Expedia 2009 Annual Report Download - page 57

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The year-over-year increase of $32 million in technology and content expense in 2009 was primarily due to
increased depreciation and amortization of technology assets as well as increased incentive compensation
expense. We expect technology and content expense to decrease as a percentage of revenue in 2010.
The year-over-year increase of $42 million in 2008 was primarily due to increased personnel-related
expenses primarily in our higher growth businesses, including the TripAdvisor Media Network, as well as an
increase in the amortization of software development costs.
General and Administrative
Year ended December 31, % Change
2009 2008 2007 2009 vs 2008 2008 vs 2007
($ in millions)
Personnel and overhead ................... $158 $154 $138 3% 11%
Professional fees ......................... 74 58 58 26% 0%
Other .................................. 58 57 56 3% 1%
Total general and administrative .......... $290 $269 $252 8% 6%
% of revenue ............................ 9.8% 9.1% 9.5%
General and administrative expense consists primarily of personnel-related costs, including our executive
leadership, finance, legal and human resource functions as well as fees for external professional services
including legal, tax and accounting, and other costs including stock-based compensation.
In 2009, the increase in general and administrative expense was primarily due to an increase in legal fees,
settlements and other professional fees of $16 million, including costs related to the consumer class action
lawsuit and occupancy tax matters, as well as higher personnel costs resulting from increased incentive
compensation expense. We expect general and administrative expense to decrease as a percentage of revenue in
2010.
In 2008, the increase in general and administrative expense was primarily due to an increase in personnel
and overhead costs of $16 million. Personnel and overhead costs increased due to increased headcount related to
the continued expansion of our TripAdvisor Media Network and European points of sale, including through
acquisitions such as Venere, as well as higher incentive compensation at certain points of sale.
Amortization of Intangible Assets
Year ended December 31, % Change
2009 2008 2007 2009 vs 2008 2008 vs 2007
($ in millions)
Amortization of intangible assets ............ $38 $69 $78 (46)% (10)%
% of revenue ............................ 1.3% 2.4% 2.9%
In 2009 and 2008, the decrease in amortization of intangible assets expense was primarily due to the
completion of amortization related to certain technology and supplier relationship intangible assets, partially
offset by amortization related to new business acquisitions. In 2009, the completion of amortization related to
certain distribution agreements also contributed to the decrease. For additional information about our
acquisitions, see Note 3 — Acquisitions and Other Investments in the notes to consolidated financial statements.
Occupancy Tax Assessments and Legal Reserves
During 2009, we recognized $48 million related to monies paid in advance of litigation in the San Francisco
occupancy tax proceedings and an accrual of $19 million for the estimated settlement cost of the Expedia
consumer class action lawsuit. For additional information, see Note 14 — Commitments and Contingencies in
the notes to the consolidated financial statements.
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