Expedia 2012 Annual Report Download - page 114

December 31, 2009 through December 31, 2010. During 2010, the IRS concluded its audit of our consolidated
federal tax return for the periods ended December 31, 2005 through December 31, 2007. As a result, we
decreased our liability for unrecognized tax benefits by $152 million, $16 million of which decreased our
provision for income taxes, $112 million increased additional paid-in capital and the remaining amount was
primarily a decrease to deferred tax assets. The increase in additional paid-in capital is attributable to excess tax
benefits related to certain exercises of stock options during 2005 and 2007, the cash benefits of which were
recognized during those years.
Expedia believes its annual tax provisions have included amounts considered sufficient to pay assessments
that may result from tax authority examinations. However, the final settlement of tax authority examinations is
uncertain, and tax provisions may have to be adjusted in the period the examinations are concluded.
NOTE 12 — Stockholders’ Equity
All Expedia’s common stock information and related share prices included in this note have been adjusted
to reflect our one-for-two reverse stock split in December 2011.
Common Stock and Class B Common Stock
Our authorized common stock consists of 1.6 billion shares of common stock with par value of $0.0001 per
share, and 400 million shares of Class B common stock with par value of $0.0001 per share. Both classes of
common stock qualify for and share equally in dividends, if declared by our Board of Directors, and generally
vote together on all matters. Common stock is entitled to one vote per share and Class B common stock is
entitled to 10 votes per share. Holders of common stock, voting as a single, separate class are entitled to elect
25% of the total number of directors. Class B common stockholders may, at any time, convert their shares into
common stock, on a one for one share basis. Upon conversion, the Class B common stock is retired and is not
available for reissue. In the event of liquidation, dissolution, distribution of assets or winding-up of Expedia, Inc.,
the holders of both classes of common stock have equal rights to receive all the assets of Expedia, Inc. after the
rights of the holders of the preferred stock, if any, have been satisfied.
Preferred Stock
In December 2011, in connection with the spin-off, we completed a preferred stock merger which resulted
in each share of Series A preferred stock converting into the right to receive cash equal to $22.23 per share plus
an amount equal to accrued and unpaid dividends and resulted in a cash payment of approximately $17,000. As
of December 31, 2012 and 2011, we have no preferred stock outstanding.
Share Repurchases
During 2012, 2010, and 2006, our Board of Directors, or the Executive Committee, acting on behalf of the
Board of Directors, authorized a repurchase of up to 20 million outstanding shares of our common stock during
each of the respective years for a total of 60 million shares. Shares repurchased under the authorized programs
were as follows:
Year ended December 31,
2012 2011(1) 2010(2)
Number of shares repurchased 10.7 million 10.6 million 20.6 million
Average price per share $ 37.15 $ 26.60 $ 23.71
Total cost of repurchases (in millions)(3) $ 397 $ 283 $ 489
(1) On a reverse split adjusted basis the number of shares repurchased was 5.3 million for $53.20 per share.
(2) On a reverse split adjusted basis the number of shares repurchased was 10.3 million for $47.42 per share.
(3) Amount excludes transaction costs.
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