Expedia.com Expedia, Inc. Expects One-Time Increase in Reserve
BELLEVUE, Wash., March 1, 2000—Expedia, Inc. (NASDAQ: EXPE), today announced that the company is working with federal law enforcement agencies to combat a recent increase in fraudulent transactions on the Expedia.com™ travel service. The fraud was committed by professional criminals who illegally obtained credit cards from non-Expedia.com sources and used those stolen cards to purchase travel online.
The credit cards were not obtained from Expedia.com and customers were not affected by this occurrence. The security of the Expedia.com site and its customer information has not been compromised.
As a result of the recent fraudulent activity, Expedia, Inc. expects to book in the current quarter a one-time reserve of $4 million to $6 million as part of cost of sales. This charge represents the company's estimate of unreserved fraudulent activity to date and is less than one half of one percent of tickets sold. The gross bookings to date on the Expedia.com site total over $1 billion, and the company's net revenues total over $85 million.
Since discovering the fraudulent activity, Expedia, Inc. has put additional anti-fraud measures in place above and beyond its existing credit card verification procedures. These measures have already proven effective.
About Expedia, Inc.
Expedia, Inc. (NASDAQ: EXPE) operates Expedia.com (http://expedia.com), a leading travel site in the United States with localized versions for travelers in Canada, Germany, and the United Kingdom. To help customers travel right, Expedia.com provides the best combination of air, car, and hotel booking, vacation package and cruise offers, destination information, and point-to-point mapping.
Expedia.com customers are supported by a credit card guarantee (U.S. site only), privacy policy, and live agents accessible via e-mail and a toll-free telephone number available 24 hours a day/seven days a week. Expedia.com also is available under Travel on the MSN™ network of Internet services.
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This press release contains forward-looking statements relating to future events or future financial performance that involve risks and uncertainties. Such statements can be identified by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or comparable terms. These statement are only predictions and actual results could differ materially from those anticipated in these statements based upon a number of factors including final adjustments made in closing the quarter and those identified in the Company’s filings with the SEC.
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