Delaware
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001-37938
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81-1838757
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(State or other jurisdiction of
incorporation or organization)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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Exhibit No.
|
Name
|
|
Unaudited Pro Forma Consolidated Financial Statements.
|
LIBERTY EXPEDIA HOLDINGS, INC.
|
||
By:
|
/s/ Wade Haufschild
|
|
Name:
|
Wade Haufschild
|
|
Title:
|
Chief Financial Officer
|
Historical Liberty
Expedia Holdings,
Inc., as reported
|
Pro Forma
Adjustment to
Deconsolidate
Expedia, Inc.
and record
equity method
investment in
Expedia Inc. (a)
|
Pro Forma
|
||||||||||
Assets
|
amounts in millions
|
|||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
$
|
2,512
|
(2,443
|
)
|
69
|
|||||||
Accounts receivable, net
|
2,154
|
(2,151
|
)
|
3
|
||||||||
Short-term marketable securities
|
53
|
(28
|
)
|
25
|
||||||||
Prepaid expenses
|
262
|
(259
|
)
|
3
|
||||||||
Other current assets
|
323
|
(292
|
)
|
31
|
||||||||
Total current assets
|
5,304
|
(5,173
|
)
|
131
|
||||||||
Investment in Expedia
|
—
|
2,690
|
(b)
|
2,690
|
||||||||
Property and equipment
|
1,481
|
(1,447
|
)
|
34
|
||||||||
Accumulated depreciation
|
(438
|
)
|
407
|
(31
|
)
|
|||||||
1,043
|
(1,040
|
)
|
3
|
|||||||||
Intangible assets not subject to amortization:
|
0
|
|||||||||||
Goodwill
|
15,112
|
(15,112
|
)
|
—
|
||||||||
Tradename
|
5,726
|
(5,706
|
)
|
20
|
||||||||
20,838
|
(20,818
|
)
|
20
|
|||||||||
Intangible assets subject to amortization, net
|
3,931
|
(3,918
|
)
|
13
|
||||||||
Other assets, net
|
781
|
(778
|
)
|
3
|
||||||||
Total assets
|
$
|
31,897
|
(29,037
|
)
|
2,860
|
Liabilities and Equity
|
|
||||||||||||
Current liabilities:
|
|
||||||||||||
Accounts payable, merchant
|
$
|
1,699
|
(1,699
|
)
|
—
|
||||||||
Accounts payable, other
|
800
|
(788
|
)
|
12
|
|||||||||
Accrued liabilities
|
829
|
(808
|
)
|
21
|
|||||||||
Deferred merchant bookings
|
4,327
|
(4,327
|
)
|
—
|
|||||||||
Deferred revenue
|
367
|
(364
|
)
|
3
|
|||||||||
Current portion of long-term debt
|
5
|
—
|
5
|
||||||||||
Other current liabilities
|
51
|
(51
|
)
|
—
|
|||||||||
Total current liabilities
|
8,078
|
(8,037
|
)
|
41
|
|||||||||
Long-term debt and capital lease obligations, net, including $382 million and $398 million measured at fair value
|
4,238
|
(3,856
|
)
|
382
|
|||||||||
Deferred income tax liabilities
|
1,530
|
(921
|
)
|
(c)
|
609
|
||||||||
Other long term liabilities
|
534
|
(536
|
)
|
(2
|
)
|
||||||||
Total liabilities
|
14,380
|
(13,350
|
)
|
1,030
|
|||||||||
Equity
|
|
||||||||||||
Preferred stock, $.01 par value. Authorized 50,000,000 shares; no shares issued
|
—
|
—
|
—
|
||||||||||
Series A common stock, $.01 par value. Authorized 160,000,000 shares; issued and outstanding 54,496,214 and 54,438,883 at
December 31, 2018 and 2017, respectively
|
1
|
—
|
1
|
||||||||||
Series B common stock, $.01 par value. Authorized 6,000,000 shares; issued and outstanding 2,830,174 and 2,830,174 at
December 31, 2018 and 2017, respectively
|
—
|
—
|
—
|
||||||||||
Additional paid-in capital
|
313
|
—
|
313
|
||||||||||
Accumulated other comprehensive earnings (loss), net of taxes
|
36
|
(38
|
)
|
(d)
|
(2
|
)
|
|||||||
Retained earnings (accumulated deficit)
|
2,051
|
(533
|
)
|
(d)
|
1,518
|
||||||||
Total stockholders' equity
|
2,401
|
(571
|
)
|
1,830
|
|||||||||
Noncontrolling interests in equity of subsidiaries
|
15,116
|
(15,116
|
)
|
(d)
|
—
|
||||||||
Total equity
|
17,517
|
(15,687
|
)
|
1,830
|
|||||||||
Commitments and contingencies
|
|
||||||||||||
Total liabilities and equity
|
$
|
31,897
|
(29,037
|
)
|
2,860
|
Historical
Liberty
Expedia
Holdings,
Inc., as
reported
|
Pro Forma
Adjustment
to
Deconsolidate
Expedia, Inc.
(a)
|
Pro Forma
Adjustments
to record
equity
method
investment
in Expedia,
Inc. (a)
|
Pro Forma
|
||||||||||||||
amounts in millions
|
|||||||||||||||||
Service revenue
|
$
|
11,223
|
(11,223
|
)
|
—
|
—
|
|||||||||||
Product revenue
|
226
|
—
|
—
|
226
|
|||||||||||||
Total revenue, net
|
11,449
|
(11,223
|
)
|
—
|
226
|
||||||||||||
Operating costs and expenses:
|
|||||||||||||||||
Selling and marketing
|
5,747
|
(5,721
|
)
|
—
|
26
|
||||||||||||
Cost of service revenue
|
1,864
|
(1,864
|
)
|
—
|
—
|
||||||||||||
Technology and content
|
1,124
|
(1,124
|
)
|
—
|
—
|
||||||||||||
Cost of goods sold (exclusive of depreciation shown separately below)
|
170
|
—
|
—
|
170
|
|||||||||||||
General and administrative
|
805
|
(779
|
)
|
—
|
26
|
||||||||||||
Other operating expense
|
18
|
—
|
—
|
18
|
|||||||||||||
Depreciation and amortization
|
1,936
|
(1,922
|
)
|
—
|
14
|
||||||||||||
Legal reserves, occupancy tax and other
|
(59
|
)
|
59
|
—
|
—
|
||||||||||||
Impairment of goodwill and intangible assets
|
544
|
(487
|
)
|
—
|
57
|
||||||||||||
12,149
|
(11,838
|
)
|
—
|
311
|
|||||||||||||
Operating income (loss)
|
(700
|
)
|
615
|
(85
|
)
|
||||||||||||
Other income (expense):
|
|||||||||||||||||
Interest expense
|
(135
|
)
|
130
|
—
|
(5
|
)
|
|||||||||||
Realized and unrealized gains (losses) on investments, net
|
—
|
—
|
(139
|
)
|
(e)
|
(139
|
)
|
||||||||||
Other, net
|
(22
|
)
|
39
|
—
|
17
|
||||||||||||
$
|
(157
|
)
|
169
|
(139
|
)
|
(127
|
)
|
Earnings (loss) before income taxes
|
(857
|
)
|
784
|
(139
|
)
|
(212
|
)
|
||||||||||
Income tax (expense) benefit
|
214
|
(207
|
)
|
38
|
(f)
|
45
|
|||||||||||
Net earnings (loss)
|
(643
|
)
|
577
|
(101
|
)
|
(167
|
)
|
||||||||||
Less net earnings (loss) attributable to the noncontrolling interests
|
(515
|
)
|
515
|
—
|
—
|
||||||||||||
Net earnings (loss) attributable to Liberty Expedia Holdings shareholders
|
$
|
(128
|
)
|
62
|
(101
|
)
|
(167
|
)
|
|||||||||
Basic net earnings (loss) attributable to Series A and Series B Expedia Holdings, Inc. shareholders per common share
|
(2.25
|
)
|
(2.93
|
)
|
|||||||||||||
Diluted net earnings (loss) attributable to Series A and Series B Expedia Holdings, Inc. shareholders per common share
|
(2.25
|
)
|
(2.93
|
)
|
(1) |
Basis of Pro Forma Presentation
|
(2) |
Pro Forma Adjustments
|
|
(a) |
Deconsolidate Expedia and record equity method investment in Expedia
|
|
(b) |
Investment in Expedia
|
December 31, 2018
|
||||
Expedia price per share
|
$
|
112.65
|
||
Liberty’s shares owned in Expedia
|
23,876,671
|
|||
Fair value of Liberty’s investment in Expedia (in millions)
|
$
|
2,690
|
|
(c) |
Deferred income tax liabilities
|
December 31, 2018
|
||||
amounts in millions
|
||||
Deconsolidate deferred income tax liabilities related to Expedia
|
$
|
(1,531
|
)
|
|
Recognized deferred income tax liabilities related to Investment in Expedia
|
610
|
|||
Total deferred income tax liabilities adjustment
|
$
|
(921
|
)
|
|
(d) |
Equity components
|
December 31, 2018
|
||||
amounts in millions
|
||||
Fair value of Liberty’s investment in Expedia (note 2 (b))
|
$
|
2,690
|
||
Carrying amount of noncontrolling interest in Expedia
|
15,116
|
|||
$
|
17,806
|
|||
Net carrying amount of Expedia’s assets and liabilities
|
17,767
|
|||
Gain (loss) on deconsolidation
|
$
|
39
|
||
Reclassify AOCI to earnings
|
38
|
|||
Recognize deferred income tax liabilities related to Investment in Expedia
|
(610
|
)
|
||
Total retained earnings adjustment
|
$
|
(533
|
)
|
|
(e) |
Realized and unrealized gains (losses) on investments, net
|
|
(f) |
Income tax (expense) benefit
|