Expedia 2008 Annual Report Download - page 101
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The tax effect of cumulative temporary differences and net operating losses that give rise to our deferred
tax assets and deferred tax liabilities as of December 31, 2008 and 2007 are as follows:
2008 2007
December 31,
(In thousands)
Deferred tax assets:
Provision for accrued expenses ................................. $ 26,395 $ 23,705
Deferred revenue ........................................... 16,646 3,041
Net operating loss and tax credit carryforwards ..................... 31,536 23,856
Capitalized R&D expenditures ................................. 10,779 14,834
Stock-based compensation. . ................................... 48,110 45,269
Investment impairment ....................................... 8,586 8,556
Other .................................................... 10,360 10,590
Total deferred tax assets . . . ................................... 152,412 129,851
Less valuation allowance. . . ................................... (32,085) (27,911)
Net deferred tax assets ....................................... $120,327 $ 101,940
Deferred tax liabilities:
Prepaid merchant bookings and prepaid expenses.................... $ (44,647) $ (39,825)
Intangible assets ............................................ (220,379) (375,069)
Investment in subsidiaries . . ................................... (10,449) (10,823)
Unrealized gains ............................................ (12,946) (18,719)
Property and equipment . . . ................................... (25,848) (20,951)
Other .................................................... — (53)
Total deferred tax liabilities . ................................... $(314,269) $(465,440)
Net deferred tax liability . . . ................................... $(193,942) $(363,500)
At December 31, 2008, we had federal, state and foreign net operating loss carryforwards (“NOLs”) of
approximately $10 million, $53 million and $70 million. If not utilized, the federal and state NOLs will expire
at various times between 2009 and 2028, $65 million foreign NOLs can be carried forward indefinitely, and
$5 million foreign NOLs will expire at various times between 2009 and 2028.
At December 31, 2008, we had a valuation allowance of approximately $32 million related to the portion
of net operating loss carryforwards and other items for which it is more likely than not that the tax benefit
will not be realized. This amount represented an increase of approximately $4 million over the amount
recorded as of December 31, 2007 and was primarily attributable to an increase in foreign operating losses.
F-29
Expedia, Inc.
Notes to Consolidated Financial Statements — (Continued)