Income Taxes	6 Months Ended
Jun. 30, 2014
Income Taxes	Note 9 – Income Taxes We determine our provision for income taxes for interim periods using an estimate of our annual effective tax rate. We record any changes affecting the estimated annual tax rate in the interim period in which the change occurs, including discrete tax items. Our effective tax rate was 19.5% and 27.9% for the three months ended June 30, 2014 and 2013, and 24.2% and (39.3)% for the six months ended June 30, 2014 and 2013. The change in the effective rate for the three months ended June 30, 2014 compared to the same period in 2013 was due to the recording of a valuation allowance related to foreign deferred tax assets in 2013. For the six months ended June 30, 2013, we recorded $13 million of income tax expense to our pre-tax losses primarily as a result of non-deductible stock-based compensation recorded related to the trivago acquisition and non-deductible penalties included in the Hawaii pay-to-play assessments, disclosed below in Note 10 — Commitments and Contingencies. 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 statute of limitations for federal income taxes for the years 2001 through 2005, when Expedia filed as part of IAC/InterActiveCorp’s consolidated group, expired on July 1, 2014. As a result, previously unrecognized tax benefits, including interest, totaling $25.6 million will be recognized in the third quarter of 2014 in continuing operations. The IRS is currently examining Expedia’s U.S. consolidated federal income tax returns for the periods ended December 31, 2009 through December 31, 2010.

Income Taxes

6 Months Ended

Jun. 30, 2014

Note 9 – Income Taxes

We determine our provision for income taxes for interim periods using an estimate of our annual effective tax rate. We record any changes affecting the estimated annual tax rate in the interim period in which the change occurs, including discrete tax items. Our effective tax rate was 19.5% and 27.9% for the three months ended June 30, 2014 and 2013, and 24.2% and (39.3)% for the six months ended June 30, 2014 and 2013. The change in the effective rate for the three months ended June 30, 2014 compared to the same period in 2013 was due to the recording of a valuation allowance related to foreign deferred tax assets in 2013. For the six months ended June 30, 2013, we recorded $13 million of income tax expense to our pre-tax losses primarily as a result of non-deductible stock-based compensation recorded related to the trivago acquisition and non-deductible penalties included in the Hawaii pay-to-play assessments, disclosed below in Note 10 — Commitments and Contingencies.

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 statute of limitations for federal income taxes for the years 2001 through 2005, when Expedia filed as part of IAC/InterActiveCorp’s consolidated group, expired on July 1, 2014. As a result, previously unrecognized tax benefits, including interest, totaling $25.6 million will be recognized in the third quarter of 2014 in continuing operations.

The IRS is currently examining Expedia’s U.S. consolidated federal income tax returns for the periods ended December 31, 2009 through December 31, 2010.