Priceline 2010 Annual Report Download - page 134
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60
Income Taxes
Year Ended
December 31,
($000)
2009 2008 Change
Income Tax Benefit (Expense) ................ $47,168 $(90,171) (152.3)%
Our effective tax rate for the years ended December 31, 2009 and 2008 was (10.7)% and 32.7%,
respectively. Our effective tax rate for the year ended December 31, 2009 differs from the expected tax provision at
the U.S. statutory tax rate of 35%, principally because it includes tax benefits of $183.3 million resulting from the
reversal of a portion of the valuation allowance on our deferred tax assets related to net operating loss carryforwards.
Other items contributing to the difference between our effective tax rate and the statutory tax rate for the
years ended December 31, 2009 and 2008 include lower foreign tax rates and the foreign tax benefit of interest
expense on intercompany debt, partially offset by state income taxes.
Due to our significant NOLs, we do not expect to pay significant cash taxes on our U.S. federal taxable
income for the foreseeable future. We expect to make cash payments for foreign taxes, U.S. state income taxes and
U.S. federal alternative minimum tax.
See Note 15 to the Consolidated Financial Statements for details about the non-cash income tax benefits for
the year ended December 31, 2009.
Equity in Income (Loss) of Investees
Year Ended
December 31,
($000)
2009 2008 Change
Equity in Income (Loss) of Investees ................................................ $2 $(310) (100.6)%
Equity in income (loss) of investees for the years ended December 31, 2009 and 2008 represented our pro
rata share of pricelinemortgage.com’s net results. In July 2009, pricelinemortgage.com was dissolved, and we
received $8.9 million in cash for our 49% equity investment in pricelinemortgage.com. We do not expect the
dissolution of our investment in pricelinemortgage.com to materially impact future periods.
Noncontrolling Interests
Year Ended
December 31,
($000)
2009 2008 Change
Noncontrolling Interests ...................................................................... $ - $3,378 (100.0)%
Noncontrolling interests for the year ended December 31, 2008, represented income associated with the
ownership of priceline.com International that was held by former shareholders of Booking.com B.V. and
Booking.com Limited, including certain European based managers of that business. In September 2008, we
repurchased all of the remaining outstanding shares of priceline.com International and, as a result, there are no
longer any noncontrolling interests in priceline.com International.