Note 11 – 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, 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.

In connection with the spin-off, TripAdvisor Holdings, LLC and TripAdvisor LLC, both post-spin-off subsidiaries of TripAdvisor, were released from their guarantees of obligations under our existing debt facility and instruments. The discontinued operations of TripAdvisor and its subsidiaries have been presented within the following condensed consolidating financial statements within Guarantor Subsidiaries and Non-Guarantor Subsidiaries consistent with the classification in prior periods. In addition, in connection with the spin-off and the Notice of Redemption of the 8.5% Notes as described in Note 3 — Acquisitions and Dispositions, such 8.5% Notes and the related deposit for the redemption were included within total current liabilities and total current assets of the Parent as of December 31, 2011.

CONDENSED CONSOLIDATING STATEMENT OF OPERATION

Three months ended September 30, 2012


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	1,039,520		$	160,882		$	(1,382	)	$	1,199,020
Costs and expenses:
Cost of revenue		—			194,103			48,996			534			243,633
Selling and marketing		—			374,409			133,420			(2,073	)		505,756
Technology and content		—			90,427			35,232			(42	)		125,617
General and administrative		—			55,112			29,829			199			85,140
Amortization of intangible assets		—			1,555			7,919			—			9,474
Legal reserves, occupancy tax and other		—			2,310			—			—			2,310
Intercompany (income) expense, net		—			207,291			(207,291	)		—			—

Operating income		—			114,313			112,777			—			227,090
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		183,803			112,800			—			(296,603	)		—
Other, net		(20,835	)		(3,871	)		1,954			—			(22,752	)

Total other income (expense), net		162,968			108,929			1,954			(296,603	)		(22,752	)

Income before income taxes		162,968			223,242			114,731			(296,603	)		204,338
Provision for income taxes		6,966			(38,609	)		(4,507	)		—			(36,150	)

Income from continuing operations		169,934			184,633			110,224			(296,603	)		168,188
Discontinued operations, net of taxes		1,543			—			—			—			1,543

Net income		171,477			184,633			110,224			(296,603	)		169,731
Net loss attributable to noncontrolling interests		—			—			1,746			—			1,746

Net income attributable to Expedia, Inc.	$	171,477		$	184,633		$	111,970		$	(296,603	)	$	171,477

Comprehensive income attributable to Expedia, Inc.	$	171,477		$	184,921		$	125,859		$	(296,603	)	$	185,654

CONDENSED CONSOLIDATING STATEMENT OF OPERATION

Three months ended September 30, 2011


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	895,434		$	128,580		$	(3,564	)	$	1,020,450
Costs and expenses:
Cost of revenue		—			177,489			28,480			482			206,451
Selling and marketing		—			300,216			111,912			(3,959	)		408,169
Technology and content		—			76,655			21,922			(105	)		98,472
General and administrative		—			54,029			24,633			18			78,680
Amortization of intangible assets		—			1,230			4,334			—			5,564
Legal reserves, occupancy tax and other		—			14,015			—			—			14,015
Intercompany (income) expense, net		—			175,848			(175,848	)		—			—

Operating income		—			95,952			113,147			—			209,099
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		185,509			89,058			—			(274,567	)		—
Other, net		(20,914	)		38,803			(24,549	)		—			(6,660	)

Total other income (expense), net		164,595			127,861			(24,549	)		(274,567	)		(6,660	)

Income before income taxes		164,595			223,813			88,598			(274,567	)		202,439
Provision for income taxes		6,278			(37,160	)		283			—			(30,599	)

Income from continuing operations		170,873			186,653			88,881			(274,567	)		171,840
Discontinued operations, net of taxes		38,661			38,457			48,028			(86,580	)		38,566

Net income		209,534			225,110			136,909			(361,147	)		210,406
Net income attributable to noncontrolling interests		—			—			(872	)		—			(872	)

Net income attributable to Expedia, Inc.	$	209,534		$	225,110		$	136,037		$	(361,147	)	$	209,534

Comprehensive income attributable to Expedia, Inc.	$	209,534		$	224,334		$	100,453		$	(361,214	)	$	173,107

CONDENSED CONSOLIDATING STATEMENT OF OPERATION

Nine months ended September 30, 2012


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	2,664,255		$	395,282		$	(4,049	)	$	3,055,488
Costs and expenses:
Cost of revenue		—			550,129			122,354			989			673,472
Selling and marketing		—			990,527			342,646			(5,772	)		1,327,401
Technology and content		—			260,231			90,773			(450	)		350,554
General and administrative		—			161,570			84,182			1,184			246,936
Amortization of intangible assets		—			4,888			16,639			—			21,527
Legal reserves, occupancy tax and other		—			5,384			—			—			5,384
Intercompany (income) expense, net		—			521,952			(521,952	)		—			—

Operating income		—			169,574			260,640			—			430,214
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		333,172			251,410			—			(584,582	)		—
Other, net		(62,536	)		(39,564	)		37,915			—			(64,185	)

Total other income (expense), net		270,636			211,846			37,915			(584,582	)		(64,185	)

Income from continuing operations before income taxes		270,636			381,420			298,555			(584,582	)		366,029
Provision for income taxes		25,147			(45,614	)		(49,678	)		—			(70,145	)

Income from continuing operations		295,783			335,806			248,877			(584,582	)		295,884
Discontinued operations, net of taxes		(22,346	)		—			—			—			(22,346	)

Net income		273,437			335,806			248,877			(584,582	)		273,538
Net income attributable to noncontrolling interests		—			—			(101	)		—			(101	)

Net income attributable to Expedia, Inc.	$	273,437		$	335,806		$	248,776		$	(584,582	)	$	273,437

Comprehensive income attributable to Expedia, Inc.	$	273,437		$	336,580		$	252,768		$	(584,582	)	$	278,203

CONDENSED CONSOLIDATING STATEMENT OF OPERATION

Nine months ended September 30, 2011


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue	$	—		$	2,336,627		$	335,983		$	(10,734	)	$	2,661,876
Costs and expenses:
Cost of revenue		—			496,348			80,824			699			577,871
Selling and marketing		—			853,292			317,690			(11,422	)		1,159,560
Technology and content		—			222,785			55,754			(159	)		278,380
General and administrative		—			157,116			64,621			148			221,885
Amortization of intangible assets		—			3,752			13,560			—			17,312
Legal reserves, occupancy tax and other		—			18,904			—			—			18,904
Intercompany (income) expense, net		—			455,384			(455,384	)		—			—

Operating income		—			129,046			258,918			—			387,964
Other income (expense):
Equity in pre-tax earnings of consolidated subsidiaries		307,997			212,186			—			(520,183	)		—
Other, net		(62,530	)		9,771			(2,712	)		—			(55,471	)

Total other income (expense), net		245,467			221,957			(2,712	)		(520,183	)		(55,471	)

Income before income taxes		245,467			351,003			256,206			(520,183	)		332,493
Provision for income taxes		18,775			(40,270	)		(45,122	)		—			(66,617	)

Income from continuing operations		264,242			310,733			211,084			(520,183	)		265,876
Discontinued operations, net of taxes		137,724			143,283			112,397			(255,775	)		137,629

Net income		401,966			454,016			323,481			(775,958	)		403,505
Net income attributable to noncontrolling interests		—			—			(1,539	)		—			(1,539	)

Net income attributable to Expedia, Inc.	$	401,966		$	454,016		$	321,942		$	(775,958	)	$	401,966

Comprehensive income attributable to Expedia, Inc.	$	401,966		$	453,926		$	317,016		$	(775,958	)	$	396,950

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2012


	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Total current assets	$	135,432	$	2,805,523	$	918,942	$	(768,487	)	$	3,091,410
Investment in subsidiaries		4,244,307		1,284,243		—		(5,528,550	)		—
Intangible assets, net		—		636,408		191,910		—			828,318
Goodwill		—		2,436,533		570,429		—			3,006,962
Other assets, net		4,973		430,119		145,783		—			580,875

TOTAL ASSETS	$	4,384,712	$	7,592,826	$	1,827,064	$	(6,297,037	)	$	7,507,565

LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities	$	663,075	$	2,988,327	$	415,664	$	(768,487	)	$	3,298,579
Long-term debt		1,249,328		—		—		—			1,249,328
Other liabilities		—		354,238		133,111		—			487,349
Stockholders’ equity		2,472,309		4,250,261		1,278,289		(5,528,550	)		2,472,309

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,384,712	$	7,592,826	$	1,827,064	$	(6,297,037	)	$	7,507,565

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2011


	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Total current assets	$	551,488	$	1,538,509	$	644,825	$	(460,393	)	$	2,274,429
Investment in subsidiaries		3,891,811		1,126,412		—		(5,018,223	)		—
Intangible assets, net		—		634,581		109,317		—			743,898
Goodwill		—		2,415,482		461,819		—			2,877,301
Other assets, net		5,587		465,473		138,570		—			609,630

TOTAL ASSETS	$	4,448,886	$	6,180,457	$	1,354,531	$	(5,478,616	)	$	6,505,258

LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities	$	894,438	$	1,906,349	$	212,963	$	(460,393	)	$	2,553,357
Long-term debt		1,249,281		—		—		—			1,249,281
Other liabilities		—		378,729		18,724		—			397,453
Stockholders’ equity		2,305,167		3,895,379		1,122,844		(5,018,223	)		2,305,167

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,448,886	$	6,180,457	$	1,354,531	$	(5,478,616	)	$	6,505,258

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine months ended September 30, 2012


	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities from continuing operations	$	—		$	1,270,214		$	183,694		$	1,453,908

Investing activities:
Capital expenditures, including internal-use software and website development		—			(143,051	)		(33,929	)		(176,980	)
Purchases of investments		—			(1,265,212	)		(265,537	)		(1,530,749	)
Sales and maturities of investments		—			992,292			251,773			1,244,065
Acquisitions, net of cash acquired		—			—			(198,398	)		(198,398	)
Other, net		—			(8,511	)		(2,203	)		(10,714	)

Net cash used in investing activities from continuing operations		—			(424,482	)		(248,294	)		(672,776	)

Financing activities:
Treasury stock activity		(366,037	)		—			—			(366,037	)
Payment of dividends to stockholders		(42,470	)		—			—			(42,470	)
Proceeds from exercise of equity awards		231,073			—			1,585			232,658
Transfers (to) from related parties		149,001			(149,001	)		—			—
Other, net		28,433			(2,746	)		(3,765	)		21,922

Net cash used in financing activities from continuing operations		—			(151,747	)		(2,180	)		(153,927	)

Net cash provided by (used in) continuing operations		—			693,985			(66,780	)		627,205
Net cash used in discontinued operations		—			(7,607	)		—			(7,607	)
Effect of exchange rate changes on cash and cash equivalents		—			5,863			133			5,996

Net increase (decrease) in cash and cash equivalents		—			692,241			(66,647	)		625,594
Cash and cash equivalents at beginning of period		—			357,252			331,882			689,134

Cash and cash equivalents at end of period	$	—		$	1,049,493		$	265,235		$	1,314,728

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine months ended September 30, 2011


	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidated
	(In thousands)
Operating activities:
Net cash provided by operating activities from continuing operations	$	—		$	924,286		$	94,412		$	1,018,698

Investing activities:
Capital expenditures, including internal-use software and website development		—			(140,897	)		(16,970	)		(157,867	)
Purchases of investments		—			(1,111,613	)		(67,942	)		(1,179,555	)
Sales and maturities of investments		—			973,476			72,919			1,046,395
Other, net		—			(8,117	)		(7,037	)		(15,154	)

Net cash used in investing activities from continuing operations		—			(287,151	)		(19,030	)		(306,181	)
Financing activities:
Treasury stock activity		(208,693	)		—			—			(208,693	)
Payment of dividends to stockholders		(57,732	)		—			—			(57,732	)
Sales of additional interests in controlled subsidiaries, net		—			—			70,626			70,626
Transfers (to) from related parties		241,554			(241,554	)		—			—
Other, net		24,871			(3,888	)		5,556			26,539

Net cash provided by (used in) financing activities from continuing operations		—			(245,442	)		76,182			(169,260	)
Net cash provided by from continuing operations		—			391,693			151,564			543,257

Net cash provided by discontinued operations		—			114,412			—			114,412

Effect of exchange rate changes on cash and cash equivalents		—			(14,950	)		1,671			(13,279	)

Net increase in cash and cash equivalents		—			491,155			153,235			644,390
Cash and cash equivalents at beginning of period		—			361,516			259,683			621,199

Cash and cash equivalents at end of period	$	—		$	852,673		$	412,917		$	1,265,589