þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2008 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware | 20-2705720 | |||
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
Title of each class:
|
Name of each exchange on which registered:
|
|
Common stock, $0.001 par value
|
The NASDAQ Global Select Market | |
Warrants to acquire one-half of one share of common stock
|
The NASDAQ Global Select Market | |
Warrants to acquire 0.969375 of one share of common stock
|
The NASDAQ Global Select Market |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Outstanding Shares at February 13, 2009
|
||
Class
|
were approximately, | |
Common stock, $0.001 par value per share
|
261,739,849 shares | |
Class B common stock, $0.001 par value per share
|
25,599,998 shares |
Document
|
Parts Into Which Incorporated | |
Portions of the definitive Proxy Statement for the 2009 Annual
Meeting of Stockholders (Proxy Statement)
|
Part III |
1
Part I. Item 1. | Business |
2
3
4
5
6
7
8
9
10
61
62
63
E-2
E-3
E-4
Part I.
Item 1A.
Risk
Factors
11
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Quarterly variations in our operating results;
Operating results that vary from the expectations of securities
analysts and investors;
Changes in expectations as to our future financial performance,
including financial estimates by securities analysts and
investors;
Rating agency credit rating actions;
Reaction to our earnings releases and conference calls, or
presentations by executives at investor and industry conferences;
Changes in our capital structure;
Changes in market valuations of other internet or online service
companies;
Announcements of technological innovations or new services by us
or our competitors;
Announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;
Loss of a major supplier participant, such as an airline or
hotel chain;
Changes in the status of our intellectual property rights;
Lack of success in the expansion of our business model
geographically;
Announcements by third parties of significant claims or
proceedings against us or adverse developments in pending
proceedings;
Additions or departures of key personnel;
Rumors or public speculation about any of the above
factors; and
Market and volume fluctuations in the stock markets in general.
14
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17
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Increasing our vulnerability to general adverse economic and
industry conditions;
Requiring us to dedicate a portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of cash flow to fund working capital, capital
expenditures, acquisitions and investments and other general
corporate purposes;
Making it difficult for us to optimally capitalize and manage
the cash flow for our businesses;
Limiting our flexibility in planning for, or reacting to,
changes in our businesses and the markets in which we operate;
Placing us at a competitive disadvantage compared to our
competitors that have less debt; and
Limiting our ability to borrow additional funds or to borrow
funds at rates or on other terms we find acceptable.
Borrow money, and guarantee or provide other support for
indebtedness of third parties including guarantees;
Pay dividends on, redeem or repurchase our capital stock;
Make investments in entities that we do not control, including
joint ventures;
Enter into certain asset sale transactions;
Enter into secured financing arrangements;
Enter into sale and leaseback transactions; and
Enter into unrelated businesses.
18
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Use of cash resources and incurrence of debt and contingent
liabilities in funding acquisitions;
Amortization expenses related to acquired intangible assets and
other adverse accounting consequences;
Costs incurred in identifying and performing due diligence on
potential acquisition targets that may or may not be successful;
Difficulties and expenses in assimilating the operations,
products, technology, privacy protection systems, information
systems or personnel of the acquired company;
Impairment of relationships with employees, suppliers and
affiliates of our business and the acquired business;
The assumption of known and unknown debt and liabilities of the
acquired company;
Failure to generate adequate returns on our acquisitions and
investments;
Entrance into markets in which we have no direct prior
experience; and
Impairment of goodwill or other intangible assets arising from
our acquisitions.
20
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Part I. Item 1B.
Unresolved
Staff Comments
Part I. Item 2.
Properties
Part I. Item 3.
Legal
Proceedings
21
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22
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23
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25
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Part I. Item 4.
Submission
of Matters to a Vote of Security Holders
Part II.
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
High
Low
$
15.36
$
6.00
20.42
13.61
25.50
18.31
31.88
20.18
High
Low
$
35.28
$
27.48
32.57
25.45
29.85
22.44
23.34
19.97
35
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Part II. Item 6.
Selected
Financial Data
36
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Year Ended December 31,
2008(1)
2007
2006
2005
2004
(In thousands, except per share data)
$
2,937,013
$
2,665,332
$
2,237,586
$
2,119,455
$
1,843,013
(2,428,953
)
529,069
351,329
397,052
240,473
(2,517,763
)
295,864
244,934
228,730
163,473
$
(8.80
)
$
1.00
$
0.72
$
0.68
$
0.49
(8.63
)
0.94
0.70
0.65
0.48
286,167
296,640
338,047
336,819
335,540
291,830
314,233
352,181
349,530
340,549
December 31,
2008
2007
2006
2005
2004
$
(367,454
)
$
(728,697
)
$
(224,770
)
$
(847,981
)
$
1,263,678
5,894,249
8,295,422
8,264,317
7,756,892
9,537,187
52,937
61,935
61,756
71,774
18,435
1,544,548
1,085,000
500,000
2,328,394
4,818,081
5,904,290
5,733,763
N/A
N/A
N/A
N/A
N/A
8,152,629
(1)
The year ended December 31, 2008 includes an approximately
$3 billion impairment charge related to goodwill,
intangible and other long-lived assets.
Part II. Item 7.
Managements
Discussion and Analysis of Financial Condition and Results
of Operations
37
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38
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39
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40
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It requires us to make an assumption because information was not
available at the time or it included matters that were highly
uncertain at the time we were making the estimate; and/or
Changes in the estimate or different estimates that we could
have selected may have had a material impact on our financial
condition or results of operations.
41
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42
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43
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44
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Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
14,465,508
$
13,937,381
$
12,736,765
4
%
9
%
4,565,994
3,871,695
2,722,609
18
%
42
%
2,237,291
1,822,769
1,423,098
23
%
28
%
$
21,268,793
$
19,631,845
$
16,882,472
8
%
16
%
14.2
%
13.6
%
13.1
%
15.1
%
15.7
%
16.6
%
8.9
%
8.8
%
8.3
%
13.8
%
13.6
%
13.3
%
45
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Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
2,047,807
$
1,897,995
$
1,666,804
8
%
14
%
689,978
606,997
452,012
14
%
34
%
199,228
160,340
118,770
24
%
35
%
$
2,937,013
$
2,665,332
$
2,237,586
10
%
19
%
46
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Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
634,744
$
562,401
$
502,638
13
%
12
%
21.6
%
21.1
%
22.5
%
$
2,302,269
$
2,102,931
$
1,734,948
9
%
21
%
78.39
%
78.90
%
77.5
%
Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
1,101,403
$
992,560
$
786,195
11
%
26
%
37.5
%
37.2
%
35.1
%
Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
355,431
$
321,250
$
289,649
11
%
11
%
12.1
%
12.1
%
12.9
%
47
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Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
208,952
$
182,483
$
140,371
15
%
30
%
7.1
%
6.8
%
6.3
%
Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
69,436
$
77,569
$
110,766
(10
)%
(30
)%
2.4
%
2.9
%
5.0
%
48
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Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
(2,428,953
)
$
529,069
$
351,329
(559
)%
51
%
(82.7
)%
19.9
%
15.7
%
Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
697,774
$
669,487
$
599,018
4
%
12
%
23.8
%
25.1
%
26.8
%
49
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It corresponds more closely to the cash operating income
generated from our core operations by excluding significant
non-cash operating expenses, such as stock-based
compensation; and
It provides greater insight into management decision making at
Expedia, as OIBA is our primary internal metric for evaluating
the performance of our business.
Year Ended December 31,
2008
2007
2006
(In thousands)
$
697,774
$
669,487
$
599,018
(69,436
)
(77,569
)
(110,766
)
(2,762,100
)
(233,900
)
(47,000
)
(61,291
)
(62,849
)
(80,285
)
(9,638
)
(2,428,953
)
529,069
351,329
(41,573
)
(13,478
)
14,799
(44,178
)
(18,607
)
18,770
(5,966
)
(203,114
)
(139,451
)
2,907
1,994
(513
)
$
(2,517,763
)
$
295,864
$
244,934
Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
30,411
$
39,418
$
32,065
(23
)%
23
%
(71,984
)
(52,896
)
(17,266
)
36
%
206
%
50
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Year Ended December 31,
2008
2007
2006
(In thousands)
$
(47,129
)
$
(22,047
)
$
10,367
(979
)
(2,614
)
2,541
4,600
(5,748
)
8,137
12,058
(670
)
(256
)
(2,275
)
$
(44,178
)
$
(18,607
)
$
18,770
Year Ended December 31,
% Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
($ in thousands)
$
5,966
$
203,114
$
139,451
(97
)%
46
%
(0.2
)%
40.9
%
36.2
%
51
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Year Ended December 31,
$ Change
2008
2007
2006
2008 vs 2007
2007 vs 2006
(In thousands)
$
520,688
$
712,069
$
617,440
$
(191,381
)
$
94,629
(859,558
)
(179,506
)
(113,500
)
(680,052
)
(66,006
)
464,801
(789,979
)
9,772
1,254,780
(799,751
)
(77,905
)
21,528
42,146
(99,433
)
(20,618
)
52
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53
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By Period
Less than
More than
Total
1 Year
1 to 3 Years
3 to 5 Years
5 Years
(In thousands)
$
1,545,359
$
71,839
$
142,560
$
142,560
$
1,188,400
650,000
650,000
265,855
39,097
72,189
61,165
93,404
32,293
22,101
10,192
39,079
39,079
58,226
57,045
1,181
$
2,590,812
$
229,161
$
876,122
$
203,725
$
1,281,804
(1)
Our 8.5% Notes and 7.456% Notes include interest
payments through maturity in 2016 and 2018, respectively, based
on the stated fixed rates. In the above table, we have reflected
the 7.456% Notes based on the maturity date in 2018;
however such Notes are repayable in whole or in part on
August 15, 2013 at the option of the holders.
(2)
As we expect borrowings under our credit facility to vary, only
repayment of principal outstanding at December 31, 2008 is
included. Interest expense and fees related to our credit
facility were $12 million in 2008.
54
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(3)
The operating leases are for office space and related office
equipment. We account for these leases on a monthly basis.
Certain leases contain periodic rent escalation adjustments and
renewal options. Operating lease obligations expire at various
dates with the latest maturity in 2018.
(4)
Our purchase obligations represent the minimum obligations we
have under agreements with certain of our vendors and marketing
partners. These minimum obligations are less than our projected
use for those periods. Payments may be more than the minimum
obligations based on actual use.
(5)
Guarantees and LOCs are commitments that represent funding
responsibilities that may require our performance in the event
of third-party demands or contingent events. These commitments
consist of stand-by LOCs and guarantees. We use our stand-by
LOCs to secure payment for hotel room transactions to particular
hotel properties. The outstanding balance of our stand-by LOCs
directly reduces the amount available to us from our revolving
credit facility. In addition, we provide a guarantee to the
aviation authority of one country to protect against potential
non-delivery of our packaged travel services sold within that
country. This country holds all travel agents and tour companies
to the same standard. The letter of credit amounts in the above
table represent the amount of commitment expiration per period.
(6)
Excludes $190 million of unrecognized tax benefits for
which we cannot make a reasonably reliable estimate of the
amount and period of payment.
Part II. Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
55
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Part II. Item 8.
Consolidated
Financial Statements and Supplementary Data
Part II. Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
56
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Part II. Item 9A.
Controls
and Procedures
57
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Expedia, Inc.
58
Table of Contents
Part II. Item 9B.
Other
Information
Part III. Item 10.
Directors,
Executive Officers and Corporate Governance
Part III. Item 11.
Executive
Compensation
Part III. Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Part III. Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Part III. Item 14.
Principal
Accountant Fees and Services
Part IV.
Item 15.
Exhibits,
Consolidated Financial Statements and Financial Statement
Schedules
59
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Exhibit
Filed
Incorporated by Reference
2
.1
Separation Agreement by and between Expedia, Inc. and
IAC/InterActiveCorp, dated as of August 9, 2005
10-Q
000-51447
2.1
11/14/2005
3
.1
Amended and Restated Certificate of Incorporation of Expedia,
Inc.
8-K
000-51447
3.1
08/15/2005
3
.2
Certificate of Designations of Expedia, Inc. Series A
Cumulative Convertible Preferred Stock
8-K
000-51447
3.2
08/15/2005
3
.3
Amended and Restated Bylaws of Expedia, Inc.
8-K
000-51447
3.3
08/15/2005
4
.1
Equity Warrant Agreement for Warrants to Purchase up to
14,590,514 Shares of Common Stock expiring February 4,
2009, between Expedia, Inc. and The Bank of New York, as Equity
Warrant Agent, dated as of August 9, 2005
8-A/A
000-51447
4.2
08/22/2005
4
.2
Stockholder Equity Warrant Agreement for Warrants to Purchase up
to 11,450,182 Shares of Common Stock, between Expedia, Inc.
and Mellon Investor Services LLC, as Equity Warrant Agent, dated
as of August 9, 2005
8-A/A
000-51447
4.3
08/22/2005
4
.3
Optionholder Equity Warrant Agreement for Warrants to Purchase
up to 1,558,651 Shares of Common Stock, between Expedia,
Inc. and Mellon Investor Services LLC, as Equity Warrant Agent,
dated as of August 9, 2005
8-A/A
000-51447
4.4
08/22/2005
4
.4
Indenture, dated as of August 21, 2006, among Expedia,
Inc., as Issuer, the Subsidiary Guarantors from time to time
parties thereto, and The Bank of New York Trust Company,
N.A., as Trustee, relating to Expedia, Inc.s
7.456% Senior Notes due 2018
10-Q
000-51447
4.1
11/14/2006
4
.5
First Supplemental Indenture, dated as of January 19, 2007,
among Expedia, Inc., the Subsidiary Guarantors party thereto and
The Bank of New York Trust Company, N.A., as Trustee
S-4
333-140195
4.2
01/25/2007
10
.1
Governance Agreement, by and among Expedia, Inc., Liberty Media
Corporation and Barry Diller, dated as of August 9, 2005
10-Q
000-51447
10.6
11/14/2005
10
.2
First Amendment to Governance Agreement, dated as of
June 19, 2007, among Expedia, Inc., Liberty Media
Corporation and Barry Diller
8-K
000-51447
10.1
06/19/2007
10
.3
Stockholders Agreement, by and between Liberty Media Corporation
and Barry Diller, dated as of August 9, 2005
10-Q
000-51447
10.7
11/14/2005
60
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Exhibit
Filed
Incorporated by Reference
10
.4
Tax Sharing Agreement by and between Expedia, Inc. and
IAC/InterActiveCorp, dated as of August 9, 2005
10-Q
000-51447
10.10
11/14/2005
10
.5
Employee Matters Agreement by and between Expedia, Inc. and
IAC/InterActiveCorp, dated as of August 9, 2005
10-Q
000-51447
10.11
11/14/2005
10
.6
Transition Services Agreement by and between Expedia, Inc. and
IAC/InterActiveCorp, dated as of August 9, 2005
10-Q
000-51447
10.12
11/14/2005
10
.7
Credit Agreement dated as of July 8, 2005, among Expedia,
Inc., a Delaware corporation, Expedia, Inc., a Washington
corporation, Travelscape, Inc., a Nevada corporation,
hotels.com, a Delaware corporation and Hotwire, Inc., a Delaware
corporation, as Borrowers; the Lenders party thereto; Bank of
America, N.A., as Syndication Agent; Wachovia Bank, N.A. and The
Royal Bank of Scotland PLC, as Co-Documentation Agents; JPMorgan
Chase Bank, N.A., as Administrative Agent; and J.P. Morgan
Europe Limited, as London Agent (Credit Agreement)
8-K
333-124303-01
10.1
07/14/2005
10
.8
First Amendment to Credit Agreement, dated as of
December 7, 2006
SC TO
005-80935
(b)(2)
12/11/2006
10
.9
Second Amendment to Credit Agreement, dated as of
December 18, 2006
SC TO/A
005-80935
(b)(3)
12/22/2006
10
.10
Third Amendment to Credit Agreement, dated as of August 7,
2007
8-K
000-51447
10.1
08/08/2007
10
.11
Office Building Lease by and between Tower 333 LLC, a Delaware
limited liability company, and Expedia, Inc., a Washington
corporation, dated June 25, 2007
10-Q
000-51447
10.1
08/03/2007
10
.12*
Amended and Restated Expedia, Inc. 2005 Stock and Annual
Incentive Plan, effective as of January 1, 2009
X
10
.13*
Amended and Restated Expedia, Inc. Non-Employee Director
Deferred Compensation Plan, effective as of January 1, 2009
X
10
.14*
Form of Restricted Stock Unit Agreement (domestic employees)
10-Q
000-51447
10.24
11/14/2006
10
.15*
Form of Restricted Stock Unit Agreement (directors)
10-Q
000-51447
10.9
11/14/2005
10
.16*
Summary of Expedia, Inc. Non-Employee Director Compensation
Arrangements
10-Q
000-51447
10.1
05/09/2007
10
.17*
Amended and Restated Expedia, Inc. Executive Deferred
Compensation Plan, effective as of January 1, 2009
X
Table of Contents
Exhibit
Filed
Incorporated by Reference
10
.18*
Expedia Restricted Stock Unit Agreement between Dara
Khosrowshahi and Expedia, Inc., dated March 7, 2006
10-K
000-51447
10.16
03/31/2006
10
.19*
Amendment Agreement between Dara Khosrowshahi and Expedia, Inc.,
dated December 31, 2008
X
10
.20*
Employment Agreement between Michael B. Adler and Expedia, Inc.,
effective as of May 16, 2006
10-Q
000-51447
10.19
11/14/2006
10
.21*
Expedia, Inc. Restricted Stock Unit Agreement between Expedia,
Inc. and Michael B. Adler, effective as of May 16, 2006
10-Q
000-51447
10.20
11/14/2006
10
.22*
Amendment to Employment Agreement and Restricted Stock Unit
Agreements between Expedia, Inc. and Michael B. Adler, dated
December 31, 2008
X
10
.23*
Employment Agreement by and between Burke Norton and Expedia,
Inc., effective October 25, 2006
10-Q
000-51447
10.21
11/14/2006
10
.24*
Expedia, Inc. Restricted Stock Unit Agreement (First Agreement)
between Expedia, Inc. and Burke Norton, dated as of
October 25, 2006
10-Q
000-51447
10.22
11/14/2006
10
.25*
Expedia, Inc. Restricted Stock Unit Agreement (Second Agreement)
between Expedia, Inc. and Burke Norton, dated as of
October 25, 2006
10-Q
000-51447
10.23
11/14/2006
10
.26*
Amendment to Employment Agreement and Restricted Stock Unit
Agreements between Expedia, Inc. and Burke Norton, dated
December 31, 2008
X
10
.27*
Separation Agreement between Paul Onnen and Expedia, Inc., dated
August 30, 2007
10-Q
000-51447
10.1
11/08/2007
10
.28*
Stock Option Agreement between IAC/InterActiveCorp and Barry
Diller, dated as of June 7, 2005
10-Q**
000-20570
10.8
11/09/2005
10
.29*
IAC/InterActiveCorp 2005 Stock and Annual Incentive Plan
S-4/A**
333-124303
Annex J
06/17/2005
10
.30*
Employment Agreement by and between Pierre Samec and Expedia,
Inc., effective August 7, 2007
10-K
000-51447
10.29
02/22/2008
10
.31*
First Amendment to Employment Agreement between Pierre V. Samec
and Expedia, Inc., dated October 27, 2008
X
21
Subsidiaries of the Registrant
X
23
.1
Consent of Independent Registered Public Accounting Firm
X
31
.1
Certifications of the Chairman and Senior Executive Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
X
Table of Contents
Exhibit
Filed
Incorporated by Reference
31
.2
Certification of the Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
X
31
.3
Certification of the Chief Financial Officer pursuant
Section 302 of the Sarbanes-Oxley Act of 2002
X
32
.1
Certification of the Chairman and Senior Executive pursuant
Section 906 of the Sarbanes-Oxley Act of 2002
X
32
.2
Certification of the Chief Executive Officer pursuant
Section 906 of the Sarbanes-Oxley Act of 2002
X
32
.3
Certification of the Chief Financial Officer pursuant
Section 906 of the Sarbanes-Oxley Act of 2002
X
*
Indicates a management contract or compensatory plan or
arrangement.
**
Indicates reference to filing of IAC/InterActiveCorp
Table of Contents
By:
Chief Executive Officer, President and Director
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer)
Chief Accounting Officer and Controller
(Principal Accounting Officer)
Director (Chairman of the Board)
Director (Vice Chairman)
Director
Director
Director
Director
Director
64
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Director
Director
65
Table of Contents
F-2
F-3
F-4
F-5
F-6
F-7
E-1
F-1
Table of Contents
F-2
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands, except per share data)
$
2,937,013
$
2,665,332
$
2,237,586
634,744
562,401
502,638
2,302,269
2,102,931
1,734,948
1,101,403
992,560
786,195
355,431
321,250
289,649
208,952
182,483
140,371
69,436
77,569
110,766
2,762,100
233,900
47,000
9,638
(2,428,953
)
529,069
351,329
30,411
39,418
32,065
(71,984
)
(52,896
)
(17,266
)
(44,178
)
(18,607
)
18,770
(85,751
)
(32,085
)
33,569
(2,514,704
)
496,984
384,898
(5,966
)
(203,114
)
(139,451
)
2,907
1,994
(513
)
$
(2,517,763
)
$
295,864
$
244,934
$
(8.80
)
$
1.00
$
0.72
(8.63
)
0.94
0.70
286,167
296,640
338,047
291,830
314,233
352,181
$
2,253
$
2,893
$
8,399
10,324
12,472
15,893
34,335
31,851
36,877
14,379
15,633
19,116
$
61,291
$
62,849
$
80,285
F-3
Table of Contents
F-4
Table of Contents
Accumulated
Class B
Additional
Retained
Other
Common Stock
Common Stock
Paid-in
Treasury Stock
Earnings
Comprehensive
Shares
Amount
Shares
Amount
Capital
Shares
Amount
(Deficit)
Income (Loss)
Total
(In thousands, except share data)
323,184,577
$
323
25,599,998
$
26
$
5,695,498
1,205,091
$
(25,464
)
$
64,978
$
(1,598
)
$
5,733,763
244,934
244,934
(1,119
)
(1,119
)
14,696
14,696
258,511
80,832
80,832
4,881,699
5
34,283
34,288
19,139
19,139
(10,296
)
(10,296
)
2,524
2,524
960,137
(7,292
)
(7,292
)
20,000,000
(288,399
)
(288,399
)
2,930
2,930
78,290
78,290
328,066,276
328
25,599,998
26
5,903,200
22,165,228
(321,155
)
309,912
11,979
5,904,290
295,864
295,864
3,018
3,018
16,768
16,768
315,650
(3,572
)
(3,572
)
6,579
6,579
8,990,484
9
54,843
54,852
(121,208
)
(121,208
)
(459
)
(459
)
402,427
(9,389
)
(9,389
)
55,000,003
(1,388,289
)
(1,388,289
)
60,333
60,333
(706
)
(706
)
337,056,760
337
25,599,998
26
5,902,582
77,567,658
(1,718,833
)
602,204
31,765
4,818,081
(2,517,763
)
(2,517,763
)
(339
)
(339
)
(36,088
)
(36,088
)
(2,554,190
)
10,500
10,500
1,624
1,624
2,468,708
3
6,330
6,333
(1,646
)
(1,646
)
583,515
(12,402
)
(12,402
)
60,094
60,094
339,525,468
$
340
25,599,998
$
26
$
5,979,484
78,151,173
$
(1,731,235
)
$
(1,915,559
)
$
(4,662
)
$
2,328,394
F-5
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands)
$
(2,517,763
)
$
295,864
$
244,934
76,800
59,526
48,779
130,727
140,418
200,689
(209,042
)
(1,583
)
(10,652
)
(4,600
)
5,748
(8,137
)
979
2,614
(2,541
)
(2,907
)
(1,994
)
513
2,762,100
233,900
47,000
77,958
(12,524
)
(37,182
)
55,175
2,967
3,801
1,100
32,208
(44,363
)
(32,148
)
(15,072
)
(32,378
)
(20,694
)
(75,443
)
101,068
63,246
54,400
51,702
59,858
(85,443
)
142,608
59,450
3,744
1,562
3,225
520,688
712,069
617,440
(159,827
)
(86,658
)
(92,631
)
(538,439
)
(59,622
)
(32,518
)
(80,360
)
64,387
(55,175
)
(92,923
)
1,155
(33,226
)
(1,514
)
1,624
13,163
(859,558
)
(179,506
)
(113,500
)
740,000
755,000
(675,000
)
(170,000
)
(230,000
)
392,348
495,346
11,753
(6,494
)
4,578
6,353
55,038
35,258
3,191
95,702
1,317
(121,208
)
(12,865
)
(1,397,173
)
(295,691
)
(979
)
(844
)
(1,036
)
464,801
(789,979
)
9,772
(77,905
)
21,528
42,146
48,026
(235,888
)
555,858
617,386
853,274
297,416
$
665,412
$
617,386
$
853,274
$
53,459
$
49,266
$
4,287
179,273
78,345
126,126
F-6
Table of Contents
NOTE 1
Organization
and Basis of Presentation
NOTE 2
Significant
Accounting Policies
F-7
Table of Contents
F-8
Table of Contents
F-9
Table of Contents
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
F-14
Table of Contents
F-15
Table of Contents
F-16
Table of Contents
$
328,449
112,968
47,641
(14,486
)
$
474,572
(1)
Acquired intangible assets primarily consist of supplier
relationship assets with a weighted average life of
10.6 years and technology assets with a weighted average
life of 3 years. In total, the weighted average life of
acquired intangible assets was 8.3 years.
F-17
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F-18
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NOTE 4
Property
and Equipment, Net
December 31,
2008
2007
(In thousands)
$
286,935
$
230,168
103,866
74,569
57,423
40,706
64,620
30,746
512,844
376,189
(292,650
)
(250,094
)
27,760
53,395
$
247,954
$
179,490
NOTE 5
Goodwill
and Intangible Assets, Net
F-19
Table of Contents
December 31,
2008
2007
(In thousands)
$
3,538,569
$
6,006,338
689,541
867,246
143,878
103,511
$
4,371,988
$
6,977,095
F-20
Table of Contents
North America
Europe
Other(1)
Total
(In thousands)
$
4,740,698
$
1,021,351
$
99,243
$
5,861,292
140,428
201
140,629
(9,402
)
(9,402
)
7,778
6,041
13,819
$
4,871,724
$
1,029,129
$
105,485
$
6,006,338
134,267
181,777
12,405
328,449
(1,982,000
)
(758,900
)
(21,200
)
(2,762,100
)
(2,823
)
(2,823
)
(3,765
)
(22,126
)
(5,404
)
(31,295
)
$
3,017,403
$
429,880
$
91,286
$
3,538,569
(1)
Other includes Asia Pacific and Egencia.
December 31, 2008
December 31, 2007
Accumulated
Accumulated
Cost
Amortization
Net
Cost
Amortization
Net
(In thousands)
$
280,484
$
(220,612
)
$
59,872
$
212,514
$
(206,464
)
$
6,050
221,166
(195,941
)
25,225
203,028
(183,082
)
19,946
177,426
(177,155
)
271
177,426
(154,091
)
23,335
34,782
(18,381
)
16,401
33,049
(14,899
)
18,150
26,540
(21,895
)
4,645
26,549
(20,723
)
5,826
11,678
(8,500
)
3,178
10,940
(5,729
)
5,211
81,659
(47,373
)
34,286
61,809
(36,816
)
24,993
$
833,735
$
(689,857
)
$
143,878
$
725,315
$
(621,804
)
$
103,511
F-21
Table of Contents
$
36,143
28,175
19,966
14,498
9,811
35,285
$
143,878
NOTE 6
Debt
December 31,
December 31,
2008
2007
(In thousands)
$
394,548
$
500,000
500,000
894,548
500,000
650,000
585,000
$
1,544,548
$
1,085,000
F-22
Table of Contents
NOTE 7
Derivative
Instruments
F-23
Table of Contents
NOTE 8
Employee
Benefit Plans
F-24
Table of Contents
NOTE 9
Stock-Based
Awards and Other Equity Instruments
Weighted
Average Grant-
Date Fair
RSUs
Value
(In thousands)
5,765
$
24.08
5,016
18.59
(1,337
)
23.94
(1,923
)
23.09
7,521
20.72
3,768
22.92
(1,538
)
21.72
(1,489
)
21.20
8,262
21.43
4,123
21.78
(1,846
)
21.76
(1,493
)
22.20
9,046
21.41
F-25
Table of Contents
Weighted
Outstanding
Outstanding
Average
Warrants at
Warrants at
Exercise
December 31,
December 31,
Price
2007
Exercised
Cancelled
2008
(In thousands, except per warrant data)
$
25.56
16,094
16,094
31.22
7,295
7,295
11.93
11,085
(5
)
11,080
13.23
163
163
34,637
(5
)
34,632
Weighted
Average
Remaining
Aggregate
Options
Exercise Price
Contractual Life
Intrinsic Value
(In thousands)
(In years)
(In thousands)
27,706
$
15.71
(3,657
)
9.41
(916
)
20.38
23,133
16.52
(13,242
)
10.30
(216
)
29.61
9,675
24.74
1,275
8.14
(618
)
10.14
(498
)
29.14
9,834
23.29
4.8
$
1,273
4,759
20.29
2.2
858
9,427
23.94
4.6
1,136
2.18
%
45.63
%
4.54
$
3.38
F-26
Table of Contents
Options Outstanding
Options Exercisable
Weighted-
Remaining
Weighted-
Average
Contractual
Average
Shares
Price Per Share
Life
Shares
Exercise Price
(In thousands)
(In years)
(In thousands)
184
$
3.77
3.8
184
$
3.77
668
7.58
9.7
18
6.25
947
9.06
7.1
322
9.80
911
14.76
3.1
911
14.76
2,691
21.40
1.7
2,691
21.40
2,768
28.39
6.1
368
27.77
1,632
38.34
5.7
232
38.28
33
73.49
1.0
33
73.49
9,834
23.29
4.8
4,759
20.29
NOTE 10
Income
Taxes
Year Ended December 31,
2008
2007
2006
(In thousands)
$
(2,442,297
)
$
500,624
$
388,588
(72,407
)
(3,640
)
(3,690
)
$
(2,514,704
)
$
496,984
$
384,898
F-27
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands)
$
196,072
$
182,960
$
144,194
16,029
16,837
4,581
2,907
4,900
1,328
215,008
204,697
150,103
(188,901
)
(8,041
)
(8,803
)
(7,841
)
7,062
(1,572
)
(12,300
)
(604
)
(277
)
(209,042
)
(1,583
)
(10,652
)
$
5,966
$
203,114
$
139,451
F-28
Table of Contents
December 31,
2008
2007
(In thousands)
$
26,395
$
23,705
16,646
3,041
31,536
23,856
10,779
14,834
48,110
45,269
8,586
8,556
10,360
10,590
152,412
129,851
(32,085
)
(27,911
)
$
120,327
$
101,940
$
(44,647
)
$
(39,825
)
(220,379
)
(375,069
)
(10,449
)
(10,823
)
(12,946
)
(18,719
)
(25,848
)
(20,951
)
(53
)
$
(314,269
)
$
(465,440
)
$
(193,942
)
$
(363,500
)
F-29
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands)
$
(880,146
)
$
173,944
$
134,714
855,550
11,317
9,844
4,813
12,525
4,211
6,720
15,115
(76
)
$
5,966
$
203,114
$
139,451
$
63,710
104,231
5,652
173,593
15,883
(22,520
)
(4,911
)
17,794
$
179,839
(1)
As of December 31, 2008, we had $180 million of
unrecognized tax benefits, of which $190 million is
classified as long-term and included in Other long-term
liabilities.
F-30
Table of Contents
NOTE 11
Stockholders
Equity
F-31
Table of Contents
December 31,
2008
2007
(In thousands)
$
$
339
(4,662
)
31,426
$
(4,662
)
$
31,765
For the Year Ended December 31,
2008
2007
2006
(In thousands)
$
(2,517,763
)
$
295,864
$
244,934
(36,088
)
16,768
14,696
3,614
(5,545
)
(7,832
)
(3,953
)
8,563
6,713
(36,427
)
19,786
13,577
$
(2,554,190
)
$
315,650
$
258,511
NOTE 12
Earnings
Per Share
F-32
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands, except per share data)
$
(2,517,763
)
$
295,864
$
244,934
$
(8.80
)
$
1.00
$
0.72
(8.63
)
0.94
0.70
286,167
296,640
338,047
904
7,384
7,744
3,698
7,574
3,600
1,061
2,635
2,790
291,830
314,233
352,181
NOTE 13
Other
Income (Expense)
For the Year Ended December 31,
2008
2007
2006
(In thousands)
$
(47,129
)
$
(22,047
)
$
10,367
(979
)
(2,614
)
2,541
4,600
(5,748
)
8,137
12,058
(670
)
(256
)
(2,275
)
$
(44,178
)
$
(18,607
)
$
18,770
F-33
Table of Contents
NOTE 14
Commitments
and Contingencies
By Period
Less than
More than
Total
1 Year
1 to 3 Years
3 to 5 Years
5 Years
(In thousands)
$
32,293
$
22,101
$
10,192
$
$
39,079
39,079
58,226
57,045
1,181
$
129,598
$
118,225
$
11,373
$
$
$
39,097
36,984
35,205
33,626
27,539
93,404
$
265,855
F-34
Table of Contents
NOTE 15
Related
Party Transactions
F-35
Table of Contents
NOTE 16
Segment
Information
F-36
Table of Contents
Year Ended December 31, 2008
Corporate
North America
Europe
and Other
Total
(In thousands)
$
2,047,807
$
689,978
$
199,228
$
2,937,013
$
898,949
$
215,772
$
(416,947
)
$
697,774
(69,436
)
(69,436
)
(2,762,100
)
(2,762,100
)
(233,900
)
(233,900
)
(61,291
)
(61,291
)
$
898,949
$
215,772
$
(3,543,674
)
$
(2,428,953
)
Year Ended December 31, 2007
Corporate
North America
Europe
and Other
Total
(In thousands)
$
1,897,995
$
606,997
$
160,340
$
2,665,332
$
821,144
$
207,747
$
(359,404
)
$
669,487
(77,569
)
(77,569
)
(62,849
)
(62,849
)
$
821,144
$
207,747
$
(499,822
)
$
529,069
Year Ended December 31, 2006
Corporate
North America
Europe
and Other
Total
(In thousands)
$
1,666,804
$
452,012
$
118,770
$
2,237,586
$
735,458
$
157,945
$
(294,385
)
$
599,018
(110,766
)
(110,766
)
(47,000
)
(47,000
)
(80,285
)
(80,285
)
(9,638
)
(9,638
)
$
725,820
$
157,945
$
(532,436
)
$
351,329
F-37
Table of Contents
It corresponds more closely to the cash operating income
generated from our core operations by excluding significant
non-cash operating expenses; and
It provides greater insight into management decision making at
Expedia, as OIBA is our primary internal metric for evaluating
the performance of our business.
Year Ended December 31,
2008
2007
2006
(In thousands)
$
697,774
$
669,487
$
599,018
(69,436
)
(77,569
)
(110,766
)
(2,762,100
)
(233,900
)
(47,000
)
(61,291
)
(62,849
)
(80,285
)
(9,638
)
(2,428,953
)
529,069
351,329
(41,573
)
(13,478
)
14,799
(44,178
)
(18,607
)
18,770
(5,966
)
(203,114
)
(139,451
)
2,907
1,994
(513
)
$
(2,517,763
)
$
295,864
$
244,934
F-38
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands)
$
1,923,452
$
1,806,479
$
1,610,018
1,013,561
858,853
627,568
$
2,937,013
$
2,665,332
$
2,237,586
As of December 31,
2008
2007
(In thousands)
$
219,543
$
158,574
28,411
20,916
$
247,954
$
179,490
F-39
Table of Contents
NOTE 17
Valuation
and Qualifying Accounts
Balance of
Charges to
Balance at
Beginning of
Charges to
Other
End of
Period
Earnings
Accounts
Deductions
Period
(In thousands)
$
6,081
$
6,121
$
1,974
$
(1,592
)
$
12,584
6,300
5,842
$
4,874
$
4,289
$
395
$
(3,477
)
$
6,081
6,046
6,300
$
3,914
$
2,747
$
200
$
(1,987
)
$
4,874
5,125
6,046
F-40
Table of Contents
NOTE 18
Quarterly
Financial Information (Unaudited)
Three Months Ended
March 31
June 30
September 30
December 31
(In thousands, except per share data)
$
687,817
$
795,048
$
833,337
$
620,811
535,874
626,174
656,336
483,885
89,998
170,541
199,586
(2,889,078
)
51,306
96,089
94,824
(2,759,982
)
$
0.18
$
0.34
$
0.33
$
(9.62
)
0.17
0.33
0.33
(9.60
)
$
550,511
$
689,923
$
759,596
$
665,302
429,213
546,277
608,543
518,898
67,334
153,625
179,772
128,338
34,776
96,136
99,595
65,357
$
0.11
$
0.32
$
0.34
$
0.23
0.11
0.30
0.32
0.22
(1)
Included as part of operating loss and net loss for the fourth
quarter of 2008 is an approximately $3 billion impairment
charge related to goodwill, intangible and other long-lived
assets. In addition, the fourth quarter of 2008 was impacted by
a $7 million adjustment related to intangible amortization
which should have been included in prior quarterly periods of
2008.
(2)
Earnings per share is computed independently for each of the
quarters presented. Therefore, the sum of the quarterly earnings
per share may not equal the total computed for the year.
F-41
Table of Contents
NOTE 19
Guarantor
and Non-Guarantor Supplemental Financial Information
Year Ended December 31, 2008
Guarantor
Non-Guarantor
Parent
Subsidiaries
Subsidiaries
Eliminations
Consolidated
(In thousands)
$
$
2,618,064
$
740,027
$
(421,078
)
$
2,937,013
530,365
108,928
(4,549
)
634,744
2,087,699
631,099
(416,529
)
2,302,269
1,076,662
441,189
(416,448
)
1,101,403
261,645
94,083
(297
)
355,431
155,633
53,103
216
208,952
52,928
16,508
69,436
2,592,672
169,428
2,762,100
198,541
35,359
233,900
(2,250,382
)
(178,571
)
(2,428,953
)
(2,490,324
)
(138,939
)
2,629,263
(50,648
)
(13,719
)
(21,384
)
(85,751
)
(2,540,972
)
(152,658
)
(21,384
)
2,629,263
(85,751
)
(2,540,972
)
(2,403,040
)
(199,955
)
2,629,263
(2,514,704
)
23,209
(83,849
)
54,674
(5,966
)
2,907
2,907
$
(2,517,763
)
$
(2,486,889
)
$
(142,374
)
$
2,629,263
$
(2,517,763
)
F-42
Table of Contents
Year Ended December 31, 2007
Guarantor
Non-Guarantor
Parent
Subsidiaries
Subsidiaries
Eliminations
Consolidated
(In thousands)
$
$
2,439,218
$
598,594
$
(372,480
)
$
2,665,332
471,845
95,449
(4,893
)
562,401
1,967,373
503,145
(367,587
)
2,102,931
996,114
364,213
(367,767
)
992,560
242,818
78,232
200
321,250
142,141
40,362
(20
)
182,483
69,828
7,741
77,569
516,472
12,597
529,069
326,003
8,230
(334,233
)
(44,080
)
12,448
(462
)
9
(32,085
)
281,923
20,678
(462
)
(334,224
)
(32,085
)
281,923
537,150
12,135
(334,224
)
496,984
13,941
(207,877
)
(9,178
)
(203,114
)
1,994
1,994
$
295,864
$
329,273
$
4,951
$
(334,224
)
$
295,864
F-43
Table of Contents
Year Ended December 31, 2006
Guarantor
Non-Guarantor
Parent
Subsidiaries
Subsidiaries
Eliminations
Consolidated
(In thousands)
$
$
2,080,327
$
423,608
$
(266,349
)
$
2,237,586
428,656
77,831
(3,849
)
502,638
1,651,671
345,777
(262,500
)
1,734,948
790,991
257,781
(262,577
)
786,195
234,937
54,631
81
289,649
109,805
30,570
(4
)
140,371
103,720
7,046
110,766
47,000
47,000
9,638
9,638
355,580
(4,251
)
351,329
245,464
(1,080
)
(244,384
)
(5,451
)
37,675
1,345
33,569
240,013
36,595
1,345
(244,384
)
33,569
240,013
392,175
(2,906
)
(244,384
)
384,898
4,921
(143,689
)
(683
)
(139,451
)
(677
)
164
(513
)
$
244,934
$
247,809
$
(3,425
)
$
(244,384
)
$
244,934
F-44
Table of Contents
December 31, 2008
December 31, 2007
F-45
Table of Contents
Guarantor
Non-Guarantor
Parent
Subsidiaries
Subsidiaries
Consolidated
(In thousands)
$
$
241,282
$
279,406
$
520,688
(133,842
)
(25,985
)
(159,827
)
(538,439
)
(538,439
)
(80,360
)
(80,360
)
64,387
64,387
(55,175
)
(55,175
)
(92,923
)
(92,923
)
(157
)
2,936
2,779
(205,147
)
(654,411
)
(859,558
)
740,000
740,000
(675,000
)
(675,000
)
392,348
392,348
(386,108
)
115,955
270,153
(6,240
)
12,035
1,658
7,453
192,990
271,811
464,801
(69,983
)
(7,922
)
(77,905
)
159,142
(111,116
)
48,026
379,199
238,187
617,386
$
$
538,341
$
127,071
$
665,412
F-46
Table of Contents
Guarantor
Non-Guarantor
Parent
Subsidiaries
Subsidiaries
Consolidated
(In thousands)
$
$
610,105
$
101,964
$
712,069
(72,263
)
(14,395
)
(86,658
)
(39,695
)
(53,153
)
(92,848
)
(111,958
)
(67,548
)
(179,506
)
755,000
755,000
(170,000
)
(170,000
)
(1,397,173
)
(1,397,173
)
1,399,386
(1,399,386
)
95,702
95,702
(121,208
)
(121,208
)
23,293
14,798
9,609
47,700
(799,588
)
9,609
(789,979
)
22,100
(572
)
21,528
(279,341
)
43,453
(235,888
)
658,540
194,734
853,274
$
$
379,199
$
238,187
$
617,386
F-47
Table of Contents
Guarantor
Non-Guarantor
Parent
Subsidiaries
Subsidiaries
Consolidated
(In thousands)
$
50
$
578,387
$
39,003
$
617,440
(34
)
(83,308
)
(9,289
)
(92,631
)
(16
)
(30,957
)
10,104
(20,869
)
(50
)
(114,265
)
815
(113,500
)
(230,000
)
(230,000
)
495,346
495,346
(295,691
)
(295,691
)
(199,655
)
230,449
9,323
40,117
449
9,323
9,772
42,446
(300
)
42,146
507,017
48,841
555,858
151,523
145,893
297,416
$
$
658,540
$
194,734
$
853,274
F-48
Table of Contents
Exhibit
Filed
Incorporated by Reference
2
.1
Separation Agreement by and between Expedia, Inc. and
IAC/InterActiveCorp, dated as of August 9, 2005
10-Q
000-51447
2.1
11/14/2005
3
.1
Amended and Restated Certificate of Incorporation of Expedia,
Inc.
8-K
000-51447
3.1
08/15/2005
3
.2
Certificate of Designations of Expedia, Inc. Series A
Cumulative Convertible Preferred Stock
8-K
000-51447
3.2
08/15/2005
3
.3
Amended and Restated Bylaws of Expedia, Inc.
8-K
000-51447
3.3
08/15/2005
4
.1
Equity Warrant Agreement for Warrants to Purchase up to
14,590,514 Shares of Common Stock expiring February 4,
2009, between Expedia, Inc. and The Bank of New York, as Equity
Warrant Agent, dated as of August 9, 2005
8-A/A
000-51447
4.2
08/22/2005
4
.2
Stockholder Equity Warrant Agreement for Warrants to Purchase up
to 11,450,182 Shares of Common Stock, between Expedia, Inc.
and Mellon Investor Services LLC, as Equity Warrant Agent, dated
as of August 9, 2005
8-A/A
000-51447
4.3
08/22/2005
4
.3
Optionholder Equity Warrant Agreement for Warrants to Purchase
up to 1,558,651 Shares of Common Stock, between Expedia,
Inc. and Mellon Investor Services LLC, as Equity Warrant Agent,
dated as of August 9, 2005
8-A/A
000-51447
4.4
08/22/2005
4
.4
Indenture, dated as of August 21, 2006, among Expedia,
Inc., as Issuer, the Subsidiary Guarantors from time to time
parties thereto, and The Bank of New York Trust Company,
N.A., as Trustee, relating to Expedia, Inc.s
7.456% Senior Notes due 2018
10-Q
000-51447
4.1
11/14/2006
4
.5
First Supplemental Indenture, dated as of January 19, 2007,
among Expedia, Inc., the Subsidiary Guarantors party thereto and
The Bank of New York Trust Company, N.A., as Trustee
S-4
333-140195
4.2
01/25/2007
10
.1
Governance Agreement, by and among Expedia, Inc., Liberty Media
Corporation and Barry Diller, dated as of August 9, 2005
10-Q
000-51447
10.6
11/14/2005
10
.2
First Amendment to Governance Agreement, dated as of
June 19, 2007, among Expedia, Inc., Liberty Media
Corporation and Barry Diller
8-K
000-51447
10.1
06/19/2007
10
.3
Stockholders Agreement, by and between Liberty Media Corporation
and Barry Diller, dated as of August 9, 2005
8-K
000-51447
10.7
11/14/2005
E-1
Table of Contents
Exhibit
Filed
Incorporated by Reference
10
.4
Tax Sharing Agreement by and between Expedia, Inc. and
IAC/InterActiveCorp, dated as of August 9, 2005
10-Q
000-51447
10.10
11/14/2005
10
.5
Employee Matters Agreement by and between Expedia, Inc. and
IAC/InterActiveCorp, dated as of August 9, 2005
10-Q
000-51447
10.11
11/14/2005
10
.6
Transition Services Agreement by and between Expedia, Inc. and
IAC/InterActiveCorp, dated as of August 9, 2005
10-Q
000-51447
10.12
11/14/2005
10
.7
Credit Agreement dated as of July 8, 2005, among Expedia,
Inc., a Delaware corporation, Expedia, Inc., a Washington
corporation, Travelscape, Inc., a Nevada corporation,
hotels.com, a Delaware corporation and Hotwire, Inc., a Delaware
corporation, as Borrowers; the Lenders party thereto; Bank of
America, N.A., as Syndication Agent; Wachovia Bank, N.A. and The
Royal Bank of Scotland PLC, as Co-Documentation Agents; JPMorgan
Chase Bank, N.A., as Administrative Agent; and J.P. Morgan
Europe Limited, as London Agent (Credit Agreement)
8-K
333-124303-01
10.1
07/14/2005
10
.8
First Amendment to Credit Agreement, dated as of
December 7, 2006
SC TO
005-80935
(b)(2)
12/11/2006
10
.9
Second Amendment to Credit Agreement, dated as of
December 18, 2006
SC TO/A
005-80935
(b)(3)
12/22/2006
10
.10
Third Amendment to Credit Agreement, dated as of August 7,
2007
8-K
000-51447
10.1
08/08/2007
10
.11
Office Building Lease by and between Tower 333 LLC, a Delaware
limited liability company, and Expedia, Inc., a Washington
corporation, dated June 25, 2007
10-Q
000-51447
10.1
08/03/2007
10
.12*
Amended and Restated Expedia, Inc. 2005 Stock and Annual
Incentive Plan, effective as of January 1, 2009
X
10
.13*
Amended and Restated Expedia, Inc. Non-Employee Director
Deferred Compensation Plan, effective as of January 1, 2009
X
10
.14*
Form of Restricted Stock Unit Agreement (domestic employees)
10-Q
000-51447
10.24
11/14/2006
10
.15*
Form of Restricted Stock Unit Agreement (directors)
10-Q
000-51447
10.9
11/14/2005
10
.16*
Summary of Expedia, Inc. Non-Employee Director Compensation
Arrangements
10-Q
000-51447
10.1
05/09/2007
10
.17*
Amended and Restated Expedia, Inc. Executive Deferred
Compensation Plan, effective as of January 1, 2009
X
Table of Contents
Exhibit
Filed
Incorporated by Reference
10
.18*
Expedia Restricted Stock Unit Agreement between Dara
Khosrowshahi and Expedia, Inc., dated March 7, 2006
10-K
000-51447
10.16
03/31/2006
10
.19*
Amendment Agreement between Dara Khosrowshahi and Expedia, Inc.,
dated December 31, 2008
X
10
.20*
Employment Agreement between Michael B. Adler and Expedia,
Inc., effective as of May 16, 2006
10-Q
000-51447
10.19
11/14/2006
10
.21*
Expedia, Inc. Restricted Stock Unit Agreement between Expedia,
Inc. and Michael B. Adler, effective as of May 16, 2006
10-Q
000-51447
10.20
11/14/2006
10
.22*
Amendment to Employment Agreement and Restricted Stock Unit
Agreements between Expedia, Inc. and Michael B. Adler, dated
December 31, 2008
X
10
.23*
Employment Agreement by and between Burke Norton and Expedia,
Inc., effective October 25, 2006
10-Q
000-51447
10.21
11/14/2006
10
.24*
Expedia, Inc. Restricted Stock Unit Agreement (First Agreement)
between Expedia, Inc. and Burke Norton, dated as of
October 25, 2006
10-Q
000-51447
10.22
11/14/2006
10
.25*
Expedia, Inc. Restricted Stock Unit Agreement (Second Agreement)
between Expedia, Inc. and Burke Norton, dated as of
October 25, 2006
10-Q
000-51447
10.23
11/14/2006
10
.26*
Amendment to Employment Agreement and Restricted Stock Unit
Agreements between Expedia, Inc. and Burke Norton, dated
December 31, 2008
X
10
.27*
Separation Agreement between Paul Onnen and Expedia, Inc., dated
August 30, 2007
10-Q
000-51447
10.1
11/08/2007
10
.28*
Stock Option Agreement between IAC/InterActiveCorp and Barry
Diller, dated as of June 7, 2005
10-Q**
000-20570
10.8
11/09/2005
10
.29*
IAC/InterActiveCorp 2005 Stock and Annual Incentive Plan
S-4/A**
333-124303
Annex J
06/17/2005
10
.30*
Employment Agreement by and between Pierre Samec and Expedia,
Inc., effective August 7, 2007
10-K
000-51447
10.29
02/22/2008
10
.31*
First Amendment to Employment Agreement between Pierre V. Samec
and Expedia, Inc., dated October 27, 2008
X
21
Subsidiaries of the Registrant
X
23
.1
Consent of Independent Registered Public Accounting Firm
X
31
.1
Certifications of the Chairman and Senior Executive Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
X
Table of Contents
Exhibit
Filed
Incorporated by Reference
31
.2
Certification of the Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
X
31
.3
Certification of the Chief Financial Officer pursuant
Section 302 of the Sarbanes-Oxley Act of 2002
X
32
.1
Certification of the Chairman and Senior Executive pursuant
Section 906 of the Sarbanes-Oxley Act of 2002
X
32
.2
Certification of the Chief Executive Officer pursuant
Section 906 of the Sarbanes-Oxley Act of 2002
X
32
.3
Certification of the Chief Financial Officer pursuant
Section 906 of the Sarbanes-Oxley Act of 2002
X
*
**
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Page | ||||||
1.
|
PURPOSE | 1 | ||||
2.
|
EFFECTIVE DATE | 1 | ||||
3.
|
ELIGIBILITY | 1 | ||||
4.
|
ELECTION TO DEFER COMPENSATION | 1 | ||||
5.
|
DEFERRED COMPENSATION ACCOUNT | 2 | ||||
6.
|
VALUE OF DEFERRED COMPENSATION ACCOUNTS | 3 | ||||
7.
|
PAYMENT OF DEFERRED COMPENSATION | 3 | ||||
8.
|
PARTICIPANTS RIGHTS UNSECURED | 4 | ||||
9.
|
NONASSIGNABILITY | 4 | ||||
10.
|
ADMINISTRATION | 4 | ||||
11.
|
STOCK SUBJECT TO PLAN | 5 | ||||
12.
|
CONDITIONS UPON ISSUANCE OF COMMON STOCK | 5 | ||||
13.
|
AMENDMENT AND TERMINATION | 5 | ||||
14.
|
SECTION 409A | 5 |
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-4-
EXPEDIA, INC.
|
||||
By: | /s/ Patricia L. Zuccotti | |||
Its: | SVP, Chief Accounting Officer and Controller | |||
-5-
single lump-sum payment in cash or Expedia Common Stock, as the ease may, to be paid generally during the period from January 1 to March 15 of the year following the year in which the undersigneds service terminates; * or | |||
installment payments in (insert number up to five) annual installments, the first annual installment to be paid generally during the period from January 1 to March 15 of the year following the year in which the undersigneds service terminates, and subsequent annual installment payments to begin on January 15 of the year following the year in which the undersigneds first payment was made.* |
* | No payment will be made to Specified Employees (as defined in the Plan) during the six-month period following the termination date. |
| by November 1 for continuing Directors to begin deferrals for payments otherwise to be received beginning in the next calendar year; or | ||
| prior to beginning service on the Board of Directors of the Company for new Directors. |
Date:
|
||||
|
||||
|
[NON-EMPLOYEE DIRECTOR] | |||
|
||||
Received on this day of
on
|
||||
behalf of Expedia, Inc:
|
||||
|
||||
|
||||
|
[CORPORATE SECRETARY] |
-6-
Page | ||||
SECTION 1 PURPOSE
|
1 | |||
|
||||
SECTION 2 DEFINITIONS
|
1 | |||
|
||||
SECTION 3 PARTICIPATION
|
5 | |||
|
||||
SECTION 4 DEFERRAL OF COMPENSATION
|
6 | |||
|
||||
4.1 Deferral Agreement
|
6 | |||
|
||||
4.2 Book Entry of Deferred Compensation
|
6 | |||
|
||||
4.3 Vesting
|
6 | |||
|
||||
SECTION 5 MEASUREMENT OF EARNINGS
|
6 | |||
|
||||
5.1 Selection of Measuring Alternatives
|
6 | |||
|
||||
5.2 Changes; Computation
|
7 | |||
|
||||
5.3 Other Rules and Procedures
|
7 | |||
|
||||
SECTION 6 AMOUNT AND DISTRIBUTION OF SUPPLEMENTAL BENEFIT
|
7 | |||
|
||||
6.1 Supplemental Benefits
|
7 | |||
|
||||
6.2 Death
|
7 | |||
|
||||
6.3 Timing of Elections to Change Form and Timing of Distribution
|
8 | |||
|
||||
SECTION 7 HARDSHIP WITHDRAWALS
|
8 | |||
|
||||
7.1 Approval Process
|
8 | |||
|
||||
7.2 Maximum Amount
|
8 | |||
|
||||
7.3 Payment Timing
|
8 | |||
|
||||
7.4 Cancellation of Deferral Agreement
|
8 | |||
|
||||
SECTION 8 CHANGE OF CONTROL
|
9 | |||
|
||||
SECTION 9 CLAIMS PROCEDURES
|
9 | |||
|
||||
9.1 Initial Claim
|
9 | |||
|
||||
9.2 Claim Denial Review
|
10 | |||
|
||||
9.3 Interpretations
|
11 | |||
|
||||
SECTION 10 NO FUNDING OBLIGATION
|
11 | |||
|
||||
SECTION 11 NONTRANSFERABILITY OF RIGHTS UNDER THE PLAN
|
11 | |||
|
||||
SECTION 12 MINORS AND INCOMPETENTS
|
12 | |||
|
||||
12.1 Determination
|
12 | |||
|
||||
12.2 Payments
|
12 | |||
|
||||
SECTION 13 ASSIGNMENT
|
13 | |||
|
||||
SECTION 14 LIMITATION OF RIGHTS
|
13 |
-i-
Page | ||||
SECTION 15 ADMINISTRATION
|
13 | |||
|
||||
SECTION 16 AMENDMENT OR TERMINATION OF PLAN
|
14 | |||
|
||||
SECTION 17 SEVERABILITY OF PROVISIONS
|
14 | |||
|
||||
SECTION 18 ENTIRE AGREEMENT
|
14 | |||
|
||||
SECTION 19 HEADINGS AND CAPTIONS
|
14 | |||
|
||||
SECTION 20 NONEMPLOYMENT
|
14 | |||
|
||||
SECTION 21 PAYMENT NOT SALARY
|
14 | |||
|
||||
SECTION 22 GENDER AND NUMBER
|
14 | |||
|
||||
SECTION 23 CONTROLLING LAW
|
15 |
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EXPEDIA, INC. | ||||||
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By: | /s/ Patricia L. Zuccotti | ||||
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Patricia L. Zuccotti
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Its: | SVP, Chief Accounting Officer & Controller |
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ELIGIBLE INDIVIDUAL
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/s/ Dara Khosrowshahi | ||||
Dara Khosrowshahi | ||||
EXPEDIA, INC.
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/s/ Burke F. Norton | ||||
Name: | Burke F. Norton | |||
Title: | Executive Vice President & General Counsel |
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EXECUTIVE
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/s/ Michael B. Adler | ||||
Michael B. Adler | ||||
EXPEDIA, INC.
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/s/ Burke F. Norton | ||||
Name: | Burke F. Norton | |||
Title: | Executive Vice President & General Counsel | |||
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EXECUTIVE | |||
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/s/ Burke Norton | |||
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Burke Norton | |||
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EXPEDIA, INC. | |||
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/s/ Amy E. Weaver | |||
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Name: Amy E. Weaver | |||
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Title: Vice President, Deputy General Counsel |
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ACKNOWLEDGED AND AGREED: | |||
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EXPEDIA, INC. | |||
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By: /s/ Burke F. Norton | |||
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Name: Burke F. Norton | |||
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Title: Executive Vice President & General Counsel | |||
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Date: November 10, 2008 | |||
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EMPLOYEE | |||
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By: /s/ Pierre V. Samec | |||
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Name: Pierre V. Samec | |||
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Date: November 10, 2008 |
Entity | Jurisdiction of Formation | |
Activity Information Center, Inc.
|
HI | |
Canadian Holdings, LLC
|
DE | |
Carrentals, LLC
|
DE | |
Classic Vacations, LLC
|
NV | |
CruiseShipCenters Holdings Inc. (50%)
|
NV | |
CruiseShipCenters USA Inc. (50%)
|
NV | |
DN Holdings LLC
|
DE | |
Egencia APAC Holdings, Inc.
|
WA | |
Egencia LLC
|
NV | |
Expedia Global, LLC
|
NV | |
Expedia US, Inc.
|
NV | |
Expedia, Inc.
|
WA | |
FlipKey, Inc.
|
DE | |
Hotels.com GP, LLC
|
TX | |
Hotels.com, L.P.
|
TX | |
Hotwire, Inc.
|
DE | |
HRN 99 Holdings, LLC
|
NY | |
IAN.com, LP
|
DE | |
Interactive Affiliate Network, LLC
|
DE | |
Onetime.com, Inc.
|
NV | |
Premier Getaways, Inc.
|
FL | |
Smarter Travel Media LLC
|
NV | |
T-16 Holdings, LLC
|
DE | |
The Independent Traveler, Inc.
|
NJ | |
Travelscape, LLC
|
NV | |
Tripadvisor APAC Holdings Corporation
|
DE | |
Tripadvisor Holdings, LLC
|
MA | |
Tripadvisor LLC
|
DE | |
Virtualtourist.com, Inc.
|
CA | |
WWTE, Inc.
|
NV |
As of December 31, 2008
Entity
Jurisdiction of Formation
Japan
British Virgin Islands
France
Japan
Canada (BC company)
Canada (BC company)
Canada (BC company)
Australia
Belgium
Canada
France
France
Germany
India
United Kingdom
Cayman Islands
China
United Kingdom
Japan
Hong Kong
Cayman Islands
Cayman Islands
Cayman Islands
Australia
China
Canada
Brazil
Japan
Denmark
Japan
Finland
France
United Arab Emirates (Dubai)
Japan
France
Italy
Mexico
India
Japan
New Zealand
Norway
Republic of Korea
Poland
Belgium
Japan
Spain
France
Singapore
Sweden
Thailand
Germany
United Kingdom
Netherlands
Entity
Jurisdiction of Formation
France
United Kingdom
Japan
France
Canada (Nova Scotia company)
Luxembourg
China
Japan
United Kingdom
Japan
India
China
Italy
France
United Kingdom
Italy
Ireland
Luxembourg
(1) | Registration Statement (Form S-4 No. 333-140195) of Expedia, Inc. and in the related Prospectus, | ||
(2) | Registration Statement (Form S-8 No. 333-127324) pertaining to the Expedia, Inc. 2005 Stock and Annual Incentive Plan, the Expedia, Inc. 401(k) Retirement Savings Plan, and the Expedia, Inc. Deferred Compensation Plan for Non-Employee Directors of Expedia, Inc., | ||
(3) | Registration Statement (Form S-4/A No. 333-124303-01) of Expedia, Inc., | ||
(4) | Registration Statement (Form S-3ASR No. 333-146721-01) of Expedia, Inc. and in the related Prospectus, and | ||
(5) | Registration Statement (Form S-8 No. 333-154913) pertaining to the Expedia, Inc. 2005 Stock and Annual Incentive Plan; |
1. | I have reviewed this annual report on Form 10-K of Expedia, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c. | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d. | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 19, 2009 | /s/ BARRY DILLER | |||
Barry Diller | ||||
Chairman and Senior Executive | ||||
1. | I have reviewed this annual report on Form 10-K of Expedia, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c. | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d. | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 19, 2009 | /s/ DARA KHOSROWSHAHI | |||
Dara Khosrowshahi | ||||
Chief Executive Officer | ||||
1. | I have reviewed this annual report on Form 10-K of Expedia, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c. | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d. | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 19, 2009 | /s/ MICHAEL B. ADLER | |||
Michael B. Adler | ||||
Chief Financial Officer | ||||
1) | the Annual Report on Form 10-K of the Company for the year ended December 31, 2008 (the Report) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 19, 2009 | /s/ BARRY DILLER | |||
Barry Diller | ||||
Chairman and Senior Executive |
1) | the Annual Report on Form 10-K of the Company for the year ended December 31, 2008 (the Report) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 19, 2009 | /s/ DARA KHOSROWSHAHI | |||
Dara Khosrowshahi | ||||
Chief Executive Officer |
1) | the Annual Report on Form 10-K of the Company for the year ended December 31, 2008 (the Report) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 19, 2009 | /s/ MICHAEL B. ADLER | |||
Michael B. Adler | ||||
Chief Financial Officer | ||||