ServiceMagic 2010 Annual Report Download - page 92

Table of Contents
IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 9—FINANCIAL INSTRUMENTS
The fair values of the financial instruments listed below have been determined by the Company using available market information and
appropriate valuation methodologies.
The carrying value of cash equivalents approximates fair value due to their short-term maturity. The fair value of notes receivable is based
on discounting the expected future cash flow streams using yields of the underlying credit. The fair value of long-term debt is estimated using
quoted market prices or indices for similar liabilities and taking into consideration other factors such as credit quality and maturity. The fair
value of the guarantee, letters of credit and surety bond are based on the present value of the costs associated with maintaining these instruments
over their expected term. See Note 2 for discussion of the fair value of marketable securities and the long-term marketable equity security and
Note 8 for discussion of the fair value of the auction rate securities.
NOTE 10—LONG-TERM DEBT
The balance of long-term debt is comprised of (in thousands):
On July 11, 2008, IAC commenced a tender offer to purchase the outstanding Senior Notes. On August 20, 2008, the Company purchased
for cash $456.7 million in principal amount of Senior Notes validly tendered. Concurrent with the tender offer and in connection with the Spin-
Off, the Company exchanged an additional $277.4 million in principal amount of Senior Notes for the debt of ILG. In connection with the tender
offer and the exchange, the Company recorded a net loss of $63.2 million on the extinguishment of $734.2 million of the Senior Notes which is
recorded in "Other (expense) income, net" in the accompanying consolidated statement of operations.
In connection with the financing of the construction of IAC's corporate headquarters, on August 31, 2005, the New York City Industrial
Development Agency (the "Agency") issued $80 million
87
December 31, 2010
December 31, 2009
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
(In thousands)
Cash and cash equivalents
$
742,099
$
742,099
$
1,245,997
$
1,245,997
Marketable securities
563,997
563,997
487,591
487,591
Long
-
term marketable equity security
—
—
15,608
15,608
Auction rate securities
13,100
13,100
12,635
12,635
Notes receivable
3,316
2,818
3,271
2,426
Long
-
term debt
(95,844
)
(83,363
)
(95,844
)
(77,123
)
Guarantee, letters of credit and surety bond
N/A
(362
)
N/A
(535
)
December 31,
2010 2009
7.00% Senior Notes due January 15, 2013; interest payable each January 15
and July 15 which commenced July 15, 2003
$
15,844
$
15,844
5% New York City Industrial Development Agency Liberty Bonds due
September 1, 2035; interest payable each March 1 and September 1 which
commenced March 1, 2006
80,000
80,000
Long
-
term debt
$
95,844
$
95,844