Expedia 2009 Annual Report Download - page 62

The effect of foreign exchange on our cash balances denominated in foreign currency in 2008 showed a net
decrease of $100 million primarily due to a sharp depreciation in foreign currencies during the second half of
2008 compared with appreciating foreign currencies throughout 2007, and included a $21 million loss related to
euro cash holdings during the third quarter of 2008 to economically hedge the purchase price of an acquisition.
We currently have authorization, for which there is no fixed termination date, from our Board of Directors
to repurchase up to 20 million outstanding shares of our common stock; no such repurchases have been made
under this authorization. The number of shares we may make under this authorization is subject to certain of our
debt covenants.
We also have a shelf registration statement filed with the SEC under which Expedia, Inc. may offer from
time to time debt securities, guarantees of debt securities, preferred stock, common stock or warrants. The shelf
registration statement expires on October 15, 2010.
In our opinion, available cash, funds from operations and available borrowings will provide sufficient
capital resources to meet our foreseeable liquidity needs. Our liquidity has not been materially impacted by the
credit market disruptions, which were more pronounced in the fourth quarter of 2008 and the first half of 2009.
There can be no assurance, however, that future borrowings, including refinancings, if any, will be available on
terms acceptable to us.
Contractual Obligations and Commercial Commitments
The following table presents our material contractual obligations and commercial commitments as of
December 31, 2009:
By Period
Total
Less than
1 year
1to3
years
3to5
years
More than
5 years
(In millions)
Long-term debt(1) .......................... $1,474 $ 71 $143 $143 $1,117
Operating leases(2) ......................... 231 38 69 55 69
Purchase obligations(3) ..................... 58 32 26 — —
Guarantees(4) ............................. 65 65 — — —
Letters of credit(4) ......................... 42 42 — — —
Total(5) .................................. $1,870 $248 $238 $198 $1,186
(1) Our 8.5% Notes and 7.456% Notes include interest payments through maturity in 2016 and 2018,
respectively, based on the stated fixed rates. In the above table, we have reflected the 7.456% Notes based
on the maturity date in 2018; however such Notes are repayable in whole or in part on August 15, 2013 at
the option of the holders.
(2) The operating leases are for office space and related office equipment. We account for these leases on a
monthly basis. Certain leases contain periodic rent escalation adjustments and renewal options. Operating
lease obligations expire at various dates with the latest maturity in 2018.
(3) Our purchase obligations represent the minimum obligations we have under agreements with certain of our
vendors and marketing partners. These minimum obligations are less than our projected use for those
periods. Payments may be more than the minimum obligations based on actual use.
(4) Guarantees and LOCs are commitments that represent funding responsibilities that may require our
performance in the event of third-party demands or contingent events. We use our stand-by LOCs primarily
to secure payment for hotel room transactions to particular hotel properties. The outstanding balance of our
stand-by LOCs directly reduces the amount available to us from our revolving credit facility. The LOC
amounts in the above table represent the amount of commitment expiration per period. In addition, we
provide a guarantee to the aviation authority of one country to protect against potential non-delivery of our
packaged travel services sold within that country. This country holds all travel agents and tour companies to
the same standard.
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