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EXPEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
2007 2006 2005
Year Ended December 31,
(In thousands)
Operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 295,864 $ 244,934 $ 228,730
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,526 48,779 50,445
Amortization of intangible assets, non-cash distribution and marketing and
stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,418 200,689 230,389
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,583) (10,652) 68,198
Unrealized (gain) loss on derivative instruments, net . . . . . . . . . . . . . . . . . . . 5,748 (8,137) 6,042
Equity in (income) loss of unconsolidated affiliates . . . . . . . . . . . . . . . . . . . . 2,614 (2,541) (1,668)
Minority interest in income (loss) of consolidated subsidiaries, net . . . . . . . . . (1,994) 513 (836)
Write-off of long-term investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 23,426
Impairment of intangible asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 47,000 —
Foreign exchange (gain) loss on cash and cash equivalents, net . . . . . . . . . . . . (12,524) (37,182) 9,292
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,801 1,100 1,161
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (44,363) (32,148) (21,833)
Prepaid merchant bookings and prepaid expenses . . . . . . . . . . . . . . . . . . . . (32,378) (20,694) (22,492)
Accounts payable, other, accrued expenses and other current liabilities . . . . . 51,702 59,858 156,931
Accounts payable, merchant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,068 63,246 84,636
Deferred merchant bookings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,608 59,450 45,051
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,562 3,225 1,715
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . 712,069 617,440 859,187
Investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (86,658) (92,631) (52,315)
Acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59,622) (32,518) 10,547
Proceeds from sale of business to a related party . . . . . . . . . . . . . . . . . . . . . . — 13,163 —
Increase in long-term investments and deposits . . . . . . . . . . . . . . . . . . . . . . . (33,226) (1,514) (369)
Purchase of marketable securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (63)
Proceeds from sale of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,000
Transfers to IAC/InterActiveCorp, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (757,206)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (2,937)
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (179,506) (113,500) (801,343)
Financing activities:
Credit facility borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 755,000 — 230,000
Credit facility repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (170,000) (230,000) —
Proceeds from issuance of long-term debt, net of issuance costs . . . . . . . . . . . — 495,346 —
Changes in restricted cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . (6,494) 4,578 (9,495)
Proceeds from exercise of equity awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,038 35,258 29,060
Excess tax benefit on equity awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,702 1,317 —
Withholding taxes for stock option exercises . . . . . . . . . . . . . . . . . . . . . . . . . (121,208) — (86,556)
Treasury stock activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,397,173) (295,691) —
Distribution to IAC/InterActiveCorp, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (52,844)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (844) (1,036) (3,658)
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . (789,979) 9,772 106,507
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . 21,528 42,146 (8,603)
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . (235,888) 555,858 155,748
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . 853,274 297,416 141,668
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 617,386 $ 853,274 $ 297,416
Supplemental cash flow information
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,266 $ 4,287 $ 248
Income tax payments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,345 126,126 10,384
See notes to consolidated financial statements.
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