Expedia 2007 Annual Report Download - page 51

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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, 2007, 2006 and 2005:
2007 2006 2005
Year Ended December 31,
(In thousands)
OIBA.......................................... $669,487 $ 599,018 $ 627,441
Amortization of intangible assets...................... (77,569) (110,766) (126,067)
Impairment of intangible asset ....................... — (47,000) —
Stock-based compensation .......................... (62,849) (80,285) (91,725)
Amortization of non-cash distribution and marketing ....... — (9,638) (12,597)
Operating Income ................................. 529,069 351,329 397,052
Interest income, net ............................... (13,478) 14,799 48,673
Write-off of long-term investment ..................... — — (23,426)
Other, net ....................................... (18,607) 18,770 (8,428)
Provision for income taxes .......................... (203,114) (139,451) (185,977)
Minority interest in (income) loss of consolidated
subsidiaries, net ................................ 1,994 (513) 836
Net Income ..................................... $295,864 $ 244,934 $ 228,730
Interest Income
2007 2006 2005 2007 vs 2006 2006 vs 2005
Year Ended December 31, % Change
($ in thousands)
Interest income from
IAC/InterActiveCorp ............ $ — $ — $40,089 N/A (100)%
Other interest income ............. 39,418 32,065 10,690 23% 200%
Prior to the Spin-Off, the intercompany receivable balances were subject to a cash management
arrangement with IAC. Since we extinguished our intercompany receivable balances with IAC at Spin-Off with
a non-cash distribution to IAC, we no longer receive interest income from IAC.
The year-over-year increases in other interest income were primarily due to higher average cash and cash
equivalent balances.
Interest Expense
2007 2006 2005 2007 vs 2006 2006 vs 2005
Year Ended December 31, % Change
($ in thousands)
Interest expense ................ $(52,896) $(17,266) $(2,106) 206% 720%
Interest expense increased in 2007 as compared to 2006 primarily due to higher average debt balances
resulting from the $500.0 million senior unsecured notes (the “Notes”) issuance in August 2006 and a
$500.0 million draw on our revolving credit facility in August 2007 to fund a portion of the tender offer
completed in the third quarter of 2007. At December 31, 2007 and 2006 our long-term indebtedness totaled
$1.085 billion and $500.0 million.
In 2006, interest expense increased compared to 2005 due to interest expense related to the Notes.
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