Expedia 2005 Annual Report Download - page 90

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Expedia, Inc.
Notes to Consolidated Financial Statements Ì (Continued)
maturity in 2014. For the years ended December 31, 2005, 2004 and 2003, we recorded rental expense of
$26.0 million, $23.6 million and $14.6 million related thereto.
The following table presents our estimated future minimum rental payments under operating leases
with noncancelable lease terms that expire after December 31, 2005:
Year Ending December 31, (In thousands)
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 26,004
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24,083
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20,767
2009 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,676
2010 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,389
After ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,027
$103,946
Legal Proceedings
In the ordinary course of business, we are a party to various lawsuits. In the opinion of management,
none of these lawsuits should have a material impact on the liquidity, results of operations, or financial
condition of Expedia. We also evaluate other potential contingent matters, including value-added tax,
transient occupancy or accommodation tax and similar matters. We do not believe that the amount of
liability that could be reasonably possible with respect to these matters would have a material adverse
affect on our financial results.
Securities Related Class Action Litigations. While we are not a party to the securities litigation filed
against IAC, under the terms of our Separation Agreement with IAC, we have generally agreed to bear a
portion of the costs and liabilities, if any, associated with any securities law litigation relating to conduct
prior to the Spin-Off of the businesses or entities that comprise Expedia following the Spin-Off. This case
arises out of IAC's August 4, 2004, announcement of its earnings for the second quarter of 2004.
Litigation relating to the IAC/Hotels.com merger agreement announced April 10, 2003, is pending in
Delaware. The principal claim in these actions is that the defendants breached their fiduciary duty to the
plaintiffs by entering into or approving the merger agreement.
Hotels.com is also a party to a securities class action and a shareholder derivative suit relating to
Hotels.com's guidance for the fourth quarter of 2002. The principal claim in these actions is that the
defendants violated federal securities laws by making misstatements of material facts, failing to disclose
material information, and trading in the company's securities while in possession of material, non-public
information. In 2004, the court dismissed virtually all of the plaintiffs' claims with prejudice in the
securities class action. In the shareholder derivative suit, on March 7, 2005, the district court issued orders
staying the case until further notice and directing that the case be administratively closed pending a
decision in the appeal of the action discussed above. The case remains administratively closed.
Litigation Relating to Hotel Occupancy Taxes. Expedia and certain of its businesses are parties to
consumer and municipality litigation involving hotel occupancy taxes.
We believe that the claims in the litigation discussed above lack merit and will continue to defend
vigorously against them.
F-33