)	(9)
Increase (decrease) in equity equivalents⁵	2,317)	(3,063)	1,242)	832)	538)
Interest expense	351)	360)	173)	190)	182)
Interest expense, operating lease liability⁶	15)	23)	23)	33)	32)
Adjusted interest expense	366)	383)	196)	223)	214)
Tax benefit of interest expense⁷	(77)	(80)	(41)	(47)	(75)
Adjusted interest expense, after taxes⁸	289)	303)	155)	176)	139)
Interest income	(9)	(18)	(59)	(71)	(34)
Investment income, before taxes	(9)	(18)	(59)	(71)	(34)
Tax expense (benefit) of investment income⁹	2)	4)	12)	15)	12)
Investment income, after taxes¹⁰	(7)	(14)	(47)	(56)	(22)
Net income (loss) attributable to noncontrolling interest	3)	(116)	7)	(8)	(7)
Net operating profit after taxes (NOPAT)	2,614)	(5,503)	1,922)	1,350)	1,026)

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).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for expected credit losses.

³ Addition of increase (decrease) in deferred merchant bookings and deferred revenue.

⁴ Addition of increase (decrease) in restructuring and related reorganization accrued liability.

⁵ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to Expedia Group, Inc..

⁶ 2021 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 437 × 3.50% = 15

⁷ 2021 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 366 × 21.00% = 77

⁸ Addition of after taxes interest expense to net income (loss) attributable to Expedia Group, Inc..

⁹ 2021 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 9 × 21.00% = 2

¹⁰ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Expedia Group Inc. NOPAT decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Expedia Group Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Income tax expense (benefit)	(53)	(423)	203)	87)	45)
Less: Deferred income tax expense (benefit)	(145)	(488)	(91)	(308)	(103)
Add: Tax savings from interest expense	77)	80)	41)	47)	75)
Less: Tax imposed on investment income	2)	4)	12)	15)	12)
Cash operating taxes	167)	142)	323)	427)	212)

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).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Expedia Group Inc. cash operating taxes decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.

Expedia Group Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Current maturities of long-term debt	735)	—)	749)	—)	500)
Long-term debt, excluding current maturities	7,715)	8,216)	4,189)	3,717)	3,749)
Operating lease liability¹	437)	639)	651)	759)	692)
Total reported debt & leases	8,887)	8,855)	5,589)	4,476)	4,941)
Total Expedia Group, Inc. stockholders’ equity	2,057)	2,532)	3,967)	4,104)	4,522)
Net deferred tax (assets) liabilities²	(708)	(592)	(89)	—)	311)
Allowance for expected credit losses³	65)	101)	41)	34)	31)
Deferred merchant bookings and deferred revenue⁴	5,854)	3,279)	6,000)	4,691)	3,545)
Restructuring and related reorganization accrued liability⁵	26)	103)	17)	—)	9)
Equity equivalents⁶	5,237)	2,891)	5,969)	4,725)	3,896)
Accumulated other comprehensive (income) loss, net of tax⁷	149)	178)	217)	220)	149)
Redeemable non-controlling interests	—)	13)	15)	30)	22)
Non-redeemable non-controlling interests	1,495)	1,494)	1,569)	1,547)	1,606)
Adjusted total Expedia Group, Inc. stockholders’ equity	8,938)	7,108)	11,737)	10,626)	10,196)
Projects in progress⁸	(33)	(51)	(510)	(531)	(365)
Investments⁹	(294)	(147)	(655)	(147)	(732)
Invested capital	17,498)	15,765)	16,161)	14,424)	14,039)

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).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of deferred merchant bookings and deferred revenue.

⁵ Addition of restructuring and related reorganization accrued liability.

⁶ Addition of equity equivalents to total Expedia Group, Inc. stockholders’ equity.

⁷ Removal of accumulated other comprehensive income.

⁸ Subtraction of projects in progress.

⁹ Subtraction of investments.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Expedia Group Inc. invested capital decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Expedia Group Inc., cost of capital calculations

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	29,924)	29,924)	÷	39,561)	=	0.76	0.76	×	18.92%	=	14.31%
Series A Preferred Stock	—)	—)	÷	39,561)	=	0.00	0.00	×	0.00%	=	0.00%
Long-term debt, including current maturities³	9,200)	9,200)	÷	39,561)	=	0.23	0.23	×	3.57% × (1 – 21.00%)	=	0.66%
Operating lease liability⁴	437)	437)	÷	39,561)	=	0.01	0.01	×	3.50% × (1 – 21.00%)	=	0.03%
Total:	39,561)					1.00					15.00%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, including current maturities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	21,078)	21,078)	÷	31,839)	=	0.66	0.66	×	18.92%	=	12.53%
Series A Preferred Stock	1,022)	1,022)	÷	31,839)	=	0.03	0.03	×	7.34%	=	0.24%
Long-term debt, including current maturities³	9,100)	9,100)	÷	31,839)	=	0.29	0.29	×	4.68% × (1 – 21.00%)	=	1.06%
Operating lease liability⁴	639)	639)	÷	31,839)	=	0.02	0.02	×	3.60% × (1 – 21.00%)	=	0.06%
Total:	31,839)					1.00					13.87%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, including current maturities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	17,191)	17,191)	÷	22,961)	=	0.75	0.75	×	18.92%	=	14.17%
Series A Preferred Stock	—)	—)	÷	22,961)	=	0.00	0.00	×	0.00%	=	0.00%
Long-term debt, including current maturities³	5,119)	5,119)	÷	22,961)	=	0.22	0.22	×	4.05% × (1 – 21.00%)	=	0.71%
Operating lease liability⁴	651)	651)	÷	22,961)	=	0.03	0.03	×	3.50% × (1 – 21.00%)	=	0.08%
Total:	22,961)					1.00					14.96%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, including current maturities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	19,252)	19,252)	÷	23,739)	=	0.81	0.81	×	18.92%	=	15.34%
Series A Preferred Stock	—)	—)	÷	23,739)	=	0.00	0.00	×	0.00%	=	0.00%
Long-term debt, including current maturities³	3,728)	3,728)	÷	23,739)	=	0.16	0.16	×	4.31% × (1 – 21.00%)	=	0.53%
Operating lease liability⁴	759)	759)	÷	23,739)	=	0.03	0.03	×	4.31% × (1 – 21.00%)	=	0.11%
Total:	23,739)					1.00					15.99%

Based on: 10-K (reporting date: 2018-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, including current maturities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	15,791)	15,791)	÷	20,941)	=	0.75	0.75	×	18.92%	=	14.27%
Series A Preferred Stock	—)	—)	÷	20,941)	=	0.00	0.00	×	0.00%	=	0.00%
Long-term debt, including current maturities³	4,458)	4,458)	÷	20,941)	=	0.21	0.21	×	4.66% × (1 – 35.00%)	=	0.64%
Operating lease liability⁴	692)	692)	÷	20,941)	=	0.03	0.03	×	4.66% × (1 – 35.00%)	=	0.10%
Total:	20,941)					1.00					15.01%

Based on: 10-K (reporting date: 2017-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, including current maturities. See details »

⁴ Operating lease liability. See details »

Expedia Group Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit¹	(10)	(7,690)	(495)	(956)	(1,082)
Invested capital²	17,498)	15,765)	16,161)	14,424)	14,039)
Performance Ratio
Economic spread ratio³	-0.06%	-48.78%	-3.06%	-6.63%	-7.70%
Benchmarks
Economic Spread Ratio, Competitors⁴
Amazon.com Inc.	4.79%	2.15%	-1.19%	—	—
Home Depot Inc.	16.48%	23.56%	24.00%	—	—
Lowe’s Cos. Inc.	12.41%	8.47%	-1.00%	—	—
TJX Cos. Inc.	-9.39%	8.31%	7.59%	—	—

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).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2021 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -10 ÷ 17,498 = -0.06%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Expedia Group Inc. economic spread ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Expedia Group Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit¹	(10)	(7,690)	(495)	(956)	(1,082)

Revenue	8,598)	5,199)	12,067)	11,223)	10,060)
Add: Increase (decrease) in deferred merchant bookings and deferred revenue	2,575)	(2,721)	1,309)	1,146)	645)
Adjusted revenue	11,173)	2,478)	13,376)	12,369)	10,705)
Performance Ratio
Economic profit margin²	-0.09%	-310.33%	-3.70%	-7.73%	-10.10%
Benchmarks
Economic Profit Margin, Competitors³
Amazon.com Inc.	2.06%	0.83%	-0.54%	—	—
Home Depot Inc.	6.20%	7.82%	7.58%	—	—
Lowe’s Cos. Inc.	3.93%	3.14%	-0.35%	—	—
TJX Cos. Inc.	-6.54%	3.72%	3.39%	—	—

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).

¹ Economic profit. See details »

² 2021 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × -10 ÷ 11,173 = -0.09%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Expedia Group Inc. economic profit margin deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Expedia Group Inc. (NASDAQ:EXPE)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin