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NOTE 4 — Discontinued Operations
On December 20, 2011, we completed the spin-off of TripAdvisor, Inc., which included its flagship brand as
well as 18 other travel media brands. Accordingly, we have presented the financial condition and results of
operations of our former TripAdvisor Media Group segment in the consolidated financial statements through
December 20, 2011 as discontinued operations. Additionally, the 2012 loss incurred to extinguish our 8.5%
senior notes due 2016 (the “8.5% Notes”) as a result of the spin-off was recorded as discontinued operations. See
below for a full description of the extinguishment. Financial data for the discontinued operations for the years
ended December 31, 2012, 2011, 2010 were as follows:
Year ended December 31,
2012 2011 2010
(In thousands)
Revenue $ — $620,994 $485,574
Income (loss) before income taxes $ (37,568) $230,380 $194,729
Provision for income taxes 15,029 (82,118) (74,666)
Net income (loss) (22,539) 148,262 120,063
Net income attributable to noncontrolling interest — (114) (178)
Net income (loss) attributable to discontinued
operations $ (22,539) $148,148 $119,885
Earnings (loss) per share:
Basic $ (0.17) $ 1.09 $ 0.85
Diluted (0.16) 1.07 0.83
Shares used in computing earnings per share:
Basic 134,203 135,888 141,233
Diluted 139,929 138,702 144,014
Discontinued operations for the year ended December 31, 2011 included spin-off costs (e.g., legal and
professional fees) of $14 million.
Our Leisure segment recognized approximately $207 million of sales and marketing expense from
TripAdvisor in 2011 through the spin-off date, and $171 million of sales and marketing expense for the year
ended December 31, 2010.
The indenture governing our $400 million aggregate principal amount of the 8.5% Notes contained certain
covenants that could have restricted implementation of the spin-off. On December 20, 2011, prior to consummation
of the spin-off, we gave “Notice of Redemption” to the bondholders, the effect of which was the bonds became due
and payable on the redemption date at the redemption price. The redemption price was equal to 100% of the
principal amount plus a make-whole premium as of, and accrued and unpaid interest to, the redemption date. The
redemption date was defined as 30 days after the Notice of Redemption was given. In order to complete the Notice
of Redemption, we were required to irrevocably deposit, with the Trustee, funds sufficient to pay the redemption
price plus accrued interest on the 8.5% Notes (approximately $451 million). The 8.5% Notes were fully redeemed
on January 19, 2012, the redemption date, for approximately $450 million. In connection with the redemption, we
incurred a pre-tax loss from early extinguishment of debt of approximately $38 million (or $24 million net of tax),
which included an early redemption premium of $33 million and the write-off of $5 million of unamortized debt
issuance and discount costs. This loss was recorded within discontinued operations in the first quarter of 2012, as
that was the period in which the bonds were legally extinguished.
As a result of the above, as of December 31, 2012, the current asset of discontinued operations included a
$14 million tax benefit primarily related to the loss on extinguishment of debt. As of December 31, 2011, we had
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