Expedia 2014 Annual Report Download - page 28

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Depending on the size of the exposures and the relative movements of exchange rates, if we choose not to
hedge or fail to hedge effectively our exposure, we could experience a material adverse effect on our financial
statements and financial condition. As we have seen in some recent periods, in the event of severe volatility in
exchange rates these exposures can increase, and the impact on our results of operations can be more
pronounced. In addition, the current environment and the increasingly global nature of our business have made
hedging these exposures more complex. We have increased and plan to continue increasing the scope,
complexity and duration of our foreign exchange risk management. We make a number of estimates in
conducting hedging activities including in some cases cancellations and payments in foreign currencies. In
addition, an effective exchange rate hedging program is dependent upon effective systems, accurate and reliable
data sources, controls and change management procedures. In the event our estimates differ significantly from
actual results or if we fail to adopt effective hedging processes, we could experience greater volatility as a result
of our hedging activities.
Our stock price is highly volatile.
The market price of our common stock is highly volatile and could continue to be subject to wide
fluctuations in response to factors such as the following, some of which are beyond our control:
• Quarterly variations in our operating and financial results;
• Operating and financial results that vary from the expectations of securities analysts and investors,
including failure to deliver returns on technology or emerging market marketing investments;
• Changes in expectations as to our future financial performance, including financial estimates by
securities analysts and investors;
• Rating agency credit rating actions or pronouncements;
• Reaction to our earnings releases and conference calls, or presentations by executives at investor and
industry conferences;
• Changes in our capital structure;
• Changes in market valuations of other internet or online service companies;
• Changes in search industry dynamics, such as key word pricing and traffic, or other changes that
negatively affect our ability to generate traffic to our websites;
• Announcements of dividends or changes in the amount or frequency of our dividends;
• Announcements of technological innovations or new services by us or our competitors;
• Announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships,
joint ventures or capital commitments;
• Loss of a major travel supplier, such as an airline, hotel or car rental chain;
• Changes in the status of our intellectual property rights;
• Lack of success in the expansion of our business model geographically;
• Significant claims or proceedings against us or adverse developments or decisions in pending
proceedings;
• Additions or departures of key personnel;
• Rumors or public speculation about any of the above factors; and
• Price and volume fluctuations in the stock markets in general.
Volatility in our stock price could also make us less attractive to certain investors, and/or invite speculative
trading in our common stock or debt instruments.
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