Disposition of Business

6 Months Ended

Jun. 30, 2016

Disposition of Business

Note 4 – Disposition of Business

On May 22, 2015, we completed the sale of our 62.4% ownership stake in eLong, Inc., which was previously a separate reportable segment, for approximately $671 million (or $666 million net of costs to sell and other transaction expenses) to several purchasers, including Ctrip.com International, Ltd. Of the total sales price, approximately $67 million was remitted directly to escrow for estimated tax obligations, and is recorded in long-term investments and other assets on our consolidated balance sheet as of June 30, 2016 and represented a noncash item in our consolidated statement of cash flows for the six months ended June 30, 2015. As a result of the sale, we recognized a pre-tax gain of $509 million ($395 million after tax) during the second quarter of 2015 included in gain on sale of business in our consolidated statement of operations.

The following table presents the carrying amounts of our eLong business immediately preceding the disposition on May 22, 2015, in thousands:

Total current assets(1)	$	350,196
Total long-term assets		137,709
Total assets divested	$	487,905
Total current liabilities	$	187,296
Total long-term liabilities		5,782
Total liabilities divested	$	193,078
Components of accumulated other comprehensive income divested		45,259
Non-redeemable noncontrolling interest divested		92,550
Net carrying value divested	$	157,018

(1) Includes cash and cash equivalents of approximately $74 million.

We evaluated the disposition of eLong and determined it did not meet the “major effect” criteria for classification as a discontinued operation largely due to the recency of material impacts to our quarterly consolidated operating and net income at the time of the determination. However, we determined that the disposition did represent an individually significant component of our business. The following table presents certain amounts related to eLong in our consolidated results of operations through its disposal on May 22, 2015:

	Three months ended June 30,			Six months ended June 30,
	2015			2015
	(In thousands)
Operating loss(1)	$	(45,454	)	$	(85,536	)
Income before taxes(2)		464,817			438,843
Income before taxes attributable to Expedia, Inc.(2)		480,940			465,400
Net income attributable to Expedia, Inc.(3)		367,427			349,183

(1) Includes stock-based compensation and amortization of intangible assets of approximately $15 million for the three months ended June 30, 2015 and $20 million for the six months ended June 30, 2015, which were included within Corporate & Eliminations in Note 15 – Segment Information.

(2) The three and six months ended June 30, 2015 includes the pre-tax gain of $509 million related to the gain on sale.

(3) The three and six months ended June 30, 2015 includes the after-tax gain of $395 million related to the gain on sale.