Expedia 2012 Annual Report Download - page 8

• Expedia Local Expert®(“ELE”), a destination services and concierge services provider;
• Expedia®CruiseShipCenters®, with home-based agents and retail locations in the United States
and Canada;
• Egencia®, the world’s fifth largest corporate travel management company;
• eLong™, Inc. (“eLong”), China’s second largest online travel company; and
• Venere.com™, a European online hotel specialist.
Summary of the Spin-Off from IAC/InterActiveCorp
On August 9, 2005, IAC/InterActiveCorp (“IAC”) completed the spin-off of substantially all of its travel
and travel-related businesses by way of the distribution of all outstanding shares of Expedia, Inc., a newly-
formed Delaware corporation, to IAC stockholders. Upon completion of the spin-off from IAC, Expedia shares
began trading on The Nasdaq Global Select Market under the symbol “EXPE.”
Summary of the Spin-Off of TripAdvisor, Inc.
On December 20, 2011, following the close of trading on the Nasdaq Stock Market, Expedia completed the
spin-off of TripAdvisor, Inc. (“TripAdvisor”), a Delaware corporation, to Expedia stockholders. We refer to this
transaction as the “spin-off.” TripAdvisor consists of the domestic and international operations previously
associated with Expedia’s TripAdvisor Media Group and is now a separately traded public company, trading
under the symbol “TRIP” on The Nasdaq Global Select Market. Expedia continues to own and operate our
remaining businesses—the domestic and international operations of our travel transaction brands—as a
separately traded public company, trading under the symbol “EXPE” on The Nasdaq Global Select Market.
Immediately prior to the spin-off, Expedia effected a one-for-two reverse stock split of outstanding our
capital stock, with cash paid in lieu of fractional shares. The spin-off was then effected by means of a
reclassification of our capital stock such that for every two shares of Expedia common stock and Class B
common stock owned prior to the spin-off and the reverse stock split, one share of new Expedia common stock
or Class B common stock and one share of TripAdvisor common stock or Class B common stock was issued at
the effective time of the spin-off. In addition, immediately following the spin-off, our outstanding warrants to
purchase common stock converted into adjusted warrants to purchase shares of Expedia common stock and new
warrants to purchase shares of TripAdvisor common stock, with terms materially consistent with those contained
in the original warrants. In connection with a preferred stock merger that occurred prior to completion of the
spin-off, all outstanding shares of our Series A Cumulative Convertible Preferred Stock were converted into the
right to receive cash.
Equity Ownership and Voting Control
As of December 31, 2012, there were 122,529,595 shares of Expedia common stock and 12,799,999 shares
of Expedia Class B common stock outstanding. Expedia stockholders are entitled to one vote for each share of
common stock and ten votes for each share of Class B common stock outstanding. As of December 31, 2012,
Liberty Interactive Corporation (“Liberty”), through a wholly-owned subsidiary, held approximately 8% of
Expedia’s outstanding common stock and 100% of Expedia’s outstanding Class B common stock (or, assuming
conversion of all shares of Class B common stock into shares of common stock, held 17% of Expedia’s
outstanding common stock). As of such date, Barry Diller, Chairman and Senior Executive of Expedia (through
his own holdings and holdings of Liberty, over which Mr. Diller generally has voting control pursuant to an
irrevocable proxy granted by Liberty under the Stockholders Agreement described below) controlled
approximately 57% of the outstanding total voting power of Expedia.
Pursuant to the Amended and Restated Stockholders Agreement, dated as of December 20, 2011 between
Liberty and Mr. Diller, Mr. Diller is effectively able to control the outcome of nearly all matters submitted to a
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