Income Taxes	6 Months Ended
Jun. 30, 2013
Income Taxes	Note 8 – Income Taxes We determine our provision for income taxes for interim periods using an estimate of our annual effective rate. We record any changes to the estimated annual rate in the interim period in which the change occurs, including discrete tax items. Our effective tax rate was 27.9% and 21.3% for the three months ended June 30, 2013 and 2012, and (39.3)% and 21.0% for the six months ended June 30, 2013 and 2012. The change in the effective tax rate for the three months ended June 30, 2013 as compared to the same period in 2012 was due to the recording of a valuation allowance related to foreign deferred tax assets. For the six months ended June 30, 2013, we recorded $13 million of income tax expense on our pre-tax losses primarily as a result of non-deductible stock-based compensation recorded in relation to the trivago acquisiton and non-deductible penalties included in the Hawaii pay-to-play assessments, disclosed below in Note 9 – Commitments and Contingencies. *Uncertain Tax Positions* The Company is routinely under audit by federal, state, local and foreign income tax authorities. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service (“IRS”) has substantially completed its audit of IAC/InterActiveCorp’s (“IAC”) U.S. consolidated federal income tax returns for the years ended December 31, 2001 through 2005 when Expedia filed as part of the IAC consolidated group. The settlement of these tax years has been submitted to the Joint Committee on Taxation for approval. The statute of limitations for the years 2001 through 2005 has been extended to June 30, 2014. The IRS is currently examining Expedia’s U.S. federal income tax returns for the periods ended December 31, 2009 through December 31, 2010. The Company believes it is reasonably possible its liabilities related to uncertain tax positions could decrease by $29.4 million within twelve months of the current reporting date due to settlements, expirations of statutes of limitations, and the reversal of deductible temporary differences.

Note 8 – Income Taxes

We determine our provision for income taxes for interim periods using an estimate of our annual effective rate. We record any changes to the estimated annual rate in the interim period in which the change occurs, including discrete tax items. Our effective tax rate was 27.9% and 21.3% for the three months ended June 30, 2013 and 2012, and (39.3)% and 21.0% for the six months ended June 30, 2013 and 2012. The change in the effective tax rate for the three months ended June 30, 2013 as compared to the same period in 2012 was due to the recording of a valuation allowance related to foreign deferred tax assets. For the six months ended June 30, 2013, we recorded $13 million of income tax expense on our pre-tax losses primarily as a result of non-deductible stock-based compensation recorded in relation to the trivago acquisiton and non-deductible penalties included in the Hawaii pay-to-play assessments, disclosed below in Note 9 – Commitments and Contingencies.

Uncertain Tax Positions

The Company is routinely under audit by federal, state, local and foreign income tax authorities. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service (“IRS”) has substantially completed its audit of IAC/InterActiveCorp’s (“IAC”) U.S. consolidated federal income tax returns for the years ended December 31, 2001 through 2005 when Expedia filed as part of the IAC consolidated group. The settlement of these tax years has been submitted to the Joint Committee on Taxation for approval. The statute of limitations for the years 2001 through 2005 has been extended to June 30, 2014. The IRS is currently examining Expedia’s U.S. federal income tax returns for the periods ended December 31, 2009 through December 31, 2010.

The Company believes it is reasonably possible its liabilities related to uncertain tax positions could decrease by $29.4 million within twelve months of the current reporting date due to settlements, expirations of statutes of limitations, and the reversal of deductible temporary differences.