Expedia 2007 Annual Report Download - page 102

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China, localized Expedia websites in Australia, Japan and New Zealand, as well as localized versions of
Hotels.com in various Asian countries. In addition, we record amortization of intangible assets and any related
impairment, as well as stock-based compensation expense in Corporate and Other.
The following table presents our segment information for the years ended December 31, 2007 and 2006.
We have not reported segment information for the year ended December 31, 2005, as it is not practicable to
do so. In addition, as a significant portion of our property and equipment is not allocated to our operating
segments, we do not report the assets or related depreciation expense as it would not be meaningful, nor do
we regularly provide such information to our chief operating decision makers.
North America Europe
Corporate
and Other Total
2007
Year Ended December 31,
(In thousands)
Revenue................................... $1,897,995 $606,997 $ 160,340 $2,665,332
Operating Income Before Amortization (Unaudited) . . $ 821,144 $207,747 $(359,404) $ 669,487
Amortization of intangible assets ................ — — (77,569) (77,569)
Stock-based compensation ..................... — — (62,849) (62,849)
Amortization of non-cash distribution and marketing . . — — — —
Operating income (loss) ....................... $ 821,144 $207,747 $(499,822) $ 529,069
North America Europe
Corporate
and Other Total Total
2006 2005
Year Ended December 31,
(In thousands)
Revenue ........................ $1,666,804 $452,012 $ 118,770 $2,237,586 $2,119,455
Operating Income Before Amortization
(Unaudited) ................... $ 735,458 $157,945 $(294,385) $ 599,018 $ 627,441
Amortization of intangible assets ..... — — (110,766) (110,766) (126,067)
Impairment of intangible asset ....... — — (47,000) (47,000) —
Stock-based compensation .......... — — (80,285) (80,285) (91,725)
Amortization of non-cash distribution
and marketing.................. (9,638) — — (9,638) (12,597)
Operating income (loss) ............ $ 725,820 $157,945 $(532,436) $ 351,329 $ 397,052
We have revised certain 2006 revenue and expense allocations between our segments to reflect current
allocations for certain points of sale. There was no impact on total consolidated revenue or operating income
before amortization as a result of these changes.
Definition of Operating Income Before Amortization (“OIBA”)
We provide OIBA as a supplemental measure to GAAP. We define OIBA as operating income plus:
(1) amortization of non-cash distribution and marketing expense, (2) stock-based compensation expense,
(3) amortization of intangible assets and goodwill and intangible asset impairment, if applicable and (4) certain
one-time items, if applicable.
OIBA is the primary operating metric used by which management evaluates the performance of our
business, on which internal budgets are based, and by which management is compensated. Management
F-36
Expedia, Inc.
Notes to Consolidated Financial Statements — (Continued)