Guarantor and Non-Guarantor Supplemental Financial Information

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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 September 30, 2016



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	1,989,806		$	696,558		$	(105,459	)	$	2,580,905
Costs and expenses:
Cost of revenue	—			333,872			86,609			(3,574		)	416,907
Selling and marketing	—			848,930			457,559			(101,968		)	1,204,521
Technology and content	—			220,809			80,567			70			301,446
General and administrative	—			117,924			47,892			13			165,829
Amortization of intangible assets	—			54,169			22,911			—			77,080
Legal reserves, occupancy tax and other	—			22,332			—			—			22,332
Restructuring and related reorganization charges	—			4,358			2,280			—			6,638
Intercompany (income) expense, net	—			128,787			(128,787		)	—			—
Operating income	—			258,625			127,527			—			386,152
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries	305,307			115,361			—			(420,668		)	—
Other, net	(41,199		)	(18,905		)	13,507			—			(46,597		)
Total other income, net	264,108			96,456			13,507			(420,668		)	(46,597		)
Income before income taxes	264,108			355,081			141,034			(420,668		)	339,555
Provision for income taxes	15,223			(47,643		)	(28,207		)	—			(60,627		)
Net income	279,331			307,438			112,827			(420,668		)	278,928
Net loss attributable to noncontrolling interests	—			—			403			—			403
Net income attributable to Expedia, Inc.	$	279,331		$	307,438		$	113,230		$	(420,668	)	$	279,331
Comprehensive income attributable to Expedia, Inc.	$	271,785		$	303,969		$	109,258		$	(413,227	)	$	271,785

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Three months ended September 30, 2015



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	1,505,178		$	500,625		$	(68,050	)	$	1,937,753
Costs and expenses:
Cost of revenue	—			263,990			67,155			(3,079		)	328,066
Selling and marketing	—			665,577			342,864			(65,152		)	943,289
Technology and content	—			143,209			59,422			72			202,703
General and administrative	—			87,240			42,819			109			130,168
Amortization of intangible assets	—			9,822			21,578			—			31,400
Legal reserves, occupancy tax and other	—			(114,550		)	—			—			(114,550		)
Restructuring and related reorganization charges	—			70,699			980			—			71,679
Intercompany (income) expense, net	—			198,094			(198,094		)	—			—
Operating income	—			181,097			163,901			—			344,998
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries	302,954			210,173			—			(513,127		)	—
Other, net	(31,304		)	34,669			(6,176		)	—			(2,811		)
Total other income (expense), net	271,650			244,842			(6,176		)	(513,127		)	(2,811		)
Income before income taxes	271,650			425,939			157,725			(513,127		)	342,187
Provision for income taxes	11,566			(120,387		)	42,871			—			(65,950		)
Net income	283,216			305,552			200,596			(513,127		)	276,237
Net loss attributable to noncontrolling interests	—			—			6,979			—			6,979
Net income attributable to Expedia, Inc.	$	283,216		$	305,552		$	207,575		$	(513,127	)	$	283,216
Comprehensive income attributable to Expedia, Inc.	$	281,516		$	305,560		$	181,712		$	(513,127	)	$	255,661

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Nine months ended September 30, 2016



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	5,159,351		$	1,754,111		$	(232,727	)	$	6,680,735
Costs and expenses:
Cost of revenue	—			974,040			261,545			(9,728		)	1,225,857
Selling and marketing	—			2,367,393			1,254,774			(223,305		)	3,398,862
Technology and content	—			659,532			251,148			241			910,921
General and administrative	—			319,156			185,174			65			504,395
Amortization of intangible assets	—			169,988			81,272			—			251,260
Legal reserves, occupancy tax and other	—			28,650			—			—			28,650
Restructuring and related reorganization charges	—			28,135			18,139			—			46,274
Intercompany (income) expense, net	—			497,160			(497,160		)	—			—
Operating income	—			115,297			199,219			—			314,516
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries	280,012			210,051			—			(490,063		)	—
Other, net	(123,110		)	(51,294		)	21,362			—			(153,042		)
Total other income, net	156,902			158,757			21,362			(490,063		)	(153,042		)
Income before income taxes	156,902			274,054			220,581			(490,063		)	161,474
Provision for income taxes	45,489			13,556			(44,116		)	—			14,929
Net income	202,391			287,610			176,465			(490,063		)	176,403
Net loss attributable to noncontrolling interests	—			—			25,988			—			25,988
Net income attributable to Expedia, Inc.	$	202,391		$	287,610		$	202,453		$	(490,063	)	$	202,391
Comprehensive income attributable to Expedia, Inc.	$	180,173		$	277,161		$	165,262		$	(442,423	)	$	180,173

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Nine months ended September 30, 2015



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries⁽¹⁾			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	3,855,338		$	1,281,688		$	(163,276	)	$	4,973,750
Costs and expenses:
Cost of revenue	—			746,928			230,706			(6,568		)	971,066
Selling and marketing	—			1,788,957			960,444			(157,251		)	2,592,150
Technology and content	—			401,725			177,828			121			579,674
General and administrative	—			239,110			148,427			422			387,959
Amortization of intangible assets	—			14,298			69,024			—			83,322
Legal reserves, occupancy tax and other	—			(106,511		)	—			—			(106,511		)
Restructuring and related reorganization charges	—			70,830			11,171			—			82,001
Intercompany (income) expense, net	—			557,940			(557,940		)	—			—
Operating income (loss)	—			142,061			242,028			—			384,089
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries	831,017			806,988			—			(1,638,005		)	—
Other, net	(85,669		)	62,208			571,267			—			547,806
Total other income (expense), net	745,348			869,196			571,267			(1,638,005		)	547,806
Income before income taxes	745,348			1,011,257			813,295			(1,638,005		)	931,895
Provision for income taxes	31,655			(172,858		)	(55,058		)	—			(196,261		)
Net income	777,003			838,399			758,237			(1,638,005		)	735,634
Net loss attributable to noncontrolling interests	—			—			41,369			—			41,369
Net income attributable to Expedia, Inc.	$	777,003		$	838,399		$	799,606		$	(1,638,005	)	$	777,003
Comprehensive income attributable to Expedia, Inc.	$	762,583		$	814,362		$	692,590		$	(1,638,005	)	$	631,530


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

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2016



	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Total current assets	$	278,829	$	2,873,058	$	1,626,281	$	(1,157,874	)	$	3,620,294
Investment in subsidiaries	7,754,832		1,282,482		—		(9,037,314		)	—
Intangible assets, net	—		2,000,452		573,188		—			2,573,640
Goodwill	—		6,829,361		1,197,818		—			8,027,179
Other assets, net	1,981		1,576,126		352,458		(19,912		)	1,910,653
TOTAL ASSETS	$	8,035,642	$	14,561,479	$	3,749,745	$	(10,215,100	)	$	16,131,766
LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities	$	878,804	$	6,155,746	$	742,762	$	(1,157,874	)	$	6,619,438
Long-term debt	3,204,210		—		—		—			3,204,210
Other liabilities	—		613,319		183,119		(19,912		)	776,526
Redeemable noncontrolling interests	—		—		1,578,964		—			1,578,964
Stockholders’ equity	3,952,628		7,792,414		1,244,900		(9,037,314		)	3,952,628
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,035,642	$	14,561,479	$	3,749,745	$	(10,215,100	)	$	16,131,766

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

Nine months ended September 30, 2016



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities	$	—		$	1,094,505		$	449,173		$	1,543,678
Investing activities:
Capital expenditures, including internal-use software and website development	—			(474,982		)	(92,062		)	(567,044		)
Transfers (to) from related parties	—			(172,731		)	172,731			—
Purchases of investments	—			—			(20,446		)	(20,446		)
Sales and maturities of investments	—			28,257			3,380			31,637
Acquisitions, net of cash acquired	—			—			(777		)	(777		)
Other, net	—			(30,158		)	(2,135		)	(32,293		)
Net cash provided by (used in) investing activities	—			(649,614		)	60,691			(588,923		)
Financing activities:
Payment of HomeAway Convertible Notes	—			(401,424		)	—			(401,424		)
Proceeds from issuance of long-term debt, net of issuance costs	(1,792		)	—			—			(1,792		)
Purchases of treasury stock	(366,723		)	—			—			(366,723		)
Payment of dividends to stockholders	(111,009		)	—			—			(111,009		)
Proceeds from exercise of equity awards	103,760			—			—			103,760
Withholding taxes for stock option exercises	(1,282		)	—			—			(1,282		)
Transfers (to) from related parties	377,321			(126,989		)	(250,332		)	—
Other, net	(275		)	(8,038		)	(28,514		)	(36,827		)
Net cash used in financing activities	—			(536,451		)	(278,846		)	(815,297		)
Effect of exchange rate changes on cash and cash equivalents	—			15,920			12,798			28,718
Net increase in cash and cash equivalents	—			(75,640		)	243,816			168,176
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	$	—		$	766,056		$	1,078,419		$	1,844,475

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine months ended September 30, 2015



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities	$	—		$	911,173		$	630,353		$	1,541,526
Investing activities:
Capital expenditures, including internal-use software and website development	—			(570,619		)	(54,820		)	(625,439		)
Purchases of investments	—			(464,538		)	(47,791		)	(512,329		)
Sales and maturities of investments	—			308,539			83,732			392,271
Acquisitions, net of cash acquired	—			(1,870,030		)	(63,791		)	(1,933,821		)
Proceeds from sale of business, net of cash divested and disposal costs	—			—			523,882			523,882
Other, net	—			39,975			11,665			51,640
Net cash provided by (used in) investing activities	—			(2,556,673		)	452,877			(2,103,796		)
Financing activities:
Proceeds from issuance of long-term debt, net of debt issuance costs	700,454			—			—			700,454
Purchases of treasury stock	(48,694		)	—			—			(48,694		)
Issuance of treasury stock	22,575			—			—			22,575
Payment of dividends to stockholders	(77,173		)	—			—			(77,173		)
Proceeds from exercise of equity awards	82,108			—			1,190			83,298
Withholding taxes for stock option exercises	(85,033		)	—			—			(85,033		)
Transfers (to) from related parties	(679,700		)	1,579,045			(899,345		)	—
Other, net	85,463			23,196			20,722			129,381
Net cash provided by (used in) financing activities	—			1,602,241			(877,433		)	724,808
Effect of exchange rate changes on cash and cash equivalents	—			(70,026		)	(39,873		)	(109,899		)
Net increase (decrease) in cash and cash equivalents	—			(113,285		)	165,924			52,639
Cash and cash equivalents at beginning of period	—			943,976			458,724			1,402,700
Cash and cash equivalents at end of period	$	—		$	830,691		$	624,648		$	1,455,339