Expedia 2006 Annual Report Download - page 97

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• it provides greater insight into management decision making at Expedia, as OIBA is our primary
internal metric for evaluating the performance of our business.
OIBA has certain limitations in that it does not take into account the impact of certain expenses to our
consolidated statements of income, including stock-based compensation, non-cash payments to partners,
acquisition-related accounting and certain one-time items, if applicable. Due to the high variability and
difficulty in predicting certain items that affect net income, such as tax rates, stock price and interest rates, we
are unable to provide a reconciliation to net income on a forward-looking basis without unreasonable efforts.
Reconciliation of OIBA to Operating Income and Net Income
The following table presents a reconciliation of OIBA to operating income and net income for the years
ended December 31, 2006, 2005 and 2004:
2006 2005 2004
Year Ended December 31,
(In thousands)
OIBA (Unaudited) ................................ $599,018 $ 627,441 $ 553,692
Amortization of intangible assets...................... (110,766) (126,067) (125,091)
Impairment of intangible asset ....................... (47,000) — —
Stock-based compensation .......................... (80,285) (91,725) (171,400)
Amortization of non-cash distribution and marketing ....... (9,638) (12,597) (16,728)
Operating Income ................................. 351,329 397,052 240,473
Interest income, net ............................... 14,799 48,673 38,356
Write-off of long-term investment ..................... — (23,426) —
Other, net ....................................... 18,770 (8,428) (9,286)
Provision for income taxes .......................... (139,451) (185,977) (106,371)
Minority interest in (income) loss of consolidated
subsidiaries, net ................................ (513) 836 301
Net Income ..................................... $244,934 $ 228,730 $ 163,473
Geographic Information
We maintain operations in the United States, Australia, Belgium, Canada, China, France, Germany, Italy,
Japan, Mexico, the Netherlands, Spain, the United Kingdom and other international territories. The following
table presents revenue by geographic area, the United States and all other countries, for the years ended
December 31, 2006, 2005 and 2004:
2006 2005 2004
Year Ended December 31,
(In thousands)
Revenue
United States ................................ $1,615,929 $1,619,603 $1,509,820
All other countries ............................ 621,657 499,852 333,193
$2,237,586 $2,119,455 $1,843,013
We have revised the 2005 and 2004 revenue allocations between the United States and all other countries
to reflect the current revenue allocations for certain points of sale in 2006. There was no impact on total
consolidated revenue as a result of these changes.
F-37
Expedia, Inc.
Notes to Consolidated Financial Statements — (Continued)