Expedia 2012 Annual Report Download - page 104

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As of December 31, 2012 and 2011, our cash and cash equivalents consisted primarily of prime institutional
money market funds with maturities of 90 days or less, time deposits as well as bank account balances.
We invest in investment grade corporate debt securities, all of which are classified as available for sale. As
of December 31, 2012, we had $119 million of short-term and $126 million of long-term available for sale
investments and the amortized cost basis of the investments approximated their fair value with gross unrealized
gains of $2 million and gross unrealized losses of less than $1 million. As of December 31, 2011, we had
$57 million of short-term and $212 million of long-term available for sale investments and the amortized cost
basis of the investments approximated their fair value with gross unrealized gains of $2 million and gross
unrealized losses of $1 million.
We also hold time deposit investments with financial institutions. Time deposits with original maturities of
less than 90 days are classified as cash equivalents and those with remaining maturities of less than one year are
classified within short-term investments. Additionally, we have time deposits classified as restricted cash to
fulfill the requirement of an aviation authority of a certain foreign country to protect against the potential
non-delivery of travel services in that country. Of the total time deposit investments, $274 million and
$237 million as of December 31, 2012 and 2011 related to balances held by our majority-owned subsidiaries.
We use foreign currency forward contracts to economically hedge certain merchant revenue exposures and
in lieu of holding certain foreign currency cash for the purpose of economically hedging our foreign currency-
denominated operating liabilities. As of December 31, 2012, we were party to outstanding forward contracts
hedging our liability exposures with a total net notional value of $667 million. We had a net forward liability of
$3 million as of December 31, 2012 recorded in accrued expenses and other current liabilities and a net forward
asset of $1 million as of December 31, 2011 recorded in prepaid expenses and other current assets. We recorded
$(21) million, $(1) million and $6 million in net gains (losses) from foreign currency forward contracts in 2012,
2011 and 2010.
NOTE 6 — Property and Equipment, Net
Our property and equipment consists of the following:
December 31,
2012 2011
(In thousands)
Capitalized software development $ 648,477 $ 473,916
Computer equipment 147,245 157,219
Furniture and other equipment 119,103 98,631
Leasehold improvements 107,376 85,735
1,022,201 815,501
Less: accumulated depreciation (655,301) (552,241)
Projects in progress 42,473 57,022
Property and equipment, net $ 409,373 $ 320,282
As of December 31, 2012 and 2011, our recorded capitalized software development costs, net of
accumulated amortization, were $257 million and $184 million. For the years ended December 31, 2012, 2011
and 2010, we recorded amortization of capitalized software development costs of $100 million, $73 million and
$61 million, most of which is included in technology and content expenses.
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