Expedia 2005 Annual Report Download - page 88

Download and view the complete annual report

Please find page 88 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)
certain times through 2017, elect to have their shares redeemed or elect to convert their shares into
common stock based upon formulas described in the related Certificate of Designations of Series A
Cumulative Convertible Preferred Stock of Expedia, Inc. Beginning February 4, 2012, we may redeem the
preferred stock for cash or common stock. On February 4, 2022, all outstanding shares of preferred stock
automatically convert into common stock.
NOTE 15 Ì Earnings Per Share
Basic Earnings Per Share
For the year ended December 31, 2005, we computed basic earnings per share using the number of
shares of common stock and Class B common stock outstanding immediately following the Spin-Off, as if
such shares were outstanding for the entire period prior to the Spin-Off, plus the weighted average of such
shares outstanding following the Spin-Off.
For the years ended December 31, 2004 and 2003, we computed basic earnings per share using the
number of shares of common stock and Class B common stock outstanding immediately following the
Spin-Off, as if such shares were outstanding for the entire period.
Diluted Earnings Per Share
For the year ended December 31, 2005, we computed diluted earnings per share using (i) the number
of shares of common stock and Class B common stock used in the basic earnings per share calculation as
indicated above (ii) if dilutive, the incremental common stock that we would issue upon the assumed
exercise of stock options and stock warrants and the vesting of restricted stock units using the treasury
stock method, and (iii) the shares we are contractually obligated to issue associated with the Ask Jeeves
Notes, if converted, and other stock-based commitments.
For the years ended December 31, 2004 and 2003, we computed diluted earnings per share using
(i) the number of shares of common stock and Class B common stock used in the basic earnings per
share calculation as indicated above, and (ii) if dilutive, the incremental common stock that we would
issue upon exercise of potentially dilutive stock-based commitments if the terms of the agreement under
which the commitments were issued obligate us to issue the instrument as of the Spin-Off. Some of the
stock warrant agreements meet this requirement, but options to purchase common stock and other
potentially dilutive items do not. Warrants meeting this requirement were included in our diluted earnings
per share calculation for the year ended December 31, 2004 and 2003, based on the number of days they
were outstanding at Spin-Off. We treated all other securities as if they were granted as of the Spin-Off.
F-31