Note 16 – 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, and 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 OPERATIONS

Three months ended June 30, 2016


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	1,695,662		$	565,245		$	(65,038	)	$	2,195,869
Costs and expenses:
Cost of revenue		—			322,020			87,411			(3,051	)		406,380
Selling and marketing		—			790,376			426,742			(62,125	)		1,154,993
Technology and content		—			220,548			97,273			100			317,921
General and administrative		—			107,265			85,252			38			192,555
Amortization of intangible assets		—			59,990			24,191			—			84,181
Legal reserves, occupancy tax and other		—			4,344			—			—			4,344
Restructuring and related reorganization charges		—			3,518			6,315			—			9,833
Intercompany (income) expense, net		—			192,684			(192,684	)		—			—

Operating income (loss)		—			(5,083	)		30,745			—			25,662
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		57,308			48,411			—			(105,719	)		—
Other, net		(40,695	)		8,879			(6,041	)		—			(37,857	)

Total other income (expense), net		16,613			57,290			(6,041	)		(105,719	)		(37,857	)

Income before income taxes		16,613			52,207			24,704			(105,720	)		(12,195	)
Provision for income taxes		15,036			8,106			(4,940	)		—			18,202

Net income		31,649			60,313			19,764			(105,720	)		6,007
Net loss attributable to noncontrolling interests		—			—			25,642			—			25,642

Net income attributable to Expedia, Inc.	$	31,649		$	60,313		$	45,406		$	(105,720	)	$	31,649

Comprehensive income attributable to Expedia, Inc.	$	40,190		$	60,031		$	24,949		$	(105,720	)	$	19,450

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Three months ended June 30, 2015


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries⁽¹⁾			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	1,281,820		$	431,840		$	(51,060	)	$	1,662,600
Costs and expenses:
Cost of revenue		—			242,750			80,851			(2,519	)		321,082
Selling and marketing		—			602,621			331,600			(48,741	)		885,480
Technology and content		—			128,593			57,891			32			186,516
General and administrative		—			81,674			59,552			168			141,394
Amortization of intangible assets		—			2,795			24,085			—			26,880
Legal reserves, occupancy tax and other		—			5,510			—			—			5,510
Restructuring and related reorganization charges		—			(773	)		6,419			—			5,646
Intercompany (income) expense, net		—			196,828			(196,828	)		—			—

Operating income		—			21,822			68,270			—			90,092
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		466,986			529,635			—			(996,621	)		—
Other, net		(27,506	)		(24,758	)		520,229			—			467,965
Total other income (expense), net		439,480			504,877			520,229			(996,621	)		467,965

Income before income taxes		439,480			526,699			588,499			(996,621	)		558,057
Provision for income taxes		10,164			(57,230	)		(84,155	)		—			(131,221	)

Net income		449,644			469,469			504,344			(996,621	)		426,836
Net loss attributable to noncontrolling interests		—			—			22,808			—			22,808

Net income attributable to Expedia, Inc.	$	449,644		$	469,469		$	527,152		$	(996,621	)	$	449,644

Comprehensive income attributable to Expedia, Inc.	$	436,924		$	445,247		$	546,882		$	(996,621	)	$	432,432

(1)	Includes results of eLong through its disposal on May 22, 2015.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Six months ended June 30, 2016


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	3,169,545		$	1,057,553		$	(127,268	)	$	4,099,830
Costs and expenses:
Cost of revenue		—			640,168			174,936			(6,154	)		808,950
Selling and marketing		—			1,518,463			797,215			(121,337	)		2,194,341
Technology and content		—			438,723			170,581			171			609,475
General and administrative		—			201,232			137,282			52			338,566
Amortization of intangible assets		—			115,819			58,361			—			174,180
Legal reserves, occupancy tax and other		—			6,318			—			—			6,318
Restructuring and related reorganization charges		—			23,777			15,859			—			39,636
Intercompany (income) expense, net		—			368,373			(368,373	)		—			—

Operating income (loss)		—			(143,328	)		71,692			—			(71,636	)
Other income (expense):
Equity in pre-tax earnings (losses) of consolidated subsidiaries		(25,295	)		94,690			—			(69,395	)		—
Other, net		(81,911	)		(32,389	)		7,855			—			(106,445	)

Total other income (expense), net		(107,206	)		62,301			7,855			(69,395	)		(106,445	)

Income (loss) before income taxes		(107,206	)		(81,027	)		79,547			(69,396	)		(178,081	)
Provision for income taxes		30,266			61,199			(15,909	)		—			75,556

Net income (loss)		(76,940	)		(19,828	)		63,638			(69,396	)		(102,525	)
Net loss attributable to noncontrolling interests		—			—			25,585			—			25,585

Net income (loss) attributable to Expedia, Inc.	$	(76,940	)	$	(19,828	)	$	89,223		$	(69,396	)	$	(76,940	)

Comprehensive income (loss) attributable to Expedia, Inc.	$	(84,632	)	$	(19,174	)	$	81,590		$	(69,396	)	$	(91,612	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Six months ended June 30, 2015


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries⁽¹⁾			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	2,350,160		$	781,063		$	(95,226	)	$	3,035,997
Costs and expenses:
Cost of revenue		—			482,938			163,551			(3,489	)		643,000
Selling and marketing		—			1,123,380			617,580			(92,099	)		1,648,861
Technology and content		—			258,516			118,406			49			376,971
General and administrative		—			151,870			105,608			313			257,791
Amortization of intangible assets		—			4,476			47,446			—			51,922
Legal reserves, occupancy tax and other		—			8,039			—			—			8,039
Restructuring and related reorganization charges		—			131			10,191			—			10,322
Intercompany (income) expense, net		—			359,846			(359,846	)		—			—

Operating income (loss)		—			(39,036	)		78,127			—			39,091
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		528,063			596,815			—			(1,124,878	)		—
Other, net		(54,365	)		27,539			577,443			—			550,617

Total other income (expense), net		473,698			624,354			577,443			(1,124,878	)		550,617

Income before income taxes		473,698			585,318			655,570			(1,124,878	)		589,708
Provision for income taxes		20,089			(52,471	)		(97,929	)		—			(130,311	)

Net income		493,787			532,847			557,641			(1,124,878	)		459,397
Net loss attributable to noncontrolling interests		—			—			34,390			—			34,390

Net income attributable to Expedia, Inc.	$	493,787		$	532,847		$	592,031		$	(1,124,878	)	$	493,787

Comprehensive income attributable to Expedia, Inc.	$	481,067		$	508,802		$	510,878		$	(1,124,878	)	$	375,869

(1)	Includes results of eLong through its disposal on May 22, 2015.

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2016


	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Total current assets	$	263,607	$	3,512,056	$	1,433,736	$	(1,045,422	)	$	4,163,977
Investment in subsidiaries		8,043,599		1,762,251		—		(9,805,850	)		—
Intangible assets, net		—		2,054,909		591,130		—			2,646,039
Goodwill		—		6,830,839		1,188,936		—			8,019,775
Other assets, net		1,982		1,524,063		392,618		(19,912	)		1,898,751

TOTAL ASSETS	$	8,309,188	$	15,684,118	$	3,606,420	$	(10,871,184	)	$	16,728,542

LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities	$	845,419	$	6,904,371	$	742,387	$	(1,045,422	)	$	7,446,755
Long-term debt		3,196,847		—		—		—			3,196,847
Other liabilities		—		699,331		154,767		(19,912	)		834,186
Redeemable noncontrolling interests		—		—		983,832		—			983,832
Stockholders’ equity		4,266,922		8,080,416		1,725,434		(9,805,850	)		4,266,922

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,309,188	$	15,684,118	$	3,606,420	$	(10,871,184	)	$	16,728,542

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2015


	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Total current assets	$	230,840	$	2,261,450	$	1,201,064	$	(717,093	)	$	2,976,261
Investment in subsidiaries		8,420,890		3,106,719		—		(11,527,609	)		—
Intangible assets, net		—		1,974,968		818,986		—			2,793,954
Goodwill		—		5,859,457		2,133,484		—			7,992,941
Other assets, net		33		1,381,837		354,482		(13,833	)		1,722,519

TOTAL ASSETS	$	8,651,763	$	14,584,431	$	4,508,016	$	(12,258,535	)	$	15,485,675

LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities	$	538,856	$	5,511,639	$	592,615	$	(717,093	)	$	5,926,017
Long-term debt		3,183,140		—		—		—			3,183,140
Other liabilities		—		620,685		181,421		(13,833	)		788,273
Redeemable noncontrolling interests		—		—		658,478		—			658,478
Stockholders’ equity		4,929,767		8,452,107		3,075,502		(11,527,609	)		4,929,767

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,651,763	$	14,584,431	$	4,508,016	$	(12,258,535	)	$	15,485,675

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six months ended June 30, 2016


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities	$	—		$	1,527,488		$	198,609		$	1,726,097

Investing activities:
Capital expenditures, including internal-use software and website development		—			(341,818	)		(38,163	)		(379,981	)
Transfers (to) from related parties		—			(172,731	)		172,731			—
Purchases of investments		—			—			(20,446	)		(20,446	)
Sales and maturities of investments		—			22,758			—			22,758
Other, net		—			(19,081	)		2,222			(16,859	)

Net cash provided by (used in) investing activities		—			(510,872	)		116,344			(394,528	)

Financing activities:
Payment of HomeAway Convertible Notes		—			(400,443	)		—			(400,443	)
Purchases of treasury stock		(328,311	)		—			—			(328,311	)
Withholding taxes for stock option exercises		(1,282	)								(1,282	)
Transfers (to) from related parties		333,702			(83,370	)		(250,332	)		—
Other, net		(4,109	)		(3,052	)		(11,292	)		(18,453	)

Net cash used in financing activities		—			(486,865	)		(261,624	)		(748,489	)

Effect of exchange rate changes on cash and cash equivalents		—			21,609			15,536			37,145

Net increase in cash and cash equivalents		—			551,360			68,865			620,225
Cash and cash equivalents at beginning of the period		—			841,696			834,603			1,676,299

Cash and cash equivalents at end of the period	$	—		$	1,393,056		$	903,468		$	2,296,524

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six months ended June 30, 2015


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities	$	—		$	1,248,954		$	413,077		$	1,662,031
Investing activities:
Capital expenditures, including internal-use software and website development		—			(438,301	)		(30,426	)		(468,727	)
Purchases of investments		—			(458,318	)		(47,791	)		(506,109	)
Sales and maturities of investments		—			142,593			83,732			226,325
Acquisitions, net of cash acquired		—			(273,000	)		(54,362	)		(327,362	)
Proceeds from sale of business, net of cash divested and disposal costs		—			—			527,212			527,212
Other, net		—			29,460			10,435			39,895

Net cash provided by (used in) investing activities		—			(997,566	)		488,800			(508,766	)

Financing activities:
Proceeds from issuance of long-term debt, net of debt issuance costs		702,348			—			—			702,348
Purchases of treasury stock		(44,925	)		—			—			(44,925	)
Issuance of treasury stock		22,487			—			—			22,487
Withholding taxes for stock option exercises		(85,033	)		—			—			(85,033	)
Transfers (to) from related parties		(675,864	)		1,179,655			(503,791	)		—
Other, net		80,987			(1,290	)		11,466			91,163

Net cash provided by (used in) financing activities		—			1,178,365			(492,325	)		686,040

Effect of exchange rate changes on cash and cash equivalents		—			(33,037	)		(21,839	)		(54,876	)

Net increase in cash and cash equivalents		—			1,396,716			387,713			1,784,429
Cash and cash equivalents at beginning of period		—			943,976			458,724			1,402,700

Cash and cash equivalents at end of period	$	—		$	2,340,692		$	846,437		$	3,187,129