Expedia 2011 Annual Report Download - page 60

Download and view the complete annual report

Please find page 60 of the 2011 Expedia annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 125

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125

Restructuring Charges
During 2009, in conjunction with the reorganization of our business around our global brands, and the
resulting centralization of locations and brand management, marketing and administrative personnel as well as
certain customer operations centers, we recognized $34 million in restructuring charges. These charges were
primarily related to employee severance and related benefits. Restructuring charges related to the brand
reorganization were completed by the end of 2009. For additional information, see Note 14 — Restructuring
Charges in the notes to the consolidated financial statements.
Operating Income
Year ended December 31, % Change
2011 2010 2009 2011 vs 2010 2010 vs 2009
($ in millions)
Operating income $ 480 $ 501 $ 398 (4%) 26%
% of revenue 13.9% 16.5% 14.5%
In 2011, operating income decreased primarily due to increased costs and expenses including a growth in
selling and marketing expense, technology and content expense and general and administrative expense in excess
of revenue growth. In 2010, operating income increased primarily due to an increase in revenue, which was
offset by a corresponding increase to operating expenses, as well as restructuring charges recorded in 2009 that
did not recur and higher legal reserves, occupancy tax and other recorded in 2009.
Interest Income and Expense
Year ended December 31, % Change
2011 2010 2009 2011 vs 2010 2010 vs 2009
($ in millions)
Interest income $ 20 $ 7 $ 6 187% 14%
Interest expense (91) (66) (49) 37% 34%
Interest income increased in 2011 compared to 2010 primarily due to a higher rate of return on cash, cash
equivalent and investment balances as well as higher average cash, cash equivalent and investment balances.
Interest income increased in 2010 compared to 2009 primarily due to higher average cash, cash equivalent and
investment balances. Interest expense increased in 2011 and 2010 primarily resulting from additional interest on
the $750 million senior unsecured notes issued in August 2010.
At December 31, 2011 and 2010, our long-term indebtedness totaled $1.249 billion for both periods. At
December 31, 2009, our long-term indebtedness totaled $500 million.
Other, Net
Other, net is comprised of the following:
Year ended December 31, % Change
2011 2010 2009 2011 vs 2010 2010 vs 2009
($ in millions)
Foreign exchange rate losses, net $(8) $ (16) $(29) (48%) (45%)
Other 1 — (6) N/A N/A
Total other, net $(7) $ (16) $(35) (55%) (55%)
56