Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations

NOTE 4 — Discontinued Operations

On December 20, 2011, we completed the spin-off of TripAdvisor, Inc., which included its flagship brand as well as 18 other travel media brands. Accordingly, we have presented the financial condition and results of operations of our former TripAdvisor Media Group segment in the consolidated financial statements through December 20, 2011 as discontinued operations. Additionally, the 2012 loss incurred to extinguish our 8.5% senior notes due 2016 (the “8.5% Notes”) as a result of the spin-off was recorded as discontinued operations. See below for a full description of the extinguishment. Financial data for the discontinued operations for the years ended December 31, 2012, 2011, 2010 were as follows:

	Year ended December 31,
	2012			2011			2010
	(In thousands)
Revenue	$	—		$	620,994		$	485,574
Income (loss) before income taxes	$	(37,568	)	$	230,380		$	194,729
Provision for income taxes		15,029			(82,118	)		(74,666	)
Net income (loss)		(22,539	)		148,262			120,063
Net income attributable to noncontrolling interest		—			(114	)		(178	)
Net income (loss) attributable to discontinued operations	$	(22,539	)	$	148,148		$	119,885
Earnings (loss) per share:
Basic	$	(0.17	)	$	1.09		$	0.85
Diluted		(0.16	)		1.07			0.83
Shares used in computing earnings per share:
Basic		134,203			135,888			141,233
Diluted		139,929			138,702			144,014

Discontinued operations for the year ended December 31, 2011 included spin-off costs (e.g., legal and professional fees) of $14 million.

Our Leisure segment recognized approximately $207 million of sales and marketing expense from TripAdvisor in 2011 through the spin-off date, and $171 million of sales and marketing expense for the year ended December 31, 2010.

The indenture governing our $400 million aggregate principal amount of the 8.5% Notes contained certain covenants that could have restricted implementation of the spin-off. On December 20, 2011, prior to consummation of the spin-off, we gave “Notice of Redemption” to the bondholders, the effect of which was the bonds became due and payable on the redemption date at the redemption price. The redemption price was equal to 100% of the principal amount plus a make-whole premium as of, and accrued and unpaid interest to, the redemption date. The redemption date was defined as 30 days after the Notice of Redemption was given. In order to complete the Notice of Redemption, we were required to irrevocably deposit, with the Trustee, funds sufficient to pay the redemption price plus accrued interest on the 8.5% Notes (approximately $451 million). The 8.5% Notes were fully redeemed on January 19, 2012, the redemption date, for approximately $450 million. In connection with the redemption, we incurred a pre-tax loss from early extinguishment of debt of approximately $38 million (or $24 million net of tax), which included an early redemption premium of $33 million and the write-off of $5 million of unamortized debt issuance and discount costs. This loss was recorded within discontinued operations in the first quarter of 2012, as that was the period in which the bonds were legally extinguished.

As a result of the above, as of December 31, 2012, the current asset of discontinued operations included a $14 million tax benefit primarily related to the loss on extinguishment of debt. As of December 31, 2011, we had a current asset of discontinued operations of $456 million primarily related to the deposit for the redemption price of the 8.5% Notes as well as a current liability of discontinued operations of $420 million for the 8.5% Notes, accrued interest expense related to the 8.5% Notes and accrued spin-off costs. The interest expense and amortization of debt issuance and discount costs related to the 8.5% Notes of $35 million for the years ended December 31, 2011 and 2010 were included within discontinued operations within our consolidated statement of operations.