Expedia 2011 Annual Report Download - page 67

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excluding the contracts economically hedging our forecasted merchant revenue) and $29 million ($19 million
excluding the contracts economically hedging our forecasted merchant revenue). As we increase our operations
in international markets, our exposure to fluctuations in foreign currency exchange rates increases. The economic
impact to us of foreign currency exchange rate movements is linked to variability in real growth, inflation,
interest rates, governmental actions and other factors. These changes, if material, could cause us to adjust our
financing and operating strategies.
Part II. Item 8. Consolidated Financial Statements and Supplementary Data
The Consolidated Financial Statements and Schedule listed in the Index to Financial Statements, Schedules
and Exhibits on page F-1 are filed as part of this report.
Part II. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Part II. Item 9A. Controls and Procedures
Changes in Internal Control over Financial Reporting.
There were no changes to our internal control over financial reporting that occurred during the quarter ended
December 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Evaluation of Disclosure Controls and Procedures.
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), our management, including our Chairman and Senior Executive, Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our Chairman
and Senior Executive, Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the
period covered by this report, our disclosure controls and procedures were effective.
Management’s Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) of the Exchange Act. Internal control over financial reporting is a process
to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in
accordance with accounting principles generally accepted in the United States of America. Management
conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria
for effective control over financial reporting described in Internal Control — Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation,
management has concluded that, as of December 31, 2011, the Company’s internal control over financial
reporting was effective. Management has reviewed its assessment with the Audit Committee. Ernst & Young,
LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over
financial reporting as of December 31, 2011, as stated in their report which is included below.
Limitations on Controls.
Management does not expect that our disclosure controls and procedures or our internal control over
financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed
and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its
objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due
to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have
been detected.
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