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Discontinued Operations
 12 Months Ended
Dec. 31, 2011
Discontinued Operations [Abstract]  
Discontinued Operations

NOTE 4 — Discontinued Operations

On December 20, 2011, we completed the spin-off of TripAdvisor, Inc., which includes its flagship brand as well as 18 other travel media brands. Accordingly, we have presented the financial condition and results of operations of our former TripAdvisor Media Group segment in the consolidated financial statements through December 20, 2011 as discontinued operations. The revenue and income for the discontinued operations for the years ended December 31, 2011, 2010, 2009 were as follows:

 

     Year ended December 31,  
     2011     2010     2009  
           (In thousands)        

Revenue

    $ 620,994      $ 314,461      $ 212,375   

Income before income taxes

      230,380        194,729        138,247   

Provision for income taxes

      (82,118 )      (74,666 )      (52,898 ) 
  

 

 

    

 

 

    

 

 

  

Net income

      148,262        120,063        85,349   

Net (income) loss attributable to noncontrolling interest

      (114 )      (178 )      212   
  

 

 

    

 

 

    

 

 

  

Net income attributable to discontinued operations

    $ 148,148      $ 119,885      $ 85,561   
  

 

 

    

 

 

    

 

 

  

Earnings per share:

       

Basic

    $ 1.09      $ 0.85      $ 0.59   

Diluted

      1.07        0.83        0.59   

Shares used in computing earnings per share:

       

Basic

      135,888        141,233        144,107   

Diluted

      138,702        144,014        146,071   

Discontinued operations for the year ended December 31, 2011 included spin-off costs (e.g., legal and professional fees) of $14 million.

Our Leisure segment recognized approximately $207 million of sales and marketing expense from TripAdvisor in 2011 through the spin-off date, and $171 million and $140 million of sales and marketing expense for the years ended December 31, 2010 and 2009.

The indenture governing our $400 million aggregate principal amount of 8.5% senior notes due 2016 (the "8.5% Notes") contained certain covenants that could have restricted implementation of the spin-off. On December 20, 2011, prior to consummation of the spin-off, we gave "Notice of Redemption" to the bondholders, the effect of which was the bonds became due and payable on the redemption date at the redemption price. The redemption price was equal to 100% of the principal amount plus a make-whole premium as of, and accrued and unpaid interest to, the redemption date. The redemption date is defined as 30 days after the Notice of Redemption is given. In order to complete the Notice of Redemption, we were required to irrevocably deposit, with the Trustee, funds sufficient to pay the redemption price plus accrued interest on the 8.5% Notes (approximately $451 million). The 8.5% Notes were fully redeemed on January 19, 2012, the redemption date, for approximately $450 million. In connection with the redemption, we incurred a pre-tax loss from early extinguishment of debt of approximately $38 million (or $25 million net of tax), which included an early redemption premium of $33 million and the write-off of $5 million of unamortized debt issuance and discount costs. This loss will be recorded within discontinued operations in the first quarter of 2012, as that is the period in which the bonds were legally extinguished. The debt extinguishment was completed, in part, using the approximately $400 million of cash distributed to us from TripAdvisor in connection with the spin-off.

As a result of the above, at December 31, 2011, we had a current asset of discontinued operations of $456 million primarily related to the deposit for the redemption price of the 8.5% Notes as well as a current liability of discontinued operations of $420 million for the 8.5% Notes, accrued interest expense related to the 8.5% Notes and accrued spin-off costs. As of December 31, 2010, the 8.5% Notes were included within noncurrent liabilities of discontinued operations and the related interest expense and amortization of debt issuance and discount costs of $35 million for the years ended December 31, 2011, 2010 and 2009 were included within discontinued operations within our consolidated statement of operations.