Item 16. Form 10-K Summary

Not applicable.

Signatures

Pursuant to the requirements of the Section 13 or 15(d) Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Expedia Group, Inc.
			By:			/s/ PETER KERN
						Peter Kern Chief Executive Officer and Vice Chairman

February 8, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 8, 2024.

Signature						Title
/s/ PETER KERN						Chief Executive Officer, Vice Chairman and Director
Peter Kern						(Principal Executive Officer)
/s/ JULIE WHALEN						Chief Financial Officer and Director
Julie Whalen						(Principal Financial Officer)
/s/ LANCE SOLIDAY						Senior Vice President, Chief Accounting
Lance Soliday						Officer and Controller
						(Principal Accounting Officer)
/s/ BARRY DILLER						Chairman of the Board, Senior Executive and Director
Barry Diller
/s/ BEVERLY ANDERSON						Director
Beverly Anderson
/s/ MOINA BANERJEE						Director
Moina Banerjee
/s/ CHELSEA CLINTON						Director
Chelsea Clinton
/s/ HENRIQUE DUBUGRAS						Director
Henrique Dubugras
/s/ CRAIG JACOBSON						Director
Craig Jacobson
/s/ DARA KHOSROWSHAHI						Director
Dara Khosrowshahi
/s/ PATRICIA MENENDEZ CAMBO						Director
Patricia Menendez Cambo
/s/ ALEX VON FURSTENBERG						Director
Alex von Furstenberg
/s/ ALEXANDR WANG						Director
Alexandr Wang

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS

Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42**)**			F- 2
Consolidated Statements of Operations			F- 4
Consolidated Statements of Comprehensive Income			F- 5
Consolidated Balance Sheets			F- 6
Consolidated Statements of Changes in Stockholders’ Equity			F- 7
Consolidated Statements of Cash Flows			F- 8
Notes to Consolidated Financial Statements			F- 9

F- 1

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Expedia Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Expedia Group, Inc. (the Company) as of December 31, 2023 and 2022, 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, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 8, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

						Loyalty Programs
Description of the Matter						As discussed in Note 2 of the financial statements, travelers enrolled in the One Key, Expedia Rewards and Hotels.com Rewards loyalty programs (collectively “loyalty programs”) earn rewards with each eligible booking made which can be redeemed for free or discounted future bookings. Member consideration is allocated between travel services and rewards earned in the loyalty programs. The Company defers the relative standalone selling price of earned rewards, net of rewards not expected to be redeemed (known as “breakage”), as deferred loyalty rewards within deferred merchant bookings on the consolidated balance sheet. To estimate the relative standalone selling price for rewards, the Company considers the stated redemption value per reward dictated by the terms of the loyalty programs and then estimates the future breakage of rewards based on statistical modeling techniques using historical member activity. The deferred loyalty rewards balance, net of amounts paid to the travel suppler, is recognized as revenue when the travel service purchased with the loyalty reward is satisfied.

F- 2

						Auditing the Company’s deferred loyalty rewards balance is especially complex and judgmental due to significant measurement uncertainty in determining the expected future breakage of rewards. Management uses statistical modeling techniques to estimate future breakage based on historical member activity. The amount of member consideration allocated to the rewards earned is sensitive to the expected future breakage assumption. The introduction of new programs, changes in loyalty program terms or the method, or manner in which rewards can be redeemed by members can change member behavior which increases the measurement uncertainty as historical member activity may not be indicative of future behavior.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over Management’s review of the statistical modeling techniques and resulting breakage estimates. We also tested controls over the completeness and accuracy of member activity data used in the breakage estimate analyses. This included controls over the Company’s systems and the application controls involved in the process to track loyalty reward member activity. To test the deferred loyalty rewards balance, we performed audit procedures that included, among others, involving our actuarial specialists to assist us in assessing the methods used by Management and to develop an independent actuarial estimate of a reasonable range of breakage rates. We then compared this reasonable range of breakage rates to the Company’s estimates. Additionally, we tested the completeness and accuracy of the member activity data used by our actuarial specialists in their breakage analyses.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2004.

Seattle, Washington

February 8, 2024

F- 3

Consolidated Financial Statements

EXPEDIA GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

			Year ended December 31,
			2023						2022						2021
			(In millions, except for per share data)
Revenue			$	12,839					$	11,667					$	8,598
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below) (1)			1,573						1,657						1,522
Selling and marketing - direct			6,107						5,428						3,499
Selling and marketing - indirect (1)			756						672						722
Technology and content (1)			1,358						1,181						1,074
General and administrative (1)			771						748						705
Depreciation and amortization			807						792						814
Impairment of goodwill			297						—						14
Intangible and other long-term asset impairment			129						81						6
Legal reserves, occupancy tax and other			8						23						1
Restructuring and related reorganization charges			—						—						55
Operating income			1,033						1,085						186
Other income (expense):
Interest income			207						60						9
Interest expense			(245)						(277)						(351)
Gain (loss) on debt extinguishment, net			—						49						(280)
Gain on sale of business, net			25						6						456
Other, net			(2)						(385)						(58)
Total other expense, net			(15)						(547)						(224)
Income (loss) before income taxes			1,018						538						(38)
Provision for income taxes			(330)						(195)						53
Net income			688						343						15
Net (income) loss attributable to non-controlling interests			109						9						(3)
Net income attributable to Expedia Group, Inc.			797						352						12
Preferred stock dividend			—						—						(67)
Loss on redemption of preferred stock			—						—						(214)
Net income (loss) attributable to Expedia Group, Inc. common stockholders			$	797					$	352					$	(269)
Earnings (loss) per share attributable to Expedia Group, Inc. available to common stockholders:
Basic			$	5.50					$	2.24					$	(1.80)
Diluted			5.31						2.17						(1.80)
Shares used in computing earnings (loss) per share (000's):
Basic			144,967						156,672						149,734
Diluted			150,228						161,751						149,734

---

(1) Includes stock-based compensation as follows:
Cost of revenue			$	14					$	14					$	22
Selling and marketing			79						67						96
Technology and content			138						111						117
General and administrative			182						182						183

See notes to consolidated financial statements.

F- 4

EXPEDIA GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

			Year ended December 31,
			2023						2022						2021
			(In millions)
Net income			$	688					$	343					$	15
Other comprehensive income (loss), net of tax
Currency translation adjustments, net of taxes			27						(106)						(72)
Net reclassification of foreign currency translation adjustments into total other expenses, net			—						—						74
Other comprehensive income (loss), net of tax			27						(106)						2
Comprehensive income			715						237						17
Less: Comprehensive loss attributable to non-controlling interests			(107)						(30)						(24)
Less: Preferred stock dividend			—						—						67
Less: Loss on redemption of preferred stock			—						—						214
Comprehensive income (loss) attributable to Expedia Group, Inc. common stockholders			$	822					$	267					$	(240)

See notes to consolidated financial statements.

F- 5

EXPEDIA GROUP, INC.

CONSOLIDATED BALANCE SHEETS

			December 31,
			2023						2022
			(In millions, except per share data)
ASSETS
Current assets:
Cash and cash equivalents			$	4,225					$	4,096
Restricted cash and cash equivalents			1,436						1,755
Short-term investments			28						48
Accounts receivable, net of allowance of $46 and $40			2,786						2,078
Income taxes receivable			47						40
Prepaid expenses and other current assets			708						774
Total current assets			9,230						8,791
Property and equipment, net			2,359						2,210
Operating lease right-of-use assets			357						363
Long-term investments and other assets			1,238						1,184
Deferred income taxes			586						661
Intangible assets, net			1,023						1,209
Goodwill			6,849						7,143
TOTAL ASSETS			$	21,642					$	21,561
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, merchant			$	2,041					$	1,709
Accounts payable, other			1,077						947
Deferred merchant bookings			7,723						7,151
Deferred revenue			164						163
Income taxes payable			26						21
Accrued expenses and other current liabilities			752						787
Total current liabilities			11,783						10,778
Long-term debt, excluding current maturities			6,253						6,240
Deferred income taxes			33						52
Operating lease liabilities			314						312
Other long-term liabilities			473						451
Commitments and contingencies
Stockholders’ equity:
Common stock $.0001 par value, Authorized shares: 1,600,000			—						—
Shares issued: 282,149 and 278,264; Shares outstanding: 131,522 and 147,757
Class B common stock $.0001 par value, Authorized shares: 400,000			—						—
Shares issued: 12,800 and 12,800; Shares outstanding: 5,523 and 5,523
Additional paid-in capital			15,398						14,795
Treasury stock — Common stock and Class B, at cost, Shares: 157,903 and 137,783			(13,023)						(10,869)
Retained earnings (deficit)			(632)						(1,409)
Accumulated other comprehensive income (loss)			(209)						(234)
Total Expedia Group, Inc. stockholders’ equity			1,534						2,283
Non-redeemable non-controlling interest			1,252						1,445
Total stockholders’ equity			2,786						3,728
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	21,642					$	21,561

See notes to consolidated financial statements.

F- 6

EXPEDIA GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In millions, except share and per share data)

						Common stock												Class B common stock												Additional paid-in capital						Treasury stock - Common and Class B												Retained earnings (deficit)						Accumulated other comprehensive income (loss)						Non-redeemable non-controlling interest						Total
						Shares						Amount						Shares						Amount						Shares						Amount
Balance as of December 31, 2020						261,563,912						$	—					12,799,999						$	—					$	13,566					130,766,537						$	(10,097)					$	(1,781)					$	(178)					$	1,494					$	3,004
Net income																																																12												3						15
Other comprehensive income (loss), net of taxes																																																						29						(27)						2
Payment of preferred dividends (declared at $74.96 per share)																														(67)																																				(67)
Proceeds from exercise of equity instruments and employee stock purchase plans						8,031,432						—																		503																																				503
Exercise of common stock warrants						5,065,381						—																																																						—
Loss on redemption of preferred stock																														(214)																																				(214)
Withholding taxes for stock options																														(20)																																				(20)
Treasury stock activity related to vesting of equity instruments																																				1,046,227						(165)																								(165)
Adjustment to the fair value of redeemable non-controlling interests																																																8																		8
Other changes in ownership of non-controlling interests																														(4)																														25						21
Stock-based compensation expense																														465																																				465
Balance as of December 31, 2021						274,660,725						$	—					12,799,999						$	—					$	14,229					131,812,764						$	(10,262)					$	(1,761)					$	(149)					$	1,495					$	3,552
Net income (loss)																																																352												(9)						343
Other comprehensive income (loss), net of taxes																																																						(85)						(21)						(106)
Proceeds from exercise of equity instruments and employee stock purchase plans						3,603,510						—																		131																																				131
Treasury stock activity related to vesting of equity instruments																																				768,173						(107)																								(107)
Common stock repurchases																																				5,202,492						(500)																								(500)
Other changes in ownership of non-controlling interests																														24																														(20)						4
Stock-based compensation expense																														411																																				411
Balance as of December 31, 2022						278,264,235						$	—					12,799,999						$	—					$	14,795					137,783,429						$	(10,869)					$	(1,409)					$	(234)					$	1,445					$	3,728
Net income (loss)																																																797												(109)						688
Other comprehensive income, net of taxes																																																						25						2						27
Proceeds from exercise of equity instruments and employee stock purchase plans						3,884,341						—																		101																																				101
Withholding taxes for stock options																														(7)																																				(7)
Treasury stock activity related to vesting of equity instruments																																				973,946						(106)																								(106)
Common stock repurchases																																				19,145,610						(2,031)																								(2,031)
Other changes in ownership of non-controlling interests																														16																														(86)						(70)
Stock-based compensation expense																														474																																				474
Other																														19						—						(17)						(20)																		(18)
Balance as of December 31, 2023						282,148,576						$	—					12,799,999						$	—					$	15,398					157,902,985						$	(13,023)					$	(632)					$	(209)					$	1,252					$	2,786

See notes to consolidated financial statements.

F- 7

EXPEDIA GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Year ended December 31,
			2023						2022						2021
			(In millions)
Operating activities:
Net income			$	688					$	343					$	15
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment, including internal-use software and website development			748						704						715
Amortization of stock-based compensation			413						374						418
Amortization of intangible assets			59						88						99
Impairment of goodwill, intangible and other long-term assets			426						81						20
Deferred income taxes			62						70						(145)
Foreign exchange (gain) loss on cash, restricted cash and short-term investments, net			(16)						128						105
Realized loss on foreign currency forwards, net			—						78						16
(Gain) loss on minority equity investments, net			(16)						345						29
(Gain) loss on debt extinguishment, net			—						(49)						280
Gain on sale of business, net			(25)						(6)						(456)
Other			80						23						32
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable			(741)						(838)						(721)
Prepaid expenses and other assets			98						55						(224)
Accounts payable, merchant			332						375						777
Accounts payable, other, accrued expenses and other liabilities			101						194						136
Tax payable/receivable, net			(91)						11						10
Deferred merchant bookings			572						1,464						2,642
Net cash provided by operating activities			2,690						3,440						3,748
Investing activities:
Capital expenditures, including internal-use software and website development			(846)						(662)						(673)
Purchases of investments			(28)						(60)						(201)
Sales and maturities of investments			49						205						23
Cash and restricted cash divested from sale of business, net of proceeds			25						4						(60)
Proceeds from initial exchange of cross-currency interest rate swaps			—						337						—
Payments for initial exchange of cross-currency interest rate swaps			—						(337)						—
Other, net			—						(67)						(20)
Net cash used in investing activities			(800)						(580)						(931)
Financing activities:
Proceeds from issuance of long-term debt, net of issuance costs			—						—						1,964
Payment of long-term debt			—						(2,141)						(1,706)
Debt extinguishment costs			—						(22)						(258)
Redemption of preferred stock			—						—						(1,236)
Purchases of treasury stock			(2,137)						(607)						(165)
Payment of dividends to preferred stockholders			—						—						(67)
Proceeds from exercise of equity awards and employee stock purchase plan			101						131						503
Other, net			(60)						15						(8)
Net cash used in financing activities			(2,096)						(2,624)						(973)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents			16						(190)						(177)
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents			(190)						46						1,667
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year			5,851						5,805						4,138
Cash, cash equivalents and restricted cash and cash equivalents at end of year			$	5,661					$	5,851					$	5,805
Supplemental cash flow information
Cash paid for interest			$	231					$	291					$	342
Income tax payments, net			281						102						74

See notes to consolidated financial statements.

F- 8

Expedia Group, Inc.

Notes to Consolidated Financial Statements

NOTE 1 — Organization and Basis of Presentation

Description of Business

Expedia Group, Inc. and its subsidiaries provide travel products and services to leisure and corporate travelers in the United States and abroad as well as various media and advertising offerings to travel and non-travel advertisers. These travel products and services are offered through a diversified portfolio of brands including: Brand Expedia®, Hotels.com®, Expedia® Partner Solutions, Vrbo®, trivago®, Orbitz®, Travelocity®, Hotwire®, Wotif®, ebookers®, CheapTickets®, Expedia Group™ Media Solutions, CarRentals.com™ and Expedia CruisesTM. In addition, many of these brands have related international points of sale. We refer to Expedia Group, Inc. and its subsidiaries collectively as “Expedia Group,” the “Company,” “us,” “we” and “our” in these consolidated financial statements.

Basis of Presentation

The accompanying consolidated financial statements include Expedia Group, Inc., our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. We record our investments in entities that we do not control, but over which we have the ability to exercise significant influence, using the equity method or at fair value. We have eliminated significant intercompany transactions and accounts.

We believe that the assumptions underlying our consolidated financial statements are reasonable. However, these consolidated financial statements do not present our future financial position, the results of our future operations and cash flows.

Seasonality

We generally experience seasonal fluctuations in the demand for our travel services. For example, traditional leisure travel bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The number of bookings typically decreases in the fourth quarter. Since revenue for most of our travel services, including merchant and agency hotel, is recognized as the travel takes place rather than when it is booked, revenue typically lags bookings by several weeks for our hotel business and can be several months or more for our alternative accommodations business. Historically, Vrbo has seen seasonally stronger bookings in the first quarter of the year, with the relevant stays occurring during the peak summer travel months. The seasonal revenue impact is exacerbated with respect to income by the nature of our variable cost of revenue and direct sales and marketing costs, which we typically realize in closer alignment to booking volumes, and the more stable nature of our fixed costs. As a result on a consolidated basis, revenue and income are typically the lowest in the first quarter and highest in the third quarter.

NOTE 2 — Significant Accounting Policies

Consolidation

Our consolidated financial statements include the accounts of Expedia Group, Inc., our wholly-owned subsidiaries, and entities for which we control a majority of the entity’s outstanding common stock. We record non-controlling interest in our consolidated financial statements to recognize the minority ownership interest in our consolidated subsidiaries. Non-controlling interest in the earnings and losses of consolidated subsidiaries represent the share of net income or loss allocated to members or partners in our consolidated entities. trivago is a separately listed company on the Nasdaq Global Select Market and, therefore, is subject to its own reporting and filing requirements, which could result in possible differences that are not expected to be material to Expedia Group, Inc.

We have eliminated significant intercompany transactions and accounts in our consolidated financial statements.

Accounting Estimates

We use estimates and assumptions in the preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our consolidated financial statements include revenue recognition; recoverability of current and long-lived assets, intangible assets and goodwill; income and transactional taxes, such as potential settlements related to occupancy and excise taxes; loss contingencies; deferred

F- 9

loyalty rewards; stock-based compensation; accounting for derivative instruments and provisions for credit losses, customer refunds and chargebacks.

Reclassifications

We have reclassified prior period financial statements to conform to the current period presentation.

Revenue Recognition

We recognize revenue upon transfer of control of our promised services in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

For our primary transaction-based revenue sources, discussed below, we have determined net presentation (that is, the amount billed to a traveler less the amount paid to a supplier) is appropriate for the majority of our revenue transactions as the supplier is primarily responsible for providing the underlying travel services and we do not control the service provided by the supplier to the traveler. We exclude all taxes assessed by a government authority, if any, from the measurement of transaction prices that are imposed on our travel related services or collected by the Company from customers (which are therefore excluded from revenue).

We offer traditional travel services on a stand-alone and package basis generally either through the merchant or the agency business model.

Under the merchant model, we facilitate the booking of hotel rooms, alternative accommodations, airline seats, car rentals and destination services from our travel suppliers and we are the merchant of record for such bookings.

Under the agency model, we pass reservations booked by the traveler to the relevant travel supplier and the travel supplier serves as the merchant of record for such bookings. We receive commissions or ticketing fees from the travel supplier and/or traveler. For certain agency airline, hotel and car transactions, we also receive fees through global distribution systems (“GDS”) that provide the computer systems through which the travel supplier inventory is made available and through which reservations are booked.

Under the advertising model, we offer travel and non-travel advertisers access to a potential source of incremental traffic and transactions through our various media and advertising offerings on trivago and our transaction-based websites.

In addition, Vrbo also provides subscription-based listing and other ancillary services to property owners and managers.

The nature of our travel booking service performance obligations vary based on the travel service with differences primarily related to the degree to which we provide post booking services to the traveler and the timing when rights and obligations are triggered in our underlying supplier agreements. We consider both the traveler and travel supplier as our customers.

Refer to NOTE 18 — Segment Information for revenue by business model and service type.

Lodging. Our lodging revenue is comprised of revenue recognized under the merchant, agency and Vrbo subscription-based listing services model.

Merchant Hotel. We provide travelers access to book hotel room reservations through our contracts with lodging suppliers, which provide us with rates and availability information for rooms but for which we have no control over the rooms and do not bear inventory risk. Our travelers pay us for merchant hotel transactions prior to departing on their trip, generally when they book the reservation. We record the payment in deferred merchant bookings until the stayed night occurs, at which point we recognize the revenue, net of amounts paid to suppliers, as this is when our performance obligation is satisfied. Payments to suppliers are generally due within 30 days of check-in or stay. In certain instances when a supplier invoices us for less than the cost we accrued, we generally reduce our merchant accounts payable and the supplier costs within net revenue six months in arrears, net of an allowance, when we determine it is not probable that we will be required to pay the supplier, based on historical experience. Cancellation fees are collected and remitted to the supplier, if applicable.

Agency Hotel. We generally record agency revenue from the hotel when the stayed night occurs as we provide post booking services to the traveler and, thus consider the stay as when our performance obligation is satisfied. We record an allowance for cancellations on this revenue based on historical experience.

Merchant and Agency Vrbo Alternative Accommodations. Vrbo's lodging revenue is generally earned on a pay-per-booking basis, which can be either merchant or agency bookings depending on the nature of the payment processor. Pay-per-booking arrangements are commission-based where rental property owners and managers bear the inventory risk, have latitude in setting the price and compensate Vrbo for facilitating bookings with travelers. Under pay-per-booking arrangements, each booking is a separate contract as listings are typically cancelable at any time and the related revenue, net of amounts paid to property owners, is recognized at check in, which is the point in time when our service to the traveler is complete. Vrbo also

F- 10

charges a traveler service fee at the time of booking. The service fee charged to travelers provides compensation for Vrbo's services, including but not limited to the use of Vrbo's website and a “Book with Confidence Guarantee” providing travelers with comprehensive payment protection and 24/7 traveler support. The performance obligation is to facilitate the booking of a property and assist travelers up to their check in process and, as such, the traveler service fee revenue is recognized at check-in.

Subscription-based Listing Services. To a lesser extent, Vrbo's lodging revenue is also earned on a pay-per-subscription basis. In pay-per-subscription contracts, property owners or managers purchase in advance online advertising services related to the listing of their properties for rent over a fixed term (typically one year). As the performance obligation is the listing service and is provided to the property owner or manager over the life of the listing period, the pay-per-subscription revenue is recognized on a straight-line basis over the listing period.

Merchant and Agency Air. We record revenue on air transactions when the traveler books the transaction, as we do not typically provide significant post booking services to the traveler and payments due to and from air carriers are typically due at the time of ticketing. We record a reserve for chargebacks and cancellations at the time of the transaction based on historical experience. In certain transactions, the GDS collects commissions from our suppliers and passes these commissions to us, net of their fees. Therefore, we view payments through the GDS as commissions from suppliers and record these commissions in net revenue. Fees paid to the GDS as compensation for their role in processing transactions are recorded as cost of revenue.

Advertising and Media**.** We record revenue from click-through fees charged to our travel partners for leads sent to the travel partners’ websites. We record revenue from click-through fees after the traveler makes the click-through to the related travel partners’ websites. We record revenue for advertising placements ratably over the advertising period or upon delivery of advertising impressions, depending on the terms of the contract. Payments from advertisers are generally due within 30 days of invoicing.

Other. Other primarily includes transaction revenue for booking services related to products such as car, cruise and destination services under the agency business model. We generally record the related revenue when the travel occurs, as in most cases we provide post booking services and this is when our performance obligation is complete. Additionally, no rights or obligations are triggered in our supplier agreements until the travel occurs. We record an allowance for cancellations on this revenue based on historical experience. Revenue from other ancillary alternative accommodation services or products are recorded either upon delivery or when we provide the service. In addition, other also includes travel insurance products primarily under the merchant model, for which revenue is recorded at the time the transaction is booked.

Packages. Packages assembled by travelers through the packaging functionality on our websites generally include a merchant hotel component and some combination of an air, car or destination services component. The individual package components are accounted for as separate performance obligations and recognized in accordance with our revenue recognition policies stated above.

Prepaid Merchant Bookings. We classify payments made to suppliers in advance of Vrbo performance obligations as prepaid merchant bookings included within prepaid and other current assets. Prepaid merchant bookings was $365 million as of December 31, 2023 and $480 million as of December 31, 2022.

Deferred Merchant Bookings. We classify cash payments received in advance of our performance obligations as deferred merchant bookings. At December 31, 2022, $6.2 billion of advance cash payments was reported within deferred merchant bookings, $5.3 billion of which was recognized resulting in $871 million of revenue during the year ended December 31, 2023 with the remainder primarily consisting of cancellations during the year. At December 31, 2023, the related balance was $6.9 billion.

Travelers enrolled in our internally administered traveler loyalty rewards programs earn rewards for each eligible booking made which can be redeemed for free or discounted future bookings. One Key allows members to earn OneKeyCash, the currency of the One Key program, on eligible hotels, alternative accommodations, activities, packages, car rentals, fights and cruises made on the U.S. points of sale on Brand Expedia, Hotels.com and Vrbo. Hotels.com Rewards continues to be offered outside the U.S. and offers travelers one free night at any Hotels.com partner property after that traveler stays 10 nights, subject to certain restrictions. Expedia Rewards also continues to be offered outside the U.S. and enables participating travelers to earn points on all hotel, flight, package and activities made on various international Brand Expedia websites. As travelers accumulate rewards towards free travel products, we defer the relative standalone selling price of earned rewards, net of expected breakage, as deferred loyalty rewards within deferred merchant bookings on the consolidated balance sheet. In order to estimate the standalone selling price of the underlying services on which rewards can be redeemed for all loyalty programs, we use an adjusted market assessment approach and consider the redemption values expected from the traveler. We then estimate the number of rewards that will not be redeemed based on historical activity in our members' accounts as well as statistical modeling techniques. Revenue is recognized when we have satisfied our performance obligation relating to the rewards, that is when the travel service purchased with the loyalty award is satisfied. The majority of rewards expected to be redeemed are recognized within one to two years of being earned. At December 31, 2022, $961 million of deferred loyalty

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rewards was reported within deferred merchant bookings, all of which was recognized as revenue during the year ended December 31, 2023. At December 31, 2023, the related balance was $871 million.

Deferred Revenue. Deferred revenue primarily consists of unearned subscription revenue as well as deferred advertising revenue. At December 31, 2022, $163 million was recorded as deferred revenue, $125 million of which was recognized as revenue during the year ended December 31, 2023. At December 31, 2023, the related balance was $164 million.

Practical Expedients and Exemptions. We have used the portfolio approach to account for our loyalty points as the rewards programs share similar characteristics within each program in relation to the value provided to the traveler and their breakage patterns. Using this portfolio approach is not expected to differ materially from applying the guidance to individual contracts. However, we will continue to assess and refine, if necessary, how a portfolio within each rewards program is defined.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Cash, Restricted Cash, and Cash Equivalents

Our cash and cash equivalents include cash and liquid financial instruments, including money market funds and term deposit investments, with maturities of three months or less when purchased. Restricted cash includes cash and cash equivalents that is restricted through legal contracts, regulations or our intention to use the cash for a specific purpose. Our restricted cash primarily relates to certain traveler deposits and to a lesser extent collateral for office leases. The following table reconciles cash, cash equivalents and restricted cash reported in our consolidated balance sheets to the total amount presented in our consolidated statements of cash flows:

			December 31,
			2023						2022
			(in millions)
Cash and cash equivalents			$	4,225					$	4,096
Restricted cash and cash equivalents			1,436						1,755
Total cash, cash equivalents and restricted cash and cash equivalents in the consolidated statements of cash flows			$	5,661					$	5,851

Short-term and Long-term Investments

We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such designation at each balance sheet date. Investments, other than minority equity investments, classified as available-for-sale are recorded at fair value with unrealized holding gains and losses recorded, net of tax, as a component of accumulated other comprehensive income ("OCI"). Realized gains and losses from the sale of available-for-sale investments, if any, are determined on a specific identification basis. Investments with remaining maturities of less than one year are classified within short-term investments. All other investments are classified within long-term investments and other assets.

Minority equity investments with either readily determinable fair values, or for which we have elected to apply the fair value option, are measured at fair value on a recurring basis with changes in fair value recorded through net income or loss. Minority investments without readily determinable fair values, for which we have not elected to measure at fair value, are measured using the equity method, or measured at cost with observable price changes reflected through net income or loss. We perform a qualitative assessment on a quarterly basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value of minority equity investments are recorded in other income (expense), net.

Accounts Receivable

Accounts receivable are generally due within thirty days and are recorded net of an allowance for expected uncollectible amounts. We consider accounts outstanding longer than the contractual payment terms as past due. The risk characteristics we generally review when analyzing our accounts receivable pools primarily include the type of receivable (for example, credit card vs hotel collect), collection terms and historical or expected credit loss patterns. For each pool, we make estimates of expected credit losses for our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded as cost of revenue in our consolidated statements of operations.

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Property and Equipment

We record property and equipment at cost, net of accumulated depreciation and amortization. We also capitalize certain costs incurred related to the development of internal use software. We capitalize costs incurred during the application development stage related to the development of internal use software. We expense costs incurred related to the planning and post-implementation phases of development as incurred.

We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is three to five years for computer equipment, capitalized software development and furniture and other equipment, 15 years for land improvements, and 40 years for buildings, which includes our corporate headquarters. Land is not depreciated. We amortize leasehold improvement using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease.

We establish assets and liabilities for the present value of estimated future costs to return certain of our leased facilities to their original condition under the authoritative accounting guidance for asset retirement obligations. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs.

Leases

We determine if an arrangement is a lease at inception. Operating leases are primarily for office space and data centers and are included in operating lease right-of-use ("ROU") assets, accrued expenses and other current liabilities, and operating lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For operating leases with a term of one year or less, we have elected to not recognize a lease liability or ROU asset on our consolidated balance sheet. Instead, we recognize the lease payments as expense on a straight-line basis over the lease term. Short-term lease costs are immaterial to our consolidated statements of operations and cash flows.

We have office space and data center lease agreements with insignificant non-lease components and have elected the practical expedient to combine and account for lease and non-lease components as a single lease component.

Business Combinations

We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and trade names, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Any changes to provisional amounts identified during the measurement period are recognized in the reporting period in which the adjustment amounts are determined.

Recoverability of Goodwill and Indefinite-Lived Intangible Assets

Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. We assess goodwill and indefinite-lived intangible assets, neither of which is amortized, for impairment annually as of October 1, or more frequently, if events and circumstances indicate impairment may have occurred. In the evaluation of goodwill for impairment, we typically perform a quantitative assessment and compare the fair value of the reporting unit to the carrying value. An impairment charge is recorded based on the excess of the reporting unit's carrying amount over its fair value. Periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the goodwill is more likely than not impaired.

We generally base our measurement of fair value of reporting units on a blended analysis of the present value of future discounted cash flows and market valuation approach. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant

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estimates in the discounted cash flows model include: our weighted average cost of capital; long-term rate of growth and profitability of our business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company to comparable publicly traded firms in similar lines of business. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting units.

We believe the weighted use of discounted cash flows and market approach is the best method for determining the fair value of our reporting units because these are the most common valuation methodologies used within the travel and internet industries; and the blended use of both models compensates for the inherent risks associated with either model if used on a stand-alone basis.

In addition to measuring the fair value of our reporting units as described above, we consider the combined carrying and fair values of our reporting units in relation to the Company’s total fair value of equity plus debt as of the assessment date. Our equity value assumes our fully diluted market capitalization, using either the stock price on the valuation date or the average stock price over a range of dates around the valuation date, plus an estimated acquisition premium which is based on observable transactions of comparable companies. The debt value is based on the highest value expected to be paid to repurchase the debt, which can be fair value, principal or principal plus a premium depending on the terms of each debt instrument.

In our evaluation of our indefinite-lived intangible assets, we typically first perform a quantitative assessment and an impairment charge is recorded for the excess of the carrying value of indefinite-lived intangible assets over their fair value, if necessary. We base our measurement of fair value of indefinite-lived intangible assets, which primarily consist of trade name and trademarks, using the relief-from-royalty method. This method assumes that the trade name and trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. As with goodwill, periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the indefinite-lived intangible asset is more likely than not impaired.

Recoverability of Intangible Assets with Definite Lives and Other Long-Lived Assets

Intangible assets with definite lives and other long-lived assets are carried at cost and are amortized on a straight-line basis over their estimated useful lives of one to ten years. We review the carrying value of long-lived assets or asset groups, including property and equipment, to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, we would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset groups carrying amount and its estimated fair value.

Assets held for sale, to the extent we have any, are reported at the lower of cost or fair value less costs to sell.

Income Taxes

We record income taxes under the liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted tax rates expected to be in effect when we realize the underlying items of income and expense.

We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as other relevant factors. We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. All deferred income taxes are classified as long-term on our consolidated balance sheets.

We account for uncertain tax positions based on a two-step process of evaluating recognition and measurement criteria. The first step assesses whether the tax position is more likely than not to be sustained upon examination by the tax authority, including resolution of any appeals or litigation, based on the technical merits of the position. If the tax position meets the more

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likely than not criteria, the portion of the tax benefit greater than 50% likely to be realized upon settlement with the tax authority is recognized in the financial statements.

We recognize interest and penalties related to unrecognized tax benefits in the income tax expense line in our consolidated statement of operations. Accrued interest and penalties are included in other long-term liabilities on the consolidated balance sheet.

In relation to tax effects for accumulated OCI, our policy is to release the tax effects of amounts reclassified from accumulated OCI to pre-tax income (loss) from continuing operations. Any remaining tax effect in accumulated OCI is released following a portfolio approach.

We account for the global intangible low-tax income earned by our foreign subsidiaries included in gross U.S. taxable income in the period incurred.

Derivative Instruments

Derivative instruments are carried at fair value on our consolidated balance sheets. The fair values of the derivative financial instruments generally represent the estimated amounts we would expect to receive or pay upon termination of the contracts as of the reporting date.

At December 31, 2023 and 2022, our derivative instruments primarily consisted of foreign currency forward contracts. We use foreign currency forward contracts to economically hedge certain merchant revenue exposures, foreign denominated liabilities related to certain of our loyalty programs and our other foreign currency-denominated operating liabilities. Our goal in managing our foreign exchange risk is to reduce, to the extent practicable, our potential exposure to the changes that exchange rates might have on our earnings, cash flows and financial position. Our foreign currency forward contracts are typically short-term and, as they do not qualify for hedge accounting treatment, we classify the changes in their fair value in other, net and present associated cash flows within investing activities on the statement of cash flows. We do not hold or issue financial instruments for speculative or trading purposes.

Until their redemption in March 2022, the aggregate principal value of our €650 million of registered senior unsecured notes that bore interest at 2.5% (the “2.5% Notes”) was designated as a hedge of our net investment in certain Euro-functional currency subsidiaries. In March 2022, we redeemed the 2.5% Notes and terminated the related hedging relationship. The currency translation adjustment amounts associated with the net investment hedge of the 2.5% Notes will remain in accumulated OCI until realized upon a full or partial sale or liquidation of applicable Euro-functional currency subsidiaries.

In March 2022, we entered into two fixed-to-fixed cross-currency interest rate swaps (the “swaps”) with an aggregate notional amount of €300 million. During the term of each contract, we receive interest payments in U.S. dollars at a fixed rate of 5% and make interest payments in Euros at an average fixed rate of 3.38% based on a notional amount and fixed interest rates determined at contract inception. The swaps were designated as a hedge of our net investment in certain Euro functional currency subsidiaries. Hedge effectiveness is assessed each quarter based on the net investment in the foreign subsidiaries designated as the hedged item and the changes in the fair value of the designated interest rate swaps based on spot rates. For hedges that meet the effectiveness requirements, changes in fair value are recorded as accumulated OCI within the foreign currency translation adjustment. Amounts excluded from hedge effectiveness at inception are recognized as interest accrues within interest expense. The maturity date of both swaps is February 2026, whereby, we will receive U.S. dollars from and pay Euros to the contract counterparties.

Foreign Currency Translation and Transaction Gains and Losses

Certain of our operations outside of the United States use the related local currency as their functional currency. We translate revenue and expense at average rates of exchange during the period. We translate assets and liabilities at the rates of exchange as of the consolidated balance sheet dates and include foreign currency translation gains and losses as a component of accumulated OCI. Due to the nature of our operations and our corporate structure, we also have subsidiaries that have significant transactions in foreign currencies other than their functional currency. We record transaction gains and losses in our consolidated statements of operations related to the recurring remeasurement and settlement of such transactions.

To the extent practicable, we attempt to minimize this exposure by maintaining natural hedges between our current assets and current liabilities of similarly denominated foreign currencies. Additionally, as discussed above, we use foreign currency forward contracts to economically hedge certain merchant revenue exposures and in lieu of holding certain foreign currency cash for the purpose of economically hedging our foreign currency-denominated operating liabilities.

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Debt Issuance Costs

We defer costs we incur to issue debt, which are presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, and amortize these costs to interest expense over the term of the debt or in circumstances where the debt can be redeemed at the option of the holders, over the term of the redemption option.

Marketing Promotions

We periodically provide incentive offers to our customers to encourage booking of travel products and services. Generally, our incentive offers are as follows:

Current Discount Offers. These promotions include dollar or percent off discounts to be applied against current purchases. We record the discounts as reduction in revenue at the date we record the corresponding revenue transaction.

Inducement Offers. These promotions include discounts granted at the time of a current purchase to be applied against a future qualifying purchase. We treat inducement offers as a reduction to revenue based on estimated future redemption rates. We allocate the discount amount at the time of the offer between the current performance obligation and the potential future performance obligations based on our expected relative value of the transactions. We estimate our redemption rates using our historical experience for similar inducement offers.

Concession Offers. These promotions include discounts to be applied against a future purchase to maintain customer satisfaction. Upon issuance, we record these concession offers as a reduction to revenue based on estimated future redemption rates. We estimate our redemption rates using our historical experience for concession offers.

Advertising Expense

We incur advertising expense consisting of offline costs, including television and print advertising, and online advertising expense to promote our brands. We expense the production costs associated with advertisements in the period in which the advertisement first takes place. We expense the costs of communicating the advertisement (e.g., television airtime) as incurred each time the advertisement is shown. For the years ended December 31, 2023, 2022 and 2021, our advertising expense was $3.8 billion, $3.9 billion and $2.7 billion.

Stock-Based Compensation

We measure and amortize the fair value of restricted stock units (“RSUs”) and stock options as follows:

Restricted Stock Units. RSUs are stock awards that are granted to employees entitling the holder to shares of common stock as the award vests, typically over a four-year period, but may accelerate in certain circumstances. We measure the value of RSUs at fair value based on the number of shares granted and the quoted price of our common stock at the date of grant. We amortize the fair value, net of actual forfeitures, as stock-based compensation expense over the vesting term generally on a straight-line basis, but at least equal to the portion of the grant-date fair value of the award that is vested at that date. In addition, we have a limited number of performance stock units ("PSUs"), for which we calculate the fair value using a Monte Carlo valuation model and amortized the fair value, net of actual forfeitures, as stock-based compensation over the vesting term, generally a two or three year period, on an accelerated basis. The number of shares that ultimately vest depends on achieving certain performance metrics or performance goals, as applicable, by the end of the performance period, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances. We record RSUs that may be settled by the holder in cash, rather than shares, as a liability and we remeasure these instruments at fair value at the end of each reporting period. Upon settlement of these awards, our total compensation expense recorded over the vesting period of the awards will equal the settlement amount, which is based on our stock price on the settlement date.

Stock Options. Our employee stock options consist of service based awards. We measure the value of stock options issued or modified, including unvested options assumed in acquisitions, on the grant date (or modification or acquisition dates, if applicable) at fair value, using appropriate valuation techniques, including the Black-Scholes. We amortize the fair value, net of actual forfeitures, over the remaining explicit vesting term in the case of service-based awards and the longer of the derived service period or the explicit service period for awards with market conditions on a straight-line basis. In addition, we classify certain employee option awards as liabilities when we deem it not probable that the employees holding the awards will bear the risk and rewards of stock ownership for a reasonable period of time. Such options are revalued at the end of each reporting period and upon settlement our total compensation expense recorded from grant date to settlement date will equal the settlement amount. The majority of our stock options vest over three to four years.

Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value.

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Earnings Per Share

We compute basic earnings per share by taking net income or loss attributable to Expedia Group, Inc. available to common stockholders divided by the weighted average number of common and Class B common shares outstanding during the period excluding restricted stock and stock held in escrow. Diluted earnings per share include the potential dilution that could occur from stock-based awards and other stock-based commitments (which includes our Convertible Notes) using the treasury stock or the if converted method, as applicable. For additional information on how we compute earnings per share, see NOTE 12 — Earnings Per Share.

Fair Value Recognition, Measurement and Disclosure

The carrying amounts of cash and cash equivalents and restricted cash and cash equivalents reported on our consolidated balance sheets approximate fair value as we maintain them with various high-quality financial institutions. The accounts receivable are short-term in nature and are generally settled shortly after the sale.

We disclose the fair value of our financial instruments based on the fair value hierarchy using the following three categories:

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Certain Risks and Concentrations

Our business is subject to certain risks and concentrations including dependence on relationships with travel suppliers, primarily airlines and hotels, dependence on third-party technology providers, exposure to risks associated with online commerce security and payment related fraud. We also rely on global distribution system partners and third-party service providers for certain fulfillment services**.**

Financial instruments, which potentially subject us to concentration of credit risk, consist primarily of cash and cash equivalents. We maintain some cash and cash equivalents balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits. Our cash and cash equivalents are primarily composed of term deposits as well as bank (both interest and non-interest bearing) account balances denominated in U.S. dollars, Euros, British pound, Canadian dollar, Australian dollar, Brazilian real, Indian Rupee, South Korean Won and Japanese Yen.

Contingent Liabilities

We have a number of regulatory and legal matters outstanding, as discussed further in NOTE 15 — Commitments and Contingencies. Periodically, we review the status of all significant outstanding matters to assess the potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of operations. We provide disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both of these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. We base accruals made on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements.

Occupancy and Other Taxes

Some states and localities impose taxes (e.g. transient occupancy, accommodation tax, sales tax, and/or business privilege tax) on the use or occupancy of hotel accommodations or other traveler services. Generally, hotels collect taxes based on the room rate paid to the hotel and remit these taxes to the various tax authorities. When a customer books a room through one of our travel services, we collect a tax recovery charge from the customer which we pay to the hotel. We calculate the tax recovery charge by applying the applicable tax rate supplied to us by the hotels to the amount that the hotel has agreed to receive for the rental of the room by the consumer. In most jurisdictions, we do not collect or remit taxes, nor do we pay taxes to the hotel operator on the portion of the customer payment we retain. Some jurisdictions have questioned our practice in this regard. While the applicable tax provisions vary among the jurisdictions, we generally believe that we are not required to collect and

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remit such taxes. A limited number of taxing jurisdictions have made similar claims against certain of our companies for tax amounts due on the rental amounts charged by owners of alternative accommodations properties or for taxes on our services. We are an intermediary between a traveler and a party renting a vacation property and we believe is similarly not liable for such taxes. We are engaged in discussions with tax authorities in various jurisdictions to resolve these issues. Some tax authorities have brought lawsuits or have levied assessments asserting that we are required to collect and remit tax. The ultimate resolution in all jurisdictions cannot be determined at this time. We have established a reserve for the potential settlement of issues related to hotel occupancy and other taxes when determined to be probable and estimable. See NOTE 15 — Commitments and Contingencies for further discussion.

Recently Adopted Accounting Policies

As of January 1, 2023, we adopted the new guidance related to recognizing and measuring contract assets and contract liabilities from contracts with customers acquired in a business combination. The new guidance requires acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination as compared to current GAAP where an acquirer generally recognizes such items at fair value on the acquisition date. The adoption of this new guidance had no impact on our consolidated financial statements.

Recent Accounting Policies Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued new guidance that modifies the disclosure and presentation requirements of reportable segments. The new guidance requires the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit and loss. In addition, the new guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. The update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statement disclosures.

In December 2023, the FASB issued new guidance to improve its income tax disclosure requirements. Under the new guidance, public business entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate). The new guidance is effective for public business entities for annual periods beginning after December 15, 2024. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statement disclosures.

NOTE 3 — Fair Value Measurements

Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 are classified using the fair value hierarchy in the table below:

			Total						Level 1						Level 2
			(In millions)
Assets
Cash equivalents:
Money market funds			$	168					$	168					$	—
Term deposits			71						—						71
Derivatives:
Cross-currency interest rate swaps			8						—						8
Investments:
Term deposits			28						—						28
Equity investments			584						584						—
Total assets			$	859					$	752					$	107
Liabilities
Derivatives:
Foreign currency forward contracts			$	9					$	—					$	9

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Financial assets measured at fair value on a recurring basis as of December 31, 2022 are classified using the fair value hierarchy in the table below:

			Total						Level 1						Level 2
			(In millions)
Assets
Cash equivalents:
Money market funds			$	3					$	3					$	—
Term deposits			188						—						188
Derivatives:
Foreign currency forward contracts			15						—						15
Cross-currency interest rate swaps			21						—						21
Investments:
Term deposits			48						—						48
Equity investments			564						49						515
Total assets			$	839					$	52					$	787

We classify our cash equivalents and investments within Level 1 and Level 2 as we value our cash equivalents and investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Valuation of the foreign currency forward contracts is based on foreign currency exchange rates in active markets, a Level 2 input. Valuation of the cross-currency interest rate swaps is based on foreign currency exchange rates and the current interest rate curve, Level 2 inputs.

We hold term deposit investments with financial institutions. Term deposits with original maturities of less than three months are classified as cash equivalents. Those with remaining maturities of less than one year are classified within short-term investments and those with remaining maturities of greater than one year are classified within long-term investments and other assets.

As of December 31, 2023 and 2022, our cash and cash equivalents consisted primarily of term deposits and money market funds with maturities of three months or less and bank account balances.

We use foreign currency forward contracts to economically hedge certain merchant revenue exposures, foreign denominated liabilities related to certain of our loyalty programs and our other foreign currency-denominated operating liabilities. As of December 31, 2023, we were party to outstanding forward contracts hedging our liability exposures with a total net notional value of $3.7 billion. As of December 31, 2023 and 2022, we had net forward liability of $9 million ($28 million gross forward liability) recorded in accrued expenses and other current liabilities and $15 million ($29 million gross forward asset) recorded in prepaid expenses and other current assets. We recorded $(24) million, $(66) million and $1 million in net gains (losses) from foreign currency forward contracts in 2023, 2022 and 2021.

On March 2, 2022, we entered into two fixed-to-fixed cross-currency interest rate swaps with an aggregate notional amount of €300 million, and maturity dates of February 2026. The swaps were designated as net investment hedges of Euro assets with the objective to protect the U.S. dollar value of our net investments in the Euro foreign operations due to movements in foreign currency. The fair value of the cross-currency interest rate swaps was an $8 million asset as of December 31, 2023 and a $21 million asset as of December 31, 2022, recorded in long-term investments and other assets. The gain recognized in interest expense was $5 million during the years ended December 31, 2023 and 2022.

Our equity investments include our marketable equity investment in Despegar, a publicly traded company, which is included in long-term investments and other assets in our consolidated balance sheets. During the years ended December 31, 2023, 2022, and 2021, we recognized gains (losses) of approximately $42 million, $(45) million and $(29) million, respectively, within other, net in our consolidated statements of operations related to the fair value changes of this equity investment.

In connection with our disposition of Egencia (our former corporate travel arm) in November 2021 as discussed in NOTE 16 – Divestitures, we became an indirect holder of approximately 19% interest in GBT JerseyCo Ltd. (“GBT”), doing business as American Express Global Business Travel, with an initial fair value of $815 million. In May 2022, GBT completed a deSPAC business combination with Apollo Strategic Growth Capital. This combination resulted in a newly publicly traded company, Global Business Travel Group, Inc. (“GBTG”), which together with GBT’s pre-combination shareholders owned all of GBT. Post combination and as of December 31, 2022, we had an approximately 16% ownership interest in GBT and a commensurate voting interest in GBTG. In July 2023, GBTG simplified its organizational structure, and we exchanged our previously held GBT shares for an equal number of GBTG shares with no change to our ownership interest. Our previous GBT shares were exchangeable on a 1:1 basis for GBTG shares, and as such, we valued our investment based on the GBTG’s share

F- 19

price. As a result of this exchange, as of the third quarter of 2023, we reclassified our investment from Level 2 to a Level 1 asset. As of December 31, 2023, we have an approximately 16% ownership interest in GBTG. In 2023 and 2022, we recognized a loss of approximately $26 million and approximately $300 million within other, net in our consolidated statements of operations related to the fair value changes of this equity investment.

Assets Measured at Fair Value on a Non-recurring Basis

Our non-financial assets, such as goodwill, intangible assets and property and equipment, as well as equity method investments for which we have not elected the fair value option, are adjusted to fair value when an impairment charge is recognized or the underlying investment is sold. Such fair value measurements are based predominately on Level 3 inputs. We measure our minority investments that do not have readily determinable fair values at cost less impairment, adjusted by observable price changes with changes recorded within other, net on our consolidated statements of operations.

Goodwill. During 2023, we recognized a goodwill impairment charge of $297 million related to our trivago segment. This impairment charge resulted from trivago’s recent strategic shift which included intensifying its brand marketing investments with an anticipated decrease in profitability. As a result, we concluded that sufficient indicators existed that to require us to perform an interim quantitative assessment of goodwill for our trivago segment as of September 30, 2023, in which we compared the fair value of the reporting unit to its carrying value. The fair value estimate for the reporting unit was based on a blended analysis of the present value of future discounted cash flows and market value approach, Level 3 inputs. The significant estimates used in the discounted cash flows model included our weighted average cost of capital, projected cash flows and the long-term rate of growth. Our assumptions were based on the actual historical performance of the reporting unit and considered the weakening of operating results, and implied risk premiums based on market prices of our equity and debt as of the assessment date. Our significant estimates in the market approach model included identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and earnings multiples in estimating the fair value of the reporting unit. The excess of the reporting unit's carrying value over our estimate of the fair value was recorded as the goodwill impairment charge in third quarter of 2023. As of December 31, 2023, our trivago segment had no goodwill remaining.

As noted above, trivago is subject to its own reporting and filing requirements and, therefore, assesses goodwill at a lower level, which could result in possible differences in the ultimate amount or timing of impairments recognized. Additionally, as the stock of our trivago segment is publicly traded, it is difficult to predict market dynamics and the extent or duration of any stock declines.

During 2021, we recognized a goodwill impairment charge of $14 million in our B2B segment resulting from valuing a component of our Egencia reporting unit that remained after the sale on November 1, 2021.

Intangible and Long-term Assets. During 2023, we recognized intangible asset impairment charges of $129 million related to indefinite-lived trade names that resulted from changes in estimated future revenues of the related brands, of which $114 million related to our B2C segment and $15 million related to our trivago segment. The indefinite-lived intangible assets, classified as Level 3 measurements, were valued using the relief-from-royalty method, which includes unobservable inputs, including projected revenues and royalty rates, which ranged from 3% to 4% with a weighted average royalty rate of 3.2%.

During 2022, we recognized intangible impairment charges of $81 million related to an indefinite-lived trade name within our trivago segment that resulted from changes in the weighted average cost of capital. The indefinite-lived trade name asset, classified as Level 3 measurements, was valued using the relief-from-royalty method, which includes unobservable inputs, including projected revenues, royalty rates and weighted average cost of capital.

During 2021, we recognized long-term asset impairment charges of $6 million in our B2B segment resulting from the write-off of capitalized software of a component of our Egencia reporting unit that remained after the sale on November 1, 2021.

Minority Investments without Readily Determinable Fair Values. As of both December 31, 2023 and 2022, the carrying values of our minority investments without readily determinable fair values totaled $330 million. During 2023, 2022 and 2021, we had no material gains or losses recognized related to these minority investments. As of December 31, 2023, total cumulative adjustments made to the initial cost basis of these investments included $2 million in unrealized upward adjustments and $105 million in unrealized downward adjustments (including impairments).

F- 20

NOTE 4 — Property and Equipment, Net

Our property and equipment consists of the following:

			December 31,
			2023						2022
			(In millions)
Capitalized software development			$	3,290					$	3,107
Computer equipment			202						353
Furniture and other equipment			113						102
Buildings and leasehold improvements			1,222						1,183
Land			146						146
			4,973						4,891
Less: accumulated depreciation			(2,765)						(2,744)
Projects in progress			151						63
Property and equipment, net			$	2,359					$	2,210

As of December 31, 2023 and 2022, our recorded capitalized software development costs, net of accumulated amortization, which have been placed in service were $999 million and $960 million. For the years ended December 31, 2023, 2022 and 2021, we recorded amortization of capitalized software development costs of $642 million, $597 million and $588 million included in depreciation and amortization expense.

As of December 31, 2023, 2022 and 2021, we had $5 million, $26 million and $4 million, respectively, included in accounts payable for the acquisition of property and equipment, which is considered a non-cash investing activity in the consolidated statements of cash flows.

NOTE 5 – Leases

We have operating leases for office space and data centers. Our leases have remaining lease terms of one year to 14 years, some of which include options to extend the leases for up to ten years, and some of which include options to terminate the leases within one year.

Operating lease costs were $97 million, $99 million and $119 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Supplemental cash flow information related to leases were as follows:

			Year ended December 31,
			2023						2022						2021
			(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating lease payments			$	92					$	96					$	151
Right-of-use assets obtained in exchange for lease obligations:
Operating leases			86						75						30

Supplemental consolidated balance sheet information related to leases were as follows:

			December 31, 2023						December 31, 2022
			(in millions)
Operating lease right-of-use assets			$	357					$	363
Current lease liabilities, included within Accrued expenses and other current liabilities			$	66					$	77
Long-term lease liabilities, included within Operating lease liabilities			314						312
Total operating lease liabilities			$	380					$	389
Weighted average remaining lease term			6.9 years						7.1 years
Weighted average discount rate			4.1		%				3.5		%

F- 21

Maturities of lease liabilities are as follows:

			Operating Leases
			(in millions)
Year ending December 31,
2024			$	77
2025			70
2026			65
2027			60
2028			53
2029 and thereafter			111
Total lease payments			436
Less: imputed interest			(56)
Total			$	380

NOTE 6 — Goodwill and Intangible Assets, Net

The following table presents our goodwill and intangible assets as of December 31, 2023 and 2022:

			December 31,
			2023						2022
			(In millions)
Goodwill			$	6,849					$	7,143
Intangible assets with indefinite lives			912						1,058
Intangible assets with definite lives, net			111						151
			$	7,872					$	8,352

Impairment Assessments. We perform our annual assessment of possible impairment of goodwill and indefinite-lived intangible assets as of October 1, or more frequently if events and circumstances indicate that an impairment may have occurred.

During 2023, due to trivago’s recent strategic shift which included intensifying its brand marketing investments with an anticipated decrease in profitability, in addition to our annual assessment, we deemed it necessary to perform an interim assessment of goodwill and intangible assets. As a result of the assessment during the third quarter of 2023, we recognized a goodwill impairment charge of $297 million related to our trivago segment as well as intangible impairment charges of $15 million related to indefinite-lived trade name within our trivago segment. In addition, during the fourth quarter of 2023, we recognized intangible impairment charges of $114 million related to indefinite-lived trade names within our B2C segment.

During 2022, we recognized intangible impairment charges of $81 million related to an indefinite-lived trade name within our trivago segment. During 2021, we recognized a goodwill impairment charge of $14 million.

Goodwill. The following table presents the changes in goodwill by reportable segment:

			B2C						B2B						trivago						Total
			(In millions)
Balance as of January 1, 2022			$	6,462					$	394					$	315					$	7,171
Foreign exchange translation and other			(29)						18						(17)						(28)
Balance as of December 31, 2022			6,433						412						298						7,143
Impairment charges			—						—						(297)						(297)
Foreign exchange translation and other			3						1						(1)						3
Balance as of December 31, 2023			$	6,436					$	413					$	—					$	6,849

As of December 31, 2023, accumulated goodwill impairment losses in total were $3.6 billion, of which $3.0 billion was associated with our B2C segment, $537 million was associated with our trivago segment and $14 million was associated with our B2B segment. As of December 31, 2022, accumulated goodwill impairment losses in total were $3.3 billion, of which $3.0 billion was associated with our B2C segment, $240 million was associated with our trivago segment and $14 million was associated with our B2B segment.

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Indefinite-lived Intangible Assets. Our indefinite-lived intangible assets relate principally to trade names and trademarks acquired in various acquisitions.

Intangible Assets with Definite Lives. The following table presents the components of our intangible assets with definite lives as of December 31, 2023 and 2022:

			December 31, 2023																		December 31, 2022
			Cost						Accumulated Amortization						Net						Cost						Accumulated Amortization						Net
			(In millions)
Customer relationships			$	382					$	(353)					$	29					$	382					$	(336)					$	46
Supplier relationships			480						(471)						9						478						(460)						18
Domain names			167						(131)						36						149						(118)						31
Other			689						(652)						37						686						(630)						56
Total			$	1,718					$	(1,607)					$	111					$	1,695					$	(1,544)					$	151

Amortization expense was $59 million, $88 million and $99 million for the years ended December 31, 2023, 2022 and 2021. The estimated future amortization expense related to intangible assets with definite lives as of December 31, 2023, assuming no subsequent impairment of the underlying assets, is as follows, in millions:

2024			$	58
2025			38
2026			12
2027			3
Total			$	111

NOTE 7 — Debt

The following table sets forth our outstanding debt:

			December 31,
			2023						2022
			(In millions)
6.25% senior notes due 2025			$	1,039					$	1,036
5.0% senior notes due 2026			748						746
0% convertible senior notes due 2026			993						989
4.625% senior notes due 2027			746						745
3.8% senior notes due 2028			996						995
3.25% senior notes due 2030			1,238						1,237
2.95% senior notes due 2031			493						492
Long-term debt(1)			$	6,253					$	6,240

---

(1)Net of applicable discounts and debt issuance costs.

Redemption of Senior Notes

During 2022, we early redeemed all of our €650 million registered senior unsecured notes that were due June 2022 and bore interest at 2.5% (the “2.5% Notes”), all of our $500 million registered senior unsecured notes that were due December 2023 and bore interest at 3.6% (the “3.6% Notes”), and all of our $500 million registered senior unsecured notes that were due August 2024 and bore interest at 4.5% (the “4.5% Notes”), which resulted in the recognition of a loss on debt extinguishment of $24 million during the year ended December 31, 2022. This loss primarily reflected the payment of "make-whole" premiums of $20 million for the 3.6% and 4.5% Notes as well as the write-off of unamortized debt issuance costs and discounts of $4 million.

In addition, during 2022, we settled a tender offer to purchase $500 million in aggregate principal of our 2.95% Senior Notes due 2031 (the “2.95% Notes”) for an aggregate cash repurchase price of approximately $418 million, which resulted in

F- 23

the recognition of a net gain on debt extinguishment of $73 million. The net gain included the write-off of debt issuance costs and discounts of $8 million as well as fees of $1 million.

During 2021, we redeemed all of our then outstanding 7.0% senior notes due 2025 as well as settled the tender offer to purchase $956 million in aggregate principal of our 6.25% senior notes due 2025, which resulted in the recognition of a loss on debt extinguishment of $280 million during the year ended December 31, 2021. This loss primarily reflected the payment of early payment premiums and fees associated with the tender offer as well as the write-off of unamortized debt issuance costs.

Outstanding Debt

Senior Notes Outstanding. In prior years, we issued the following senior notes, which are still outstanding as of December 31, 2023:

*•*Approximately $1 billion of senior unsecured notes that are due in May 2025 that bear interest at 6.25% (the “6.25% Notes”), which reflects the 2021 tender offer to purchase $956 million in aggregate principal discussed above. The 6.25% Notes were issued at a price of 100% of the aggregate principal amount. Interest is payable semi-annually in arrears in May and November of each year. We may redeem some or all of the 6.25% Notes at any time prior to February 1, 2025 by paying a “make-whole” premium plus accrued and unpaid interest, if any. We may redeem some or all of the 6.25% Notes on or after February 1, 2025 at par plus accrued and unpaid interest, if any.

• $750 million of registered senior unsecured notes that are due in February 2026 that bear interest at 5.0% (the “5.0% Notes”). The 5.0% Notes were issued at 99.535% of par resulting in a discount, which is being amortized over their life. Interest is payable semi-annually in arrears in February and August of each year. We may redeem the 5.0% Notes at our option at any time in whole or from time to time in part. If we elect to redeem the 5.0% Notes prior to November 12, 2025, we may redeem them at a redemption price of 100% of the principal plus accrued interest, plus a “make-whole” premium. If we elect to redeem the 5.0% Notes on or after November 12, 2025, we may redeem them at a redemption price of 100% of the principal plus accrued interest.

• $750 million of registered senior unsecured notes that are due in August 2027 that bear interest at 4.625% (the “4.625% Notes”). The 4.625% Notes were issued at a price of 99.997% of the aggregate principal amount. Interest is payable semi-annually in arrears in February and August of each year. We may redeem some or all of the 4.625% Notes at any time prior to May 1, 2027 by paying a “make-whole” premium plus accrued and unpaid interest, if any. We may redeem some or all of the 4.625% Notes on or after May 1, 2027 at par plus accrued and unpaid interest, if any.

• $1 billion of registered senior unsecured notes that are due in February 2028 that bear interest at 3.8% (the “3.8% Notes”). The 3.8% Notes were issued at 99.747% of par resulting in a discount, which is being amortized over their life. Interest is payable semi-annually in arrears in February and August of each year. We may redeem the 3.8% Notes at our option at any time in whole or from time to time in part. If we elect to redeem the 3.8% Notes prior to November 15, 2027, we may redeem them at a redemption price of 100% of the principal plus accrued interest, plus a “make-whole” premium. If we elect to redeem the 3.8% Notes on or after November 15, 2027, we may redeem them at a redemption price of 100% of the principal plus accrued interest.

• $1.25 billion of registered senior unsecured notes that are due in February 2030 and bear interest at 3.25% (the “3.25% Notes”). The 3.25% Notes were issued at 99.225% of par resulting in a discount, which is being amortized over their life. Interest is payable semi-annually in arrears in February and August of each year. We may redeem the 3.25% Notes at our option at any time in whole or from time to time in part. If we elect to redeem the 3.25% Notes prior to November 15, 2029, we may redeem them at a redemption price of 100% of the principal plus accrued interest, plus a “make-whole” premium. If we elect to redeem the 3.25% Notes on or after November 15, 2029, we may redeem them at a redemption price of 100% of the principal plus accrued interest.

•$500 million of senior unsecured notes that are due in March 2031 and bear interest at 2.95%, which reflects the 2022 tender offer to purchase $500 million in aggregate principal discussed above. The 2.95% Notes were issued at a price of 99.081% of the aggregate principal amount. Interest is payable semi-annually in arrears in March and September of each year and the interest rate is subject to adjustment based on certain ratings events. We may redeem some or all of the 2.95% Notes at any time prior to December 15, 2030 by paying a “make-whole” premium plus accrued and unpaid interest, if any. We may redeem some or all of the 2.95% Notes on or after December 15, 2030 at par plus accrued and unpaid interest, if any.

All of our outstanding senior notes (collectively the "Senior Notes") are senior unsecured obligations issued by Expedia Group and guaranteed by certain domestic Expedia Group subsidiaries. The Senior Notes rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations of Expedia Group and the guarantor subsidiaries. In addition, the Senior Notes include covenants that limit our ability to (i) create certain liens, (ii) enter into sale/leaseback

F- 24

transactions and (iii) merge or consolidate with or into another entity or transfer substantially all of our assets. The Senior Notes are redeemable in whole or in part, at the option of the holders thereof, upon the occurrence of certain change of control triggering events at a purchase price in cash equal to 101% of the principal plus accrued and unpaid interest. Accrued interest related to the Senior Notes was $73 million as of both December 31, 2023 and 2022.

Convertible Notes Outstanding. The net carrying amount of the Convertible Notes as of December 31, 2023 and 2022 was $993 million and $989 million, respectively, which reflects the $1 billion in principal less unamortized debt issuance costs of $7 million and $11 million, respectively. Interest expense related to the amortization of the debt issuance costs for the Convertible Notes was $3 million during both of the years ended December 31, 2023 and 2022.

The Convertible Notes are unsecured, unsubordinated obligations and rank equally in right of payment with each other and with all of our existing and future unsecured and unsubordinated obligations, including our existing senior notes. The Convertible Notes are fully and unconditionally guaranteed by the subsidiary guarantors, which include each domestic subsidiary that is a borrower under or guarantees the obligations under our existing senior secured credit agreement. So long as the guarantees are in effect, each subsidiary guarantor’s guarantee will be the unsecured, unsubordinated obligation of such subsidiary guarantor and will rank equally in right of payment with each other and with all of such subsidiary guarantor’s existing and future unsecured and unsubordinated obligations, including such subsidiary guarantor’s guarantees of our existing senior notes.

The Convertible Notes will mature on February 15, 2026, unless earlier converted, redeemed or repurchased. The Convertible Notes will not bear regular interest, and the principal amount of the Convertible Notes will not accrete.

The Convertible Notes have an initial conversion rate of 3.9212 shares of common stock of Expedia Group with a par value $0.0001 per share (referred to as “our common stock” herein), per $1,000 principal amount of Convertible Notes, which is equal to an initial conversion price of approximately $255.02 per share of our common stock. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of stock dividends and payment of cash dividends. At any time prior to the close of business on the business day immediately preceding November 15, 2025, holders may convert their Convertible Notes at their option only under the following circumstances:

• during any calendar quarter commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is equal to or greater than 130% of the conversion price then in effect on each applicable trading day;

• during the five business day period immediately after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;

• if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the business day immediately prior to the redemption date, but only with respect to the Convertible Notes called for redemption (or deemed called for redemption); or

• upon the occurrence of specified corporate events.

Irrespective of the foregoing conditions, holders may convert their Convertible Notes on or after November 15, 2025 and prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Additionally, upon the occurrence of a corporate event that constitutes a “make-whole fundamental change” per the indenture, or if we call the Convertible Notes for redemption, and a holder elects to convert its Convertible Notes in connection with such make-whole fundamental change or during the related redemption period, as the case may be, such holder may be entitled to an increase in the conversion rate in certain circumstances as described in the indenture. Upon conversion, holders will receive cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

We may not redeem the Convertible Notes prior to February 20, 2024. On or after February 20, 2024 and prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price per share of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, we may redeem for cash all or part of the Convertible Notes at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date, except as otherwise described in the indenture.

F- 25

Estimated Fair Value. The total estimated fair value of our Senior Notes was approximately $5.1 billion and $4.9 billion as of December 31, 2023 and 2022. Additionally, the estimated fair value of the Convertible Notes was $953 million and $871 million as of December 31, 2023 and 2022. The fair value was determined based on quoted market prices in less active markets and is categorized according as Level 2 in the fair value hierarchy.

Credit Facility

As of December 31, 2023 and 2022, Expedia Group maintained a $2.5 billion revolving credit facility that matures in April 2027. As of December 31, 2023 and 2022, we had no revolving credit facility borrowings outstanding. Loans under the revolving credit facility bear interest at a rate equal to an index rate plus a margin (a) in the case of term benchmark loans, ranging from 1.00% to 1.75% per annum, depending on Expedia Group's credit ratings, and (b) in the case of base rate loans, ranging from 0.00% to 0.75% per annum, depending on Expedia Group's credit ratings. A fee is payable quarterly in respect of undrawn commitments under the revolving credit facility at a rate ranging from 0.10% to 0.25% per annum, depending on Expedia Group's credit ratings. The terms of the revolving credit facility require Expedia Group to not exceed a specified maximum consolidated leverage ratio as of the end of each fiscal quarter.

The revolving credit facility has a $120 million letter of credit (“LOC”) sublimit, and the amount of LOCs issued under the facility reduced the credit amount available. As of December 31, 2023 and 2022, there was $40 million and $38 million of outstanding stand-by LOCs issued under the facility.

NOTE 8 — Employee Benefit Plans

Our U.S. employees are generally eligible to participate in a retirement and savings plan that qualifies under Section 401(k) of the Internal Revenue Code. Participating employees may contribute up to 50% of their eligible compensation on a pre-tax and/or Roth basis. Employees may also contribute up to 10% after-tax, not to exceed 60% of pay and not more than statutory limits. Expedia Group makes matching contributions in an amount equal to 50% of participant 401(k) contributions up to the first 6% of their compensation each payroll period. Our contribution vests with the employee after the employee completes two years of service. Participating employees have the option to invest in our common stock, but there is no requirement for participating employees to invest their contribution or our matching contribution in our common stock. We also have various defined contribution plans for our international employees. Our contributions to these benefit plans were $72 million, $63 million and $68 million for the years ended December 31, 2023, 2022 and 2021.

NOTE 9 — Stock-Based Awards and Other Equity Instruments

Pursuant to the Amended and Restated Expedia Group, Inc. 2005 Stock and Annual Incentive Plan, we may grant restricted stock, restricted stock awards, RSUs, stock options and other stock-based awards, such as PSUs, to directors, officers, employees and consultants. As of December 31, 2023, we had approximately 10 million shares of common stock reserved for new stock-based awards under the 2005 Stock and Annual Incentive Plan. We issue new shares to satisfy the exercise or release of stock-based awards.

The following table presents a summary of RSU activity:

			RSUs						Weighted Average Grant-Date Fair Value
			(In thousands)
Balance as of December 31, 2022			6,630						$	146.43
Granted			5,191						96.93
Vested			(2,880)						127.48
Cancelled			(868)						129.00
Balance as of December 31, 2023			8,073						123.24

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The following table presents a summary of PSU activity:

			PSUs						Weighted Average Grant-Date Fair Value
			(In thousands)
Shares probable to be issued as of December 31, 2022			33						$	87.58
Granted			232						99.87
Performance Shares Adjustment(1)			117						100.25
Vested			(24)						86.30
Cancelled			(81)						111.91
Shares probable to be issued as of December 31, 2023			277						99.84

---

(1)Outcome for vested performance-based awards is updated based upon achievement of certain stock price growth rate targets of the Company’s common stock. Probable outcome for unvested performance-based awards is based upon achievement of certain stock price growth rate targets of the Company’s common stock as of December 31, 2023.

The total market value of RSU and PSU shares vested during the years ended December 31, 2023, 2022 and 2021 was $316 million, $336 million and $504 million.

The following table summarizes the estimated vesting, as of December 31, 2023, of PSUs granted in 2023, 2022 and 2021, net of forfeiture and vesting since the respective grant dates:

						By Grant Year
Performance Stock Units						2023						2022						2021						Total						Weighted Average Grant-Date Fair Value
						(In thousands)
Shares probable to be issued						277						—						—						277						$	99.84
Shares not subject to the achievement of minimum performance thresholds						—						—						—						—						—
Shares that could be issued if maximum performance thresholds are met						444						183						248						875						151.44

The following table presents a summary of our stock option activity:

			Options						Weighted Average Exercise Price						Remaining Contractual Life						Aggregate Intrinsic Value
			(In thousands)												(In years)						(In millions)
Balance as of December 31, 2022			4,075						$	135.93
Exercised			(538)						110.77
Cancelled			(326)						105.74
Balance as of December 31, 2023			3,211						143.42						3.2						$	40
Exercisable as of December 31, 2023			936						109.97						0.9						40
Vested and expected to vest after December 31, 2023			3,211						143.42						3.2						40

The aggregate intrinsic value of outstanding options shown in the stock option activity table above represents the total pretax intrinsic value at December 31, 2023, based on our closing stock price of $151.79 as of the last trading date in 2023. The total intrinsic value of stock options exercised was $9 million, $89 million and $302 million for the years ended December 31, 2023, 2022 and 2021.

There were no options granted during 2023 or 2022. The fair value of stock options granted during 2021 were estimated at the date of grant using the Black-Scholes option-pricing model, assuming the following weighted average assumptions:

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Risk-free interest rate			0.82		%
Expected volatility			42.64		%
Expected life (in years)			5.13
Dividend yield			—		%
Weighted-average estimated fair value of options granted during the year			$	60.39

In 2023, 2022 and 2021, we recognized total stock-based compensation expense of $413 million, $374 million and $418 million. The total income tax benefit related to stock-based compensation expense was $88 million, $106 million and $157 million for 2023, 2022 and 2021. We capitalized $71 million, $54 million and $68 million of stock-based compensation expense associated with the cost of developing internal-use software in 2023, 2022 and 2021.

Cash received from stock-based award exercises for the years ended December 31, 2023, 2022 and 2021 was $60 million, $98 million and $476 million, respectively. Total current income tax benefits during the years ended December 31, 2023, 2022 and 2021 associated with the exercise of stock-based awards held by our employees were $17 million, $17 million and $28 million, respectively.

As of December 31, 2023, there was approximately $878 million of unrecognized stock-based compensation expense related to unvested stock-based awards, which is expected to be recognized in expense over a weighted-average period of 1.45 years.

Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan (“ESPP”), which allows shares of our common stock to be purchased by eligible employees at three-month intervals at 85% of the fair market value of the stock on the last day of each three-month period. Eligible employees were allowed to contribute up to 15% of their base compensation. During 2023, 2022 and 2021, approximately 442,000, 305,000, and 194,000 shares were purchased under this plan for an average price of $92.56, $109.36 and $135.38 per share. As of December 31, 2023, we have reserved approximately 1.5 million shares of our common stock for issuance under the ESPP.

NOTE 10 — Income Taxes

The following table summarizes our U.S. and foreign income (loss) before income taxes:

			Year Ended December 31,
			2023						2022						2021
			(In millions)
U.S.			$	935					$	67					$	(274)
Foreign			83						471						236
Total			$	1,018					$	538					$	(38)

Provision for Income Taxes

The following table summarizes our provision for income taxes:

			Year Ended December 31,
			2023						2022						2021
									(In millions)
Current income tax expense:
U.S. federal			$	128					$	17					$	17
State			36						6						7
Foreign			104						102						68
Current income tax expense			268						125						92
Deferred income tax (benefit) expense:
U.S. federal			75						(4)						(137)
State			(4)						(2)						(19)
Foreign			(9)						76						11
Deferred income tax (benefit) expense			62						70						(145)
Income tax (benefit) expense			$	330					$	195					$	(53)

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We reduced our current income tax payable by $17 million, $17 million, and $28 million for the years ended December 31, 2023, 2022 and 2021 for tax deductions attributable to stock-based compensation.

Deferred Income Taxes

As of December 31, 2023 and 2022, the significant components of our deferred tax assets and deferred tax liabilities were as follows:

			December 31,
			2023						2022
			(In millions)
Deferred tax assets:
Provision for accrued expenses			$	42					$	51
Deferred loyalty rewards			204						225
Net operating loss and tax credit carryforwards			314						520
Stock-based compensation			14						22
Property and equipment			23						24
Capitalized research and development			325						154
Operating lease liabilities			130						86
Long-term investments			168						194
Other			65						59
Total deferred tax assets			1,285						1,335
Less valuation allowance			(244)						(242)
Net deferred tax assets			$	1,041					$	1,093
Deferred tax liabilities:
Goodwill and intangible assets			(345)						(387)
Anticipatory foreign tax credits			(16)						—
Operating lease ROU assets			(127)						(83)
Other			—						(14)
Total deferred tax liabilities			$	(488)					$	(484)
Net deferred tax assets			$	553					$	609

As of December 31, 2023, we had state and foreign net operating loss carryforwards (“NOLs”) of approximately $283 million and $268 million. State NOLs of $85 million may be carried forward indefinitely, and state NOLs of $198 million expire at various times starting from 2025. Foreign NOLs of $178 million may be carried forward indefinitely, and foreign NOLs of $90 million expire at various times starting from 2024.

As of December 31, 2023, we had a valuation allowance of approximately $244 million related to certain tax attribute carryforwards for which it is more likely than not the tax benefits will not be realized. The valuation allowance increased by $2 million from the amount recorded as of December 31, 2022, primarily due to the unrealized capital losses on minority investments. The amount of the deferred tax asset considered realizable may be adjusted if capital gains are realized or if, in certain jurisdictions, objective negative evidence in the form of cumulative GAAP losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

Most of our foreign undistributed earnings have already been subject to U.S. federal income tax. We do not assert indefinite reinvestment on the undistributed earnings of our foreign subsidiaries.

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Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Income Tax Rate

A reconciliation of amounts computed by applying the U.S. federal statutory income tax rate to income before income taxes to total income tax expense is as follows:

			Year Ended December 31,
			2023						2022						2021
									(In millions)
Income tax (benefit) expense at the U.S. federal statutory rate of 21%			$	214					$	113					$	(8)
Foreign tax rate differential			(27)						(75)						3
U.S. federal research and development credit			(52)						(40)						(27)
Excess tax benefits related to stock-based compensation			9						(17)						(56)
Nondeductible compensation			28						37						45
Unrecognized tax benefits and related interest			39						27						6
Change in valuation allowances			—						77						(24)
Return to provision true-ups			(44)						(11)						4
State taxes			22						3						(9)
Non-creditable foreign withholding tax			3						21						1
Non-deductible goodwill impairment			92						—						—
Divestitures and entity restructuring			67						65						(6)
Foreign-derived intangible income			(25)						(15)						—
Other, net			4						10						18
Income tax (benefit) expense			$	330					$	195					$	(53)

Our effective tax rate for 2023 was higher than the 21% U.S. federal statutory income tax rate due to a non-deductible goodwill impairment and the TripAdvisor audit assessment discussed below, partially offset by research and experimentation credits. Our effective tax rate for 2022 was higher than the 21% U.S. federal statutory income tax rate due to valuation allowances on minority investments and nondeductible compensation, partially offset by research and experimentation credits. Our effective tax rate for 2021 was higher than the 21% U.S. federal statutory income tax rate due to excess tax benefits related to stock-based compensation, release of valuation allowances and research and experimentation credits, partially offset by nondeductible compensation, measured against a pre-tax loss.

Unrecognized Tax Benefits and Interest

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits and interest is as follows:

			2023						2022						2021
									(In millions)
Balance, beginning of year			$	379					$	349					$	345
Increases to tax positions related to the current year			19						23						11
Increases to tax positions related to prior years			4						5						3
Decreases to tax positions related to prior years			—						—						(11)
Settlements during current year			(1)						(8)						(6)
Interest and penalties			24						10						7
Balance, end of year			$	425					$	379					$	349

As of December 31, 2023, we had $425 million of gross unrecognized tax benefits, $223 million of which, if recognized, would affect the effective tax rate. As of December 31, 2022, we had $379 million of gross unrecognized tax benefits, $213 million of which, if recognized, would affect the effective tax rate. As of December 31, 2021, we had $349 million of gross unrecognized tax benefits, $207 million of which, if recognized, would affect the effective tax rate.

We recognize interest and penalties related to unrecognized tax benefits in provision for income taxes in our consolidated statement of operations. Accrued interest and penalties of $90 million and $66 million were reflected in our consolidated balance sheets as of December 31, 2023 and 2022.

The Company is routinely audited by U.S. federal, state, local and foreign income tax authorities. These audits include questioning the timing and amount of income and deductions, and the allocation of income and deductions among various tax

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jurisdictions. The IRS is currently examining Expedia Group’s U.S. consolidated federal income tax returns for the periods ended December 31, 2011 through December 31, 2020. The Company has consented to an extension of the statute of limitations, until December 31, 2024 for the 2011 through 2013 tax years, until March 31, 2025 for the 2014 through 2016 tax years, and until June 30, 2025 for the 2017 through 2020 tax years. As of December 31, 2023, for the Expedia Group, Inc. and Subsidiaries group, statutes of limitations for tax years 2011 through 2022 remain open to examination in the U.S. federal jurisdiction and most state jurisdictions. For the HomeAway and Orbitz groups, statutes of limitations for tax years 2001 through 2015 remain open to examination in the U.S. federal and most state jurisdictions due to NOL carryforwards.

During the fourth quarter of 2019, the IRS issued final adjustments related to transfer pricing with our foreign subsidiaries for our 2011 to 2013 tax years. The adjustments would increase our U.S. taxable income by $696 million, which would result in federal income tax of approximately $244 million, subject to interest. We do not agree with the position of the IRS. We have formally filed a protest for our 2011 to 2013 tax years and the case is currently in Appeals. During the third quarter of 2023, the IRS issued final adjustments related to transfer pricing with our foreign subsidiaries for our 2014 to 2016 tax years. The adjustments would increase our U.S. taxable income by $1.232 billion, which would result in federal income tax of approximately $431 million, subject to interest. We do not agree with the position of the IRS and intend to formally file a protest. We are also under examination by the IRS for our 2017 to 2020 tax years. We believe it is reasonably possible that the audit of the 2011 to 2013 tax years will conclude within the next 12 months.

On December 20, 2011, we completed a spin-off of TripAdvisor into a separate publicly-traded corporation. Pursuant to the tax sharing agreement between Expedia Group and TripAdvisor, TripAdvisor is responsible for its potential income tax liabilities in connection with any consolidated income tax returns filed as a part of Expedia Group’s consolidated income tax return prior to or in connection with the spin-off. TripAdvisor is required to indemnify Expedia Group for any such taxes, including interest, penalties, legal, and professional fees.

In 2023, TripAdvisor agreed in principle with the IRS to an assessed amount of $120 million, inclusive of interest and state tax effects, for transfer pricing adjustments with its foreign subsidiaries for the 2009 through 2011 tax years. The assessment is a tax liability for tax years when TripAdvisor was part of Expedia Group's consolidated income tax return and is covered by the indemnification pursuant to the tax sharing agreement. In May 2023, Expedia Group received from the IRS the final assessment for the 2009 through 2011 tax years related to the TripAdvisor matter. Expedia Group remitted $113 million in settlement payments to the IRS, as the primary obligor for this assessment, and received the reimbursement required from TripAdvisor in settlement of the indemnification receivable for this matter. During 2023, we recorded $67 million of additional income tax expense and a corresponding tax indemnification adjustment in other, net in our consolidated statements of operations representing the estimate of the incremental assessed payment to the IRS, including state tax effects.

NOTE 11 — Capital Stock

Common Stock and Class B Common Stock

Our authorized common stock consists of 1.6 billion shares of common stock with par value of $0.0001 per share, and 400 million shares of Class B common stock with par value of $0.0001 per share. Both classes of common stock qualify for and share equally in dividends, if declared by our Board of Directors, and generally vote together on all matters. Common stock is entitled to 1 vote per share and Class B common stock is entitled to 10 votes per share. Holders of common stock, voting as a single, separate class are entitled to elect 25% of the total number of directors. Class B common stockholders may, at any time, convert their shares into common stock, on a one for one share basis. Upon conversion, the Class B common stock is retired and is not available for reissue. In the event of liquidation, dissolution, distribution of assets or winding-up of Expedia Group, Inc., the holders of both classes of common stock have equal rights to receive all the assets of Expedia Group, Inc. after the rights of the holders of the preferred stock, if any, have been satisfied.

Preferred Stock and Warrants

In 2020, we issued and sold to (1) AP Fort Holdings, L.P., an affiliate of Apollo Global Management, Inc. (the “Apollo Purchaser”), 600,000 shares of the Company’s newly created Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”) and Warrants (the “Warrants”) to purchase 4.2 million shares of our common stock for an aggregate purchase price of $588 million and (2) SLP V Fort Holdings II, L.P., affiliates of Silver Lake Group, L.L.C. (the “Silver Lake Purchasers”), 600,000 shares of Series A Preferred Stock and Warrants to purchase 4.2 million shares of common stock, for an aggregate purchase price of $588 million.

In 2021, we redeemed all of the remaining outstanding Series A Preferred Stock at a price equal to 103% of the Preference Amount, plus accrued and unpaid distributions as to the redemption date using cash on-hand of $1,275 million, including a $36 million redemption premium and $39 million of accrued dividends. The loss on redemption of Preferred Stock was $214 million during the year ended December 31, 2021, which included a charge to additional paid-in capital for the redemption premium as well as $178 million related to the original issuance discount, issuance costs and the Warrants value. As

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of December 31, 2021, there was no remaining Series A Preferred Stock outstanding. The Series A Preferred Stock accumulated and we paid $67 million (or $74.96 per share of Series A Preferred Stock) in total dividends during the year ended December 31, 2021, including those mentioned above.

Warrants to Purchase Company Common Stock. Pursuant to the investment agreements in 2020, we issued to each of (1) the Silver Lake Purchasers (in the aggregate) and (2) the Apollo Purchaser, Warrants to purchase 4.2 million shares of our common stock at an exercise price of $72.00 per share. In 2021, the Apollo Purchaser exercised all of the Warrants it held and received approximately 2.5 million shares of our common stock in respect thereof, and the Silver Lake Purchasers exercised all of the Warrants they held and received approximately 2.6 million shares of our common stock in respect thereof. As of December 31, 2021, no warrants remained outstanding.

Treasury Stock

As of December 31, 2023, the Company's treasury stock was comprised of approximately 150.6 million common stock and 7.3 million Class B shares. As of December 31, 2022, the Company's treasury stock was comprised of approximately 130.5 million shares of common stock and 7.3 million Class B shares.

Share Repurchases. In 2018 and 2019, the Board of Directors and the Executive Committee of the Board, pursuant to a delegation of authority from the Board, authorized a program to repurchase up to 15 million shares and 20 million shares of our common stock (the “2018 Share Repurchase Program” and the “2019 Share Repurchase Program”). In October 2023, the Executive Committee of the Board of Directors, pursuant to a delegation of authority from the Board, authorized an additional program to repurchase up to $5 billion of our common stock (“2023 Share Repurchase Program”). The 2018 and 2019 Share Repurchase Programs have been completed. Our 2023 Share Repurchase Program does not have fixed expiration dates and does not obligate the Company to acquire any specific number of shares. Under the program, shares may be repurchased in the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will be subject to the discretion of the Company and depend on a variety of factors, including the market price of Expedia Group’s common stock, general market and economic conditions, regulatory requirements and other business considerations.

Shares repurchased under the authorized programs were as follows:

			Year Ended December 31,
			2023						2022						2021
Number of shares repurchased			19.1 million						5.2 million						—
Average price per share			$	106.07					$	96.09					$	—
Total cost of repurchases (in millions)(1)			$	2,031					$	500					$	—

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(1)Amount excludes transaction costs and the excise tax due under the Inflation Reduction Act of 2022.

As of December 31, 2023, $4.8 billion remains authorized for repurchase with no fixed termination date for the repurchases. Subsequent to the end of 2023, we repurchased an additional 1.3 million shares for a total cost of $189 million, excluding transaction costs and excise tax, representing an average of $149.65 per share.

Accumulated Other Comprehensive Income (Loss)

The balance of accumulated OCI as of December 31, 2023 and 2022 was comprised of foreign currency translation adjustments. These translation adjustments include foreign currency transaction gains at December 31, 2023 and 2022 of $6 million ($8 million before tax) and $16 million ($21 million before tax) associated with our cross-currency interest rate swaps. Additionally, translation adjustments include foreign currency transaction losses of $7 million ($10 million before tax) as of both December 31, 2023 and 2022 associated with previously settled Euro-denominated notes that were designated as net investment hedges. See NOTE 2 — Significant Accounting Policies for more information.

Non-redeemable Non-controlling Interests

As of December 31, 2023 and 2022, our ownership interest in trivago was approximately 60.0% and 61.1%.

During 2023, trivago paid a one-time extraordinary dividend totaling approximately EUR 184 million (or approximately EUR 0.53 per share), which included intercompany payments to Expedia Group as well as $78 million to third-parties included in other, net in financing activities on the consolidated statement of cash flows.

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NOTE 12 — Earnings Per Share

Basic Earnings Per Share

Basic earnings per share was calculated for the years ended December 31, 2023, 2022 and 2021 using the weighted average number of common and Class B common shares outstanding during the period excluding restricted stock and stock held in escrow.

Diluted Earnings Per Share

For the years ended December 31, 2023 and 2022, we computed diluted earnings per share using (i) the number of shares of common stock and Class B common stock used in the basic earnings per share calculation as indicated above, (ii) if dilutive, the incremental common stock that we would issue upon the assumed exercise or vesting of stock-based awards and common stock warrants using the treasury stock method, (iii) if dilutive, our Convertible Notes using the if-converted method, and (iv) other stock-based commitments. In periods when we recognize a net loss, such as the year ended December 31, 2021, we exclude the impact of outstanding stock-based awards, common stock warrants and the potential share settlement impact related to our Convertible Notes from the diluted loss per share calculation as their inclusion would have an antidilutive effect.

The following table presents our basic and diluted earnings (loss) per share:

			Year Ended December 31,
			2023						2022						2021
			(In millions, except share and per share data)
Net income attributable to Expedia Group, Inc.			$	797					$	352					$	12
Preferred stock dividend			—						—						(67)
Loss on redemption of preferred stock			—						—						(214)
Net income (loss) attributable to Expedia Group, Inc. common stockholders			$	797					$	352					$	(269)
Earnings (loss) per share attributable to Expedia Group, Inc. available to common stockholders:
Basic			$	5.50					$	2.24					$	(1.80)
Diluted			5.31						2.17						(1.80)
Weighted average number of shares outstanding (000's):
Basic			144,967						156,672						149,734
Dilutive effect of:
Convertible Notes			3,921						3,921						—
Stock-based awards			1,333						1,153						—
Other dilutive securities			7						5						—
Diluted			150,228						161,751						149,734

For the years ended December 31, 2023 and 2022, approximately 4 million and approximately 9 million of outstanding stock-based awards have been excluded from the calculations of diluted earnings per share attributable to common stockholders because their effect would have been antidilutive. For the year ended December 31, 2021, approximately 11 million of outstanding stock-based awards and approximately 4 million shares related to the potential share settlement impact related to our Convertible Notes were excluded.

The earnings per share amounts are the same for common stock and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.

NOTE 13 — Restructuring and Related Reorganization Charges

In 2020, we committed to restructuring actions intended to simplify our businesses and improve operational efficiencies, which have resulted in headcount reductions and office consolidations. As a result, we recognized $55 million in restructuring and related reorganization charges during 2021. We did not recognize any restructuring and related organization charges during 2023 and 2022. We continue to evaluate additional cost reduction efforts and should we make decisions in future periods to take further actions we may incur additional reorganization charges.

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NOTE 14 — Other Income (Expense)

Other, net

The following table presents the components of other, net:

			For the Year Ended December 31,
			2023						2022						2021
			(In millions)
Foreign exchange rate losses, net			$	(85)					$	(40)					$	(48)
Gains (losses) on minority equity investments, net			16						(345)						(29)
TripAdvisor tax indemnification adjustment			67						—						—
Other			—						—						19
Total			$	(2)					$	(385)					$	(58)

NOTE 15 — Commitments and Contingencies

Letters of Credit, Purchase Obligations and Guarantees

We have commitments and obligations that include purchase obligations, guarantees and LOCs, which could potentially require our payment in the event of demands by third parties or contingent events. The following table presents these commitments and obligations as of December 31, 2023:

									By Period
			Total						Less than 1 year						1 to 3 years						3 to 5 years						More than 5 years
			(In millions)
Purchase obligations			$	1,020					$	426					$	585					$	9					$	—
Guarantees			39						32						7						—						—
Letters of credit			44						42						2						—						—
			$	1,103					$	500					$	594					$	9					$	—

Our purchase obligations represent the minimum obligations we have under agreements with certain of our vendors. These minimum obligations are less than our projected use for those periods. Payments may be more than the minimum obligations based on actual use.

We have guarantees which consist primarily of bonds relating to tax assessments that we are contesting as well as bonds required by certain foreign countries’ aviation authorities for the potential non-delivery, by us, of packaged travel sold in those countries. The authorities also require that a portion of the total amount of packaged travel sold be bonded. Our guarantees also include certain surety bonds related to various company performance obligations.

Our LOCs consist of stand-by LOCs, underwritten by a group of lenders, which we primarily issue for certain regulatory purposes as well as to certain hotel properties to secure our payment for hotel room transactions. The contractual expiration dates of these LOCs are shown in the table above. There were no material claims made against any stand-by LOCs during the years ended December 31, 2023, 2022 and 2021.

Legal Proceedings

In the ordinary course of business, we are a party to various lawsuits. Management does not expect these lawsuits to have a material impact on the liquidity, results of operations, or financial condition of Expedia Group. We also evaluate other potential contingent matters, including value-added tax, excise tax, sales tax, transient occupancy or accommodation tax and similar matters. We do not believe that the aggregate amount of liability that could be reasonably possible with respect to these matters would have a material adverse effect on our financial results; however, litigation is inherently uncertain and the actual losses incurred in the event that our legal proceedings were to result in unfavorable outcomes could have a material adverse effect on our business and financial performance.

Litigation Relating to Occupancy Taxes. One hundred three lawsuits have been filed by or against cities, counties and states involving hotel occupancy and other taxes. Seven lawsuits are currently active. These lawsuits are in various stages and we continue to defend against the claims made in them vigorously. With respect to the principal claims in these matters, we believe that the statutes or ordinances at issue do not apply to us or the services we provide and, therefore, that we do not owe the taxes that are claimed to be owed. We believe that the statutes or ordinances at issue generally impose occupancy and other

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taxes on entities that own, operate or control hotels (or similar businesses) or furnish or provide hotel rooms or similar accommodations. To date, fifty of these lawsuits have been dismissed. Some of these dismissals have been without prejudice and, generally, allow the governmental entity or entities to seek administrative remedies prior to pursuing further litigation. Thirty-five dismissals were based on a finding that we and the other defendants were not subject to the local tax ordinance or that the local government lacked standing to pursue its claims. As a result of this litigation and other attempts by certain jurisdictions to levy such taxes, we have established a reserve for the potential settlement of issues related to hotel occupancy and other taxes, consistent with applicable accounting principles and in light of all current facts and circumstances, in the amount of $46 million and $44 million as of December 31, 2023 and 2022. Our settlement reserve is based on our best estimate of probable losses and the ultimate resolution of these contingencies may be greater or less than the liabilities recorded. An estimate for a reasonably possible loss or range of loss in excess of the amount reserved cannot be made. Changes to the settlement reserve are included within legal reserves, occupancy tax and other in the consolidated statements of operations.

Pay-to-Play. Certain jurisdictions may assert that we are required to pay any assessed taxes prior to being allowed to contest or litigate the applicability of the ordinances. This prepayment of contested taxes is referred to as “pay-to-play.” Payment of these amounts is not an admission that we believe we are subject to such taxes and, even when such payments are made, we continue to defend our position vigorously. If we prevail in the litigation, for which a pay-to-play payment was made, the jurisdiction collecting the payment will be required to repay such amounts and also may be required to pay interest.

We are in various stages of inquiry or audit with various tax authorities, some of which, including in the City of Los Angeles regarding hotel occupancy taxes, may impose a pay-to-play requirement to challenge an adverse inquiry or audit result in court.

Matters Relating to International VAT. We are in various stages of inquiry or audit in multiple European Union jurisdictions regarding the application of VAT to our European Union related transactions. While we believe we comply with applicable VAT laws, rules and regulations in the relevant jurisdictions, the tax authorities may determine that we owe additional taxes. In certain jurisdictions, including the United Kingdom, we may be required to “pay-to-play” any VAT assessment prior to contesting its validity. While we believe that we will be successful based on the merits of our positions with regard to audits in pay-to-play jurisdictions, it is nevertheless reasonably possible that we could be required to pay any assessed amounts in order to contest or litigate the applicability of any assessments and an estimate for a reasonably possible amount of any such payments cannot be made.

Competition and Consumer Matters. On August 23, 2018, the Australian Competition and Consumer Commission, or "ACCC", instituted proceedings in the Australian Federal Court against trivago. The ACCC alleged breaches of Australian Consumer Law, or "ACL," relating to trivago’s advertisements in Australia concerning the hotel prices available on trivago’s Australian site, trivago’s strike-through pricing practice and other aspects of the way offers for accommodation were displayed on trivago's Australian website. On January 20, 2020, the Australian Federal Court issued a judgment finding trivago had engaged in conduct in breach of the ACL. On October 18 and 19, 2021, the court heard submissions from the parties regarding penalties and other orders. On April 22, 2022, the Australian Federal Court issued a judgment ordering trivago to pay a penalty of AU$44.7 million, which was paid in the second quarter of 2022, and to cover the ACCC’s costs arising from the proceedings. The court also enjoined trivago from engaging in misleading conduct of the type found by the Australian Federal Court to be in contravention of the ACL. We recorded an estimated loss of approximately $11 million with respect to these proceedings in a previous period and an additional loss of approximately $23 million during the first quarter of 2022, for a total of approximately $34 million previously included in accrued expenses and other current liabilities as of March 31, 2022.

NOTE 16 – Divestitures

On November 1, 2021, we completed the sale of Egencia, Expedia Group’s corporate travel arm included within our B2B segment, to GBT. As a result of the sale, we deconsolidated Egencia, recognized a gain of $401 million within gain on sale of business, net in the consolidated statement of operations during the year ended December 31, 2021 and divested cash and restricted cash of $88 million. We received no cash for this transaction but on the date of sale Expedia Group became an indirect holder of an approximately 19% interest of GBT with an initial fair value of $815 million, and a subsidiary entered into a 10-year lodging supply agreement with GBT. During 2023 and 2022, we recognized immaterial gains of approximately $4 million and $6 million related to this transaction. See NOTE 3 — Fair Value Measurements for additional information on our ongoing investment.

In addition, during 2021, in connection with our efforts to focus on our core businesses and streamline our activities, we committed to plans to divest certain smaller businesses primarily within our B2C segment. As a result, in 2021, we completed the sales of certain smaller businesses, including Classic Vacations and Alice, which combined resulted in net gains of $57 million and net cash received of $27 million. The resulting gains in these transactions were recorded within gain on sale of business, net in the consolidated statement of operations.

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During 2023, we had no dispositions, but we recognized a $21 million gain related to the sales of businesses in a prior year. We had no disposition activity during 2022.

None of these dispositions were considered a strategic shift that will have a major effect on our operations or financial results and they did not represent individually significant components of our business; therefore, they have not been reported as discontinued operations.

NOTE 17 — Related Party Transactions

IAC/InterActiveCorp

The Company and IAC are related parties because Mr. Diller serves as Chairman and Senior Executive of both Expedia Group and IAC. At December 31, 2023, each of Expedia Group and IAC has a 50% ownership interest in two aircraft that may be used by both companies. Members of the aircraft flight crews are employed by an entity in which the Company and IAC each have a 50% ownership interest. The Company and IAC have agreed to share costs relating to flight crew compensation and benefits pro-rata according to each company’s respective usage of the aircraft, for which they are separately billed by the entity described above. We share equally in fixed and nonrecurring costs for the aircraft; direct operating costs are pro-rated based on actual usage. Another aircraft that had previously been jointly-owned by the companies was sold in November 2022, with each company receiving 50% of the $19 million in net sale proceeds.

In addition, in 2021, we entered into agreements pursuant to which we may use additional aircraft owned by a subsidiary of IAC on a cost basis. Total payments made to this entity by the Company were not material.

As of December 31, 2023 and 2022, the net basis in our ownership interest in the aircrafts then jointly-owned was $43 million and $46 million, respectively, recorded in long-term investments and other assets. In 2023, 2022 and 2021, operating and maintenance costs paid directly to the jointly-owned subsidiary for the aircraft were not material.

NOTE 18 — Segment Information

We have the following reportable segments: B2C (formerly referred to as Retail), B2B, and trivago. Our B2C segment provides a full range of travel and advertising services to our worldwide customers through a variety of consumer brands including: Expedia.com, Hotels.com, Vrbo, Orbitz, Travelocity, Wotif Group, ebookers, CheapTickets, Hotwire.com and CarRentals.com. Our B2B segment fuels a wide range of travel and non-travel companies including airlines, offline travel agents, online retailers, corporate travel management and financial institutions, who leverage our leading travel technology and tap into our diverse supply to augment their offerings and market Expedia Group rates and availabilities to their travelers. In addition, through its sale in November 2021, our B2B segment included Egencia, a full-service travel management company that provided travel services to businesses and their corporate customers. Our trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its hotel metasearch websites.

We determined our operating segments based on how our chief operating decision makers manage our business, make operating decisions and evaluate operating performance. Our primary operating metric is Adjusted EBITDA. Adjusted EBITDA for our B2C and B2B segments includes allocations of certain expenses, primarily related to our global travel supply organization and the majority of costs from our product and technology platform, as well as facility costs and the realized foreign currency gains or losses related to the forward contracts hedging a component of our net merchant lodging revenue. We base the allocations primarily on transaction volumes and other usage metrics. We do not allocate certain shared expenses such as accounting, human resources, certain information technology and legal to our reportable segments. We include these expenses in Corporate and Eliminations. Our allocation methodology is periodically evaluated and may change.

Our segment disclosure includes intersegment revenues, which primarily consist of advertising and media services provided by our trivago segment to our B2C segment. These intersegment transactions are recorded by each segment at amounts that approximate fair value as if the transactions were between third parties, and therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within Corporate and Eliminations in the table below.

Corporate and Eliminations also includes unallocated corporate functions and expenses. In addition, we record amortization of intangible assets and any related impairment, as well as stock-based compensation expense, restructuring and related reorganization charges, legal reserves, occupancy tax and other, and other items excluded from segment operating performance in Corporate and Eliminations. Such amounts are detailed in our segment reconciliation below.

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The following tables present our segment information for 2023, 2022 and 2021. As a significant portion of our property and equipment is not allocated to our operating segments and depreciation is not included in our segment measure, we do not report the assets by segment as it would not be meaningful. We do not regularly provide such information to our chief operating decision makers.

			Year ended December 31, 2023
			B2C						B2B						trivago						Corporate & Eliminations						Total
			(In millions)
Third-party revenue			$	9,113					$	3,388					$	338					$	—					$	12,839
Intersegment revenue			—						—						187						(187)						—
Revenue			$	9,113					$	3,388					$	525					$	(187)					$	12,839
Adjusted EBITDA			$	2,325					$	798					$	56					$	(499)					$	2,680
Depreciation			(526)						(113)						(5)						(104)						(748)
Amortization of intangible assets			—						—						—						(59)						(59)
Impairment of goodwill			—						—						—						(297)						(297)
Intangible and other long-term asset impairment			—						—						—						(129)						(129)
Stock-based compensation			—						—						—						(413)						(413)
Legal reserves, occupancy tax and other			—						—						—						(8)						(8)
Realized (gain) loss on revenue hedges			11						(4)						—						—						7
Operating income (loss)			$	1,810					$	681					$	51					$	(1,509)					1,033
Other expense, net																											(15)
Income before income taxes																											1,018
Provision for income taxes																											(330)
Net income																											688
Net loss attributable to non-controlling interests																											109
Net income attributable to Expedia Group, Inc.																											$	797

			Year ended December 31, 2022
			B2C						B2B						trivago						Corporate & Eliminations						Total
			(In millions)
Third-party revenue			$	8,741					$	2,546					$	380					$	—					$	11,667
Intersegment revenue			—						—						181						(181)						—
Revenue			$	8,741					$	2,546					$	561					$	(181)					$	11,667
Adjusted EBITDA			$	2,124					$	599					$	113					$	(487)					$	2,349
Depreciation			(509)						(85)						(8)						(102)						(704)
Amortization of intangible assets			—						—						—						(88)						(88)
Intangible and other long-term asset impairment			—						—						—						(81)						(81)
Stock-based compensation			—						—						—						(374)						(374)
Legal reserves, occupancy tax and other			—						—						—						(23)						(23)
Realized (gain) loss on revenue hedges			2						4						—						—						6
Operating income (loss)			$	1,617					$	518					$	105					$	(1,155)					1,085
Other expense, net																											(547)
Income before income taxes																											538
Provision for income taxes																											(195)
Net income																											343
Net loss attributable to non-controlling interests																											9
Net income attributable to Expedia Group, Inc.																											$	352

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			Year ended December 31, 2021
			B2C						B2B						trivago						Corporate & Eliminations						Total
			(In millions)
Third-party revenue			$	6,821					$	1,460					$	317					$	—					$	8,598
Intersegment revenue			—						—						106						(106)						—
Revenue			$	6,821					$	1,460					$	423					$	(106)					$	8,598
Adjusted EBITDA			$	1,782					$	110					$	39					$	(454)					$	1,477
Depreciation			(522)						(102)						(10)						(81)						(715)
Amortization of intangible assets			—						—						—						(99)						(99)
Impairment of goodwill			—						—						—						(14)						(14)
Intangible and other long-term asset impairment			—						—						—						(6)						(6)
Stock-based compensation			—						—						—						(418)						(418)
Legal reserves, occupancy tax and other			—						—						—						(1)						(1)
Restructuring and related reorganization charges			—						—						—						(55)						(55)
Realized (gain) loss on revenue hedges			17						—						—						—						17
Operating income (loss)			$	1,277					$	8					$	29					$	(1,128)					186
Other expense, net																											(224)
Loss before income taxes																											(38)
Provision for income taxes																											53
Net income																											15
Net income attributable to non-controlling interests																											(3)
Net income attributable to Expedia Group, Inc.																											12
Preferred stock dividend																											(67)
Loss on redemption of preferred stock																											(214)
Net loss attributable to Expedia Group, Inc. common stockholders																											$	(269)

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Revenue by Business Model and Service Type

The following table presents revenue by business model and service type for the years ended December 31, 2023, 2022 and 2021:

			Year Ended December 31,
			2023						2022						2021
			(In millions)
Business Model
Merchant			$	8,818					$	7,762					$	5,537
Agency			3,075						2,994						2,307
Advertising, media and other			946						911						754
Total revenue			$	12,839					$	11,667					$	8,598
Service Type
Lodging			$	10,264					$	8,905					$	6,449
Air			410						362						254
Advertising and media			821						777						603
Other(1)			1,344						1,623						1,292
Total revenue			$	12,839					$	11,667					$	8,598

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(1)Other includes car rental, insurance, activities, cruise and fee revenue related to our corporate travel business prior to our sale of Egencia on November 1, 2021, among other revenue streams, none of which are individually material.

Our B2C and B2B segments generate revenue from the merchant, agency and advertising, media and other business models as well as all service types. trivago segment revenue is generated through advertising and media.

Geographic Information

The following table presents revenue by geographic area, the United States and all other countries, based on the geographic location of our websites or points of sale with the exception of trivago, which has all been allocated to Germany, the location of its corporate headquarters, for the years ended December 31, 2023, 2022 and 2021. No sales to an individual country other than the United States accounted for more than 10% of revenue for the presented years.

			Year Ended December 31,
			2023						2022						2021
			(In millions)
Revenue
United States			$	8,147					$	7,939					$	6,569
All other countries			4,692						3,728						2,029
			$	12,839					$	11,667					$	8,598

The following table presents property and equipment, net for the United States and all other countries, as of December 31, 2023 and 2022:

			As of December 31,
			2023						2022
			(In millions)
Property and equipment, net
United States			$	2,289					$	2,111
All other countries			70						99
			$	2,359					$	2,210

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NOTE 19 — Valuation and Qualifying Accounts

The following table presents the changes in our valuation and qualifying accounts. Other reserves primarily include our accrual of the cost associated with purchases made on our website related to the use of fraudulent credit cards “charged-back” due to payment disputes and cancellation fees as well as refund reserves in 2021 and 2022 primarily due to COVID impacts.

Description			Balance at Beginning of Period						Charges to Earnings						Charges to Other Accounts**(1)**						Deductions						Balance at End of Period
			(In millions)
2023
Allowance for expected credit losses			$	40					$	33					$	(27)					$	—					$	46
Other reserves			29						1						(8)						—						22
2022
Allowance for expected credit losses			$	65					$	20					$	(3)					$	(42)					$	40
Other reserves			64						(28)						(4)						(3)						29
2021
Allowance for doubtful accounts			$	101					$	7					$	(17)					$	(26)					$	65
Other reserves			58						7						(1)						—						64

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(1)Charges to other accounts primarily relates to amounts acquired through acquisitions or disposed of through sales of businesses, net translation adjustments and reclassifications.

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