Expedia 2012 Annual Report Download - page 65

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Amortization of Intangible Assets
Year ended December 31, % Change
2012 2011 2010 2012 vs 2011 2011 vs 2010
($ in millions)
Amortization of intangible assets $ 32 $ 22 $ 23 45% (3%)
% of revenue 0.8% 0.6% 0.7%
In 2012, amortization increased compared to 2011 due to amortization related to the VIA Travel acquisition.
In addition, amortization included an approximate $2 million reduction related to a change in the estimated value
of contingent purchase consideration for one of our prior acquisitions. In 2011, the decrease in amortization of
intangible assets expense was primarily due to the completion of amortization related to certain intangible assets,
partially offset by amortization related to new business acquisitions. See Note 3 — Acquisitions in the notes to
consolidated financial statements.
Legal Reserves, Occupancy Tax and Other
Year ended December 31, % Change
2012 2011 2010 2012 vs 2011 2011 vs 2010
($ in millions)
Legal reserves, occupancy tax and other $117 $21 $23 461% (8%)
Legal Reserves, occupancy tax and other consists of increases in our reserves for court decisions and the
potential and final settlement of issues related to hotel occupancy taxes, expenses recognized related to monies
paid in advance of occupancy and other tax proceedings (“pay-to-play”) as well as certain other legal reserves.
During 2012, we recognized $110 million related to monies expected to be paid in advance of litigation
related to Hawaii’s General Excise Tax. For additional information, see Note 15 – Commitments and
Contingencies in the notes to the consolidated financial statements.
Operating Income
Year ended December 31, % Change
2012 2011 2010 2012 vs 2011 2011 vs 2010
($ in millions)
Operating income $ 432 $ 480 $ 501 (10%) (4%)
% of revenue 10.7% 13.9% 16.5%
In 2012, operating income decreased primarily due to increased costs and expenses in excess of revenue as
described above, including the Hawaii tax assessments in the current period, partially offset by the growth in
revenue.
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.
Interest Income and Expense
Year ended December 31, % Change
2012 2011 2010 2012 vs 2011 2011 vs 2010
($ in millions)
Interest income $ 26 $ 20 $ 7 31% 187%
Interest expense (88) (91) (66) (3%) 37%
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