Expedia 2012 Annual Report Download - page 71

Contractual Obligations and Commercial Commitments
The following table presents our material contractual obligations and commercial commitments as of
December 31, 2012:
By Period
Total
Less than
1 year 1 to 3 years 3 to 5 years
More than
5 years
(In millions)
Long-term debt (1) $1,831 $ 82 $164 $164 $1,421
Operating leases (2) 226 44 77 64 41
Purchase obligations (3) 109 73 36 — —
Guarantees (4) 85 84 1 — —
Letters of credit (4) 32 26 4 — 2
Total(5) $2,283 $309 $282 $228 $1,464
(1) Our 7.456% Notes and 5.95% Notes include interest payments through maturity in 2018 and 2020,
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 2021.
(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
for certain regulatory purposes as well as to secure payment for hotel room transactions to particular hotel
properties. Of the outstanding balance of our stand-by LOCs, $25 million 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 certain
foreign countries to protect against potential non-delivery of our packaged travel services sold within those
countries. These countries hold all travel agents and tour companies to the same standard. Our guarantees
also include certain surety bonds related to various company performance obligations.
(5) Excludes $102 million of unrecognized tax benefits for which we cannot make a reasonably reliable
estimate of the amount and period of payment.
As mentioned above, in December 2012, we entered into a definitive agreement to acquire a 63% equity
position in trivago. The transaction is expected to close in the first half of 2013 pending approval from relevant
competition authorities at which time we will pay €434 million in cash as well as €43 million in Expedia, Inc.
common stock to be issued in five equal increments on or about each of the first through fifth anniversaries of the
consummation of the acquisition.
Other than the items described above, we do not have any off-balance sheet arrangements as of
December 31, 2012.
Certain Relationships and Related Party Transactions
For a discussion of certain relationships and related party transactions, see the disclosure above “Summary
of the Spin-Off of TripAdvisor, Inc.” as well as Note 16 — Related Party Transactions in the notes to
consolidated financial statements.
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