Expedia 2011 Annual Report Download - page 110

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NOTE 16 — 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, 2011:
By Period
Total
Less than
1 year 1 to 3 years 3 to 5 years
More than
5 years
(In thousands)
Purchase obligations $ 35,984 $ 35,018 $ 966 $— $—
Guarantees 77,762 77,007 755 — —
Letters of credit 22,151 21,551 600 — —
$135,897 $133,576 $2,321 $— $—
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 certain foreign countries aviation authorities for the potential
non-delivery, by us, of packaged travel sold in those countries. The authorities also require that a portion of the
total amount of packaged travel sold be bonded. Our guarantees also include certain surety bonds related to
various company performance obligations.
Our LOCs consist of stand-by LOCs, underwritten by a group of lenders, which we primarily issue for
certain regulatory purposes as well as 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, 2011, 2010 and 2009.
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 2021. For the years ended
December 31, 2011, 2010 and 2009, we recorded rental expense of $67 million, $48 million and $47 million.
The following table presents our estimated future minimum rental payments under operating leases with
noncancelable lease terms that expire after December 31, 2011, in thousands:
Year ending December 31,
2012 $ 45,588
2013 40,575
2014 35,771
2015 31,092
2016 26,796
2017 and thereafter 62,744
$242,566
F-35