| Investments In Affiliates Accounted For Using The Equity Method |
Investments in Affiliates Accounted for Using the Equity Method
Liberty has various investments accounted for using the equity method. The following table includes Liberty's carrying amount and percentage ownership of the more significant investments in affiliates at December 31, 2012 and the carrying amount at December 31, 2011:
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December 31, 2012 |
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December 31, 2011 |
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Percentage
ownership
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Market
value
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Carrying
amount
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Carrying
amount
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dollars in millions |
Interactive Group |
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HSN |
37 |
% |
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$ |
1,102 |
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$ |
242 |
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217 |
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Other |
various |
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N/A |
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$ |
62 |
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13 |
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Total Interactive Group |
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$ |
304 |
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230 |
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Ventures Group |
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Expedia (1)(2)(3) |
17 |
% |
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$ |
1,389 |
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$ |
431 |
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|
621 |
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TripAdvisor (1)(4) |
N/A |
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N/A |
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N/A |
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184 |
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Other |
various |
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N/A |
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116 |
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100 |
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Total Ventures Group |
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547 |
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|
905 |
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Consolidated Liberty |
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$ |
851 |
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1,135 |
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The following table presents Liberty's share of earnings (losses) of affiliates:
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Years ended December 31, |
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2012 |
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2011 |
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2010 |
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amounts in millions |
Interactive Group |
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HSN |
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$ |
40 |
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38 |
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31 |
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Other |
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(12 |
) |
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(15 |
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(23 |
) |
Total Interactive Group |
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28 |
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23 |
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8 |
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Ventures Group |
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Expedia, Inc. (1)(2)(3) |
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67 |
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119 |
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103 |
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TripAdvisor (1)(4) |
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38 |
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— |
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— |
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Other |
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(48 |
) |
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(2 |
) |
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1 |
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Total Ventures Group |
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57 |
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117 |
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104 |
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Consolidated Liberty |
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$ |
85 |
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140 |
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112 |
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(1) |
During the fourth quarter of 2011 Expedia, Inc. completed the pro-rata split-off of TripAdvisor, a wholly owned subsidiary. Therefore, the Company had a 26% ownership interest in each of Expedia, Inc. and TripAdvisor as of December 31, 2011. |
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(2) |
Liberty entered into a forward sales contract on 12 million shares of Expedia common stock in March 2012 at a per share forward price of $34.316. The forward contract was settled in October 2012 for total cash proceeds of $412 million and the 12 million shares of Expedia common stock, previously held as collateral, were released to the counterparty. In the fourth quarter when the forward contract settled, the difference between the fair value of the Expedia shares and the carrying value of the shares ($443 million) was recognized in the gain (loss) on transactions, net line item in the statement of operations.
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(3) |
During the years ended December 31, 2012 and 2011, Expedia, Inc. paid dividends aggregating $23 million and $19 million, respectively, which were recorded as reductions to the investment balance.
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(4) |
In May 2012, Liberty sold approximately 8.5 million shares of TripAdvisor for cash proceeds of $338 million. The sale resulted in a $288 million gain recorded in gain (losses) on transactions, net, based on the average cost, in the statement of operations. On December 11, 2012, we acquired approximately 4.8 million additional shares of common stock of TripAdvisor (an additional 4% equity ownership interest), for $300 million, and obtained voting control of TripAdvisor, see note 1 for additional details of the fourth quarter transaction with TripAdvisor.
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Expedia
Summarized unaudited financial information for Expedia is as follows:
Expedia Consolidated Balance Sheets
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December 31, 2012 |
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December 31, 2011 |
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amounts in millions |
Current assets |
$ |
2,615 |
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|
2,275 |
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Property and equipment, net |
409 |
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320 |
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Goodwill |
3,016 |
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2,877 |
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Intangible assets |
821 |
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744 |
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Other assets |
224 |
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289 |
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Total assets |
$ |
7,085 |
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6,505 |
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Current liabilities |
$ |
2,982 |
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2,553 |
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Deferred income taxes |
324 |
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280 |
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Long-term debt |
1,249 |
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1,249 |
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Other liabilities |
141 |
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118 |
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Noncontrolling interest |
109 |
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105 |
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Equity |
2,280 |
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2,200 |
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Total liabilities and equity |
$ |
7,085 |
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6,505 |
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Expedia Consolidated Statements of Operations
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Years ended December 31, |
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2012 |
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2011 |
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2010 |
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amounts in millions |
Revenue |
$ |
4,030 |
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3,449 |
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3,034 |
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Cost of revenue |
(899 |
) |
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(761 |
) |
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(685 |
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Gross profit |
3,131 |
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2,688 |
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|
2,349 |
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Selling, general and administrative expenses |
(2,551 |
) |
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(2,186 |
) |
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(1,825 |
) |
Amortization |
(32 |
) |
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(22 |
) |
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(23 |
) |
Restructuring charges and other |
(116 |
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— |
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— |
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Operating income |
432 |
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|
480 |
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501 |
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Interest expense |
(88 |
) |
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(91 |
) |
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(66 |
) |
Other income (expense), net |
6 |
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13 |
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(10 |
) |
Income tax (expense) benefit |
(47 |
) |
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(76 |
) |
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(120 |
) |
Income (loss) from continuing operations |
303 |
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|
326 |
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305 |
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Discontinued operations, net of tax |
(23 |
) |
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148 |
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120 |
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Net earnings (loss) |
280 |
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|
474 |
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425 |
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Less net earnings (loss) attributable to noncontrolling interests |
— |
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(2 |
) |
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(4 |
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Net earnings (loss) attributable to Expedia, Inc. |
$ |
280 |
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472 |
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421 |
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