UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

(Mark One):

þ		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the Fiscal Year Ended December 31, 2008

or

o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

LODGENET INTERACTIVE CORPORATION 401(k) PLAN (f/k/a LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN)

LODGENET INTERACTIVE CORPORATION

(Name of Issuer of the Securities Held Pursuant to the Plan)

DELAWARE		46-0371161
(State of Incorporation)		(IRS Employer Identification Number)

3900 West Innovation Street, Sioux Falls, South Dakota 57107
(Address of Principal Executive Offices)

(605) 988-1000

 

 

INDEX

		PAGE
Form 11-K cover page for the LodgeNet Interactive Corporation 401(k) Plan		Cover
Index			2
Signature			3
FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements of the LodgeNet Interactive Corporation 401(k) Plan for the time periods specified below are submitted herewith together with the Independent Registered Public Accounting Firm’s report thereon:
Report of Independent Registered Public Accounting Firm			4
Statement of Net Assets Available for Benefits December 31, 2008 and 2007			5
Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2008			6
Notes to Financial Statements December 31, 2008 and 2007			7
Schedule of Assets (Held at End of Year) December 31, 2008			12
Exhibit 23 - Consent of Independent Registered Public Accounting Firm			13
EX-23

Signature

     The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Report of Independent Registered Public Accounting Firm

To the Participants and Administrator of
LodgeNet Interactive Corporation 401(k) Plan

In our opinion, the accompanying statement of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of LodgeNet Interactive Corporation 401(k) Plan (the “Plan”, f/k/a LodgeNet Entertainment Corporation 401(k) Plan) at December 31, 2008 and 2007, and the changes in net assets available for benefits for the year ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held at end of year is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
June 25, 2009

LODGENET INTERACTIVE CORPORATION 401(k) PLAN (f/k/a LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN)

Statement of Net Assets Available for Benefits

		As of December 31
		2008				2007
Assets
Investments, at fair value		$	24,112,302			$	34,148,318
Employer contributions receivable			464				15,540
Total Assets			24,112,766				34,163,858
Liabilities
Excess contributions payable			(8,989	)			—
Net assets available for benefits at fair value			24,103,777				34,163,858
Adjustment from fair value to contract value for fully benefit responsive investment contracts			(3,530	)			(13,590	)
NET ASSESTS AVAILABLE FOR BENEFITS		$	24,100,247			$	34,150,268

The accompanying notes are an integral part of these financial statements.

LODGENET INTERACTIVE CORPORATION 401(k) PLAN (f/k/a LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN)

Statement of Changes in Net Assets Available for Benefits

		For the year
		ended December 31 2008
Investment income
Interest and dividend income		$	577,697
Net depreciation of investments			(13,558,083	)
Total investment loss			(12,980,386	)
Contributions
Participant			3,981,698
Employer			1,317,195
Rollover			110,288
Other receipts			56,359
Total contributions			5,465,540
Deductions
Distributions to participants			(2,521,596	)
Administrative expenses			(13,579	)
Total deductions			(2,535,175	)
Net decrease			(10,050,021	)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year			34,150,268
End of year		$	24,100,247

The accompanying notes are an integral part of these financial statements.

LODGENET INTERACTIVE CORPORATION 401(k) PLAN (f/k/a LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN)

Notes to financial statements

December 31, 2008 and 2007

1 Description of the Plan

The following is not a comprehensive description of LodgeNet Interactive Corporation 401(k) Plan (the “Plan”, f/k/a LodgeNet Entertainment Corporation 401(k) Plan) and, therefore, does not include all situations and limitations covered by the Plan. Participants should refer to the plan agreement for a more complete description of the Plan’s provisions.

Effective July 21, 2008, the Plan’s name was changed to LodgeNet Interactive Corporation 401(k) Plan.

General and Eligibility

The Plan is a contributory defined contribution plan covering all eligible full and eligible part-time employees of LodgeNet Interactive Corporation, (the “Company”). Employees become eligible to make 401(k) pre-tax contributions to the Plan beginning on January 1, April 1, July 1 or October 1 immediately following completion of three consecutive months of service and attaining age 18. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Internal Revenue Code (the “Code”).

Plan Operations

The Company functions as the plan sponsor and administrator. FASCore LLC is the Plan’s recordkeeper and SunTrust Bank is the Plan’s trustee and asset custodian of the Plan.

Contributions

The maximum percentage of compensation an employee may contribute to the Plan is 50%, with an annual maximum contribution as provided by the Code of $15,500 in 2008. The Plan also allows participants who are age 50 or older to make catch-up contributions to the 401(k) Plan of $5,000 in 2008. Participants may also rollover amounts representing distributions from other qualified plans into the Plan. Amounts contributed are invested at the discretion and direction of plan participants in any of the Plan’s investment options, one of which is to invest in the common stock of the Company.

The Company may make a match of participant contributions equal to 50% of the first 6% of each participant’s eligible contribution for the plan year. Amounts contributed are allocated among the investment funds in the same manner as participant contributions. During 2008, the Company elected to make this discretionary match for the first eleven months of the year, which totaled $1,317,195. Beginning in December, the Company suspended the discretionary match. The Compensation and Benefits Committee of the Company passed a resolution dated November 20, 2008, to eliminate the matching contribution, effective for all participant contributions after November 21, 2008.

The Company may make additional discretionary contributions to the Plan. In a year in which the Company chooses to make discretionary contributions, the contributions will be allocated based upon a participant’s proportionate share of total compensation for all participants and are allocated among the investment funds in the same manner as participant contributions. There were no additional discretionary contributions in 2008.

Vesting

Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company’s matching and additional discretionary contributions, plus actual earnings thereon, is based on years of service. A participant is 100% vested after five years of credited service based on the following percentages:

		Percent vested
Less than one year of service			0	%
One year but less than two			20
Two years but less than three			40
Three years but less than four			60
Four years but less than five			80
Five years or more			100

If a participant dies or becomes disabled while still employed by the Company, his or her entire plan account balance becomes 100% vested.

Forfeitures

Forfeitures of the nonvested account balances result from participants who withdraw from the Plan before becoming fully vested in employer contributions and earnings thereon. Forfeitures are used to reduce future employer contributions. There were $33,279 in forfeitures used to offset contributions in 2008. There were $3,432 forfeitures available for future utilization at December 31, 2008, and $346 forfeitures available for future utilization at December 31, 2007.

In May, 2008, the Plan received $56,359 restitution required from a settlement between the SEC and several mutual fund companies due to market timing for the period 1998 through 2003 and the subsequent negative impact to investors. Upon receipt of these restitutions, the Company chose to utilize the funds to offset third party plan expenses, but did not use the settlement as offsets to any employer matching contribution. Within the forfeiture account a separate money source was created, the Unallocated Plan Assets account. At December 31, 2008, there was $47,602 available to offset future plan expenses.

Participant Loans

Participants may borrow funds from the Plan up to 50% of their vested balance at an interest rate determined at the time of loan origination of 1% over the prime interest rate. The prime interest rate will be determined as of the first business day each month. Loans will not be granted in amounts less than $1,000 or greater than $50,000. Loans are evidenced by a promissory note and have a repayment period of up to five years, unless the loan qualifies as a home loan for which the repayment term is up to 15 years. Principal and interest are repaid through regular payroll deductions. At December 31, 2008, interest rates on loans range from 5.00% to 9.25%, and are due at various dates through April 2023.

Distribution of Benefits

Distributions are generally made upon termination of employment, retirement or disability. Distributions are based upon the value of vested participant account balances when the benefits are withdrawn and are paid in a lump sum distribution for the entire vested account balance or a portion of the vested account balance upon participation election. If the vested account balance is less than $1,000, the balance is paid in a lump sum distribution as soon as administratively possible. Distributions may be made earlier for hardship reasons in accordance with Internal Revenue Service (“IRS”) regulations.

Account Balances

Each participant’s account is credited with the participant’s contributions and an allocation of Company contributions and Plan earnings. Plan earnings are allocated based on participant account balances as defined. Participants may invest their contributions, and redirect their account balances among the various fund options, including a Company stock fund. Company contributions are invested in the same investment options as the participant contributions. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

2 Summary of Significant Accounting Policies

The following significant accounting policies were used to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America.

Basis of Accounting

The financial statements have been prepared on the accrual basis of accounting.

Investment Valuation and Income Recognition

Investments consisting of mutual funds and Company stock are recorded at fair value as determined by SunTrust Bank, the trustee of the Plan, by reference to quoted market prices as of December 31, 2008 and 2007. Investments in common/collective trust funds are valued at the closing net asset values of the funds as determined by SunTrust Bank as of December 31, 2008 and 2007. Participant loans are valued at estimated fair value, consisting of principal outstanding and any related accrued interest.

Investment income is recorded when earned. Dividend income is recorded on ex-dividend date. The Plan presents in the Statement of Changes in Net Assets Available for Benefits the net appreciation (depreciation) in the fair value of investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on investments. Purchases and sales of investments are recorded on a trade-date basis.

Plan Expenses

Effective October 1, 2006, the Plan permits the payment of certain Plan expenses from the Plan’s assets.

Benefits

Benefits are recorded when paid.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires the Company to make significant estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates.

Risk and Uncertainties

The Plan provides for investments that, in general, are exposed to various risks, such as interest rates, market conditions and credit risk. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the values of investment securities, it is possible that changes in risk factors in the near term could continue to materially affect participants’ account balances and the amounts reported in the financial statements.

The plan invests in securities with contractual cash flows, such as asset backed securities, collateralized mortgage obligations and commercial mortgage backed securities, including securities backed by subprime mortgage loans. The value, liquidity and related income of these securities are sensitive to changes in economic conditions, including real estate value, delinquencies or defaults, or both, and may be adversely affected by shifts in the market’s perception of the issuers and changes in interest rates.

LodgeNet Interactive Corporation common stock, included in the Company Stock Fund, accounts for approximately 1% and 3% of the net assets available for benefits of the Plan at December 31, 2008 and 2007, respectively. Fluctuations in the price of LodgeNet Interactive Corporation common stock may continue to materially affect the participants’ account balances and the net assets available for benefits of the Plan as a whole.

3 Investments

The following presents investments that represent 5%  or more of the Plan’s net assets at December 31:

		2008				2007
Mutual funds
MFS Massachusetts Investors Growth Stock Class R3		$	2,006,382			$	—
Templeton Growth Fund A			1,855,527				3,503,819
T. Rowe Price Growth Stock Fund — R			1,775,076				2,925,004
RidgeWorth Investment Grade Bond I			1,426,340				1,014,731
T. Rowe Price Retirement 2030 Fund — R			1,232,775				—
American Century Income & Growth Advisor			1,183,796				1,872,364
MFS Massachusetts Investors Growth Fund			—				3,169,214
RidgeWorth Life Vision Growth & Income Fund			—				2,059,605
All other mutual funds investments, individually less than 5% of Plan assets			8,331,392				11,271,795
Total mutual funds			17,811,288				25,816,532
Common/collective trust funds
SunTrust Retirement 500 Index Fund Class B			2,344,077				3,648,350
SunTrust Retirement Stable Asset Fund (SRSA Fund)			2,872,486				2,580,989
Total common/collective trust funds			5,216,563				6,229,339
LodgeNet Interactive Corporation common stock			291,521				1,112,432
Participant loans receivable, individually less than 5% of Plan assets			792,930				990,015
		$	24,112,302			$	34,148,318

Net depreciation of investments for the year ended December 31, 2008, consisted of the following:

Mutual funds		$	(10,380,275	)
Common/collective trust funds			(1,255,172	)
Common stock			(1,922,636	)
		$	(13,558,083	)

4 Investment Contracts

The SRSA primarily invests in a variety of investment contracts such as guaranteed investment contracts (“GICs”) issued by insurance companies and other financial institutions and other investment products (synthetic GICs and collective trust funds) with similar characteristics. Traditional GICs are backed by the general account of the issuer. The Fund deposits a lump sum with the issuer and receives a guaranteed interest rate for a specified time. Interest is accrued on either a simple interest or fully compounded basis and paid either periodically or at the end of the contract term. The issuer guarantees that all qualified participant withdrawals will occur at contract value (principal plus accrued interest). GICs generally do not permit issuers to terminate the agreement prior to the scheduled maturity date.

The Plan’s participant investment balances held in the SRSA Fund had a fair value of $2,872,486 and $2,580,989 as of December 31, 2008 and 2007, respectively. The corresponding contract value, based on the underlying contract value of the SRSA as provided by the fund, was $2,868,956 and $2,567,399 as of December 31, 2008 and 2007, respectively.

As described in FASB Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the “FSP”), investment contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attributable for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. The Plan invests in investment contracts through the SRSA Fund, one of the investment options available under the Plan. As required by the FSP, the Statement of Net Assets Available for Benefits presents the fair value of the investment contracts as well as the adjustment of the fully benefit responsive investment contracts from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.

5 Fair Value

As of January 1, 2008, the Plan adopted the provisions of SFAS 157 for its investments. SFAS 157 establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB Statement No. 157 are described below:

Level 1, defined as observable inputs such as quoted prices in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of said instruments pursuant to the valuation hierarchy.

Mutual funds

The mutual funds are valued at quoted market prices in an exchange and active market, which represent the net asset values of shares held by the Plan at year end. Mutual funds are classified as Level 1 investments.

Common stocks

LodgeNet Interactive Corporation common stock is stated at fair value as quoted on a recognized securities exchange and is valued at the last reported sales price on the last business day of the Plan year. Common stocks are classified as Level 1 investments.

Common/collective trust funds

Common/collective trust funds (herein CCTs) are composed of a non-benefit-responsive investment fund and fully benefit-responsive investment contracts and are classified as Level 2 investments. Investment in the non-benefit-responsive investment fund is valued based upon the quoted redemption value of units owned by the Plan at year end. The fair value of fully benefit-responsive investment contracts is calculated using a discounted cash flow model which considers recent fee bids as determined by recognized dealers, discount rate and the duration of the underlying portfolio securities. CCTs are not available in an exchange and active market, however the fair value is determined based on the underlying investments as traded in an exchange and active market. CCTs are classified as Level 2 investments.

Participant loans

Participant loans are valued at their outstanding balances, which approximate fair value and are classified as Level 3 investments.

As of December 31, 2008, the Plan’s investments measured at fair value on a recurring basis were as follows:

		Assets at Fair Value as of December 31, 2008
		Level 1				Level 2				Level 3				Total
Investments
Mutual funds		$	17,811,288			$	—			$	—			$	17,811,288
Common stocks			291,521				—				—			$	291,521
Common/collective trusts			—				5,216,563				—				5,216,563
Participant loans			—				—				792,930				792,930
Total Investments		$	18,102,809			$	5,216,563			$	792,930			$	24,112,302

Changes in the fair value of the Plan’s Level 3 investments during the year ended December 31, 2008, were as follows:
		Participant Loans
Balance at December 31, 2007		$	992,549
Purchases, issuances and settlements, net			(199,619	)
Balance at December 31, 2008		$	792,930

The Plan obtained its latest determination letter on March 25, 2004, in which the IRS stated that the Plan, as then designed, was in compliance with the applicable requirements of the Code. The Plan has been amended since the effective date of the determination letter; however, the plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA. In the event of the Plan’s termination, participants will become fully vested in their accounts and assets will be distributed in accordance with the Plan document.

The trustee is authorized under contract provisions, or by ERISA regulations providing an administrative or statutory exemption, to invest in funds under its control and in the securities of the Company.

Participant contributions are invested in one or more of the investment fund options under the Plan, including stock of LodgeNet Interactive Corporation and investment funds under the trustee’s control. In 2008, the amount of such purchases and sales of funds managed by the trustee and of the Company’s stock were as follows:

		Purchases				Sales
SunTrust mutual funds and common/collective trust funds		$	4,620,703			$	6,888,652
LodgeNet Interactive Corporation common stock			2,368,876				1,267,151

LODGENET INTERACTIVE CORPORATION 401(k) PLAN (f/k/a LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN)

(Employer identification number: 46-0371161) (Plan number: 001)

Schedule H, line 4i — Schedule of Assets (Held At End of Year)

As of December 31, 2008

(a)		(b)		(c)		(d)		(e)
				Description of Investment,
				Including Maturity Date,
		Identity of Issue, Borrower,		Rate of Interest, Collateral,
		Lessor or Similar Party		Par or Maturity Date		Cost		Current Value
		American Century Income & Growth Advisor		Mutual Fund		**		$	1,183,796
		American Century Inflation Adjusted Bond Advisor		Mutual Fund		**			680,932
		American Century Vista Advisor		Mutual Fund		**			713,472
		BlackRock Equity Dividend A		Mutual Fund		**			230,848
		Dreyfus Premier Small Cap Value		Mutual Fund		**			519,926
		Dreyfus Premier Technology Growth Fund		Mutual Fund		**			324,633
		Federated Capital Appreciation Fund		Mutual Fund		**			564,570
		Fidelity Advisor Small Cap		Mutual Fund		**			583,778
		Franklin Small-Mid Cap Growth Fund		Mutual Fund		**			904,767
		MFS Massachusetts Investors Growth Stock Class R3		Mutual Fund		**			2,006,382
		MFS Massachusetts Research International R3		Mutual Fund		**			912,118
*		RidgeWorth Large Cap Core Equity I		Mutual Fund		**			1,018,398
*		RidgeWorth International Equity Index I		Mutual Fund		**			817,919
*		RidgeWorth Investment Grade Bond I		Mutual Fund		**			1,426,340
		Templeton Growth Fund A		Mutual Fund		**			1,855,527
		T. Rowe Price Growth Stock Fund		Mutual Fund		**			1,775,076
		T. Rowe Price Retirement 2020 Fund — R		Mutual Fund		**			472,815
		T. Rowe Price Retirement 2030 Fund — R		Mutual Fund		**			1,232,775
		T. Rowe Price Retirement 2040 Fund — R		Mutual Fund		**			507,622
		T. Rowe Price Retirement 2050 Fund — R		Mutual Fund		**			28,438
*		RidgeWorth Prime Quality Money Market Fund I		Mutual Fund		**			51,156
*		SunTrust Retirement 500 Index Fund Class B		Common/Collective Trust Fund		**			2,344,077
*		SunTrust Retirement Stable Asset Fund		Common/Collective Trust Fund		**			2,872,486
*		LodgeNet Interactive Corporation		Common Stock, 416,456 shares		**			291,521
*		Participant Loans		Interest ranging from 5.00% to 9.25%, due at various dates through April 2023		**			792,930
		Total investments at fair value						$	24,112,302
		Adjustment from fair value to contract value for fully benefit responsive investment contracts							(3,530	)
		Total investments at contract value						$	24,108,772