Expedia 2007 Annual Report Download - page 96

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Accumulated Other Comprehensive Income
The following table presents the components of accumulated other comprehensive income, net of tax:
2007 2006
December 31,
(In thousands)
Accumulated unrealized gains (losses) on derivatives .................... $ 339 $(2,679)
Accumulated foreign currency translation adjustments ................... 31,426 14,658
Total Accumulated Other Comprehensive Income ..................... $31,765 $11,979
Other Comprehensive Income
The following table presents the changes in the components of other comprehensive income, net of tax:
2007 2006 2005
For the Year Ended December 31,
(In thousands)
Net Income ....................................... $295,864 $244,934 $228,730
Other Comprehensive Income (Loss)
Currency translation adjustments ...................... 16,768 14,696 (6,465)
Unrealized gains (losses) on derivatives, net of taxes:
Unrealized holding gains (losses), net of tax effect of
$2,078 in 2007, $4,300 in 2006 and $(5,859) in 2005 . . . (5,545) (7,832) 9,722
Less: reclassification adjustment for net (gains) losses
recognized during the period, net of tax effect of
$(3,210) in 2007, $(3,691) in 2006 and $6,835 in
2005 ....................................... 8,563 6,713 (11,341)
Unrealized gains on available for sale securities, net of taxes:
Reversal of unrealized gains on eLong warrant upon
business acquisition, net of tax effect of $16,382 in
2005 ....................................... — — (27,182)
Other comprehensive income (loss) .................. 19,786 13,577 (35,266)
Total Comprehensive Income ..................... $315,650 $258,511 $193,464
In October 2004, eLong completed an initial public offering (“IPO”) of its shares. As a result of the IPO,
our warrant became subject to the mark-to-market provisions of SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities. As such, we recorded an unrealized gain of $27.2 million, net of
deferred taxes of $16.4 million, related to the warrant in other comprehensive income in 2004. We reversed
the unrealized gain in January 2005 upon exercise of our warrant.
NOTE 12 — Earnings Per Share
Basic Earnings Per Share
Basic earnings per share was calculated for the years ended December 31, 2007 and 2006 using the
weighted average number of common and Class B common shares outstanding during the period excluding
restricted stock and stock held in escrow. As of December 31, 2007 and 2006 we had 751 and 846 shares of
preferred stock outstanding, the impact of which on our earnings per share calculation is immaterial.
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
F-30
Expedia, Inc.
Notes to Consolidated Financial Statements — (Continued)