Business Context and Reporting Period
Company: Expedia, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: February 10, 2016
Subject: Regulation FD Disclosure regarding clarification of foreign exchange impact on 2016 adjusted EBITDA guidance.
Key Financial Metrics
This filing does not report specific revenue, profit, cash flow, or debt figures. It addresses a specific adjustment to financial guidance:
- 2016 Adjusted EBITDA Growth Guidance: Assumes foreign exchange rates remain unchanged from the date of the Q4 2015 earnings call.
- Foreign Exchange Impact: Approximately 100 basis points negative impact to year-over-year growth.
Material Changes and Clarifications
The filing corrects a statement made during the fourth quarter 2015 earnings conference call:
- Initial Statement: Management referenced a 600 to 700 basis point negative impact to year-over-year adjusted EBITDA relating to foreign exchange changes.
- Clarification: Upon review, the Company determined the question pertained to 2016 guidance, not Q4 2015 results. The correct negative impact to 2016 year-over-year growth guidance is approximately 100 basis points.
Guidance, Outlook, and Risks
Outlook: The full-year 2016 adjusted EBITDA growth guidance is predicated on foreign exchange rates remaining static at Q4 2015 levels.
Risks and Contingencies: The filing includes standard forward-looking statement disclaimers, noting that actual results may differ due to:
- Fluctuations in foreign exchange rates.
- Competitive global environment and changes in search engine algorithms.
- Regulatory changes, tax laws, and legal proceedings.
- Operational risks including cybersecurity, data privacy, and third-party partner failures.
- Volatility in stock price and liquidity constraints.
Investor Verification Checklist
- Verify the specific foreign exchange rate assumptions used in the 2016 adjusted EBITDA guidance.
- Review the Q4 2015 earnings call transcript to understand the context of the initial 600-700 basis point comment.
- Monitor subsequent filings for updates on foreign exchange volatility and its actual impact on 2016 results.
- Assess the sensitivity of the company's international revenue mix to currency fluctuations.