Expedia Group (EXPE) 10-K/A risk factor changes: FY2018 vs FY2017

For the fiscal year ended December 31, [removed: 2017][added: 2018]

[removed: EXPEDIA,] [added: EXPEDIA GROUP,] INC.

| [removed: Expedia,] [added: Expedia Group,] Inc. 2.500% Senior Notes due 2022 | | New York Stock Exchange |

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] 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 [removed: and post] such files).

| Non-accelerated filer | | ¨ [removed: (Do not check if a smaller reporting company)] | | Smaller reporting company | | ¨ |

As of June 30, [removed: 2017,] [added: 2018,] the aggregate market value of the registrant’s common equity held by non-affiliates was approximately [removed: $18,137,071,000.][added: $14,376,116,000.]

| Common stock, $0.0001 par value per share | | [removed: 139,033,403 shares] [added: 136,007,689] |

| Class B common stock, $0.0001 par value per share | | 12,799,999 [removed: shares] |

[removed: This] [added: Expedia Group, Inc. (“Expedia Group” or the “Company”) is filing this] Amendment No. 1 [removed: on Form 10-K/A ("Amendment No. 1") amends the Annual Report of Expedia, Inc. (the "Company") on] [added: to our] Form 10-K for the fiscal year ended December 31, [removed: 2017, as] [added: 2018, originally] filed with the Securities and Exchange Commission on February 8, [removed: 2018] [added: 2019] (the [removed: "Original Filing").][added: “2018 Form 10-K”), for the purpose of providing the information required by Part III that we intended to incorporate by reference from our proxy statement relating to our 2019 annual meeting of stockholders.]

10-K/A 1 a201810-ka.htm 10-K/A

| Class | | Outstanding Shares at April 19, 2019 |

Our 2019 proxy statement, however, will not be filed within the requisite time period for allowing such incorporation by reference.

This Amendment No. 1 speaks as of the original filing date of the 2018 Form 10-K and reflects only the changes to the cover page, Items 10, 11, 12, 13 and 14 of Part III and Item 15 of Part IV.

No other information included in the 2018 Form 10-K, including the information set forth in Part I and Part II, has been modified or updated in any way, except for Exhibit 3.2 which has been updated in accordance with Item 601(b)(3) of Regulation S-K to reflect the amendment and restatement of our bylaws on April 15, 2019.

We have also included as exhibits the certifications required under Section 302 of The Sarbanes-Oxley Act of 2002.

Because no financial statements are contained within this Amendment, we are not including certifications pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

Expedia Group, Inc.

Form 10-K/A

For the Year Ended December 31, 2018

Contents

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| Part III. | | | [1](#s4d2b8a512ee64203a08d0dd56eb18b56) |

| | Item 10. | [Directors, Executive Officers and Corporate Governance](#sEAAAD81BEBB4FE77B16517676F2A8D64) | [1](#sEAAAD81BEBB4FE77B16517676F2A8D64) |

| | Item 11. | [Executive Compensation](#sEAD902CEEC571D9F8CE117676F5D0CED) | [9](#sEAD902CEEC571D9F8CE117676F5D0CED) |

| | Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#s5E140361B7F6001A629217676FAC8830) | [33](#s5E140361B7F6001A629217676FAC8830) |

| | Item 13. | [Certain Relationships and Related Person Transactions, and Director Independence](#sF77CAB6CF842446DB44A17676FC37F08) | [36](#sF77CAB6CF842446DB44A17676FC37F08) |

| | Item 14. | [Principal Accounting Fees and Services](#sA516A54F391B0207405917676FD670D0) | [42](#sA516A54F391B0207405917676FD670D0) |

| Part IV. | | | [44](#sbae913082641424e884fa9f84dd33f4f) |

| | Item 15. | [Exhibits, Consolidated Financial Statements and Financial Statement Schedules](#s948AECD272F13693A9F31767702555E8) | [44](#s948AECD272F13693A9F31767702555E8) |

| Signatures | | | [50](#s902DB64713230D375653176770581999) |

Expedia Group, Inc.

Form 10-K/A

For the Year Ended December 31, 2018

Part III.

10-K/A 1 a201710-ka.htm 10-K/A

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| Class | | Outstanding Shares at January 26, 2018 were approximately, |

Documents Incorporated by Reference

| Document | | Parts Into Which Incorporated |

| Portions of the definitive Proxy Statement for the 2018 Annual Meeting of Stockholders (Proxy Statement) | | Part III |

This Amendment No. 1 is being filed solely to provide a corrected version of Ernst & Young LLP's report on Internal Control over Financial Reporting included in Part II, Item 9A of the Original Filing.

The corrected Ernst & Young LLP report includes paragraph headings and a statement regarding Ernst & Young LLP's independence that were inadvertently omitted from the original report, but does not in any way change the conclusions expressed by Ernst & Young LLP in the original report, or any other disclosure included in Part II, Item 9A of the Original Filing.

For ease of reference, the entire Part II, Item 9A is included in this Amendment No. 1.

Other than with respect to the foregoing, this Amendment No. 1 does not modify or update in any way the disclosures made in the Original Filing.

Controlled Company Status

Controlled Company Status.

Expedia Group is subject to the Nasdaq Stock Market Listing Rules.

These rules exempt “controlled companies,” or companies of which more than 50% of the voting power is held by an individual, a group or another company, such as Expedia Group, from certain requirements.

Based on information provided on a Schedule 13D/A filed by Mr. Diller and Liberty Expedia Holdings, Inc. (“Liberty Expedia Holdings”), on April 16, 2019, Mr. Diller and Liberty Expedia Holdings together currently beneficially own approximately 13% of the outstanding shares of common stock (or approximately 20% assuming conversion of all shares of Class B common stock into shares of common stock) and 100% of the outstanding shares of Class B common stock and, consequently, approximately 55% of the combined voting power of the outstanding Expedia Group capital stock as of April 19, 2019.

On this basis, Expedia Group is currently relying on the exemption for controlled companies from certain Nasdaq requirements, including, among others, the requirement that a majority of the Board of Directors be composed of independent directors, the requirement that the Compensation Committee be composed solely of independent directors and certain requirements relating to the nomination of directors.

On April 16, 2019, Expedia Group announced that, on April 15, 2019, it entered into an Agreement and Plan of Merger with Liberty Expedia Holdings, LEMS I LLC, a Delaware limited liability company and a wholly owned subsidiary of Expedia Group, and LEMS II Inc., a Delaware corporation and a wholly owned subsidiary of LEMS I LLC, and certain other related agreements (the “Proposed Liberty Expedia Transaction”).

The Proposed Liberty Expedia Transaction is described in greater detail in the section below titled “Recent Developments” in Item 13, “Certain Relationships and Related Person Transactions, and Director Independence.”

Information Concerning Directors

Our Directors.

The name and certain background information regarding each of our directors, as of April 1, 2019, are set forth below.

Except as noted, there are no family relationships among directors or executive officers of Expedia Group.

Ms. Chun, Ms. Coe, and Mr. Shean were nominated by Liberty Expedia Holdings, which currently has the right to nominate three individuals for election to Expedia Group’s Board of Directors pursuant to the Amended and Restated Governance Agreement among Expedia Group, Mr. Diller, and Liberty Expedia Holdings, which is described in the section below titled “Certain Relationships and Related Person Transactions- Relationships Involving Significant Stockholders, Named Executive Officers and Directors.”

In addition to the information presented below regarding each director’s specific experience, qualifications, attributes and skill, each director has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment to Expedia Group and our Board of Directors as demonstrated by the director’s past service.

Several of our directors also have extensive management experience in complex organizations.

The terms of each of our directors will expire at the next annual meeting of stockholders.

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| Name | Age | Position With Expedia Group, Inc. |

| Barry Diller | 77 | Chairman and Senior Executive |

| Peter M. Kern | 51 | Director and Vice Chairman |

| Mark D. Okerstrom | 46 | Director and Chief Executive Officer |

| Susan C. Athey | 48 | Director |

| A. George “Skip” Battle | 75 | Director |

| Courtnee A. Chun | 44 | Director (Liberty Expedia nominee) |

| Chelsea Clinton | 39 | Director |

| Pamela L. Coe | 59 | Director (Liberty Expedia nominee) |

| Jonathan L. Dolgen | 73 | Director |

| Craig A. Jacobson | 66 | Director |

| Victor A. Kaufman | 75 | Director |

| Dara Khosrowshahi | 49 | Director |

| Christopher W. Shean | 53 | Director (Liberty Expedia nominee) |

| Alexander von Furstenberg | 49 | Director |

Barry Diller

Mr. Diller has been the Chairman of the Board and Senior Executive of Expedia Group since the completion of the Company’s spin-off from IAC/InterActiveCorp (“IAC”) on August 9, 2005 (the “IAC/Expedia Group Spin-Off”).

Mr. Diller held the positions of Chairman of the Board and Chief Executive Officer of IAC and its predecessors since August 1995 and ceased serving as Chief Executive Officer in November 2010.

Mr. Diller served as Special Advisor to TripAdvisor, Inc., an online travel company, from April 2013 through March 2017, was TripAdvisor’s Chairman of the Board and Senior Executive from December 2011, when it was spun off from the Company (the “TripAdvisor Spin-Off”) until December 2012, and served a member of its Board until April 2013.

Mr. Diller served as the non-executive Chairman of the Board of Ticketmaster Entertainment, Inc. from 2008 to 2010, when it merged with Live Nation, Inc. to form Live Nation Entertainment, Inc. Mr. Diller served as the non-executive Chairman of the Board of Live Nation Entertainment, Inc. from January 2010 to October 2010 and was a member of its Board until January 2011.

He also served as Chairman of the Board and Chief Executive Officer of QVC, Inc. from December 1992 through December 1994 and as the Chairman of the Board and Chief Executive Officer of Fox, Inc. from 1984 to 1992.

Compensation Discussion and Analysis

Overview

2018 Named Executive Officers.

This Compensation Discussion and Analysis describes Expedia Group’s executive compensation program as it relates to the following individuals who are “named executive officers” of Expedia Group for the fiscal year ended December 31, 2018:

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| Name | Position With Expedia Group, Inc. |

| Barry Diller | Chairman/Senior Executive |

| Peter M. Kern | Vice Chairman |

| Mark D. Okerstrom | President and Chief Executive Officer |

| Robert J. Dzielak | Chief Legal Officer and Secretary |

| Alan R. Pickerill | Executive Vice President, Chief Financial Officer and Treasurer |

Mr. Kern was appointed Vice Chairman of Expedia Group on June 20, 2018, succeeding Mr. Kaufman who continues to serve on our Board of Directors.

Upon his appointment, Mr. Kern resigned as a member of the Company’s Audit, Compensation and Section 16 Committees, but remained as a member of the Board of Directors and was appointed to the Executive Committee of the Board of Directors.

Prior to his appointment as Vice Chairman, Mr. Kern received standard Expedia Group non-employee director compensation as described in the section below titled “Compensation of Directors,” but ceased to receive such compensation upon his appointment as Vice Chairman.

On August 17, 2018, Mr. Kern received an initial long-term equity award in connection with his appointment as Vice Chairman, which is described in the section below titled “Other 2018 Compensation Approvals-Initial Kern Equity Award.” Mr. Kern does not receive salary or cash bonus compensation for his service as an Expedia Group executive.

Compensation Program Philosophy and Objectives

Expedia Group’s executive compensation program is designed to attract, motivate, retain and reward highly skilled executives with the business experience and acumen that we believe are necessary for achievement of Expedia Group’s long-term business objectives.

We support a pay for performance culture where employees are rewarded for individual, business and overall company success.

The executive compensation program is designed to reward short- and long-term performance and to align the financial interests of executive officers with the interests of our stockholders.

To that end, we believe that compensation packages provided to executive officers should generally include both annual cash (including performance-based bonus opportunities) and a significant longer term equity-based component.

We evaluate both performance and compensation levels to ensure that:

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| • | Expedia Group maintains its ability to attract and retain outstanding employees in executive positions; |

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| • | the compensation provided to Expedia Group’s executives remains competitive with the compensation paid to similarly situated executives at comparable companies; and |

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| • | Expedia Group’s compensation programs are applied in an internally consistent manner and fall within pre-established cash and equity compensation budgets. |

Roles of the Compensation Committee and Section 16 Committee

Expedia Group has a Compensation Committee and a Section 16 Committee that together have primary responsibility for establishing the compensation of Expedia Group’s named executive officers.

The Compensation Committee is responsible for (i) administering and overseeing Expedia Group’s executive compensation program, including salary matters, bonus plans and equity compensation plans, and (ii) approving all grants of equity awards, but excluding matters governed by Rule 16b-3 under the Exchange Act.

The Section 16 Committee is responsible for administering and overseeing matters governed by Rule 16b-3 under the Exchange Act, including approving grants of equity awards to executive officers.

The Compensation Committee is appointed by the Board of Directors and, with the exception of Ms. Coe, each member satisfies the independence requirements for Compensation Committee members under the current standards imposed by the rules of the SEC and Nasdaq.

The Section 16 Committee is also appointed by the Board of Directors and consists entirely of directors who are “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act.

For the purposes of this Compensation Discussion and Analysis, we refer to the Compensation Committee and Section 16 Committee collectively as the “Compensation Committees.”

Ms. Clinton was appointed to the Compensation Committees on June 20, 2018, replacing Mr. Kern.

Equity Compensation Plan Information

The following table summarizes information, as of December 31, 2018, relating to Expedia Group’s equity compensation plans pursuant to which grants of stock options, restricted stock, RSUs or other rights to acquire shares may be granted from time to time.

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| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (A)(1) | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($)(B) | | | Number of Securities Remaining Available for Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A))(C) | | |

| Equity compensation plans approved by security holders(2) | 17,605,009 | | 100.074 | | (3) | 8,508,042 | | (4) |

| Equity compensation plans not approved by security holders(5) | 2,372 | | — | | (6) | 97,347 | | |

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| Total | 17,607,381 | | | | | 8,605,389 | | |

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| (1) | Information excludes: (i) 95,165 securities with a weighted-average exercise price of $107.404 to be issued upon the exercise of outstanding stock options, and (ii) 75,354 securities issuable in connection with restricted stock units for which there is no related exercise price, both of which were granted pursuant to plans assumed by the Company in connection with the acquisitions of Orbitz Worldwide, Inc. and HomeAway, Inc. |

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| (2) | Information relating to the Expedia Group 2005 Plan, and the Expedia Group, Inc. Employee Stock Purchase Plans (“ESPP”). |

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| (3) | Excludes the following equity-based awards outstanding as of December 31, 2018: (i) 2,685,312 securities issuable in connection with RSUs for which there is no related exercise price; (ii) grants of 45,094 SARs with a weighted-average exercise price of $98.093; and (3) grants of 8,162 cash-settled RSUs. |

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| (4) | Information includes 7,723,671 securities remaining available for issuance under the Expedia Group 2005 Plan, and 784,371 securities remaining available for issuance under the ESPP. |

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| (5) | The Director Deferred Compensation Plan. |

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| (6) | Excludes outstanding share units for which there is no related exercise price. |

Beneficial Ownership Table

The following table presents information as of April 19, 2019 relating to the beneficial ownership of Expedia Group’s capital stock by (i) each person or entity known to the Company to own beneficially more than 5% of the outstanding shares of Expedia Group’s common stock and Class B common stock, (ii) each current director of Expedia Group, (iii) each named executive officer, and (iv) all executive officers and directors of Expedia Group, as a group.

Unless otherwise indicated, beneficial owners listed in the table may be contacted at Expedia Group’s corporate headquarters at 333 108th Avenue N.E., Bellevue, Washington 98004.

As of April 19, 2019, there were 136,007,689 and 12,799,999 shares of Expedia Group common stock and Class B common stock, respectively, outstanding.

For each beneficial owner listed, the number of shares of Expedia Group common stock and the percentage of each such class listed assumes the conversion or exercise of any Expedia Group equity securities owned by such owner that are or will become exercisable, and the vesting of any Expedia Group stock options and/or RSUs that will vest, within 60 days of April 19, 2019, but does not assume the conversion, exercise or vesting of any such equity securities owned by any other owner, nor does it include the impact of the Proposed Liberty Expedia Transaction, which is described in the section below titled “Recent Developments” in Item 13, “Certain Relationships and Related Person Transactions, and Director Independence.” Shares of Expedia Group Class B common stock may, at the option of the holder, be converted on a one-for-one basis into shares of Expedia Group common stock.

The percentage of votes for all classes of Expedia Group’s capital stock is based on one vote for each share of common stock and ten votes for each share of Class B common stock.

See “Recent Developments” in Item 13, “Certain Relationships and Related Person Transactions, and Director Independence” below for a description of the Proposed Liberty Expedia Transaction and its potential effect on the Company’s ownership structure.

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| | Common Stock | | | Class B Common Stock | | | Percent (%) of Votes (All Classes) |

| Beneficial Owner | Shares | | % | Shares | | % | |

Review and Approval or Ratification of Related Person Transactions

In general, the Company will enter into or ratify a “related person transaction” only when, pursuant to the Audit Committee Charter, it has been approved by the Audit Committee of the Board of Directors.

Related persons include the Company’s executive officers, directors, 5% or more beneficial owners of our common stock, immediate family members of these persons and entities in which one of these persons has a direct or indirect material interest.

Related person transactions are transactions that meet the minimum threshold for disclosure in the proxy statement under the relevant SEC rules (generally, transactions involving amounts exceeding $120,000 in which a related person or entity has a direct or indirect material interest).

While we have no written policy, when a potential related person transaction is identified, management presents it to the Audit Committee to determine whether to approve or ratify.

When determining whether to approve, ratify, disapprove or reject any related person transaction, the Audit Committee considers all relevant factors, including the extent of the related person’s interest in the transaction, whether the terms are commercially reasonable and whether the related person transaction is consistent with the best interests of the Company and its stockholders.

The legal and accounting departments work with business units throughout the Company to identify potential related person transactions prior to execution.

In addition, the Company takes the following steps with regard to related person transactions:

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| • | On an annual basis, each director, director nominee and executive officer of the Company completes a Director and Officer Questionnaire that requires disclosure of any transaction, arrangement or relationship with the Company during the last fiscal year in which the director or executive officer, or any member of his or her immediate family, had a direct or indirect material interest. |

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| • | Each director, director nominee and executive officer is expected to promptly notify the Company’s legal department of any direct or indirect interest that such person or an immediate family member of such person had, has or may have in a transaction in which the Company participates. |

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| • | The Company performs a quarterly search of its accounts payable, accounts receivable and other databases to identify any other potential related person transactions that may require disclosure. |

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| • | Any reported transaction that the Company’s legal department determines may qualify as a related person transaction is referred to the Audit Committee. |

If any related person transaction is not approved, the Audit Committee may take such action as it may deem necessary or desirable in the best interests of the Company and its stockholders.

Relationships Involving Significant Stockholders, Named Executive Officers and Directors

Relationships Involving Mr. Diller

Expedia Group.

Mr. Diller is the Chairman and Senior Executive of Expedia Group.

Subject to the terms of an Amended and Restated Stockholders Agreement between Liberty Expedia Holdings and Mr. Diller, as amended as of November 4, 2016 (the “Stockholders Agreement”), Mr. Diller generally has the right to vote shares of Expedia Group common stock and Class B common stock beneficially owned by Liberty Expedia Holdings (the “Diller Proxy”), which proxy had been assigned by Mr. Diller to Liberty Expedia Holdings as described below.

On November 4, 2016, Qurate redeemed a portion of the outstanding shares of its Liberty Ventures common stock in exchange for all of the outstanding shares of Liberty Expedia Holdings, which at that time was a wholly owned subsidiary of Qurate (the “Liberty Split-Off”).

At the time of the Liberty Split-Off, Liberty Expedia Holdings’ assets included all of Qurate’s interest in Expedia Group.

Pursuant to a Transaction Agreement among Mr. Diller, Qurate, Liberty Expedia Holdings, John C.

Malone and Leslie Malone, dated as of March 24, 2016 and amended and restated effective as of September 22, 2016, at the time of the Liberty Split-Off, for a period ending not later than May 4, 2018 (the “Outside Date”), (i) Mr. Diller assigned the Diller Proxy to Liberty Expedia Holdings (the “Diller Assignment”) and (ii) Mr. and Mrs. Malone granted Mr. Diller an irrevocable proxy to vote all shares of Liberty Expedia Holdings Series A common stock and Series B common stock beneficially owned by them upon completion of the Liberty Split-Off or thereafter (the “Malone Proxy”), in each case, subject to certain limitations.

On March 6, 2018, Liberty Expedia Holdings, Qurate, Mr. Malone, Mrs. Malone and Mr. Diller entered into a letter agreement, which amended the termination provisions of the Transaction Agreement to extend the Outside Date to May 4, 2019.

As a result, by virtue of the voting power associated with the Malone Proxy, the governance structure at Liberty Expedia Holdings and Mr. Diller’s continuing position as Chairman of Expedia Group’s Board of Directors, as of December 31, 2018 Mr. Diller was able to elect the directors of Liberty Expedia Holdings having the power to determine how Liberty Expedia Holdings exercised certain rights and voted the shares of Expedia Group common stock and Class B common stock beneficially owned by Liberty Expedia Holdings, and which Liberty Expedia Holdings as of December 31, 2018 had the power to vote, in the election of Expedia Group directors until the termination or expiration of the Diller Assignment and Malone Proxy.

See “Recent Developments” below for a description the Proposed Liberty Expedia Transaction.

Relationships Involving Expedia Group and Liberty Expedia Holdings

Governance Agreement.

Qurate was a party to an Amended and Restated Governance Agreement with Expedia Group and Mr. Diller, dated December 20, 2011, which was assigned by Qurate to Liberty Expedia Holdings in connection with the Liberty Split\-Off (the “Governance Agreement”).

Under the Governance Agreement, Liberty Expedia Holdings has the right to nominate up to a number of directors equal to 20% of the total number of the directors on the Board (rounded up to the next whole number if the number of directors on the Board is not an even multiple of five) and has certain rights regarding committee participation, so long as certain stock ownership requirements applicable to Liberty Expedia Holdings are satisfied.

The Governance Agreement also provides that if Expedia Group issues or proposes to issue shares of Expedia Group common stock or Expedia Group Class B common stock, Liberty Expedia Holdings has preemptive rights that generally entitle it to purchase a number of shares, subject to a cap, so that Liberty Expedia Holdings will maintain the same ownership interest in Expedia Group that Liberty Expedia Holdings held immediately prior to such issuance or proposed issuance.

Pursuant to Liberty Expedia Holding’s Governance Agreement preemptive rights, Expedia Group issued 269,646 shares of Expedia Group common stock to Liberty Expedia Holdings on September 17, 2018, at a price per share of $113.32 and an aggregate purchase price of approximately $31 million.

See “Recent Developments” below for a description the Proposed Liberty Expedia Transaction.

Audit Committee Report

The Audit Committee reviews the Company’s financial reporting process on behalf of the Board of Directors.

Management has the primary responsibility for the financial statements, the public reporting process and establishing and maintaining an effective system of internal control over financial reporting.

The Company’s independent registered public accounting firm is engaged to audit and express opinions on the conformity of the Company’s financial statements to generally accepted accounting principles and applicable rules and regulations, and the effectiveness of the Company’s internal control over financial reporting.

In this context, the Audit Committee has reviewed and discussed the audited consolidated financial statements and related footnotes for the year ended December 31, 2018, together with the results of the assessment of the internal control over financial reporting, with management and Ernst & Young LLP.

The Audit Committee has discussed with Ernst & Young LLP the matters that are required to be discussed under Public Company Accounting Oversight Board (PCAOB) standards.

In addition, the Audit Committee has received the written disclosures and the letter from Ernst & Young LLP as required by PCAOB rules, and has discussed with Ernst & Young LLP, their independence from the Company and its management.

Finally, the Audit Committee has considered Ernst & Young LLP’s provision of audit and non-audit services to the Company and concluded that the provision of such services is compatible with Ernst & Young LLP’s independence.

Relying on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the fiscal year ended December 31, 2018 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for filing with the SEC.

Members of the Audit Committee:

A.

George “Skip” Battle (Chairman)

Craig A.

Jacobson

Fees Paid to Our Independent Registered Public Accounting Firm

The following table sets forth aggregate fees for professional services rendered by Ernst & Young LLP for the years ended December 31, 2018 and 2017.

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| | 2018 | | | | 2017 | | |

| Audit Fees(1) | $ | 13,858,000 | | | $ | 15,469,000 | |

| Audit-Related Fees(2) | 429,000 | | | | 1,108,000 | | |

| Total Audit and Audit-Related Fees | 14,287,000 | | | | 16,577,000 | | |

| Tax Fees(3) | 289,000 | | | | 97,000 | | |

| Other Fees(4) | 30,000 | | | | 44,000 | | |

| Total Fees | $ | 14,606,000 | | | $ | 16,718,000 | |

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| (1) | In 2018, Audit Fees include fees and expenses associated with the annual audit of the Company’s consolidated financial statements and internal control over financial reporting, statutory audits, reviews of the Company’s periodic reports, accounting consultations, reviews of SEC registration statements and consents and other services related to SEC matters. 2018 Audit Fees include $3,244,000 in fees and expenses paid by trivago N.V., a Nasdaq-listed majority-owned subsidiary of the Company, associated with financial statement audit and review services provided to trivago. In addition, 2017 Audit Fees include $4,962,000 in fees and expenses associated with financial statement audit and review services provided to trivago. |

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| (2) | Audit-Related Fees include fees and expenses for due diligence in connection with acquisitions, and related accounting consultations. |

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| (3) | In 2018, Tax Fees include $3,500 of trivago related fees. |

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| (4) | Other Fees include fees and expenses for professional education offerings to the Company’s employees, as well as access to Ernst & Young LLP’s online research tools. |

Audit Committee Review and Pre-Approval of Independent Registered Public Accounting Firm Fees

The Audit Committee has considered the audit and non-audit services provided by Ernst & Young LLP as described

| Exhibit No. | | | | Filed Herewith | [added: | Incorporated by Reference | | | | | | |]

| [removed: 23.1] [added: 23.1+] | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/1324424/000132442418000008/q4201710kaex-231.htm)] [added: Firm](http://www.sec.gov/Archives/edgar/data/1324424/000132442419000006/q42018ex-231.htm)] | | [removed: X] | [added: | | | | | | | |]

| [removed: 31.1] [added: 31.1+] | | [Certifications of the Chairman and Senior Executive Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1324424/000132442418000008/q4201710kaex-311.htm)] [added: 2002](http://www.sec.gov/Archives/edgar/data/1324424/000132442419000006/q42018ex-311.htm)] | | [removed: X] | [added: | | | | | | | |]

| [removed: 31.2] [added: 31.2+] | | [Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1324424/000132442418000008/q4201710kaex312.htm)] [added: 2002](http://www.sec.gov/Archives/edgar/data/1324424/000132442419000006/q42018ex-312.htm)] | | [removed: X] | [added: | | | | | | | |]

| [removed: 31.3] [added: 31.3+] | | [Certification of the Chief Financial Officer [removed: Pursuant to] [added: pursuant] Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1324424/000132442418000008/q4201710kaex-313.htm)] [added: 2002](http://www.sec.gov/Archives/edgar/data/1324424/000132442419000006/q42018ex-313.htm)] | | [removed: X] | [added: | | | | | | | |]

| [removed: 32.1*] [added: 32.1+] | | [Certification of the Chairman and Senior Executive [removed: Pursuant to] [added: pursuant] Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1324424/000132442418000008/q4201710kaex-321.htm)] [added: 2002](http://www.sec.gov/Archives/edgar/data/1324424/000132442419000006/q42018ex-321.htm)] | | | [added: | | | | | | | |]

| [removed: 32.2*] [added: 32.2+] | | [Certification of the Chief Executive Officer [removed: Pursuant to] [added: pursuant] Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1324424/000132442418000008/q4201710kaex-322.htm)] [added: 2002](http://www.sec.gov/Archives/edgar/data/1324424/000132442419000006/q42018ex-322.htm)] | | | [added: | | | | | | | |]

| [removed: 32.3*] [added: 32.3+] | | [Certification of the Chief Financial Officer [removed: Pursuant to] [added: pursuant] Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1324424/000132442418000008/q4201710kaex-323.htm)] [added: 2002](http://www.sec.gov/Archives/edgar/data/1324424/000132442419000006/q42018ex-323.htm)] | | | [added: | | | | | | | |]

(a)(1) and (a)(2): No financial statements or schedules are filed with this report on Form 10-K/A.

(a)(3) Exhibits:

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| Exhibit Description | | Form | | SEC File No. | | Exhibit | | Filing Date | | | | |

| 1.1 | | [Underwriting Agreement, dated Expedia, Inc., as Issuer, the Guarantors party thereto, and BNP Paribas, Goldman, Sachs & Co., J.P. Morgan Securities plc, as Representatives of the several Underwriters (relating to the Fourth Supplemental Indenture on Exhibit 4.6)](http://www.sec.gov/Archives/edgar/data/1324424/000119312515211303/d935936dex11.htm) | | | | 8-K | | 000-51447 | | 1.1 | | 6/3/2015 |

| 2.1 | | [Share Purchase Agreement, dated as of December 21, 2012, by and among Expedia, Inc., trivago GmbH, a wholly owned subsidiary of Expedia and the shareholders of trivago GmbH party thereto.](http://www.sec.gov/Archives/edgar/data/1324424/000119312512511867/d455840dex21.htm) | | | | 8-K | | 000-51447 | | 2.1 | | 12/21/2012 |

| 2.2 | | [Shareholders Agreement, dated as of December 21, 2012 by and among trivago GmbH, Expedia, Inc., a wholly owned subsidiary of Expedia and certain shareholders of trivago GmbH.](http://www.sec.gov/Archives/edgar/data/1324424/000119312512511867/d455840dex22.htm) | | | | 8-K | | 000-51447 | | 2.2 | | 12/21/2012 |

| 2.3 | | [Purchase and Sale Agreement (Cruise), dated March 10, 2015, by and between Immunex Corporation and Cruise, LLC](http://www.sec.gov/Archives/edgar/data/1324424/000119312515117407/d898503dex101.htm) | | | | 8-K | | 000-51447 | | 10.1 | | 4/2/2015 |

| 2.4 | | [First Amendment to Purchase and Sale, dated March 25, 2015, by and between Immunex Corporation and Cruise, LLC](http://www.sec.gov/Archives/edgar/data/1324424/000119312515117407/d898503dex102.htm) | | | | 8-K | | 000-51447 | | 10.2 | | 4/2/2015 |

| 2.5 | | [Share Purchase Agreement, dated May 22, 2015, by and among Expedia, Inc., Expedia Asia Pacific - Alpha Limited, Ctrip.com International, Ltd., C-Travel International Limited, Luxuriant Holdings Limited, Keystone Lodging Holdings Limited and Plateno Group Limited](http://www.sec.gov/Archives/edgar/data/1324424/000119312515197866/d930244dex21.htm) | | | | 8-K | | 000-51447 | | 2.1 | | 5/22/2015 |

| 3.1 | | [Restated Certificate of Incorporation of Expedia Group, Inc.](http://www.sec.gov/Archives/edgar/data/1324424/000132442418000013/expediagrouprestatedcertif.htm) | | | | 8-K | | 001-37429 | | 3.2 | | 3/27/2018 |

| 3.2 | | [Expedia Group, Inc. General By-Laws Amended and Restated as of April 15, 2019](http://www.sec.gov/Archives/edgar/data/1324424/000114036119007135/nc10001047x1_ex3-1.htm) | | | | 8-K | | 001-37429 | | 3.1 | | 04/16/2019 |

| 4.1 | | [Indenture, dated as of August 5, 2010, among Expedia, Inc., as Issuer, the Subsidiary Guarantors from time to time parties thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing Expedia, Inc.’s 5.95% Senior Notes due 2020](http://www.sec.gov/Archives/edgar/data/1324424/000119312510184947/dex41.htm) | | | | 8-K | | 000-51447 | | 4.1 | | 8/10/2010 |

| 4.2 | | [Ninth Supplemental Indenture, dated as of September 30, 2016, among Expedia, Inc., as Issuer, the Subsidiary Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee](http://www.sec.gov/Archives/edgar/data/1324424/000119312516728698/d151013dex41.htm) | | | | 8-K | | 001-37429 | | 4.1 | | 10/3/2016 |

| 4.3 | | [Indenture, dated as of August 13, 2014, among Expedia, Inc., as Issuer, the Subsidiary Guarantors from time to time parties thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee](http://www.sec.gov/Archives/edgar/data/1324424/000119312514313459/d776332dex41.htm) | | | | 8-K | | 000-51447 | | 4.1 | | 8/18/2014 |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| 4.4 | | [First Supplemental Indenture, dated as of August 18, 2014, among Expedia, Inc., the Subsidiary Guarantors party thereto and The Bank of New York Trust Company, N.A., as Trustee, governing Expedia, Inc.’s 4.500% Senior Notes due 2024](http://www.sec.gov/Archives/edgar/data/1324424/000119312514313459/d776332dex42.htm) | | | | 8-K | | 000-51447 | | 4.2 | | 8/18/2014 |

| 4.5 | | [Fourth Supplemental Indenture, dated as of June 3, 2015, among Expedia, Inc., as Issuer, the Subsidiary Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing Expedia, Inc.’s 2.500% Senior Notes due 2022](http://www.sec.gov/Archives/edgar/data/1324424/000119312515211303/d935936dex42.htm) | | | | 8-K | | 000-51447 | | 4.2 | | 6/3/2015 |

| 4.6 | | [Indenture, dated as of December 8, 2015, among Expedia, Inc., as Issuer, the Subsidiary Guarantors from time to time parties thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing Expedia, Inc.’s 5.000% Senior Notes due 2026](http://www.sec.gov/Archives/edgar/data/1324424/000119312515397400/d103545dex41.htm) | | | | 8-K | | 001-37429 | | 4.1 | | 12/8/2015 |

| 4.7 | | [Indenture, dated as of September 21, 2017, among Expedia, Inc., the guarantors party thereto and U.S. Bank National Association](http://www.sec.gov/Archives/edgar/data/1324424/000132442417000055/ex41_2017offeringxindenture.htm) | | | | 8-K | | 001-37429 | | 4.1 | | 9/21/2017 |

| 10.1 | | [Amended and Restated Governance Agreement among Expedia, Inc., Liberty Interactive Corporation and Barry Diller, dated as of December 20, 2011](http://www.sec.gov/Archives/edgar/data/1324424/000119312511352242/d270711dex101.htm) | | | | 8-K | | 000-51447 | | 10.1 | | 12/27/2011 |

| 10.2 | | [Assignment and Assumption of Governance Agreement, among Liberty Expedia holdings, Inc., LEXE Marginco, LLC, LEXEB, LLC, Liberty Interactive Corporation, Barry Diller and Expedia, Inc., dated as of November 4, 2016](http://www.sec.gov/Archives/edgar/data/1669600/000110465916155210/a16-21198_1ex10d6.htm) | | | | 8-K*† | | 001-37938 | | 10.6 | | 11/7/2016 |

| 10.3 | | [Amended and Restated Stockholders Agreement between Liberty Interactive Corporation and Barry Diller, dated as of December 20, 2011](http://www.sec.gov/Archives/edgar/data/1324424/000119312512050009/d269044dex1011.htm) | | | | 10-K | | 000-51447 | | 10.11 | | 2/10/2012 |

| 10.4 | | [Assignment and Assumption of Stockholders Agreement, by and among Liberty Expedia Holdings, Inc., Liberty Interactive Corporation and Barry Diller, dated November 4, 2016](http://www.sec.gov/Archives/edgar/data/1669600/000110465916155210/a16-21198_1ex10d7.htm) | | | | 8-K*† | | 001-37938 | | 10.7 | | 11/7/2016 |

| 10.5 | | [Amendment No. 1 to Stockholders Agreement, by and between Liberty Expedia Holdings, Inc. and Barry Diller, dated November 4, 2016](http://www.sec.gov/Archives/edgar/data/1669600/000110465916155210/a16-21198_1ex10d8.htm) | | | | 8-K*† | | 001-37938 | | 10.8 | | 11/7/2016 |

| 10.6 | | [Letter Agreement, dated as of March 6, 2018, by and among Liberty Expedia Holdings, Inc., Liberty Interactive Corporation, Barry Diller, John C. Malone and Leslie Malone.](http://www.sec.gov/Archives/edgar/data/1669600/000110465918015325/a18-7693_1ex10d1.htm#Exhibit10_1_104430) | | | | 8-K*† | | 001-37938 | | 10.1 | | 3/7/2018 |

| 10.7 | | [Amended and Restated Transaction Agreement, by and among Liberty Interactive Corporation, Liberty Expedia Holdings, Inc., Barry Diller, John C. Malone and Leslie Malone, dated as of September 22, 2016](http://www.sec.gov/Archives/edgar/data/1669600/000104746916015637/a2229713zex-10_13.htm) | | | | S-4/A*† | | 333-210377 | | 10.13 | | 9/23/2016 |

| 10.8 | | [Assignment Agreement, by and between Barry Diller and Liberty Expedia Holdings, Inc., dated November 4, 2016](http://www.sec.gov/Archives/edgar/data/1669600/000110465916155210/a16-21198_1ex10d10.htm) | | | | 8-K*† | | 001-37938 | | 10.10 | | 11/7/2016 |

| 10.9 | | [Tax Sharing Agreement by and between Expedia, Inc. and TripAdvisor, Inc., dated as of December 20, 2011](http://www.sec.gov/Archives/edgar/data/1324424/000119312511352242/d270711dex102.htm) | | | | 8-K | | 000-51447 | | 10.2 | | 12/27/2011 |

| 10.10 | | [Services Agreement by and between HomeAway.com, Inc. and Keystone Strategy LLC, dated April 1, 2017](http://www.sec.gov/Archives/edgar/data/1324424/000132442417000039/ex101-q22017.htm) | | | | 10-Q | | 001-37429 | | 10.1 | | 7/28/2017 |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| 10.11 | | [Amended and Restated Credit Agreement dated as of September 5, 2014, among Expedia, Inc., a Delaware corporation, Expedia, Inc., a Washington corporation, Travelscape, LLC, a Nevada limited liability company; Hotwire, Inc., a Delaware corporation, the Lenders party hereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and J.P. Morgan Europe Limited, as London Agent](http://www.sec.gov/Archives/edgar/data/1324424/000119312514339211/d787631dex101.htm) | | | | 8-K | | 000-51447 | | 10.1 | | 9/11/2014 |

| 10.12 | | [First Amendment, dated as of February 4, 2016, among Expedia, Inc., a Delaware corporation, Expedia, Inc., a Washington corporation, Travelscape, LLC, a Nevada limited liability company, Hotwire, Inc., a Delaware corporation, the lenders and issuing banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and J.P. Morgan Europe Limited, as London Agent](http://www.sec.gov/Archives/edgar/data/1324424/000119312516452998/d132562dex101.htm) | | | | 8-K | | 001-37429 | | 10.1 | | 2/8/2016 |

| 10.13 | | [Second Amendment, dated as December 22, 2016, among Expedia, Inc., a Delaware corporation, Expedia, Inc., a Washington corporation, Travelscape, LLC, a Nevada limited liability company, Hotwire, Inc., a Delaware corporation, the other Borrowing Subsidiaries from time to time party thereto, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and J.P. Morgan Europe Limited, as London Agent](http://www.sec.gov/Archives/edgar/data/1324424/000132442417000006/ex-1014.htm) | | | | 10-K | | 001-37429 | | 10.14 | | 2/10/2017 |

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| Exhibit Description | | | | |

| * | | Furnished herewith | | |

| | Expedia, Inc. | |

February 14, 2018

Changes in Internal Control over Financial Reporting.

There were no changes to our internal control over financial reporting that occurred during the quarter ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, including our Chairman and Senior Executive, Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act).

Based upon that evaluation, our Chairman and Senior Executive, Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Management’s Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act.

Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria for effective control over financial reporting described in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, management has concluded that, as of December 31, 2017, the Company’s internal control over financial reporting was effective.

Management has reviewed its assessment with the Audit Committee.

Ernst & Young, LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2017, as stated in their report which is included below.

Limitations on Controls.

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud.

Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met.

Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Expedia, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Expedia, Inc.’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Expedia, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2017 and the related notes of the Company and our report dated February 8, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/Ernst & Young LLP

Seattle, Washington

February 8, 2018