Expedia, Inc. said third quarter revenue increased 15 percent driven by strong growth at Hotels.com and Expedia Affiliate Network as well as 26 percent growth in advertising and media revenue. During the quarter, the company achieved a key milestone in its Expedia brand platform migration through an on-time implementation of the new end-to-end hotel product. The new technology is already showing conversion improvements and driving faster innovation cycles.

For the nine months ended Sept. 30, 2011, Expedia reported that free cash flow totaled $1.1 billion -- an increase of 28 percent compared to the prior year period. Year-to-date, Expedia has repurchased 10 million common shares for an aggregate purchase price of $265 million excluding transaction costs. Expedia completed 19.8 million transactions, up 9 percent. Gross bookings were valued at $7.61 billion, up 11 percent. Revenue was $1.14 billion, up 15 percent. Operating income before amortization was $316.7 million, up 8 percent and operating income was $289.4 million, up 5 percent. Adjusted net income was $218 million up 11 percent, while net income attributable to Expedia was $209.5 million up 19 percent.

On April 7, 2011, Expedia, Inc. announced its intention to spin-off TripAdvisor so that TripAdvisor will become an independent, separately traded public company. After the spin-off, TripAdvisor will consist of the domestic and international operations associated with the flagship TripAdvisor brand as well as 18 other travel media brands. After the spin-off, Expedia will continue to operate and manage our remaining businesses, subsidiaries and investments and is referred to as New Expedia, Inc.

As a percentage of Expedia’s total worldwide revenue in the third quarter of 2011, hotel accounted for 75 percent, air accounted for 9 percent and all other revenue sources accounted for the remaining 15 percent. Merchant transactions accounted for 46 percent of total gross bookings compared to 43 percent for the prior year period. The increase in merchant transactions was driven by strength in Expedia’s merchant hotel business. Merchant revenue equaled 76 percent of revenue in the third quarter, compared to 75 percent in the prior year period.

Worldwide hotel revenue increased 18 percent for the third quarter driven by a 16 percent increase in room nights stayed. Revenue per room night increased 1 percent primarily due to a 7 percent increase in average daily hotel rates during the quarter. Competitive pricing actions on hotel rooms and packages, changes in Expedia’s hotel product mix as well as accruals for loyalty programs at Expedia and Hotels.com offset most of the increase in average daily hotel rates.

Worldwide air revenue decreased 5 percent for the third quarter, primarily due to a 10 percent decrease in air tickets sold, partially offset by an increase of 6 percent in revenue per ticket. The decrease in ticket volume was partially due to a 12 percent increase in average air ticket prices. Revenue per ticket rose due to certain regional and inter-line consumer booking fees and mix shift to merchant transactions partially offset by lower net supplier economics. All other revenue (primarily car rentals, advertising revenue from our transaction websites, destination services and fees related to our corporate travel business) increased 8 percent for the third quarter.