RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2010

RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

NOTE 23—RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

Restatement of Prior Period Consolidated Financial Statements

        The December 31, 2010 and 2009 consolidated balance sheets and the consolidated statement of shareholders' equity for the years ended December 31, 2010, 2009 and 2008 have been restated to correct the deferred income tax liability relating to a gain recorded in 2002 in connection with a series of transactions, which included the exchange of certain of the Company's media businesses for certain other assets, and the subsequent incorrect allocation of a portion of the deferred income taxes that were recorded in 2002 to a former subsidiary. These errors were identified during an analysis of the tax basis of certain businesses in connection with a 2011 review of the Company's organizational structure. Accordingly, the Company has restated the financial statements referenced above to correct these errors. The correction of these errors as of December 31, 2010, 2009 and 2008 increased non-current deferred income tax liabilities and reduced shareholders' equity by $380.9 million and increased shareholders' equity and reduced deferred income taxes as of December 31, 2007 by $241.9 million. Reclassifications of certain other deferred income tax balances as of December 31, 2010 and 2009 have also been recorded. The effects of the restatement have been reflected in the other notes to the consolidated financial statements as appropriate. Correcting these errors has no impact on the Company's consolidated statement of operations or consolidated statement of cash flows.

Consolidated Balance Sheet as of December 31, 2010:

	As originally reported		Effect of restatement			As restated
	(In thousands)
Other non-current assets	$	192,383	$	(110,475	)	$	81,908
Total Assets		3,439,554		(110,475	)		3,329,079
Deferred income taxes		—		270,501			270,501
Other long-term liabilities		20,350		(111	)		20,239
Additional paid-in capital		11,428,749		(380,865	)		11,047,884
Total shareholders' equity		2,430,933		(380,865	)		2,050,068
Total Liabilities and Shareholders' Equity		3,439,554		(110,475	)		3,329,079

Consolidated Balance Sheet as of December 31, 2009:

	As originally reported		Effect of restatement			As restated
	(In thousands)
Other non-current assets	$	223,910	$	(102,292	)	$	121,618
Total Assets		4,015,889		(102,292	)		3,913,597
Deferred income taxes		—		278,609			278,609
Other long-term liabilities		23,633		(36	)		23,597
Additional paid-in capital		11,322,993		(380,865	)		10,942,128
Total shareholders' equity		3,127,826		(380,865	)		2,746,961
Total Liabilities and Shareholders' Equity		4,015,889		(102,292	)		3,913,597

Consolidated Statement of Shareholders' Equity:

	As originally reported			Effect of restatement			As restated
	(In thousands)
Additional paid-in capital as of December 31, 2010	$	11,428,749		$	(380,865	)	$	11,047,884
Total shareholders' equity as of December 31, 2010		2,430,933			(380,865	)		2,050,068
Additional paid-in capital as of December 31, 2009		11,322,993			(380,865	)		10,942,128
Total shareholders' equity as of December 31, 2009		3,127,826			(380,865	)		2,746,961
Additional paid-in capital as of December 31, 2008		11,112,014			(380,865	)		10,731,149
Total shareholders' equity as of December 31, 2008		4,427,536			(380,865	)		4,046,671
Spin-Off of HSNi, ILG, Ticketmaster and Tree.com related to retained earnings in 2008		(184,174	)		(241,863	)		(426,037	)
Spin-Off of HSNi, ILG, Ticketmaster and Tree.com related to additional paid in capital in 2008		(3,749,643	)		(380,865	)		(4,130,508	)
Spin-Off of HSNi, ILG, Ticketmaster and Tree.com related to total shareholders' equity in 2008		(3,971,284	)		(622,728	)		(4,594,012	)
Retained earnings as of December 31, 2007		567,820			241,863			809,683
Total shareholders' equity as of December 31, 2007		8,583,662			241,863			8,825,525