Note 12 – 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 June 30, 2013


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	974,513		$	242,095		$	(11,591	)	$	1,205,017
Costs and expenses:
Cost of revenue		—			205,011			56,126			1,470			262,607
Selling and marketing		—			392,961			210,580			(13,073	)		590,468
Technology and content		—			94,046			46,637			(1	)		140,682
General and administrative		—			47,198			44,680			13			91,891
Amortization of intangible assets		—			1,168			17,669			—			18,837
Legal reserves, occupancy tax and other		—			6,246			—			—			6,246
Acquistion-related and other		—			—			—			—			—
Intercompany (income) expense, net		—			236,796			(236,796	)		—			—

Operating income (loss)		—			(8,913	)		103,199			—			94,286
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		84,609			79,229			—			(163,838	)		—
Other, net		(20,797	)		15,238			(1,304	)		—			(6,863	)

Total other income (expense), net		63,812			94,467			(1,304	)		(163,838	)		(6,863	)

Income before income taxes		63,812			85,554			101,895			(163,838	)		87,423
Provision for income taxes		7,688			(2,825	)		(29,271	)		—			(24,408	)

Net income		71,500			82,729			72,624			(163,838	)		63,015
Net loss attributable to noncontrolling interests		—			—			8,485			—			8,485

Net income attributable to Expedia, Inc.	$	71,500		$	82,729		$	81,109		$	(163,838	)	$	71,500

Comprehensive income attributable to Expedia, Inc.	$	71,500		$	81,568		$	84,438		$	(163,838	)	$	73,668

CONDENSED CONSOLIDATING STATEMENT OF OPERATION

Three months ended June 30, 2012


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	901,215		$	139,728		$	(963	)	$	1,039,980
Costs and expenses:
Cost of revenue		—			186,929			42,680			132			229,741
Selling and marketing		—			335,070			111,085			(1,582	)		444,573
Technology and content		—			87,071			29,344			(389	)		116,026
General and administrative		—			54,733			27,609			876			83,218
Amortization of intangible assets		—			1,573			7,058			—			8,631
Legal reserves, occupancy tax and other		—			3,350			—			—			3,350
Intercompany (income) expense, net		—			171,914			(171,914	)		—			—

Operating income		—			60,575			93,866			—			154,441
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		117,025			104,448			—			(221,473	)		—
Other, net		(20,895	)		(35,556	)		36,874			—			(19,577	)

Total other income (expense), net		96,130			68,892			36,874			(221,473	)		(19,577	)

Income before income taxes		96,130			129,467			130,740			(221,473	)		134,864
Provision for income taxes		9,111			(11,324	)		(26,542	)		—			(28,755	)

Net income		105,241			118,143			104,198			(221,473	)		106,109
Net income attributable to noncontrolling interests		—			—			(868	)		—			(868	)

Net income attributable to Expedia, Inc.	$	105,241		$	118,143		$	103,330		$	(221,473	)	$	105,241

Comprehensive income attributable to Expedia, Inc.	$	105,241		$	117,868		$	79,852		$	(221,473	)	$	81,488


CONDENSED CONSOLIDATING STATEMENT OF OPERATION Six months ended June 30, 2013

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	1,824,612		$	409,230		$	(16,458	)	$	2,217,384
Costs and expenses:
Cost of revenue		—			400,491			110,548			2,149			513,188
Selling and marketing		—			748,927			356,363			(18,667	)		1,086,623
Technology and content		—			193,009			85,954			2			278,965
General and administrative		—			104,827			79,382			58			184,267
Amortization of intangible assets		—			2,481			28,926			—			31,407
Legal reserves, occupancy tax and other		—			67,804			—			—			67,804
Acquistion-related and other		—			—			66,472			—			66,472
Intercompany (income) expense, net		—			399,240			(399,240	)		—			—

Operating income (loss)		—			(92,167	)		80,825			—			(11,342	)
Other income (expense):
Equity in pre-tax earnings (losses) of consolidated subsidiaries		(8,666	)		40,901			—			(32,235	)		—
Other, net		(41,680	)		18,205			2,969			—			(20,506	)

Total other income (expense), net		(50,346	)		59,106			2,969			(32,235	)		(20,506	)

Income (loss) before income taxes		(50,346	)		(33,061	)		83,794			(32,235	)		(31,848	)
Provision for income taxes		17,620			23,880			(54,005	)		—			(12,505	)

Net income (loss)		(32,726	)		(9,181	)		29,789			(32,235	)		(44,353	)
Net loss attributable to noncontrolling interests		—			—			11,627			—			11,627

Net income (loss) attributable to Expedia, Inc.	$	(32,726	)	$	(9,181	)	$	41,416		$	(32,235	)	$	(32,726	)

Comprehensive income (loss) attributable to Expedia, Inc.	$	(32,726	)	$	(10,558	)	$	26,157		$	(32,235	)	$	(49,362	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATION

Six months ended June 30, 2012


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	1,624,735		$	234,400		$	(2,667	)	$	1,856,468
Costs and expenses:
Cost of revenue		—			356,026			73,358			455			429,839
Selling and marketing		—			616,118			209,226			(3,699	)		821,645
Technology and content		—			169,804			55,541			(408	)		224,937
General and administrative		—			106,458			54,353			985			161,796
Amortization of intangible assets		—			3,333			8,720			—			12,053
Legal reserves, occupancy tax and other		—			3,074			—			—			3,074
Intercompany (income) expense, net		—			314,661			(314,661	)		—			—

Operating income		—			55,261			147,863			—			203,124
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		149,369			138,610			—			(287,979	)		—
Other, net		(41,701	)		(35,693	)		35,961			—			(41,433	)

Total other income (expense), net		107,668			102,917			35,961			(287,979	)		(41,433	)

Income from continuing operations before income taxes		107,668			158,178			183,824			(287,979	)		161,691
Provision for income taxes		18,181			(7,005	)		(45,171	)		—			(33,995	)

Income from continuing operations		125,849			151,173			138,653			(287,979	)		127,696
Discontinued operations, net of taxes		(23,889	)		—			—			—			(23,889	)

Net income		101,960			151,173			138,653			(287,979	)		103,807
Net income attributable to noncontrolling interests		—			—			(1,847	)		—			(1,847	)

Net income attributable to Expedia, Inc.	$	101,960		$	151,173		$	136,806		$	(287,979	)	$	101,960

Comprehensive income attributable to Expedia, Inc.	$	101,960		$	151,659		$	126,909		$	(287,979	)	$	92,549


CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2013

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
ASSETS
Total current assets	$	155,576		$	3,664,948		$	282,616		$	(839,430	)	$	3,263,710
Investment in subsidiaries		4,303,928			1,218,834			—			(5,522,762	)		—
Intangible assets, net		—			632,373			513,027			—			1,145,400
Goodwill		—			2,436,533			1,206,663			—			3,643,196
Other assets, net		4,430			520,630			166,730			—			691,790

TOTAL ASSETS	$	4,463,934		$	8,473,318		$	2,169,036		$	(6,362,192	)	$	8,744,096

LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities	$	876,343		$	3,726,825		$	447,174		$	(839,430	)	$	4,210,912
Long-term debt		1,249,378			—			—			—			1,249,378
Other liabilities		—			433,994			511,599			—			945,593
Stockholders’ equity		2,338,213			4,312,499			1,210,263			(5,522,762	)		2,338,213

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,463,934		$	8,473,318		$	2,169,036		$	(6,362,192	)	$	8,744,096

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

Six months ended June 30, 2013


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities from continuing operations	$	—		$	558,831		$	640,777		$	1,199,608

Investing activities:
Capital expenditures, including internal-use software and website development		—			(117,537	)		(40,303	)		(157,840	)
Purchases of investments		—			(919,107	)		(210,682	)		(1,129,789	)
Sales and maturities of investments		—			554,098			218,719			772,817
Acquisitions, net of cash acquired		—			—			(540,489	)		(540,489	)
Other, net		—			24,189			(43	)		24,146

Net cash used in investing activities from continuing operations		—			(458,357	)		(572,798	)		(1,031,155	)

Financing activities:
Purchases of treasury stock		(134,238	)		—			—			(134,238	)
Proceeds from issuance of treasury stock		25,273			—			—			25,273
Proceeds from exercise of equity awards		33,566			—			1,047			34,613
Transfers (to) from related parties		83,521			(83,521	)		—			—
Other, net		(8,122	)		(7,595	)		37			(15,680	)

Net cash provided by (used in) financing activities from continuing operations		—			(91,116	)		1,084			(90,032	)

Net cash provided by continuing operations		—			9,358			69,063			78,421
Effect of exchange rate changes on cash and cash equivalents		—			(47,685	)		(12,080	)		(59,765	)

Net increase (decrease) in cash and cash equivalents		—			(38,327	)		56,983			18,656
Cash and cash equivalents at beginning of period		—			1,007,156			286,005			1,293,161

Cash and cash equivalents at end of period	$	—		$	968,829		$	342,988		$	1,311,817

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six months ended June 30, 2012


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities from continuing operations	$	—		$	1,290,763		$	109,832		$	1,400,595

Investing activities:
Capital expenditures, including internal-use software and website development		—			(95,786	)		(21,431	)		(117,217	)
Purchases of investments		—			(773,654	)		(234,091	)		(1,007,745	)
Sales and maturities of investments		—			461,527			212,788			674,315
Acquisitions, net of cash acquired		—			—			(199,267	)		(199,267	)
Other, net		—			10,460			(1,999	)		8,461

Net cash used in investing activities from continuing operations		—			(397,453	)		(244,000	)		(641,453	)

Financing activities:
Purchases of treasury stock		(297,704	)		—			—			(297,704	)
Proceeds from exercise of equity awards		224,425			—			345			224,770
Transfers (to) from related parties		80,768			(80,768	)		—			—
Other, net		(7,489	)		(5,491	)		25			(12,955	)

Net cash provided by (used in) financing activities from continuing operations		—			(86,259	)		370			(85,889	)

Net cash provided by (used in) continuing operations		—			807,051			(133,798	)		673,253
Net cash used in discontinued operations		—			(7,607	)		—			(7,607	)
Effect of exchange rate changes on cash and cash equivalents		—			(8,088	)		(3,346	)		(11,434	)

Net increase (decrease) in cash and cash equivalents		—			791,356			(137,144	)		654,212
Cash and cash equivalents at beginning of period		—			357,252			331,882			689,134

Cash and cash equivalents at end of period	$	—		$	1,148,608		$	194,738		$	1,343,346