Note 11 — Guarantor and Non-Guarantor Supplemental Financial Information

Condensed consolidating financial information of Expedia, Inc. (the “Parent”), our subsidiaries that are guarantors of our debt facility and instruments (the “Guarantor Subsidiaries”), and our subsidiaries that are not guarantors of our debt facility and instruments (the “Non-Guarantor Subsidiaries”) is shown below. The debt facility and instruments are guaranteed by certain of our wholly-owned domestic subsidiaries and rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations. The guarantees are full, unconditional, joint and several with the exception of certain customary automatic subsidiary release provisions. In this financial information, the Parent and Guarantor Subsidiaries account for investments in their wholly-owned subsidiaries using the equity method.

CONDENSED CONSOLIDATING STATEMENT OF OPERATION

Three months ended March 31, 2013


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	850,099		$	167,135		$	(4,867	)	$	1,012,367
Costs and expenses:
Cost of revenue		—			195,480			54,422			679			250,581
Selling and marketing		—			355,966			145,783			(5,594	)		496,155
Technology and content		—			98,963			39,317			3			138,283
General and administrative		—			57,629			34,702			45			92,376
Amortization of intangible assets		—			1,313			11,257			—			12,570
Legal reserves, occupancy tax and other		—			61,558			—			—			61,558
Acquistion-related and other		—			—			66,472			—			66,472
Intercompany (income) expense, net		—			162,444			(162,444	)		—			—

Operating loss		—			(83,254	)		(22,374	)		—			(105,628	)
Other income (expense):
Equity in pre-tax losses of consolidated subsidiaries		(93,275	)		(38,328	)		—			131,603			—
Other, net		(20,883	)		2,967			4,273			—			(13,643	)

Total other income (expense), net		(114,158	)		(35,361	)		4,273			131,603			(13,643	)

Loss before income taxes		(114,158	)		(118,615	)		(18,101	)		131,603			(119,271	)
Provision for income taxes		9,932			26,705			(24,734	)		—			11,903

Net loss		(104,226	)		(91,910	)		(42,835	)		131,603			(107,368	)
Net loss attributable to noncontrolling interests		—			—			3,142			—			3,142

Net loss attributable to Expedia, Inc.	$	(104,226	)	$	(91,910	)	$	(39,693	)	$	131,603		$	(104,226	)

Comprehensive loss attributable to Expedia, Inc.	$	(104,226	)	$	(92,126	)	$	(63,541	)	$	131,603		$	(128,290	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATION

Three months ended March 31, 2012


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	723,520		$	94,672		$	(1,704	)	$	816,488
Costs and expenses:
Cost of revenue		—			169,097			30,678			323			200,098
Selling and marketing		—			281,048			98,141			(2,117	)		377,072
Technology and content		—			82,733			26,197			(19	)		108,911
General and administrative		—			51,725			26,744			109			78,578
Amortization of intangible assets		—			1,760			1,662			—			3,422
Legal reserves, occupancy tax and other		—			(276	)		—			—			(276	)
Intercompany (income) expense, net		—			142,747			(142,747	)		—			—

Operating income (loss)		—			(5,314	)		53,997			—			48,683
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		32,344			34,162			—			(66,506	)		—
Other, net		(20,806	)		(137	)		(913	)		—			(21,856	)

Total other income (expense), net		11,538			34,025			(913	)		(66,506	)		(21,856	)

Income before income taxes		11,538			28,711			53,084			(66,506	)		26,827
Provision for income taxes		9,070			4,319			(18,629	)		—			(5,240	)

Income from continuing operations		20,608			33,030			34,455			(66,506	)		21,587
Discontinued operations, net of taxes		(23,889	)		—			—			—			(23,889	)

Net income (loss)		(3,281	)		33,030			34,455			(66,506	)		(2,302	)
Net income attributable to noncontrolling interests		—			—			(979	)		—			(979	)

Net income (loss) attributable to Expedia, Inc.	$	(3,281	)	$	33,030		$	33,476		$	(66,506	)	$	(3,281	)

Comprehensive income (loss) attributable to Expedia, Inc.	$	(3,281	)	$	33,791		$	47,057		$	(66,506	)	$	11,061

CONDENSED CONSOLIDATING BALANCE SHEET

March 31, 2013


	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Total current assets	$	147,888	$	3,526,996	$	147,425	$	(841,438	)	$	2,980,871
Investment in subsidiaries		4,224,101		1,134,987		—		(5,359,088	)		—
Intangible assets, net		—		633,540		530,288		—			1,163,828
Goodwill		—		2,436,533		1,205,565		—			3,642,098
Other assets, net		4,611		471,610		169,402		—			645,623

TOTAL ASSETS	$	4,376,600	$	8,203,666	$	2,052,680	$	(6,200,526	)	$	8,432,420

LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities	$	857,008	$	3,559,520	$	409,217	$	(841,438	)	$	3,984,307
Long-term debt		1,249,361		—		—		—			1,249,361
Other liabilities		—		412,662		515,859		—			928,521
Stockholders’ equity		2,270,231		4,231,484		1,127,604		(5,359,088	)		2,270,231

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,376,600	$	8,203,666	$	2,052,680	$	(6,200,526	)	$	8,432,420

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2012


	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Total current assets	$	137,942	$	2,674,496	$	675,026	$	(872,962	)	$	2,614,502
Investment in subsidiaries		4,277,954		1,188,871		—		(5,466,825	)		—
Intangible assets, net		—		634,853		186,566		—			821,419
Goodwill		—		2,436,533		579,137		—			3,015,670
Other assets, net		4,790		473,439		155,375		—			633,604

TOTAL ASSETS	$	4,420,686	$	7,408,192	$	1,596,104	$	(6,339,787	)	$	7,085,195

LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities	$	781,953	$	2,708,755	$	364,565	$	(872,962	)	$	2,982,311
Long-term debt		1,249,345		—		—		—			1,249,345
Other liabilities		—		415,465		48,686		—			464,151
Stockholders’ equity		2,389,388		4,283,972		1,182,853		(5,466,825	)		2,389,388

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,420,686	$	7,408,192	$	1,596,104	$	(6,339,787	)	$	7,085,195

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Three months ended March 31, 2013


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities from continuing operations	$	—		$	285,940		$	595,149		$	881,089

Investing activities:
Capital expenditures, including internal-use software and website development		—			(57,350	)		(29,806	)		(87,156	)
Purchases of investments		—			(532,019	)		(66,108	)		(598,127	)
Sales and maturities of investments		—			166,023			79,221			245,244
Acquisitions, net of cash acquired		—			—			(540,489	)		(540,489	)
Other, net		—			5,808			—			5,808

Net cash used in investing activities from continuing operations		—			(417,538	)		(557,182	)		(974,720	)

Financing activities:
Purchases of treasury stock		(117,672	)		—			—			(117,672	)
Proceeds from issuance of treasury stock		25,273			—			—			25,273
Transfers (to) from related parties		70,918			(70,918	)		—			—
Other, net		21,481			(7,750	)		317			14,048

Net cash provided by (used in) financing activities from continuing operations		—			(78,668	)		317			(78,351	)

Net cash provided by (used in) continuing operations		—			(210,266	)		38,284			(171,982	)
Effect of exchange rate changes on cash and cash equivalents		—			(37,808	)		(573	)		(38,381	)

Net decrease (increase) in cash and cash equivalents		—			(248,074	)		37,711			(210,363	)
Cash and cash equivalents at beginning of period		—			1,007,156			286,005			1,293,161

Cash and cash equivalents at end of period	$	—		$	759,082		$	323,716		$	1,082,798

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Three months ended March 31, 2012


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities from continuing operations	$	—		$	832,140		$	15,676		$	847,816

Investing activities:
Capital expenditures, including internal-use software and website development		—			(41,917	)		(8,897	)		(50,814	)
Purchases of investments		—			(226,114	)		(67,076	)		(293,190	)
Sales and maturities of investments		—			196,501			44,140			240,641
Other, net		—			6,637			(1,031	)		5,606

Net cash used in investing activities from continuing operations		—			(64,893	)		(32,864	)		(97,757	)

Financing activities:
Purchases of treasury stock		(198,164	)		—			—			(198,164	)
Transfers (to) from related parties		171,176			(171,176	)		—			—
Other, net		26,988			(4,190	)		115			22,913

Net cash provided by (used in) financing activities from continuing operations		—			(175,366	)		115			(175,251	)

Net cash provided by (used in) continuing operations		—			591,881			(17,073	)		574,808
Net cash used in discontinued operations		—			(7,607	)		—			(7,607	)
Effect of exchange rate changes on cash and cash equivalents		—			13,153			3,020			16,173

Net increase (decrease) in cash and cash equivalents		—			597,427			(14,053	)		583,374
Cash and cash equivalents at beginning of period		—			357,252			331,882			689,134

Cash and cash equivalents at end of period	$	—		$	954,679		$	317,829		$	1,272,508