Expedia, Inc. Reports Third Quarter 2009 Results

BELLEVUE, Wash., Oct. 29 /PRNewswire-FirstCall/ -- Expedia, Inc. (Nasdaq: EXPE - News) today announced financial results for its third quarter ended September 30, 2009.

"Quarter in and quarter out, Expedia is consistently proving its leadership and multiple business models for travel are unsurpassed," said Barry Diller, Expedia, Inc.s Chairman and Senior Executive.

"Travelers are clearly responding to our improving value proposition, as we broaden our fee cuts and increase the depth and breadth of our global supply," said Dara Khosrowshahi, Expedia, Inc.s CEO and President. "While were pleased with our financial and operating results in the third quarter, we are busy planning for a 2010 that will prove every bit as competitive and challenging as 2009."

Financial Summary & Operating Metrics (figures in $MMs, except per share amounts)

Three Months Three Months

Ended Ended Y / Y

Metric 9.30.09 9.30.08 Growth

Transactions (mm) 15.9 12.6 26%

Gross bookings 5,913.8 5,412.8 9%

Revenue 852.4 833.3 2%

Revenue margin 14.41% 15.40% (98bps)

Operating income before

amortization* ("OIBA") 256.4 230.8 11%

Operating income 223.0 199.6 12%

Adjusted net income * 144.9 118.3 22%

Net income attributable to

Expedia, Inc. 117.0 94.8 23%

Adjusted EPS * $0.48 $0.39 23%

Diluted EPS $0.40 $0.33 21%

Free cash flow * (45.1) (151.8) 70%

*"Operating income before amortization," "Adjusted net income," "Adjusted EPS," and "Free cash flow" are non-GAAP measures as defined by the Securities and Exchange Commission (the "SEC"). Please see "Definitions of Non-GAAP Measures" and "Tabular Reconciliations for Non-GAAP Measures" on pages 15-18 herein for an explanation of non-GAAP measures used throughout this release. The definitions for OIBA and Adjusted net income were revised in the first quarter of 2009.

Discussion of Results

Gross Bookings, Revenue & Revenue Margins

Gross bookings increased 9% (12% excluding the estimated negative impact from foreign exchange) for the third quarter of 2009 compared with the third quarter of 2008, driven primarily by 26% growth in transactions, partially offset by lower prices for airline tickets and hotel room nights. Domestic bookings increased 8% and international bookings increased 11% (16% excluding foreign exchange).

Revenue increased 2% (3% excluding foreign exchange) for the third quarter, primarily driven by an increase in hotel and car rental revenues, partially offset by a reduction in air revenues. Domestic revenue decreased 2% while international revenue increased 10% (11% excluding foreign exchange). Domestic revenue growth trailed international growth primarily due to a greater impact from our various fee reductions and eliminations.1234