Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements


This Quarterly Report on Form 10-Q contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements reflect the views of our management regarding current
expectations and projections about future events and are based on currently
available information. Actual results could differ materially from those
contained in these forward-looking statements for a variety of reasons,
including, but not limited to, those discussed in our Annual Report on Form 10-K
for the year ended December 31, 2021, Part I, Item 1A, "Risk Factors," as well
as those discussed elsewhere in this report. COVID-19, and the volatile regional
and global economic conditions stemming from it, and additional or unforeseen
effects from the COVID-19 pandemic, could also give rise to or aggravate these
risk factors, which in turn could materially adversely affect our business,
financial condition, liquidity, results of operations (including revenues and
profitability) and/or stock price. Further, COVID-19 may also affect our
operating and financial results in a manner that is not presently known to us or
that we currently do not consider to present significant risks to our
operations. Other unknown or unpredictable factors also could have a material
adverse effect on our business, financial condition and results of operations.
Accordingly, readers should not place undue reliance on these forward-looking
statements. The use of words such as "anticipates," "believes," "could,"
"estimates," "expects," "goal," "intends," "likely," "may," "plans,"
"potential," "predicts," "projected," "seeks," "should" and "will," or the
negative of these terms or other similar expressions, among others, generally
identify forward-looking statements; however, these words are not the exclusive
means of identifying such statements. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances are forward-looking statements. These forward-looking statements
are inherently subject to uncertainties, risks and changes in circumstances that
are difficult to predict. We are not under any obligation to, and do not intend
to, publicly update or review any of these forward-looking statements, whether
as a result of new information, future events or otherwise, even if experience
or future events make it clear that any expected results expressed or implied by
those forward-looking statements will not be realized. Please carefully review
and consider the various disclosures made in this report and in our other
reports filed with the SEC that attempt to advise interested parties of the
risks and factors that may affect our business, prospects and results of
operations.

The information included in this management's discussion and analysis of
financial condition and results of operations should be read in conjunction with
our consolidated financial statements and the notes included in this Quarterly
Report, and the audited consolidated financial statements and notes and
Management's Discussion and Analysis of Financial Condition and Results of
Operations contained in our Annual Report on Form 10-K for the year ended
December 31, 2021.

Overview


Expedia Group's mission is to power global travel for everyone, everywhere. We
believe travel is a force for good. Travel is an essential human experience that
strengthens connections, broadens horizons and bridges divides. We help reduce
the barriers to travel, making it easier, more enjoyable, more attainable and
more accessible. We bring the world within reach for customers and partners
around the globe. We leverage our supply portfolio, platform and technology
capabilities across an extensive portfolio of consumer brands, and provide
solutions to our business partners, to empower travelers to efficiently
research, plan, book and experience travel. We make available, on a stand-alone
and package basis, travel services provided by numerous lodging properties,
airlines, car rental companies, activities and experiences providers, cruise
lines, alternative accommodations property owners and managers, and other travel
product and service companies. We also offer travel and non-travel advertisers
access to a potential source of incremental traffic and transactions through our
various media and advertising offerings on our websites. For additional
information about our portfolio of brands, see the disclosure set forth in
Part I, Item 1, Business, under the caption "Management Overview" in our Annual
Report on Form 10-K for the year ended December 31, 2021.

All percentages within this section are calculated on actual, unrounded numbers.

Trends


The COVID-19 pandemic, and measures to contain the virus, including government
travel restrictions and quarantine orders, have had a significant negative
impact on the travel industry. COVID-19 has negatively impacted consumer
sentiment and consumer's ability to travel, and many of our supply partners,
particularly airlines and hotels, continue to operate at reduced but improving
service levels.

Additionally, further health-related events, political instability, geopolitical
conflicts, acts of terrorism, significant fluctuations in currency values,
sustained levels of increased inflation, sovereign debt issues, and natural
disasters, are examples of other events that could have a negative impact on the
travel industry in the future. More specifically, the recent Russia/

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Ukraine conflict has had a varying impact on the travel industry and potential
broader economic uncertainties, and it remains unclear what the extent of the
impact on future results will be.

Our financial and operating results for both 2020 and 2021 were significantly
impacted due to the decrease in travel demand related to COVID-19. During the
first half of 2022, we have experienced an increase in travel demand and gross
bookings have nearly recovered as of the second quarter to pre-COVID levels.
However, the full duration and total impact of COVID-19 and related variants
remains uncertain, and it is difficult to predict the future impacts on the
travel industry and, in particular, our business.

In addition, COVID-19 has also had broader economic impacts, including at times
an increase in unemployment levels and reduction in economic activity globally.
As the recovery unfolds, staffing shortages have also been experienced across
most of the hospitality industry. Broader, sustained negative economic impacts
could continue to put strain on our suppliers, business and service partners,
which increases the risk of credit losses and service level or other
disruptions. Our future results of operations may be subject to volatility,
particularly in the short-term, due to the impact of the above trends.

Prior to the onset of COVID-19, we began to execute a cost savings initiative
aimed at simplifying the organization and increasing efficiency. Following the
onset of COVID-19, we accelerated execution on several of these cost savings
initiatives and took additional actions to reduce costs to help mitigate the
impact to demand from COVID-19 and reduce our monthly cash usage. While some
cost actions during COVID-19 were temporary and intended to minimize cash usage
during this disruption, we expect to continue to benefit from the majority of
the savings as business conditions return to more normalized levels. In 2021, we
successfully achieved the previously outlined annualized run-rate fixed costs
savings of $700 to $750 million compared to the fourth quarter of 2019 exit
rate, as well as the greater than $200 million in variable cost savings, at 2019
volume levels. We also believe we have improved our marketing efficiency and
continue to evaluate additional opportunities to increase efficiency and improve
operational effectiveness across the Company.

As a result of these cost savings initiatives, we expect Adjusted EBITDA margins to increase compared to historical levels when revenue returns to more normalized levels.

Online Travel


Increased usage and familiarity with the internet continues to drive rapid
growth in online penetration of travel expenditures. Online penetration is
higher in the U.S. and European markets with online penetration rates in the
emerging markets, such as Asia Pacific and Latin American regions, historically
lagging behind those regions. The emerging market penetration rates increased
over the past few years, and are expected to continue growing, which presents an
attractive growth opportunity for our business, while also attracting many
competitors to online travel. This competition intensified in recent years, and
the industry is expected to remain highly competitive for the foreseeable
future. In addition to the growth of online travel agencies, we see increased
interest in the online travel industry from search engine companies such as
Google, evidenced by continued product enhancements, including new trip planning
features for users and the integration of its various travel products into the
Google Travel offering, as well as further prioritizing its own products in
search results. Competitive entrants such as "metasearch" companies, including
Kayak.com (owned by Booking Holdings), trivago (in which Expedia Group owns a
majority interest) as well as TripAdvisor, introduced differentiated features,
pricing and content compared with the legacy online travel agency companies, as
well as various forms of direct or assisted booking tools. Further, airlines and
lodging companies are aggressively pursuing direct online distribution of their
products and services. In addition, the increasing popularity of the "sharing
economy," accelerated by online penetration, has had a direct impact on the
travel and lodging industry. Businesses such as Airbnb, Vrbo (previously
HomeAway, which Expedia Group acquired in December 2015) and Booking.com (owned
by Booking Holdings) have emerged as leaders, bringing incremental alternative
accommodation and vacation rental inventory to the market. Many other
competitors, including vacation rental metasearch players, continue to emerge in
this space, which is expected to continue to grow as a percentage of the global
accommodation market. Finally, traditional consumer ecommerce and group buying
websites expanded their local offerings into the travel market by adding hotel
offers to their websites.

The online travel industry also saw the development of alternative business
models and variations in the timing of payment by travelers and to suppliers,
which in some cases place pressure on historical business models. In particular,
the agency hotel model saw rapid adoption in Europe. Expedia Group facilitates
both merchant (Expedia Collect) and agency (Hotel Collect) hotel offerings with
our hotel supply partners through both agency-only contracts as well as our
hybrid Expedia Traveler Preference ("ETP") program, which offers travelers the
choice of whether to pay Expedia Group at the time of booking or pay the hotel
at the time of stay.

In 2020, we shifted to managing our marketing investments holistically across
the brand portfolio in our Retail segment to optimize results for the Company,
and making decisions on a market by market and customer segment basis that we
think are appropriate based on the relative growth opportunity, the expected
returns, and the competitive environment. Over time, intense competition
historically led to aggressive marketing efforts by the travel suppliers and
intermediaries, and a meaningful

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unfavorable impact on our overall marketing efficiencies and operating margins.
During 2020, we increased our focus on opportunities to differentiate brands
across customer and geographic segments, increase marketing efficiency, drive a
higher proportion of transactions through direct channels and ultimately improve
the balance of transaction growth and profitability.

Lodging


Lodging includes hotel accommodations and alternative accommodations. As a
percentage of our total worldwide revenue in the second quarter of 2022, lodging
accounted for 75%. As a result of the improvement in travel demand this year,
room nights stayed grew 45% in the first half of 2022, as compared to a growth
of 35% in 2021 and a decline of 55% in 2020. The timing of recovery in consumer
sentiment on travel and on staying at hotels has, and will continue to be, a
factor in our level of room night growth, and we expect that to vary by country.
Average Daily Rates ("ADRs") for rooms stayed for Expedia Group increased 3% in
2020, increased 20% in 2021 and increased 13% in the first half of 2022. During
2021 and the first half of 2022, the increase in ADRs for our Vrbo business,
which carries a higher ADR than hotels, remains elevated compared to years prior
to the COVID-19 outbreak.

The uncertain environment as a result of COVID-19, including travel restrictions
and shifts in consumer behavior, the mix of our lodging bookings across
geographies and types of accommodations, and general variability in supply and
demand, make it difficult to predict ADR trends in the near-term.

As of June 30, 2022our global lodging marketplace had approximately 3 million lodging properties available, including over 2 million online bookable alternative accommodations listings and approximately 850,000 hotels.


Hotel. We generate the majority of our revenue through the facilitation of hotel
reservations (stand-alone and package bookings). After rolling out ETP globally
over a period of several years, during which time we reduced negotiated
economics in certain instances to compensate for hotel supply partners absorbing
expenses such as credit card fees and customer service costs, our relationships
and overall economics with hotel supply partners have been broadly stable in
recent years. As we continue to expand the breadth and depth of our global hotel
offering, in some cases we have reduced our economics in various geographies
based on local market conditions. These impacts are due to specific initiatives
intended to drive greater global size and scale through faster overall room
night growth. Additionally, increased promotional activities such as growing
loyalty programs contribute to declines in revenue per room night and
profitability.

Since our hotel supplier agreements are generally negotiated on a percentage
basis, any increase or decrease in ADRs has an impact on the revenue we earn per
room night. Over the course of the last several years, occupancies and ADRs in
the lodging industry generally increased on a currency-neutral basis in a
gradually improving overall travel environment. Other factors could pressure ADR
trends, including the continued growth in hotel supply in recent years and the
increase in alternative accommodation inventory. Further, while the global
lodging industry remains very fragmented, there has been consolidation in the
hotel space among chains as well as ownership groups. In the meantime, certain
hotel chains have been focusing on driving direct bookings on their own websites
and mobile applications by advertising lower rates than those available on
third-party websites as well as incentives such as loyalty points, increased or
exclusive product availability and complimentary Wi-Fi.

Alternative Accommodations. With our acquisition of Vrbo (previously HomeAway)
and all of its brands in December 2015, we expanded into the fast growing
alternative accommodations market. Vrbo is a leader in this market and
represents an attractive growth opportunity for Expedia Group. Vrbo has
transitioned from a listings-based classified advertising model to an online
transactional model that optimizes for both travelers and homeowner and property
manager partners, with a goal of increasing monetization and driving growth
through investments in marketing as well as in product and technology. Vrbo
offers hosts subscription-based listing or pay-per-booking service models. It
also generates revenue from a traveler service fee for bookings. In addition, we
have actively moved to integrate Vrbo listings into our global Retail services,
as well as directly add alternative accommodation listings to our offerings, to
position our key global brands to offer a full range of lodging options for
consumers.

Air


The airline industry has been dramatically impacted by COVID-19. As a result of
the significantly reduced air travel demand due to government travel
restrictions and the impact on consumer sentiment related to COVID-19, airlines
have been operating with less capacity and passenger traffic has declined
significantly. While we have experienced improvement in air bookings in the
first half of 2022 and throughout 2021, versus 2020, it continues to lag lodging
bookings and remains below 2019 levels. The recovery in air travel remains
difficult to predict, and may not correlate with the recovery in lodging demand.
According to the Transportation Security Administration ("TSA"), air traveler
7-day average throughput declined 95% in April 2020 compared to prior year
levels. The declines moderated to down approximately 20% by the end of 2021, and
as of mid-July 2022 were down 12%, compared to 2019 levels.

In addition, there is significant correlation between airline revenue and fuel
prices, and fluctuations in fuel prices generally take time to be reflected in
air revenue. Given current volatility, it is uncertain how fuel prices could
impact airfares.

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We could encounter pressure on air remuneration as air carriers combine, certain supply agreements renew, and as we continue to add airlines to ensure local coverage in new markets.

Air ticket volumes increased 20% in the first half of 2022 and 43% in 2021, compared to a decline of 63% in 2020. As a percentage of our total worldwide revenue in the second quarter of 2022, air accounted for 3%.

Advertising & Media


Our advertising and media business is principally driven by revenue generated by
trivago, a leading hotel metasearch website, and Expedia Group Media Solutions,
which is responsible for generating advertising revenue on our global online
travel brands. In the second quarter of 2022, we generated $213 million of
advertising and media revenue, a 33% increase from the same period in 2021,
representing 7% of our total worldwide revenue. Given the decline in travel
demand related to COVID-19, online travel agencies dramatically reduced
marketing spend, including on trivago, and given the uncertain duration and
impact of COVID-19 it is difficult to predict when spend will recover to
normalized levels. In response, in 2020, trivago significantly reduced its
marketing spend and took additional actions to lower operating expenses, which
continued throughout 2021 and through the first half of 2022. We expect trivago
to continue to experience pressure on revenue and profit until online travel
agencies and other hotel suppliers see consumer demand that warrants increasing
their advertising spend with trivago.

Business Strategy


As we endeavor to power global travel for everyone, everywhere our focus is to:
leverage our brand and supply strength, and our platform, to provide greater
services and value to our travelers, suppliers and business partners, and
generate sustained, profitable growth.

Leverage Brand and Supply Strength to Power the Travel Ecosystem. We believe the
strength of our brand portfolio and consistent enhancements to product and
service offerings, combined with our global scale and broad-based supply, drive
increasing value to customers and customer demand. With our significant global
audience of travelers, and our deep and broad selection of travel products, we
are also able to provide value to supply partners wanting to grow their business
through a better understanding of travel retailing and consumer demand in
addition to reaching consumers in markets beyond their reach. Our deep product
and supply footprint allows us to tailor offerings to target different types of
consumers and travel needs, employ geographic segmentation in markets around the
world, and leverage brand differentiation, among other benefits. Recently, we
shifted to more of a unified brand strategy with an increased focus on uniting
our retail brands and teams under one centralized group, which we believe will
enable us to drive further value to travelers. For example, in 2021, we
announced plans to unify and expand our existing loyalty programs into one
global rewards platform spanning all products and global brands. We also market
to consumers through a variety of channels, including internet search,
metasearch and social media websites, and having multiple brands appear in
search results also increases the likelihood of attracting new visitors.
Further, we are focusing on building longer term customer relationships. To
drive this, we need to engage our customers more frequently, generate more
repeat business and drive more transactions on a direct basis. Two key factors
drive the value of a traveler in our view - their membership in our loyalty
program and the usage of our app. We hence are focused on converting our traffic
to join our loyalty programs and use of our app. We believe that will in the
long-term increase conversion from our traffic, increase repeat rates, lower
acquisition cost of travelers and ultimately drive increased lifetime value of
our travelers.

Leverage Our Platform to Deliver More Rapid Product Innovation Resulting in
Better Traveler Experiences. During 2020, Expedia Group shifted to a platform
operating model with more unified technology, product, data engineering and data
science teams building services and capabilities that are leveraged across our
business units to serve our end customers and provide value-add services to our
travel suppliers. This model enables us to deliver more scalable services and
operate more efficiently. All of our transaction-based businesses share and
benefit from our platform infrastructure, including customer servicing and
support, data centers, search capabilities and transaction processing functions,
including payment processing and fraud operations.

As we continue to evolve our platform infrastructure, our focus is on developing
technical capabilities that support various travel products while using common
applications and frameworks. We believe this strategy will enable us to: build
in parallel because of simpler, standard architecture; ship products faster;
create more innovative solutions; and achieve greater scale. And ultimately, we
believe this will result in faster product innovation and therefore better
traveler experiences, which is a bigger focus for the Company going forward. In
addition, over time, as we enable domains around application development
frameworks, we believe we can unlock additional platform service opportunities
beyond our internal brands and other business travel partners.

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

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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. Furthermore, operating profits for our primary
advertising business, trivago, have typically been experienced in the second
half of the year, particularly the fourth quarter, as selling and marketing
costs offset revenue in the first half of the year as we typically increase
marketing during the busy booking period for spring, summer and winter holiday
travel. As a result on a consolidated basis, revenue and income are typically
the lowest in the first quarter and highest in the third quarter. The growth of
our international operations, advertising business or a change in our product
mix, including the growth of Vrbo, may influence the typical trend of the
seasonality in the future.

Impacts from COVID-19 disrupted our typical seasonal pattern for bookings,
revenue, profit and cash flows during 2020 and 2021. Significantly higher
cancellations and reduced booking volumes, particularly in the first half of
2020, resulted in material operating losses and negative cash flow. Booking and
travel trends improved in the second half of 2020, in 2021, and in the first
half of 2022. This has resulted in working capital benefits and positive cash
flow more akin to typical historical trends. It remains difficult to forecast
the seasonality for the upcoming quarters, given the uncertainty related to
COVID-19 and the shape and timing of any sustained recovery.

Critical Accounting Policies and Estimates


Critical accounting policies and estimates are those that we believe are
important in the preparation of our consolidated financial statements because
they require that we use judgment and estimates in applying those policies. We
prepare our consolidated financial statements and accompanying notes in
accordance with generally accepted accounting principles in the United States
("GAAP"). Preparation of the consolidated financial statements and accompanying
notes requires that we make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities as of the date of the consolidated financial statements as well as
revenue and expenses during the periods reported. We base our estimates on
historical experience, where applicable, and other assumptions that we believe
are reasonable under the circumstances. Actual results may differ from our
estimates under different assumptions or conditions.

There are certain critical estimates that we believe require significant judgment in the preparation of our consolidated financial statements. We consider an accounting estimate to be critical if:


•It requires us to make an assumption because information was not available at
the time or it included matters that were highly uncertain at the time we were
making the estimate; and

• Changes in the estimate or different estimates that we could have selected may have had a material impact on our financial condition or results of operations.


The COVID-19 pandemic has created and may continue to create significant
uncertainty in macroeconomic conditions, which may cause further business
disruptions and adversely impact our results of operations. As a result, many of
our estimates and assumptions required increased judgment and carry a higher
degree of variability and volatility. As events continue to evolve and
additional information becomes available, our estimates may change materially in
future periods

For additional information about our other critical accounting policies and
estimates, see the disclosure included in our Annual Report on Form 10-K for the
year ended December 31, 2021 as well as updates in the current fiscal year
provided in Note 2 - Summary of Significant Accounting Policies in the notes to
the consolidated financial statements.

Occupancy and Other Taxes


Legal Proceedings. We are currently involved in eight lawsuits brought by or
against states, cities and counties over issues involving the payment of hotel
occupancy and other taxes. We continue to defend these lawsuits vigorously. With
respect to the principal claims in these matters, we believe that the statutes
and/or ordinances at issue do not apply to us or the services we provide, namely
the facilitation of travel planning and reservations, and, therefore, that we do
not owe the taxes that are claimed to be owed. We believe that the statutes and
ordinances at issue generally impose occupancy and other taxes on entities that
own, operate or control hotels (or similar businesses) or furnish or provide
hotel rooms or similar accommodations

For additional information and other recent developments on these and other legal proceedings, see Part II, Item 1, Legal Proceedings.


We have established a reserve for the potential settlement of issues related to
hotel occupancy and other tax litigation, consistent with applicable accounting
principles and in light of all current facts and circumstances, in the amount of
$50 million as of both June 30, 2022 and December 31, 2021.

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Certain jurisdictions, including without limitation the states of New York, New
Jersey, North Carolina, Minnesota, Oregon, Rhode Island, Maryland, Pennsylvania,
Hawaii, Iowa, Massachusetts, Arizona, Wisconsin, Idaho, Arkansas, Indiana,
Maine, Nebraska, Vermont, Mississippi, Virginia, the city of New York, and the
District of Columbia, have enacted legislation seeking to tax online travel
company services as part of sales or other taxes for hotel and/or other
accommodations and/or car rental. In addition, in certain jurisdictions, we have
entered into voluntary collection agreements pursuant to which we have agreed to
voluntarily collect and remit taxes to state and/or local taxing jurisdictions.
We are currently remitting taxes to a number of jurisdictions, including without
limitation the states of New York, New Jersey, South Carolina, North Carolina,
Minnesota, Georgia, Wyoming, West Virginia, Oregon, Rhode Island, Montana,
Maryland, Kentucky, Maine, Pennsylvania, Hawaii, Iowa, Massachusetts, Arizona,
Wisconsin, Idaho, Arkansas, Indiana, Nebraska, Vermont, Colorado, Mississippi,
Virginia, the city of New York and the District of Columbia, as well as certain
other jurisdictions.

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. However, any
significant pay-to-play payment or litigation loss could negatively impact our
liquidity.

Other Jurisdictions. We are also in various stages of inquiry or audit with various tax authorities, some of which, including 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.

Segments


We have the following reportable segments: Retail, B2B, and trivago. Our Retail
segment provides a full range of travel and advertising services to our
worldwide customers through a variety of consumer brands including: Expedia.com
and Hotels.com in the United States and localized Expedia and Hotels.com
websites throughout the world, Vrbo, Orbitz, Travelocity, Wotif Group, ebookers,
CheapTickets, Hotwire.com, CarRentals.com and Expedia Cruises. Our B2B segment
is comprised of our Expedia Business Services organization including Expedia
Partner Solutions, which offers private label and co-branded products to make
travel services available to travelers through third-party company branded
websites, and, through its sale in November 2021, Egencia, a full-service travel
management company that provides 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.

Operating Metrics


Our operating results are affected by certain metrics, such as gross bookings
and revenue margin, which we believe are necessary for understanding and
evaluating us. Gross bookings generally represent the total retail value of
transactions booked for agency and merchant transactions, recorded at the time
of booking reflecting the total price due for travel by travelers, including
taxes, fees and other charges, and are reduced for cancellations and refunds.
Revenue margin is defined as revenue as a percentage of gross bookings.

Gross Bookings and Revenue Margin

                                   Three months ended June 30,                                     Six months ended June 30,
                                     2022                 2021              % Change                 2022                2021              % Change
                                         ($ in millions)                                                ($ in millions)
Gross bookings                 $      26,139           $ 20,815                    26  %       $     50,551           $ 36,237                    39  %
Revenue margin (1)                      12.2   %           10.1  %                                     10.7   %            9.3  %

____________________________

(1)trivago, which is comprised of a hotel metasearch business that differs from
our transaction-based websites, does not have associated gross bookings or
revenue margin. However, third-party revenue from trivago is included in revenue
used to calculate total revenue margin.

During the three and six months ended June 30, 2022gross bookings increased 26% and 39%, compared to the same periods in 2021, as travel demand further improved for lodging, air and other travel products during the current year.

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Results of Operations

Revenue

                                      Three months ended June 30,                                     Six months ended June 30,
                                        2022                 2021              % Change                 2022                2021               % Change
                                            ($ in millions)                                                ($ in millions)
Revenue by Segment
Retail                            $        2,420          $  1,715                    41  %       $       4,160          $  2,740                     52  %
B2B                                          650               305                   113  %               1,082               489                    121  %
trivago (Third-party revenue)                111                91                    22  %                 188               128                     47  %
   Total revenue                  $        3,181          $  2,111                    51  %       $       5,430          $  3,357                     62  %


Revenue increased 51% and 62% for the three and six months ended June 30, 2022,
compared to the same periods in 2021 with all segments growth reflecting the
improvement in travel demand.

                                         Three months ended June 30,                                     Six months ended June 30,
                                           2022                 2021              % Change                 2022                2021               % Change
                                               ($ in millions)                                                ($ in millions)
Revenue by Service Type
Lodging                              $        2,400          $  1,533                    57  %       $       4,010          $  2,436                     65  %
Air                                              95                78                    22  %                 169               128                     33  %
Advertising and media(1)                        213               161                    33  %                 379               249                     53  %
Other                                           473               339                    39  %                 872               544                     60  %
Total revenue                        $        3,181          $  2,111                    51  %       $       5,430          $  3,357                     62  %

____________________________

(1) Includes third-party revenue from trivago as well as our transaction-based websites.


Lodging revenue increased 57% and 65% for the three and six months ended
June 30, 2022, compared to the same periods in 2021, on a 40% and 45% increase
in room nights stayed across hotel and alternative accommodations as well as
stayed ADR growth of 9% and 13%.

Air revenue increased 22% for the three months ended June 30, 2022 primarily
driven by a 21% growth in revenue per air ticket as air travel demand remained
stable despite higher airfares. Air revenue increased 33% for the six months
ended June 30, 2022 driven by an increase in air tickets sold of 20% and revenue
per ticket of 11%.

Advertising and media revenue increased 33% and 53% for the three and six months
ended June 30, 2022, compared to the same periods in 2021, due to increases at
both Expedia Group Media Solutions and trivago. All other revenue, which
includes car rental, insurance, destination services, fee revenue related to our
corporate travel business (through Egencia's sale in November 2021), increased
39% and 60% for the three and six months ended June 30, 2022, compared to the
same periods in 2021, from growth in travel insurance products and car.

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In addition to the above segment and product revenue discussion, our revenue by business model is as follows:


                                      Three months ended June 30,                                     Six months ended June 30,
                                        2022                 2021              % Change                 2022                2021               % Change
                                            ($ in millions)                                                ($ in millions)
Revenue by Business Model
Merchant                          $        2,125          $  1,338                    59  %       $       3,610          $  2,134                     69  %
Agency                                       808               573                    41  %               1,374               896                     53  %
Advertising, media and other                 248               200                    24  %                 446               327                     37  %
   Total revenue                  $        3,181          $  2,111                    51  %       $       5,430          $  3,357                     62  %


Merchant revenue increased for the three and six months ended June 30, 2022,
compared to the same periods in 2021, primarily due to an increase in merchant
hotel revenue driven by an increase in room nights stayed as well as an increase
in Vrbo merchant alternative accommodations revenue and travel insurance
revenue.

Agency revenue increased for the three and six months ended June 30, 2022compared to the same periods in 2021, primarily due to an increase in agency hotel, air, alternative accommodations and car revenue.

Advertising, media and other increased for the three and six months ended
June 30, 2022compared to the same periods in 2021, primarily due to an increase in advertising revenue.

Cost of Revenue

                                   Three months ended June 30,                                      Six months ended June 30,
                                     2022                 2021              % Change                 2022                 2021               % Change
                                         ($ in millions)                                                 ($ in millions)
Direct costs                   $        345            $    266                    29  %       $        644            $    467                     38  %
Personnel and overhead                   74                 108                   (31) %                146                 218                    (33) %
Total cost of revenue          $        419            $    374                    12  %       $        790            $    685                     15  %
% of revenue                           13.2    %           17.7  %                                     14.6    %           20.4  %


Cost of revenue primarily consists of direct costs to support our customer
operations, including our customer support and telesales as well as fees to air
ticket fulfillment vendors; credit card processing, including merchant fees,
fraud and chargebacks; and other costs, primarily including data center and
cloud costs to support our websites, supplier operations, destination supply,
certain transactional level taxes as well as related personnel and overhead
costs, including stock-based compensation.

Cost of revenue increased $45 million and $105 million during the three and six
months ended June 30, 2022, compared to the same periods in 2021, primarily due
to higher merchant fees, customer service costs, and cloud costs as a result of
increased transaction volumes, which offset lower personnel costs related to the
sale of Egencia in November 2021.

Selling and Marketing

                                   Three months ended June 30,                                     Six months ended June 30,
                                     2022                 2021              % Change                 2022                2021               % Change
                                         ($ in millions)                                                ($ in millions)
Direct costs                   $       1,549           $  1,002                    55  %       $      2,725           $  1,489                     83  %
Indirect costs                           167                197                   (15) %                330                374                    (11) %
Total selling and marketing    $       1,716           $  1,199                    43  %       $      3,055           $  1,863                     64  %
% of revenue                            53.9   %           56.8  %                                     56.3   %           55.5  %


Selling and marketing expense primarily relates to direct costs, including
traffic generation costs from search engines and internet portals, television,
radio and print spending, B2B partner commissions, public relations and other
costs. The remainder of the expense relates to indirect costs, including
personnel and related overhead in our various brands and global supply
organization as well as stock-based compensation costs.

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Selling and marketing expenses increased $517 million and $1.2 billion during
the three and six months ended June 30, 2022, compared to the same periods in
2021, primarily due to an increase in spend across all main marketing channels
as well as an increase in B2B partner commissions. In addition, the decrease in
indirect costs in the current year periods was primarily driven by lower
personnel costs related to the sale of Egencia in November 2021.


Technology and Content


                                    Three months ended June 30,                                      Six months ended June 30,
                                      2022                 2021              % Change                 2022                 2021               % Change
                                          ($ in millions)                                                 ($ in millions)
Personnel and overhead          $        207            $    204                     2  %       $        409            $    378                      8  %
Other                                     77                  72                     6  %                145                 145                      -  %
Total technology and content    $        284            $    276                     3  %       $        554            $    523                      6  %
% of revenue                             8.9    %           13.1  %                                     10.2    %           15.6  %


Technology and content expense includes product development and content expense,
as well as information technology costs to support our infrastructure,
back-office applications and overall monitoring and security of our networks,
and is principally comprised of personnel and overhead, including stock-based
compensation, as well as other costs including cloud expense and licensing and
maintenance expense.

Technology and content expense remained largely consistent with an increase of
$8 million during the three months ended June 30, 2022, compared to the same
period in 2021. Technology and content expense increased $31 million during the
six months ended June 30, 2022, compared to the same period in 2021, primarily
due to an increase in personnel costs resulting from the prior year's
compensation change, which shifted discretionary bonuses to salary beginning in
the second quarter of 2021.


General and Administrative

                                        Three months ended June 30,                                      Six months ended June 30,
                                          2022                 2021              % Change                 2022                 2021               % Change
                                              ($ in millions)                                                 ($ in millions)
Personnel and overhead              $        149            $    148                     1  %       $        292            $    268                      9  %
Professional fees and other                   40                  36                    12  %                 83                  72                     17  %
Total general and administrative    $        189            $    184                     3  %       $        375            $    340                     11  %
% of revenue                                 6.0    %            8.7  %                                      6.9    %           10.1  %

General and administrative expense consists primarily of personnel-related costs, including our executive leadership, finance, legal and human resource functions and related stock-based compensation as well as fees for external professional services.


General and administrative expense remained largely consistent with an increase
of $5 million during the three months ended June 30, 2022, compared to the same
period in 2021. General and administrative expense increased $35 million during
the six months ended June 30, 2022, compared to the same period in 2021,
primarily due to an increase in personnel costs resulting from the prior year's
compensation change, which shifted discretionary bonuses to salary beginning in
the second quarter of 2021, as well as an increase of $7 million in stock-based
compensation.

Depreciation and Amortization

                                      Three months ended June 30,                                     Six months ended June 30,
                                        2022                 2021              % Change                 2022                2021               % Change
                                            ($ in millions)                                                ($ in millions)
Depreciation                      $          176          $    179                    (2) %       $         351          $    361                     (3) %
Amortization of intangible assets             21                26                   (17) %                  43                53                    (19) %
Total depreciation and
amortization                      $          197          $    205                    (4) %       $         394          $    414                     (5) %


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Depreciation decreased $3 million and $10 million during the three and six
months ended June 30, 2022, compared to the same periods in 2021. Amortization
of intangible assets decreased $5 million and $10 million during the three and
six months ended June 30, 2022, compared to the same periods in 2021 primarily
due to the completion of amortization related to certain intangible assets.

Impairment of Intangible Assets


During the three and six months ended June 30, 2022, we recognized intangible
impairment charges of $29 million related to an indefinite-lived trade name
within our trivago segment. See Note 3 - Fair Value Measurements in the notes to
the consolidated financial statements for further information.

Legal Reserves, Occupancy Tax and Other

                                  Three months ended June 30,                                          Six months ended June 30,
                                    2022                 2021               % Change                  2022                    2021                 % Change
                                        ($ in millions)                                                     ($ in millions)
Legal reserves, occupancy tax
and other                      $        2            $      (8)                      N/A       $         23                        (9)                       N/A
% of revenue                            -    %            (0.4) %                                       0.4      %               (0.2) %


Legal reserves, occupancy tax and other primarily consists of increases in our
reserves for court decisions and the potential and final settlement of issues
related to hotel occupancy and other taxes, expenses recognized related to
monies paid in advance of occupancy and other tax proceedings ("pay-to-play") as
well as certain other legal reserves.

During the three months ended June 30, 2022, the charges primarily related to
immaterial changes in our reserves related to hotel occupancy and other taxes.
During the six months ended June 30, 2022, the charges primarily related to
certain other legal reserves for trivago as described in Note 8 - Commitments
and Contingencies in the notes to the consolidated financial statements. During
the three and six months ended June 30, 2021, there were net reductions to our
reserve related to hotel occupancy and other taxes.

Restructuring and Related Reorganization Charges


In 2020, we committed to restructuring actions intended to simplify our
businesses and improve operational efficiencies, which resulted in headcount
reductions and office consolidations. As a result, we recognized $13 million and
$42 million in restructuring and related reorganization charges during the three
and six months ended June 30, 2021. We continue to actively evaluate additional
cost reduction efforts and should we make decisions in future periods to take
further actions we may incur additional reorganization charges.

Operating Income (Loss)


                                   Three months ended June 30,                                     Six months ended June 30,
                                     2022                 2021               % Change                2022               2021               % Change
                                         ($ in millions)                                                ($ in millions)
Operating income (loss)        $        345            $   (132)                      N/A       $      210           $   (501)                       N/A
% of revenue                           10.9    %           (6.3) %                                     3.9   %          (14.9) %


During the three and six months ended June 30, 2022, we had operating income of
$345 million and $210 million, compared to operating losses of $132 million and
$501 million for the same periods in 2021. The improvement in the current year
period was primarily due to growth in revenue in excess of operating costs.

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Adjusted EBITDA by Segment

                                Three months ended June 30,                                       Six months ended June 30,
                                  2022                 2021              % Change                   2022                  2021               % Change
                                      ($ in millions)                                                  ($ in millions)
Retail                      $          582          $    316                    84  %       $         770              $    422                     83  %
B2B (1)                                156                (4)                     N/A                 236                   (61)                      N/A
trivago                                 33                 5                   534  %                  58                     1                       N/A
Unallocated overhead costs
(Corporate)                           (123)             (116)                    6  %                (243)                 (219)                    11  %
Total Adjusted EBITDA (2)   $          648          $    201                   223  %       $         821              $    143                    476  %


____________________________

(1)   Includes operating results of Egencia through its sale in November 2021.
(2)   Adjusted EBITDA is a non-GAAP measure. See "Definition and Reconciliation
of Adjusted EBITDA" below for more information.

Adjusted EBITDA is our primary segment operating metric. See Note 9 - Segment
Information in the notes to the consolidated financial statements for additional
information on intersegment transactions, unallocated overhead costs and for a
reconciliation of Adjusted EBITDA by segment to net income (loss) attributable
to Expedia Group, Inc. for the periods presented above. During the fourth
quarter of 2021, we consolidated our divisional finance teams into one global
finance organization, which resulted in the reclassification of expenses from
Retail and B2B into our Corporate function. We have reclassified prior period
segment information to conform to our current period presentation.

Our Retail, B2B and trivago segments all experienced improvements in Adjusted
EBITDA during the three and six months ended June 30, 2022, compared to the same
periods in 2021, as a result of the recovering travel demand. In addition, the
B2B segment improved in part due to the absence of the prior year Adjusted
EBITDA loss related to Egencia.

Unallocated overhead costs increased $ 7 million and $ 24 million during the three and six months ended June 30, 2022compared to the same periods in 2021, primarily due to an increase in general and administrative expenses.

Interest Income and Expense

                                         Three months ended June 30,                                            Six months ended June 30,
                                           2022                   2021              % Change                     2022                     2021                % Change
                                               ($ in millions)                                                       ($ in millions)
Interest income                     $             10          $       1                   502  %       $            13                $        3                    279  %
Interest expense                                 (73)               (83)                  (13) %                  (154)                     (181)                   (15) %
Loss on debt extinguishment                      (24)                 -                      N/A                   (24)                     (280)                   (91) %



Interest income increased for the three and six months ended June 30, 2022,
compared to the same periods in 2021, as a result of higher rates of return.
Interest expense decreased for the three and six months ended June 30, 2022,
compared to the same periods in 2021, as a result of lower average senior notes
outstanding in the current year periods due to the extinguishments discussed
below.

As a result of the early redemption of the 3.6% and 4.5% senior unsecured notes
during the three and six months ended June 30, 2022, we recognized a loss on
debt extinguishment of $24 million, which primarily included the payment of
early payment premiums as well as the write-off of unamortized discount and debt
issuance costs. See Note 4 - Debt in the notes to the consolidated financial
statements for further information. In addition, as a result of the debt
refinancing transactions during the prior year, we recognized a loss on debt
extinguishment of $280 million during the six months ended June 30, 2021, which
included the payment of early payment premiums and fees as well as the write-off
of unamortized debt issuance costs.

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Other, Net

Other, net is comprised of the following:

                                                Three months ended June 30,                   Six months ended June 30,
                                                  2022                   2021                  2022                  2021
                                                                            ($ in millions)
Foreign exchange rate losses, net          $            (14)         $      (7)         $           (31)         $     (18)
Gains (losses) on minority equity
investments, net                                       (373)                (4)                    (352)                 4

Other                                                     2                  1                        3                 (1)
Total other, net                           $           (385)         $     (10)         $          (380)         $     (15)

For the three and six months ended June 30, 2022losses on minority equity investments, net included $ 333 million and $ 335 million of losses related to mark-to-market adjustments in the fair value for our Global Business Travel Group, Inc (“GBTG”) investment. See Note 3 – Fair Value Measurements in the notes to the consolidated financial statements for further information.

Provision for Income Taxes

                                  Three months ended June 30,                                     Six months ended June 30,
                                     2022                2021               % Change                2022               2021               % Change
                                        ($ in millions)                                                ($ in millions)
Provision for income taxes     $        58            $    (47)                      N/A       $      (27)          $   (216)                   (88) %
Effective tax rate                    46.2    %           21.0  %                                     8.0   %           22.1  %

We determine our provision for income taxes for interim periods using an estimate of our annual effective tax rate. We record any changes affecting the estimated annual tax rate in the interim period in which the change occurs, including discrete items.


For the three months ended June 30, 2022, the effective tax rate was a 46.2%
expense on pre-tax loss, compared to a 21.0% benefit on pre-tax loss for the
three months ended June 30, 2021. The change in the effective tax rate was
primarily due to nondeductible mark-to-market adjustments to our minority equity
investments as well as other discrete items.

For the six months ended June 30, 2022, the effective tax rate was an 8.0%
benefit on pre-tax loss, compared to a 22.1% benefit on pre-tax loss for the six
months ended June 30, 2021. The change in the effective tax rate was primarily
due to nondeductible mark-to-market adjustments to our minority equity
investments as well as other discrete items.

We are subject to taxation in the United States and foreign jurisdictions. Our
income tax filings are regularly examined by federal, state and foreign tax
authorities. During the fourth quarter of 2019, the Internal Revenue Service
("IRS") issued final adjustments related to transfer pricing with our foreign
subsidiaries for our 2011 to 2013 tax years. The proposed adjustments would
increase our U.S. taxable income by $696 million, which would result in federal
tax of approximately $244 million, subject to interest. We do not agree with the
position of the IRS. We filed a protest with the IRS for our 2011 to 2013 tax
years and Appeals returned our case to Exam for further review. We are also
under examination by the IRS for our 2014 to 2020 tax years. Subsequent years
remain open to examination by the IRS. We do not anticipate a significant impact
to our gross unrecognized tax benefits within the next 12 months related to
these years.

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Definition and Reconciliation of Adjusted EBITDA


We report Adjusted EBITDA as a supplemental measure to U.S. generally accepted
accounting principles ("GAAP"). Adjusted EBITDA is among the primary metrics by
which management evaluates the performance of the business and on which internal
budgets are based. Management believes that investors should have access to the
same set of tools that management uses to analyze our results. This non-GAAP
measure should be considered in addition to results prepared in accordance with
GAAP, but should not be considered a substitute for or superior to GAAP.
Adjusted EBITDA has certain limitations in that it does not take into account
the impact of certain expenses to our consolidated statements of operations. We
endeavor to compensate for the limitation of the non-GAAP measure presented by
also providing the most directly comparable GAAP measure and a description of
the reconciling items and adjustments to derive the non-GAAP measure. Adjusted
EBITDA also excludes certain items related to transactional tax matters, which
may ultimately be settled in cash, and we urge investors to review the detailed
disclosure regarding these matters included above, in the Legal Proceedings
section, as well as the notes to the financial statements. The non-GAAP
financial measure used by the Company may be calculated differently from, and
therefore may not be comparable to, similarly titled measures used by other
companies.

Adjusted EBITDA is defined as net income (loss) attributable to Expedia Group,
Inc. adjusted for (1) net income (loss) attributable to non-controlling
interests; (2) provision for income taxes; (3) total other expenses, net; (4)
stock-based compensation expense, including compensation expense related to
certain subsidiary equity plans; (5) acquisition-related impacts, including (i)
amortization of intangible assets and goodwill and intangible asset impairment,
(ii) gains (losses) recognized on changes in the value of contingent
consideration arrangements, if any, and (iii) upfront consideration paid to
settle employee compensation plans of the acquiree, if any; (6) certain other
items, including restructuring; (7) items included in legal reserves, occupancy
tax and other; (8) that portion of gains (losses) on revenue hedging activities
that are included in other, net that relate to revenue recognized in the period;
and (9) depreciation.

The above items are excluded from our Adjusted EBITDA measure because these
items are noncash in nature, or because the amount and timing of these items is
unpredictable, not driven by core operating results and renders comparisons with
prior periods and competitors less meaningful. We believe Adjusted EBITDA is a
useful measure for analysts and investors to evaluate our future on-going
performance as this measure allows a more meaningful comparison of our
performance and projected cash earnings with our historical results from prior
periods and to the results of our competitors. Moreover, our management uses
this measure internally to evaluate the performance of our business as a whole
and our individual business segments. In addition, we believe that by excluding
certain items, such as stock-based compensation and acquisition-related impacts,
Adjusted EBITDA corresponds more closely to the cash operating income generated
from our business and allows investors to gain an understanding of the factors
and trends affecting the ongoing cash earnings capabilities of our business,
from which capital investments are made and debt is serviced.

The reconciliation of net income (loss) attributable to Expedia Group, Inc. to Adjusted EBITDA is as follows:

                                                             Three months ended June 30,                 Six months ended June 30,
                                                               2022                  2021                 2022                  2021
                                                                                         (In millions)
Net loss attributable to Expedia Group, Inc.            $          (185)         $    (172)         $         (307)         $    (750)
Net loss attributable to non-controlling
interests                                                             -                 (5)                     (1)                (8)
Provision for income taxes                                           58                (47)                    (27)              (216)
Total other expense, net                                            472                 92                     545                473
Operating income (loss)                                             345               (132)                    210               (501)
Gain (loss) on revenue hedges related to revenue
recognized                                                          (18)                 3                     (18)                (6)
Restructuring and related reorganization charges                      -                 13                       -                 42
Legal reserves, occupancy tax and other                               2                 (8)                     23                 (9)
Stock-based compensation                                             93                120                     183                203
Depreciation and amortization                                       197                205                     394                414

Impairment of intangible assets                                      29                  -                      29                  -
Adjusted EBITDA                                         $           648          $     201          $          821          $     143

Financial Position, Liquidity and Capital Resources


Our principal sources of liquidity are typically cash flows generated from
operations, cash available under our credit facility as well as our cash and
cash equivalents and short-term investment balances, which were $5.6 billion and
$4.3 billion at

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June 30, 2022 and December 31, 2021. As of June 30, 2022, the total cash and
cash equivalents and short-term investments held outside the United States was
$687 million ($447 million in wholly-owned foreign subsidiaries and $240 million
in majority-owned subsidiaries). Our revolving credit facility with aggregate
commitments of $2.5 billion was essentially untapped at June 30, 2022.

Managing our balance sheet prudently and maintaining appropriate liquidity have
been high priorities during the COVID-19 pandemic. In 2020, in order to best
position the Company to navigate our temporary working capital changes and
depressed revenue, we took a number of actions to bolster our liquidity and
preserve financial flexibility. During the six months ended June 30, 2022, we
continued certain of these actions, including suspension of our share
repurchases and quarterly common stock dividends.

In March 2022, we early redeemed all of the €650 million of outstanding
aggregate principal amount of the Company's 2.5% Notes due in June 2022. The
redemption price for the 2.5% Notes equaled 100% of the aggregate principal
amount thereof plus accrued and unpaid interest thereon through the redemption
date.

In May 2022, we early redeemed all of our $500 million 3.6% Notes, and in June
2022, we early redeemed all of our $500 million 4.5% Notes, which resulted in
the recognition of a loss on debt extinguishment of $24 million during the three
and six months ended June 30, 2022 primarily comprised of "make-whole" premiums
as well as the write-off of unamortized discount and debt issuance costs.

Our credit ratings are periodically reviewed by rating agencies. As of June 30,
2022, Moody's rating was Baa3 with an outlook of "stable," S&P's rating was BBB-
with an outlook of "stable" and Fitch's rating was BBB- with an outlook of
"stable." Changes in our operating results, cash flows, financial position,
capital structure, financial policy or capital allocations to share repurchase,
dividends, investments and acquisitions could impact the ratings assigned by the
various rating agencies. Should our credit ratings be adjusted downward, we may
incur higher costs to borrow and/or limited access to capital markets and
interest rates on the 6.25% Notes issued in May 2020, the 4.625% Notes issued in
July 2020 as well as the 2.95% Notes issued in March 2021 will increase, which
could have a material impact on our financial condition and results of
operations.

As of June 30, 2022, we were in compliance with the covenants and conditions in
our revolving credit facility and outstanding debt as detailed in Note 4 - Debt
in the notes to the consolidated financial statements.

Under the merchant model, we receive cash from travelers at the time of booking
and we record these amounts on our consolidated balance sheets as deferred
merchant bookings. We pay our airline suppliers related to these merchant model
bookings generally within a few weeks after completing the transaction. For most
other merchant bookings, which is primarily our merchant lodging business, we
generally pay after the travelers' use and, in some cases, subsequent billing
from the hotel suppliers. Therefore, generally we receive cash from the traveler
prior to paying our supplier, and this operating cycle represents a working
capital source of cash to us. Typically, the seasonal fluctuations in our
merchant hotel bookings have affected the timing of our annual cash flows.
Generally, during the first half of the year, hotel bookings have traditionally
exceeded stays, resulting in much higher cash flow related to working capital.
During the second half of the year, this pattern typically reverses and cash
flows are typically negative. During 2020, impacts of COVID-19 disrupted our
typical working capital trends. Significantly higher cancellations and reduced
booking volumes, particularly in the first half of 2020, resulted in material
operating losses and negative cash flow. During the first half of 2022, booking
and travel trends have nearly normalized resulting in working capital benefits
and positive cash flow in the current period more akin to typical historical
trends. However, it remains difficult to forecast the working capital trends for
the upcoming quarters, given the uncertainty related to the duration of the
impact from COVID-19 and the shape and timing of any sustained recovery.

Prior to COVID-19, we embarked on an ambitious cost reduction initiative to
simplify the organization and increase efficiency. In response to COVID-19, we
took several additional actions to further reduce costs to help mitigate the
financial impact from COVID-19 and continue to improve our long-term cost
structure. For 2022, we expect total capital expenditures for the full year to
increase over 2021 spending levels as we look to continue to improve our
technology platforms, infrastructure, operational capabilities, and in the
development of service offerings and expansion of our operations.

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Our cash flows are as follows:

                                                                      Six months ended June 30,
                                                                        2022                2021             $ Change
                                                                                      (In millions)
 Cash provided by (used in):
Operating activities                                              $       4,619          $  4,684          $     (65)
Investing activities                                                       (248)             (413)               165
Financing activities                                                     (1,687)             (378)            (1,309)

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents

                       (165)              (26)              (139)


For the six months ended June 30, 2022net cash provided by operating activities decreased by $ 65 million primarily due to a decrease in benefits from working capital changes driven mostly from a change in deferred merchant bookings, partially offset by higher operating income after adjusting for impacts of depreciation and amortization.


For the six months ended June 30, 2022, we had net cash used in investing
activities of $248 million compared to cash used in investing activities of $413
million in the prior year period. The decrease was largely due to higher net
sales and maturities of investments in the current year.

For the six months ended June 30, 2022, net cash used in financing activities
primarily included payments of $1.7 billion related to the extinguishment of our
2.5% Notes, 3.6% Notes and 4.5% Notes discussed above as well as $69 million of
cash paid for treasury stock activity related to the vesting of equity
instruments. These uses of cash were largely offset by $114 million of proceeds
from the exercise of options and employee stock purchase plans. For the six
months ended June 30, 2021, net cash used in financing activities primarily
included payments of approximately $2 billion related to the extinguishment of
debt, $618 million of cash paid for the 50% redemption of preferred stock,
$85 million of cash paid for treasury stock activity related to the vesting of
equity instruments and $50 million in preferred stock dividends. These uses of
cash were largely offset by approximately $2 billion of net proceeds from the
issuance of Convertible Notes and 2.95% Notes issued in February and March 2021,
respectively, as well as $379 million of proceeds from the exercise of options
and employee stock purchase plans.

Foreign exchange rate changes resulted in a decrease of our cash and restricted cash balances denominated in foreign currency during the six months ended
June 30, 2022 and 2021 of $ 165 million and $ 26 million reflecting a net depreciation in foreign currencies relative to the US dollar during the periods.

Other than discussed above, there have been no material changes outside the normal course of business to our contractual obligations and commercial commitments since December 31, 2021.


In our opinion, our liquidity position provides sufficient capital resources to
meet our foreseeable cash needs. There can be no assurance, however, that the
cost or availability of future borrowings, including refinancings, if any, will
be available on terms acceptable to us.

Summarized Financial Information for Guarantors and the Issuer of Guaranteed Securities


Summarized financial information of Expedia Group, Inc. (the "Parent") and our
subsidiaries that are guarantors of our debt facility and instruments (the
"Guarantor Subsidiaries") is shown below on a combined basis as the "Obligor
Group." The debt facility and instruments are guaranteed by certain of our
wholly-owned domestic subsidiaries and rank equally in right of payment with all
of our existing and future unsecured and unsubordinated obligations. The
guarantees are full, unconditional, joint and several with the exception of
certain customary automatic subsidiary release provisions. In this summarized
financial information of the Obligor Group, all intercompany balances and
transactions between the Parent and Guarantor Subsidiaries have been eliminated
and all information excludes subsidiaries that are not issuers or guarantors of
our debt facility and instruments, including earnings from and investments in
these entities.

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