Expedia 2005 Annual Report Download - page 77

Download and view the complete annual report

Please find page 77 of the 2005 Expedia annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 98

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98

Expedia, Inc.
Notes to Consolidated Financial Statements Ì (Continued)
Expedia.com
In August 2003, we completed our acquisition of all the outstanding shares of Expedia.com. Prior to
the acquisition, we owned approximately 59% of Expedia.com. The purchase price, after deducting the fair
value of unvested options and warrants to purchase IAC common stock, was $3.6 billion.
Hotels.com
In June 2003, we completed our acquisition of all the outstanding shares of Hotels.com. Prior to the
acquisition, we owned approximately 67% of Hotels.com. The purchase price, after deducting the fair value
of unvested options and warrants to purchase IAC common stock, was $1.2 billion.
NOTE 6 Ì Property and Equipment, Net
Our property and equipment consists of the following:
December 31,
2005 2004
(In thousands)
Computer equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 60,648 $ 47,893
Capitalized software development ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 133,256 90,347
Leasehold improvementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20,711 18,327
Furniture and other equipmentÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29,394 24,180
Land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 8
244,009 180,755
Less: accumulated depreciation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (162,865) (106,256)
Projects in progress ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,840 6,927
Property and equipment, netÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 90,984 $ 81,426
As of December 31, 2005 and 2004, our recorded capitalized software development costs, net of
accumulated amortization, of $49.5 million and $38.7 million. For the years ended December 31, 2005,
2004 and 2003, we recorded amortization of capitalized software development costs of $38.6 million,
$24.0 million and $12.9 million.
NOTE 7 Ì Long-Term Investment and Other Assets
Write-off of Long-Term Investment
In 2005, we received information regarding the deteriorating financial condition of our long-term
investment in a leisure travel company and we determined that it was not likely we would recover any of
our investment because the decline in its value was determined to be other-than-temporary. As a result,
we recorded a loss related to this impairment of $23.4 million, which consisted of $22.5 million of
preferred stock and $0.9 million of stock warrants.
F-20