Expedia 2013 Annual Report Download - page 108

Our $750 million in registered senior unsecured notes outstanding at December 31, 2013 are due in August
2020 and bear interest at 5.95% (the “5.95% Notes”). The 5.95% Notes were issued at 99.893% of par resulting
in a discount, which is being amortized over their life. Interest is payable semi-annually in February and August
of each year. We may redeem the 5.95% Notes at a redemption price of 100% of the principal plus accrued
interest, plus a “make-whole” premium, in whole or in part.
The 7.456% and 5.95% Notes (collectively the “Notes”) are senior unsecured obligations guaranteed by
certain domestic Expedia subsidiaries and rank equally in right of payment with all of our existing and future
unsecured and unsubordinated obligations. For further information, see Note 21 — Guarantor and Non-Guarantor
Supplemental Financial Information. In addition, the Notes include covenants that limit our ability to (i) create
certain liens, (ii) enter into sale/leaseback transactions and (iii) merge or consolidate with or into another
entity. Accrued interest related to the Notes was $31 million as of both December 31, 2013 and 2012.
The approximate fair value of 7.456% Notes was approximately $587 million and $598 million as of
December 31, 2013 and 2012, and the approximate fair value of 5.95% Notes was approximately $816 million
and $832 million as of December 31, 2013 and 2012. These fair values were based on quoted market prices in
less active markets (Level 2 inputs).
Credit Facility
Expedia, Inc. maintains a $1 billion unsecured revolving credit facility with a group of lenders, which is
unconditionally guaranteed by certain domestic Expedia subsidiaries that are the same as under the Notes, that
expires in November 2017. As of December 31, 2013 and 2012, we had no revolving credit facility borrowings
outstanding. The facility bears interest based on the Company’s credit ratings, with drawn amounts bearing
interest at LIBOR plus 150 basis points and the commitment fee on undrawn amounts at 20 basis points as of
December 31, 2013. The facility contains covenants including maximum leverage and minimum interest
coverage ratios.
The amount of stand-by letters of credit (“LOC”) issued under the facility reduces the credit amount
available. As of December 31, 2013 and 2012, there was $19 million and $25 million of outstanding stand-by
LOCs issued under the facility.
NOTE 9 — Employee Benefit Plans
Our U.S. employees are generally eligible to participate in a retirement and savings plan that qualifies under
Section 401(k) of the Internal Revenue Code. Participating employees may contribute up to 50% of their pretax
salary, but not more than statutory limits. We contribute fifty cents for each dollar a participant contributes in this
plan, with a maximum contribution of 3% of a participant’s earnings. Our contribution vests with the employee
after the employee completes two years of service. Participating employees have the option to invest in our
common stock, but there is no requirement for participating employees to invest their contribution or our
matching contribution in our common stock. We also have various defined contribution plans for our
international employees. Our contributions to these benefit plans were $28 million, $22 million, and $18 million
for the years ended December 31, 2013, 2012 and 2011.
NOTE 10 — Stock-Based Awards and Other Equity Instruments
Pursuant to the Amended and Restated Expedia, Inc. 2005 Stock and Annual Incentive Plan, we may grant
restricted stock, restricted stock awards, RSUs, stock options and other stock-based awards to directors, officers,
employees and consultants. As of December 31, 2013, we had approximately 11 million shares of common stock
reserved for new stock-based awards under the 2005 Stock and Annual Incentive Plan. We issue new shares to
satisfy the exercise or release of stock-based awards.
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