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Investments
9 Months Ended
Jun. 30, 2011
Investments  
Investments

 

Note 6. Investments

Our investment portfolio includes strategic investments in privately-held companies. We reported all of our strategic investment in "Investments" on our balance sheet. As of June 30, 2011, our strategic investments primarily included the following:

ClearTrip

In March 2011, we invested $40.0 million in privately held ClearTrip, Inc. ("ClearTrip"), a leading provider of online travel services in India. Our investment consists of both preferred stock and common stock. In addition, we have a warrant to purchase up to 1.5 million shares of the preferred stock. The warrant has a five year term and can be exercised at any time during this term.

Classes of preferred stock in ClearTrip that do not meet all the characteristics of in-substance common stock have been accounted for under the cost method with net accumulated earnings recorded only to the extent of distributed dividends.

Our investment in ClearTrip's common stock and certain classes of preferred stock are accounted for under the equity method because our total ownership interest exceeds 20% and we have the ability to exert significant influence. Under the equity method, we record our investment at cost and adjust the carrying amount of the investment to recognize our proportionate share of ClearTrip's net income or loss in our income statement after the date of acquisition.

RideCharge

During 2009 and 2010, we have made investments totaling $6.0 million in privately held RideCharge, Inc. ("RideCharge"), a leading provider of ground travel booking that allows business travelers to book, pay and get reimbursed for ground transportation.

Because our preferred stock in RideCharge does not meet all the characteristics of in-substance common stock, we have accounted for our investment under the cost method with net accumulated earnings recorded only to the extent of distributed dividends. We have reported our investment in RideCharge in "Investments" on our balance sheet.

Total cost method investments were $36.1 million and $6.0 million, as of June 30, 2011 and 2010. Total equity method investments were $13.0 million as of June 30, 2011. There were no equity investments as of June 30, 2010. We assess these investments for impairment as circumstances dictate.