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NOTE 14 — Commitments and Contingencies
Letters of Credit, Purchase Obligations and Guarantees
We have commitments and obligations that include purchase obligations, guarantees and LOCs, which
could potentially require our payment in the event of demands by third parties or contingent events. The
following table presents these commitments and obligations as of December 31, 2008:
Total
Less than
1 Year 1 to 3 Years 3 to 5 Years
More than
5 Years
By Period
(In thousands)
Purchase obligations ........... $ 32,293 $ 22,101 $10,192 $— $—
Guarantees .................. 39,079 39,079 — — —
Letters of credit . . . ........... 58,226 57,045 1,181 — —
$129,598 $118,225 $11,373 $— $—
Our purchase obligations represent the minimum obligations we have under agreements with certain of
our vendors. These minimum obligations are less than our projected use for those periods. Payments may be
more than the minimum obligations based on actual use.
We have guarantees primarily related to a specific country aviation authority for the potential non-
delivery, by us, of packaged travel sold in that country. The authority also requires that a portion of the total
amount of packaged travel sold be bonded.
Our LOCs consist of stand-by LOCs, underwritten by a group of lenders, which we primarily issue to
certain hotel properties to secure our payment for hotel room transactions. The contractual expiration dates of
these LOCs are shown in the table above. There were no claims made against any stand-by LOCs during the
years ended December 31, 2008, 2007 and 2006.
Lease Commitments
We have contractual obligations in the form of operating leases for office space and related office
equipment for which we record the related expense on a monthly basis. Certain leases contain periodic rent
escalation adjustments and renewal options. Rent expense related to such leases is recorded on a straight-line
basis. Operating lease obligations expire at various dates with the latest maturity in 2018. For the years ended
December 31, 2008, 2007 and 2006, we recorded rental expense of $49 million, $33 million and $30 million.
The following table presents our estimated future minimum rental payments under operating leases with
noncancelable lease terms that expire after December 31, 2008, in thousands:
Year Ending December 31,
2009 ............................................................... $ 39,097
2010 ............................................................... 36,984
2011 ............................................................... 35,205
2012 ............................................................... 33,626
2013 ............................................................... 27,539
2014 and thereafter..................................................... 93,404
$265,855
F-34
Expedia, Inc.
Notes to Consolidated Financial Statements — (Continued)