Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Stockholders' Equity [Abstract]

Stockholders' Equity

NOTE 12 — Stockholders' Equity

All Expedia's common stock information and related share prices included in this note have been adjusted to reflect our one-for-two reverse stock split in December 2011.

Common Stock and Class B Common Stock

The following is a description of our common stock before and after the spin-off. The only change effected by the spin-off in terms of our common stock was the change in par value from $0.001 to $0.0001.

Our authorized common stock consists of 1.6 billion shares of common stock with par value of $0.0001 per share, and 400 million shares of Class B common stock with par value of $0.0001 per share. Both classes of common stock qualify for and share equally in dividends, if declared by our Board of Directors, and generally vote together on all matters. Common stock is entitled to one vote per share and Class B common stock is entitled to 10 votes per share. Holders of common stock, voting as a single, separate class are entitled to elect 25% of the total number of directors. Class B common stockholders may, at any time, convert their shares into common stock, on a one for one share basis. Upon conversion, the Class B common stock is retired and is not available for reissue. In the event of liquidation, dissolution, distribution of assets or winding-up of Expedia, Inc., the holders of both classes of common stock have equal rights to receive all the assets of Expedia, Inc. after the rights of the holders of the preferred stock have been satisfied.

Preferred Stock

As of December 31, 2010, our preferred stock had a face value of $22.23 per share and each share was entitled to an annual dividend of 1.99%. Each preferred stockholder was entitled to two votes per share. In December 2011, in connection with the spin-off, we completed a preferred stock merger which resulted in each share of Series A preferred stock converting into the right to receive cash equal to $22.23 per share plus an amount equal to accrued and unpaid dividends and resulted in a cash payment of approximately $17,000.

Share Repurchases

In 2006, our Board of Directors authorized a share repurchase of up to 20 million outstanding shares of our common stock. In 2010, the Executive Committee, acting on behalf of the Board of Directors, authorized an additional repurchase of up to 20 million outstanding shares of our common stock. During 2011 and 2010, we repurchased, through open market transactions, 10.6 million and 20.6 million shares (5.3 million and 10.3 million on a reverse split adjusted basis) under these authorizations for a total cost of $283 million and $489 million, excluding transaction costs, representing an average repurchase price of $26.60 and $23.71 per share ($53.20 and $47.42 on a reverse split adjusted basis). As of December 31, 2011, 8.8 million shares remain authorized for repurchase under the 2010 authorization. There is no fixed termination date for the repurchases.

Dividends on our Common Stock

In 2011 and 2010, the Executive Committee, acting on behalf of the Board of Directors, declared the following dividends, which have been adjusted for the one-for-two reverse stock split in December 2011:

			Dividend Per  Share				Total Amount (in  thousands)
	Declaration Date				Record Date				Payment Date
Year ended December 31, 2011:
		February 9, 2011	$	0.14		March 11, 2011	$	19,352		March 31, 2011
		April 27, 2011		0.14		May 27, 2011		19,232		June 17, 2011
		July 26, 2011		0.14		August 26, 2011		19,148		September 16, 2011
		October 26, 2011		0.14		November 18, 2011		18,818		December 9, 2011
Year ended December 31, 2010:
		February 10, 2010	$	0.14		March 11, 2010	$	20,220		March 31, 2010
		April 27, 2010		0.14		May 27, 2010		19,902		June 17, 2010
		July 26, 2010		0.14		August 26, 2010		19,703		September 16, 2010
		October 25, 2010		0.14		November 18, 2010		19,251		December 9, 2010

In addition, on February 9, 2012, the Executive Committee, acting on behalf of the Board of Directors, declared a quarterly cash dividend of $0.09 per share of outstanding common stock to the stockholders of record as of the close of business on March 12 , 2012. Future declarations of dividends are subject to final determination by our Board of Directors.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss), net of tax for 2011 and 2010 is primarily comprised of accumulated foreign currency translation adjustments.

Other Comprehensive Income (Loss)

The following table presents the changes in the components of other comprehensive income (loss), net of tax:

	For the Year Ended December 31,
	2011			2010			2009
	(In thousands)
Net income	$	474,603		$	425,560		$	303,623
Other comprehensive income (loss)
Currency translation adjustments		(1,161	)		(11,996	)		19,635
Unrealized gains (losses) on available for sale securities, net of taxes (1)		(79	)		329			—
Comprehensive income (loss)		473,363			413,893			323,258
Less: Comprehensive income attributable to noncontrolling interests		(9,616	)		(4,575	)		(4,351	)
Comprehensive income attributable to Expedia, Inc.	$	463,747		$	409,318		$	318,907

(1) Net gains recognized and reclassified during 2011 and 2010 were immaterial.

Noncontrolling Interests

In the second quarter of 2011, we acquired newly issued shares of eLong for $41 million and, at the same time, Tencent Holdings Limited also acquired approximately 16% of the outstanding shares of eLong for $84 million. In the fourth quarter of 2011, we acquired additional shares of eLong from external third parties for $93 million. As of December 31, 2011, our ownership interest in eLong was approximately 67%.

In 2011, including the eLong transactions discussed above, we acquired additional net interests in certain majority owned subsidiaries for $22 million in cash. In 2010, we acquired additional interests in certain majority owned subsidiaries, including eLong, for $78 million in cash.

Amounts paid in excess of the respective noncontrolling interests were recorded to additional paid-in capital.