Expedia 2005 Annual Report Download - page 48

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Interest Income, Net
Year Ended December 31, % Change
2005 2004 2003 2005 vs 2004 2004 vs 2003
($ in thousands)
Interest income, net:
Interest income from IAC/
InterActiveCorp ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $40,089 $30,851 $ Ì 30% N/A
Other interest income (expense),
net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,584 7,505 19,709 14% (62)%
Interest income, netÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $48,673 $38,356 $19,709 27% 95%
% of revenue (as reported)ÏÏÏÏÏÏÏÏÏ 2% 2% 1%
% of revenue (on a comparable net
basis)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2% 2% 1%
Interest income increased due to the growth in our intercompany receivable balances with IAC, as
well as an increase in the interest rates earned on these balances. The intercompany receivable balances
were covered by a cash management arrangement with IAC until the Spin-Off. Because we extinguished
our intercompany receivable balances with IAC at Spin-Off, we expect our interest income to decrease
significantly in 2006. In 2005, other interest income (expense), net includes interest expense of
$1.8 million related to short-term borrowings on our revolving credit facility.
Write-Off of Long-Term Investment
Year Ended December 31, % Change
2005 2004 2003 2005 vs 2004 2004 vs 2003
($ in thousands)
Write-off of long-term investment ÏÏÏÏÏÏÏÏÏ $23,426 $Ì $Ì N/A N/A
% of revenue (as reported) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1% 0% 0%
% of revenue (on a comparable net basis) ÏÏ 1% 0% 0%
In 2005, we received information regarding the deteriorating financial condition of our long-term
investment in a leisure travel company and determined that it was unlikely that we would recover any of
our investment because the decline in its value was other-than-temporary. As a result, we recorded a
write-off related to this impairment of $23.4 million, which consisted of $22.5 million of preferred stock
and $0.9 million of stock warrants.
Other, net
Year Ended December 31, % Change
2005 2004 2003 2005 vs 2004 2004 vs 2003
($ in thousands)
Other, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(8,428) $(9,286) $(7,729) (9)% 20%
% of revenue (as reported)ÏÏÏÏÏÏÏÏÏ 0% (1)% 0%
% of revenue (on a comparable net
basis)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0% (1)% (1)%
In 2005, other, net primarily includes an unrealized loss of $6.0 million in the fair value of derivative
instruments related to the Ask Jeeves Notes and certain stock warrants, as well as losses from the
fluctuation of foreign exchange rates. For additional information about our derivative instruments, see
Note 10, Derivative Instruments, in the notes to consolidated financial statements.
In 2004 and 2003, other, net was primarily due to losses from the fluctuation of foreign exchange
rates.
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