BELLEVUE, Wash., Nov. 3 \/PRNewswire-FirstCall\/ — Expedia, Inc. (NASDAQ: EXPE) today announced financial results for its third quarter ended September 30, 2005.<\/p>\n
<\/p>\n
“Expedia, Inc. delivered solid bookings and profit growth in its foundational quarter as an independent public company,” said Expedia, Inc. Chairman Barry Diller. “With over $15 billion in gross bookings and more than $2 billion in revenue over the last twelve months, the Company has established itself as a premier e-tailer and travel company with truly global aspirations.”<\/p>\n
<\/p>\n
“Our continued investments in improving our customer experience and supplier relationships have paid off this quarter in our fastest merchant hotel revenue growth since the third quarter of 2004,” said Dara Khosrowshahi, Expedia, Inc.’s CEO and President. “We have continued on that path in the second half of 2005 by re-designing our Expedia.com and Hotels.com sites to improve ease of use and launching our biggest holiday promotion ever — our customers save $150 off the vacation they really want to take next year by booking their holiday travel with Expedia.com.”<\/p>\n
<\/p>\n
Financial Summary (figures in $millions)<\/pre>\n::::::::::::::_
\n3 Months Ended 3 Months Ended Y \/ Y
\nSept. 30, 2005 Sept. 30, 2004 Growth
\n::::::::::::::_
\nGross bookings $3,937.2 $3,265.8 21%
\n::::::::::::::_
\nRevenue 584.7 503.8 16%
\n::::::::::::::_
\nGross profit 456.6 399.1 14%
\n::::::::::::::_
\nOperating income
\nbefore amortization * 183.5 159.6 15%
\n::::::::::::::_
\nOperating income 148.6 80.3 85%
\n::::::::::::::_
\nAdjusted net income * 126.9 110.2 15%
\n::::::::::::::_
\nNet income 82.0 58.1 41%
\n::::::::::::::_<\/p>\n<\/p>\n
* “Operating income before amortization” and “Adjusted net income” are non-GAAP measures as defined by the Securities and Exchange Commission. Please see “Definitions of Non-GAAP Measures” and “Tabular Reconciliations for Non- GAAP Measures” for an explanation of non-GAAP measures used throughout this release. Please also see “Basis of Presentation” below for additional information on financial results presented throughout this release.<\/p>\n
<\/p>\n
Discussion of Results\n Gross Bookings & Revenue<\/pre>\n<\/p>\n
Gross bookings increased 21% for the third quarter 2005 compared with third quarter 2004, with domestic gross bookings up 16% and international gross bookings up 39% versus the prior year quarter. Our results were negatively affected by hurricane and terrorist activity during the quarter.<\/p>\n
<\/p>\n
Revenue grew 16% during the quarter, primarily driven by increased worldwide merchant hotel revenue, acquisitions and growth in our car rental business. Third quarter domestic revenue increased 10%, and international revenue grew 43%.<\/p>\n
<\/p>\n
Worldwide merchant hotel revenue increased 15%, the highest rate of growth since third quarter 2004. The increase was fueled by 13% growth in room nights stayed, including rooms delivered as a component of vacation packages. Revenue per room night increased 2%, resulting from a 7% increase in average daily rates (“ADRs”), partially offset by a decrease in hotel margins (defined as hotel net revenue as a percentage of hotel gross bookings).<\/p>\n
<\/p>\n
Worldwide air revenues increased 3% during the quarter, due to a 13% increase in air tickets sold, partially offset by a 9% decline in revenue per air ticket.<\/p>\n
<\/p>\n
Revenue as a percentage of gross bookings (“revenue margin”) was 14.8% for the third quarter, down 58 basis points compared with third quarter 2004, due primarily to lower domestic air revenue per ticket and lower domestic hotel margins, partially offset by higher margins in our car rental and destination services businesses. In addition, average airfares increased 7% year-over- year, which has the effect of increasing gross bookings without a corresponding increase in our per ticket air revenues.<\/p>\n
<\/p>\n
Revenue margin was up 144 basis points sequentially compared with second quarter 2005 due to seasonality, a higher mix of merchant hotel business, lower airfares and higher margins in our car rental and destination services businesses.<\/p>\n
<\/p>\n
Profitability<\/p>\n
<\/p>\n
Gross profit for the third quarter was $457 million, up $58 million, or 14% from third quarter 2004. Gross margin was down 112 basis points to 78.1%, 92 basis points of which were due to our February 2005 acquisition of a destination services company which historically has had lower gross margins than our core business.<\/p>\n
<\/p>\n
Operating Income Before Amortization (“OIBA”) grew 15% to $184 million, driven by higher revenue and lower sales and marketing expense as a percentage of revenue, partially offset by lower gross margin and higher general and administrative and technology and content expense as a percentage of sales. OIBA growth was 18% excluding the prior year benefit of a $4.4 million net adjustment primarily for the reversal of an excise tax reserve.<\/p>\n
<\/p>\n
Operating income grew 85% during the quarter to $149 million. Operating income growth significantly exceeded OIBA growth primarily due to a $30 million net credit adjustment to non-cash compensation due largely to a change in estimate in our expected forfeiture rate for equity awards and a decrease in non-cash compensation from year-ago levels.<\/p>\n
<\/p>\n
Adjusted net income and net income for the third quarter 2005 compared to the same period in 2004 increased by $17 million and $24 million respectively, both due primarily to increases in operating income and interest income, partially offset by correspondingly higher taxes. Additionally, net income was reduced by $23 million due to a write-off of an investment, partially offset by unrealized gains of $12 million on derivative liabilities. Adjusted EPS was $0.35 for the third quarter, and diluted EPS was $0.23.<\/p>\n
<\/p>\n
For additional information on the adjustment to non-cash compensation, the investment write-off and our derivative liabilities, please see the “Income Statement Notes” and “Balance Sheet Notes” elsewhere in this release.<\/p>\n
<\/p>\n
Cash Flows & Working Capital<\/p>\n
<\/p>\n
For the nine months ended September 30, 2005, net cash provided by operating activities was $944 million. Free cash flow (a non-GAAP measure which equals net cash provided by operating activities less capital expenditures) was $903 million. Both net cash provided by operating activities and free cash flow for the nine months ended September 30, 2005 include $543 million from the change in accounts payable, accrued liabilities and deferred merchant bookings.<\/p>\n
<\/p>\n
Quarterly Highlights\n -- For the first time, worldwide gross bookings for a trailing twelve\n month period exceeded $15 billion, and revenue exceeded $2 billion.\n -- Expedia, Inc.'s international points of sale in Canada, the United\n Kingdom, Germany, France, Italy, the Netherlands, China and other\n countries accounted for 23% of gross bookings and 22% of revenue in the\n third quarter, up from 19% of gross bookings and 18% of revenue in the\n prior year period.\n -- Hotels.com continued its 'hotel expert' brand evolution, re-launching\n its U.S. website with a \"We know hotels inside and out\" bellman logo.\n The new site design offers customers virtual property tours, guest\n reviews, advanced filtering and a compare feature to line up hotels\n side-by-side to compare amenities, location, prices, ratings and more.\n Gross bookings for Hotels.com increased 9% compared with the third\n quarter of 2004.\n -- Expedia, Inc. customers worldwide can now book reservations with more\n than 70,000 hotel properties in 1,500 markets, including over 24,000\n merchant hotel properties. More than 5,000 of these properties are\n fully direct-connected, offering real-time availability, rates and\n inventory on our websites, benefiting Expedia's customers and\n suppliers.\n -- Expedia, Inc. expanded its European hotel selection through global\n agreements with Hilton International (\"HI\") and Golden Tulip\n Hospitality. Under our agreement, HI may add up to 400 properties to\n Expedia's preferred hotel program. The Golden Tulip agreement provides\n Expedia.com and Hotels.com customers with enhanced access and\n connectivity to more than 400 properties from Golden Tulip and its\n alliance partners, including Golden Tulip, Pacific International\n Suites, Pensione, Plaza Hotels and Grand Pacific hotels.\n -- Expedia.com's customers have created over 75,000 reviews of actual paid\n hotel stays covering over 12,000 distinct properties since the feature\n launched in early 2005. Traveler reviews provide valuable,\n differentiated content to Expedia.com customers, leveraging Expedia's\n scale in traffic and customers.\n -- Expedia Corporate Travel (\"ECT\") announced that it intends to launch\n ECT Canada in the first quarter of 2006. The Canadian site will build\n upon ECT's current service footprint in the United States, France, the\n United Kingdom, Belgium, Netherlands and Luxembourg. ECT also\n introduced more than 20 powerful and highly configurable new product\n enhancements to its EPower™ service platform including 3D Fare\n Display, an on-demand tool that gives travel bookers a broader view of\n multiple fares as they're searching for flights, as well as\n enhancements to EPower's ™ automated seat search and upgrade\n features.\n -- TripAdvisor, the leading global travel information and advice\n destination (http:\/\/www.tripadvisor.com\/<\/a>), has increased its travel reviews and\n opinions by more than 50% since the second quarter to more than 3\n million. These reviews and opinions cover more than 300,000 hotels,\n restaurants and attractions worldwide. Travelers have also submitted\n over 120,000 photographs covering 14,000 hotels. Expedia, Inc.'s brand\n portfolio is leveraging TripAdvisor's content by including reviews and\n opinions for select properties on Hotels.com's redesigned website.<\/pre>\nEXPEDIA, INC. AND SUBSIDIARIES
\nCONSOLIDATED STATEMENTS OF INCOME
\n(in thousands, except per share data)
\n(Unaudited)<\/p>\nThree months ended Nine months ended
\nSeptember 30, September 30,
\n:::____ ::::ampersand_lt;br \/> 2005 2004 2005 2004
\n:: :: :: ::<\/p>\nRevenue $584,653 $503,793 $1,624,706 $1,404,014
\nCost of revenue 128,072 104,722 360,474 293,952
\n:: :: :: ::
\nGross profit 456,581 399,071 1,264,232 1,110,062<\/p>\nOperating expenses:
\nSelling and marketing 185,421 177,863 542,173 523,999
\nGeneral and administrative 58,895 39,154 146,209 113,976
\nTechnology and content 28,741 22,444 81,349 61,686
\nAmortization of non-cash
\ndistribution and marketing 5,138 3,256 9,055 13,027
\nAmortization (recovery)
\nof non-cash compensation (1,009) 44,350 79,899 134,394
\nAmortization of intangibles 30,756 31,743 94,204 92,520
\n:: :: :: ::
\nOperating income 148,639 80,261 311,343 170,460<\/p>\nOther income (expense):
\nNet interest income 17,968 9,303 47,479 23,611
\nWrite-off of
\nlong-term investment (23,426) — (23,426) —
\nOther 7,379 5,398 11,889 2,906
\n:: :: :: ::
\nTotal other income, net 1,921 14,701 35,942 26,517
\n:: :: :: ::
\nEarnings before
\nincome taxes and
\nminority interest 150,560 94,962 347,285 196,977
\nIncome tax expense (69,026) (37,455) (143,895) (77,737)
\nMinority interest
\nin loss of
\nconsolidated subsidiaries 501 585 106 113
\n:: :: :: ::
\nNet income $82,035 $58,092 $203,496 $119,353
\n========== ========== ========== ==========
\nEarnings per share:
\nBasic $0.24 $0.17 $0.61 $0.36
\nDiluted $0.23 $0.17 $0.59 $0.35<\/p>\nShares used in computing earnings per share:
\nBasic 336,409 335,540 335,833 335,540
\nDiluted 353,351 340,549 344,819 340,549<\/p>\nEXPEDIA, INC. AND SUBSIDIARIES
\nCONSOLIDATED BALANCE SHEETS
\n(in thousands)<\/p>\nSeptember 30, December 31,
\n2005 2004
\n::__ ::__
\n(Unaudited) (Audited)
\nASSETS<\/p>\nCurrent assets:
\nCash and cash equivalents $227,875 $154,957
\nRestricted cash and cash equivalents 32,800 600
\nMarketable securities 25 1,000
\nAccounts and notes receivable,
\nnet of allowance of $4,026 and $2,338 180,622 143,905
\nReceivables from
\nIAC\/InterActiveCorp and subsidiaries — 1,874,745
\nDeferred income taxes 8,874 8,696
\nPrepaid merchant bookings 52,868 28,151
\nPrepaid expenses 61,640 33,803
\n:: ::
\nTotal current assets 564,704 2,245,857
\nProperty and equipment, net 85,866 81,426
\nLong-term investments and other 45,717 140,432
\nIntangible assets, net 1,204,757 1,279,361
\nGoodwill 5,875,132 5,790,111
\n:: ::
\nTOTAL ASSETS $7,776,176 $9,537,187
\n========== ==========
\nLIABILITIES AND STOCKHOLDERS’ EQUITY<\/p>\nCurrent liabilities:
\nAccounts payable, merchant $650,536 $429,739
\nAccounts payable, trade 127,908 98,666
\nDeferred merchant bookings 559,051 361,199
\nDeferred revenue 7,847 5,353
\nIncome tax payable 7,716 421
\nOther current liabilities 88,148 86,801
\n:: ::
\nTotal current liabilities 1,441,206 982,179
\nDeferred income taxes 381,463 333,696
\nDerivative liabilities 91,407 12,812
\nOther long-term liabilities 38,450 37,436
\nMinority interest 71,070 18,435<\/p>\nCommitments and contingencies<\/p>\n
Total stockholders’ equity 5,752,580 8,152,629
\n:: ::
\nTOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $7,776,176 $9,537,187
\n========== ==========<\/p>\nEXPEDIA, INC. AND SUBSIDIARIES
\nCONSOLIDATED STATEMENTS OF CASH FLOWS
\n(in thousands)
\n(Unaudited)
\nFor the Nine Months
\nEnded September 30,
\n::::
\n2005 2004
\n:: ::<\/p>\nCash flows from operating activities
\nNet income $203,496 $119,353
\nAdjustments to reconcile net income
\nto net cash provided by operating activities:
\nDepreciation 37,869 32,701
\nAmortization of non-cash
\ndistribution and marketing 9,055 13,027
\nAmortization of non-cash compensation 79,899 134,394
\nAmortization of intangibles 94,204 92,520
\nAmortization of premium
\non investment securities — 161
\nDeferred income taxes 29,948 (25,563)
\nUnrealized gain on derivative instruments (12,000) —<\/p>\nEquity in income of unconsolidated affiliates (870) (116)
\nMinority interest in loss
\nof consolidated subsidiaries (106) (113)
\nWrite-off of long-term investment 23,426 —
\nOther 690 —
\nChanges in current assets and current liabilities:
\nAccounts and notes receivable (28,468) 10,355
\nPrepaid merchant bookings
\nand prepaid expenses (39,047) (32,502)
\nAccounts payable and accrued liabilities 345,909 203,461
\nDeferred merchant bookings 197,154 167,421
\nDeferred revenue 2,494 (3,108)
\nOther, net — 2,549
\n:: ::
\nNet cash provided by operating activities 943,653 714,540
\n:: ::
\nCash flows used in investing activities
\nAcquisitions, net of cash acquired 11,515 (261,312)
\nCapital expenditures (40,859) (37,499)
\nPurchase of marketable securities (30) (5,015)
\nProceeds from sale of marketable securities 1,000 722,646
\nIncrease in long-term investments and deposits (2,379) (56,580)
\nTransfers to IAC\/InterActiveCorp, net (766,760) (1,496,467)
\nOther, net (2,937) (5,080)
\n:: ::
\nNet cash used in investing activities (800,450) (1,139,307)
\n:: ::
\nCash flows used in financing activities
\nProceeds from exercise of stock options 20,458 —
\nChanges in restricted
\ncash and cash equivalents (36,462) —
\nContribution from (distribution to)
\nIAC\/InterActiveCorp, net (52,844) 401,888
\nOther, net (2,601) (1,108)
\n:: ::
\nNet cash used in financing activities (71,449) 400,780
\nEffect of exchange rate changes
\non cash and cash equivalents 1,164 (2,425)
\n:: ::
\nNet increase (decrease)
\nin cash and cash equivalents 72,918 (26,412)
\nCash and cash equivalents
\nat beginning of period 154,957 188,639
\n:: ::
\nCash and cash equivalents at end of period $227,875 $162,227
\n========== ==========<\/p>\nIncome Statement Notes<\/p>\n
Revenue
\n— Expedia, Inc. makes travel products and services available through two
\nbusiness models: the merchant model and the agency model.
\n— Under the merchant model, we facilitate the booking of travel products
\nand services from our travel suppliers, and serve as the merchant of
\nrecord. Merchant transactions typically produce a higher level of net
\nrevenues per transaction. Merchant revenues are generally recognized
\nwhen the customer uses the travel product or service, as opposed to
\nwhen the travel product or service is booked. Merchant revenues are
\nderived from the difference between amounts paid to the travel
\nsuppliers and the amounts paid by the consumer.
\n— Under the agency model, Expedia, Inc. acts as agent in the transaction,
\npassing reservations booked by customers to the relevant travel
\nsupplier. Expedia, Inc. receives a commission or ticketing fee from the
\ntravel supplier for its services under the agency model. In agency
\ntransactions the supplier sets the price to be paid by the consumer and
\nthe travel supplier appears as merchant of record for the transaction.
\nAgency revenues are typically recognized at the time the reservation is
\nbooked. Agency revenues are derived primarily from commissions and
\nticketing fees from travel suppliers, revenues from GDS’s and fees from
\nleisure and corporate travelers.
\n— Agency gross bookings were 58% of total gross bookings for both the
\nthree and nine month periods ended September 30, 2005, compared with
\n57% for the prior year periods.<\/p>\nExpense Reclassifications
\n— As previously disclosed in our October 25, 2005 8-K\/A filing with the
\nSEC, we have reclassified certain expense amounts relating to prior
\nperiods’ results to conform to our 2005 presentation of results. The
\nreclassifications did not affect our financial position, cash flows,
\nrevenue, operating income, operating income before amortization or net
\nincome for any periods.<\/p>\nCost of Revenue
\n— Cost of revenue consists of: (1) credit card merchant fees; (2) fees
\npaid to our fulfillment vendors for processing of airline tickets and
\nrelated customer services; (3) reserves and related payments to
\nairlines for tickets purchased with fraudulent credit cards;
\n(4) allocated and direct costs of our data and call centers and
\n(5) costs paid to suppliers for certain destination inventory.
\n— Cost of revenue as a percentage of revenue was 22% for each of the
\nthree and nine month periods ended September 30, 2005, compared with
\n21% for the comparable prior year periods. The increases are largely
\ndue to lower gross margin revenues associated with an acquired
\ndestination services provider which records its ticketing sales on a
\ngross basis, which we have consolidated as of its acquisition in
\nFebruary 2005.<\/p>\nOperating Expenses
\n— Operating expenses as a percentage of revenue for the three and nine
\nmonth periods were as follows (differences due to rounding):<\/p>\nThree months Nine months
\nended September 30, ended September 30,
\n:::: ::::
\n2005 2004 2005 2004
\n:_ :_ :_ :_
\nSelling and marketing 31.7% 35.3% 33.4% 37.3%
\nGeneral and administrative 10.1% 7.8% 9.0% 8.1%
\nTechnology and content 4.9% 4.5% 5.0% 4.4%
\n:_ :_ :_ :_
\nTotal 46.7% 47.5% 47.4% 49.8%<\/p>\n— Operating expenses include depreciation expense of $12 million and
\n$29 million for the three and nine month periods ended
\nSeptember 30, 2005, and $8 million and $23 million for the comparable
\nprior year periods. The remainder of depreciation expense is captured
\nin cost of revenue.<\/p>\nSelling and Marketing
\no Selling and marketing expenses consist primarily of advertising and
\ndistribution expenses as well as personnel-related costs. Our
\ndistribution channels include Internet portals, search engines and
\nour private label and affiliate programs.
\no While year-to-date sales and marketing expense has increased 3%, we
\nexpect a significantly larger year-over-year increase in the fourth
\nquarter as we strategically shift marketing spend later in the year.
\no While we are focused on optimizing the efficiency of our sales and
\nmarketing channels, we expect absolute amounts spent in sales and
\nmarketing to increase over time due to continued expansion of our
\ninternational businesses, which have a higher sales and marketing
\ncost relative to revenue due to their comparatively early stages of
\ndevelopment, as well as increases in search-related costs, increased
\nmarketing volume and higher costs of traffic acquisition online.<\/p>\nGeneral and Administrative
\no General and administrative expense consists primarily of
\n(1) personnel-related costs for support functions that include our
\nexecutive leadership, finance, legal, tax and human resources
\nfunctions, and (2) fees for professional services that include
\nlegal, tax and accounting.
\no Year-to-date general and administrative expense has increased 28% as
\nwe increased our use of professional services and built our
\nexecutive teams and supporting staff levels largely as a result of
\nbecoming a stand-alone public company. We expect absolute amounts
\nspent on corporate personnel and professional service to increase
\nover time as we add headcount and continue incurring incremental
\ncosts as a stand-alone public company.<\/p>\nTechnology and Content
\no Technology and content expense includes research and development
\nconsisting primarily of product development expenses such as payroll
\nand related expenses for localization, and amortization of website
\ndevelopment costs.
\no Given the increasing complexity of our business, geographic
\nexpansion, initiatives in corporate travel, increased supplier
\nintegration, service-oriented architecture improvements and other
\ninitiatives, we expect absolute amounts spent in technology and
\ncontent to increase over time.<\/p>\nAmortization of Non-Cash Compensation Expense
\n— Amortization of non-cash compensation expense relates primarily to
\nexpense for restricted stock units and stock options. Since
\nFebruary 2003, we have awarded restricted stock units as our primary
\nform of stock-based compensation. Our stock-based awards generally vest
\nover periods between four and five years.
\n— Non-cash compensation contra-expense for the third quarter was
\n$1 million, consisting of $29 million in expense primarily related to
\nstock options expense, offset by a $30 million net credit due to a
\nchange in our forfeiture rate assumption for equity awards, partially
\noffset by a modification charge on equity awards related to the
\nSpin-Off.
\n— We refined our forfeiture assumptions based on actual award forfeitures
\nby employees, which was greater than the assumption used in the
\nhistorical calculation of non-cash compensation expense. While this is
\nan area of significant judgment, we will continually assess our
\nforfeiture assumption in light of actual experience and do not
\nanticipate a change of this magnitude in the future.
\n— Assuming, among other things, that our stock price does not vary widely
\nfrom present levels, we anticipate quarterly amortization of non-cash
\ncompensation expense will decrease from levels recorded in the first
\ntwo quarters of 2005 as higher value options are amortized and replaced
\nby lower value restricted stock unit expense.
\n— We will adopt SFAS 123\u00ae (“Share Based Payment”) in the first quarter
\nof 2006. We do not expect 123\u00ae will have a material effect on our
\nresults of operations or financial position.
\n— At September 30, 2005, there were approximately 43.5 million
\nstock-based awards outstanding, consisting of 38 million stock options
\nwith a $13.38 weighted average exercise price and a weighted average
\nremaining life of 3.6 years, and 5.5 million restricted stock units.
\n— We granted 30,000 stock awards during the third quarter, consisting of
\nrestricted stock units. Year-to-date Expedia, Inc. and
\nIAC\/InterActiveCorp. (“IAC”) have granted approximately 7 million stock
\nawards to Expedia employees, consisting of 3.8 million options with a
\nfive-year cliff vest granted to our Chairman with a weighted average
\nexercise price of $32.12, and approximately 3 million restricted stock
\nunits granted to other employees.<\/p>\nNet Interest Income
\n— The Company’s reduced cash balance versus historical amounts will
\nresult in reduced interest income in the near-term compared with what
\nhas been recorded in the historical combined statements of income.<\/p>\nIncome Taxes
\n— From January 1, 2005 through the Spin-Off, we were a member of the IAC
\nconsolidated tax group. Accordingly, we will file a federal income tax
\nreturn and certain state income tax returns on a combined basis for
\nthis period. IAC will settle the income tax liability related to these
\nfilings; as such, these amounts are not included in our income taxes
\npayable. As of September 30, 2005, our current income tax payable
\nrepresents amounts that we will settle with the Internal Revenue
\nService and other tax authorities based on our income taxes after the
\nSpin-Off.
\n— We have computed income taxes using our stand-alone tax rate.
\n— The effective tax rate for income from adjusted net income was 36% for
\nthe three and nine months ended September 30, 2005 compared to 37% in
\nthe prior year periods. Third quarter effective tax rates were higher
\nthan the federal statutory rate of 35% principally due to state taxes.
\n— Third quarter 2004 effective tax rates were higher than the federal
\nstatutory rate principally due to state taxes and foreign losses for
\nwhich no tax benefit was recognized.<\/p>\nForeign Exchange
\n— As Expedia, Inc.’s reporting currency is the U.S. Dollar, reported
\nfinancial results are impacted from strength or weakness in the U.S.
\ndollar in comparison to the currencies of our international websites.
\nManagement believes investors may find it useful to assess 2005 growth
\nrates with and without the impact of foreign exchange. The estimated
\nimpact of foreign exchange was as follows (amounts may not add due
\nto rounding):<\/p>\nImpact Nine Impact
\nY\/Y on Y\/Y months Y\/Y on Y\/Y
\nThree growth growth ended growth growth
\nmonths ended rates rates Sept. 30, rates rates
\nSept. 30, 2005 excluding from 2005 Y\/Y excluding from
\nY\/Y growth foreign foreign growth foreign foreign
\nrates exchange exchange rates exchange exchange
\nmovements movements movements movements
\n::::::____ ::::::
\nRevenue 16.1% 16.7% -0.7% 15.7% 15.9% -0.2%
\nOperating Income 85.2% 90.0% -4.8% 82.6% 87.9% -5.3%
\nOperating Income
\nBefore
\nAmortization 15.0% 17.4% -2.4% 20.5% 22.7% -2.2%<\/p>\nAcquisitions & Investments
\n— A number of acquisitions and investments were completed during 2004 and
\n2005 that impacted financial results during the time periods included
\nin this release, specifically our acquisitions and investments in
\nTripAdvisor, Egencia (ECT Europe), Activity World, WTM (ECT U.K.),
\neLong and Premier Getaways.
\n— Management believes that investors may find it useful to assess 2005
\ngrowth rates with and without the impact of acquisitions and
\ninvestments. The estimated impact of these acquisitions and investments
\nwas as follows:<\/p>\nImpact Impact
\nY\/Y on Y\/Y Y\/Y on Y\/Y
\ngrowth growth growth growth
\nrates rates Nine rates rates
\nexcluding from months excluding from
\nThree acqui- acqui- ended acqui- acqui-
\nmonths ended sitions sitions Sept. 30, sitions sitions
\nSept. 30, 2005 and and 2005 Y\/Y and and
\nY\/Y growth invest- invest- growth invest- invest-
\nrates ments ments rates ments ments
\n::::::____ ::::::
\nRevenue 16.1% 13.0% 3.1% 15.7% 11.5% 4.2%
\nOperating Income 85.2% 87.8% -2.6% 82.6% 78.2% 4.4%
\nOperating Income
\nBefore
\nAmortization 15.0% 15.8% -0.8% 20.5% 17.4% 3.1%<\/p>\nBalance Sheet Notes<\/p>\n
Cash, Cash Equivalents, Current Restricted Cash and Marketable Securities
\n— Cash, cash equivalents, current restricted cash and marketable
\nsecurities were $261 million at September 30, 2005.
\n— The $33 million of current restricted cash and cash equivalents
\nprimarily relates to agency air revenue transactions.<\/p>\nReceivables from IAC\/InterActiveCorp.
\n— In connection with the Spin-Off, we extinguished all intercompany
\nreceivable balances from IAC by recording a distribution to IAC
\naccording to the terms of a separation agreement between IAC and
\nExpedia, as explained in further detail in the Company’s Registration
\nStatement on Form S-4, filed on June 17, 2005.<\/p>\nAccounts & Notes Receivable
\n— Accounts and notes receivable include credit card receivables generally
\ndue within two to three days from our agency transactions, which are
\ngenerally due within 30 days from our airlines, global distribution and
\nhotel suppliers.
\n— These receivables generally track with our gross bookings pattern,
\nbuilding throughout the first half of the year and decreasing in the
\nsecond half as bookings activity subsides.<\/p>\nPrepaid Expenses
\n— Prepaid expenses are primarily composed of prepaid marketing. The
\nincrease reflects our decision to weight our marketing spend later in
\nthe year.<\/p>\nGoodwill & Intangible Assets, net
\n— Goodwill and intangible assets, net relates primarily to the Company’s
\nacquisitions of Hotels.com, Expedia.com and Hotwire.
\n— Amortization of intangible assets with definite lives was $31 million
\nand $94 million for the three and nine months ended September 30, 2005,
\ncompared with $32 million and $93 million for the three and nine month
\nperiods ended September 30, 2004. These amounts are generally not
\ndeductible for tax purposes.<\/p>\nLong-Term Investments and Other
\n— The reduction in long-term investments at September 30, 2005 versus
\nDecember 31, 2004 reflects our consolidation of eLong after exercising
\nour warrants to increase our ownership to 59% on an outstanding basis
\nand the Company’s write-off of an investment of $23 million after
\nmaking a determination that the decline in value of our investment was
\nother than temporary, partially offset by our 50% ownership interest in
\nan aircraft through a capital contribution from IAC\/InterActiveCorp.<\/p>\nDeferred Merchant Bookings and Accounts Payable, Merchant
\n— Deferred merchant bookings consist of amounts received from customers
\nwho have not yet traveled. Merchant revenue is generally not recognized
\nuntil travel is initiated.
\n— The payment to suppliers related to these bookings is not made until
\napproximately one week after booking for air travel and, for all other
\nmerchant bookings, after the customer’s use and subsequent billing from
\nthe supplier. Therefore, especially for merchant hotel, which
\nrepresents the majority of Expedia’s overall merchant bookings, there
\nis generally some period of time from the receipt of cash from
\ncustomers to supplier payment.
\n— As long as the merchant hotel business continues to grow positively, as
\nit has historically, and our business model does not change, we expect
\nthat the change in working capital will continue to be positive. If
\nthis business declines or if the model changes, it would negatively
\naffect our working capital.
\n— For the nine months ended September 30, 2005, the change in deferred
\nmerchant bookings and accounts payable and accrued liabilities
\ncontributed $543 million to cash flow from operating activities.<\/p>\nRevolving Credit Facility
\n— On July 11, 2005, we entered into a $1 billion five-year unsecured
\nrevolving credit facility with a group of lenders. The revolving
\nfacility bears interest based on our financial leverage, and is
\ncurrently at a rate equal to LIBOR plus .50%. The revolving credit
\nfacility also contains financial covenants consisting of a leverage
\nratio and a minimum net worth. As of September 30, 2005 we were in
\ncompliance with all covenants.
\n— Expenses associated with the facility were less than $1 million during
\nthe third quarter and are classified in net interest income on the
\nstatements of income. There was no outstanding balance on the facility
\nat September 30, 2005. We expect to utilize the revolver during the
\nfourth quarter of 2005 as our gross bookings reach their seasonal low
\nand our accounts payable from merchant bookings come due.<\/p>\nDerivative Liabilities
\n— In connection with IAC’s acquisition of Ask Jeeves, we are obligated to
\nissue shares of Expedia, Inc. common stock (or pay cash in equal value)
\nto holders of Ask Jeeves convertible notes. We estimate that we may be
\nrequired to issue up to 4.3 million shares of Expedia, Inc. common
\nstock upon conversion. The estimated fair value of this obligation at
\nSeptember 30, 2005 was $88 million, recorded as a derivative liability
\non our balance sheet.
\n— For the three and nine months ended September 30, 2005, we recorded
\nunrealized gains of $12 million principally related to the Ask Jeeves
\nliability due to the decrease in our share price during the third
\nquarter. These gains are recorded in “other income” on our statements
\nof income.
\n— We anticipate recording a quarterly gain or loss in future quarters as
\nwe adjust the fair value of these long-term liabilities due to
\nfluctuations in our stock price. The size or incidence of such gains or
\nlosses is not predictable.<\/p>\nSeries A Cumulative Convertible Preferred Stock (“Preferred Stock”)
\n— We have fewer than 1,000 shares of preferred stock outstanding with an
\naggregate face value of less than $20,000.<\/p>\nExpedia Class B Common Stock
\n— There are approximately 26 million shares of Expedia Class B common
\nstock outstanding.
\n— The holders of Class B common stock are entitled to one vote when
\nvoting separately as a class, and ten votes when voting together as a
\nsingle group with the holders of Expedia common stock and Expedia
\npreferred stock.
\n— Our Chairman has general voting authority for the Class B common stock.<\/p>\nWarrants
\n— As of September 30, 2005 Expedia, Inc. had approximately 59 million
\nwarrants outstanding, which if exercised in full would entitle their
\nholders to acquire approximately 35 million common shares of Expedia,
\nInc. for an aggregate purchase price of approximately $775 million
\n(average $22.28 per Expedia, Inc. common share).
\n— There are approximately 32 million warrants related to the Vivendi
\nUniversal transaction completed by IAC\/InterActiveCorp in 2002. There
\nare two tranches of these warrants, both of which expire in 2012:
\no Approximately 24 million warrants entitle the holders to acquire
\n1\/2 share of Expedia, Inc. at an exercise price of $12.23. If
\nexercised in full, the warrants would entitle their holders to
\napproximately 12 million Expedia, Inc. common shares.
\no Approximately 8 million warrants entitle the holders to acquire
\n1\/2 share of Expedia, Inc. at an exercise price of $14.45. If
\nexercised in full, the warrants would entitle their holders to
\napproximately 4 million Expedia, Inc. common shares.
\n— There are approximately 26 million warrants that are publicly-traded on
\nNasdaq under the ticker symbols “EXPEW” and “EXPEZ.” Both issues expire
\nin February 2009.
\no There are approximately 15 million EXPEW warrants outstanding. Each
\nwarrant entitles the holder to acquire 1\/2 share of Expedia, Inc. at
\nan exercise price of $15.61. If exercised in full, the warrants
\nwould entitle their holders to approximately 7 million Expedia, Inc.
\ncommon shares.
\no There are approximately 11 million EXPEZ warrants outstanding. Each
\nwarrant entitles the holder to acquire approximately 0.97 shares of
\nExpedia, Inc. at an exercise price of $11.56. If exercised in full,
\nthe warrants would entitle their holders to approximately 11 million
\nExpedia, Inc. common shares.
\n— There are less than 1 million miscellaneous warrants outstanding.<\/p>\nExpedia, Inc.
\nSupplemental Information – Third Quarter 2005<\/p>\n— The following metrics are intended as a supplement to the financial
\nstatements found in this press release and in our filings with the SEC.
\nIn the event of discrepancies between amounts in these tables and our
\nhistorical financial statements, readers should rely on the financial
\nstatements in our releases and SEC filings.
\n— As our business evolves and as we integrate our operations, we intend
\nto periodically review and refine the definition, methodology and
\nappropriateness of each of our supplemental metrics. As a result, these
\nmetrics are subject to removal and \/ or change, and such changes could
\nbe material.
\n— We have changed our methodology for the allocation of gross bookings by
\nbrand. “Expedia” gross bookings constitute bookings from all Expedia-
\nbranded properties, including our international sites and our worldwide
\nExpedia Corporate travel businesses. “Other” gross bookings constitute
\nbookings from all brands other than Expedia-branded properties and
\nHotels.com. In addition, there have been minor adjustments to
\nhistorical allocation of our revenue between domestic and
\ninternational.
\n— Metrics, with the exception of revenue items, include 100% of the
\nresults of an unconsolidated joint-venture of which we own
\napproximately 49.9%.
\n— These metrics do not include adjustments for one-time items,
\nacquisitions, foreign exchange or other adjustments. Some numbers may
\nnot add due to rounding.<\/p>\n(in $ millions) 2004 2005 YTD
\n::__ :::: ::___
\nYTD YTD
\nQ3 Q4 Q1 Q2 Q3 2004 2005
\n: : : : : : :<\/p>\nGross Bookings by Geography
\nDomestic $2,630 $2,300 $3,184 $3,229 $3,050 $8,155 $9,463
\nInternational 636 595 902 909 887 1,724 2,698
\n:_ :_ :_ :_ :_ :_ :__
\nTotal $3,266 $2,895 $4,086 $4,138 $3,937 $9,879 $12,161<\/p>\nNet Revenue by Geography
\nDomestic $414 $350 $386 $440 $457 $1,183 $1,283
\nInternational 89 89 99 115 128 221 342
\n:_ :_ :_ :_ :_ :_ :__
\nTotal $504 $439 $485 $555 $585 $1,404 $1,625<\/p>\nGross Bookings by Brand
\nExpedia $2,525 $2,310 $3,251 $3,191 $3,047 $7,567 $9,489
\nHotels.com 461 351 483 502 502 1,425 1,487
\nOther 280 234 352 445 388 887 1,185
\n:_ :_ :_ :_ :_ :_ :__
\nTotal $3,266 $2,895 $4,086 $4,138 $3,937 $9,879 $12,161<\/p>\nGross Bookings by Agency\/Merchant
\nAgency $1,875 $1,760 $2,386 $2,422 $2,296 $5,585 $7,104
\nMerchant 1,391 1,135 1,700 1,716 1,641 4,294 5,057
\n:_ :_ :_ :_ :_ :_ :__
\nTotal $3,266 $2,895 $4,086 $4,138 $3,937 $9,879 $12,161<\/p>\nPackages Revenue $106 $92 $114 $125 $128 $304 $367
\nNumber
\nof Transactions 9.2 7.6 9.7 10.0 10.3 25.9 30.0
\nMerchant
\nhotel room nights 9.1 7.4 7.3 9.0 10.2 24.4 26.5<\/p>\nNotes & Definitions:<\/p>\n
<\/p>\n
Gross Bookings — Total retail value of transactions booked for both agency and merchant transactions, recorded at the time of booking. Bookings include the total price due for travel by customers, including taxes, fees and other charges.<\/p>\n
<\/p>\n
Number of Transactions — Quantity of purchases reported as booked, net of cancellations. Packages purchased using our packages wizard, which by definition include a merchant hotel, are recorded as a single transaction.<\/p>\n
<\/p>\n
Merchant Hotel Room Nights — Worldwide merchant hotel nights, net of cancellations. With the exception of Hotwire, nights are reported as stayed. This metric includes nights stayed on both a package and stand-alone basis.<\/p>\n
<\/p>\n
Definitions of Non-GAAP Measures<\/p>\n
<\/p>\n
The following measures are defined by the Securities and Exchange Commission as non-GAAP financial measures.<\/p>\n
<\/p>\n
Operating Income Before Amortization is defined as operating income plus: (1) amortization of non-cash distribution and marketing expense, (2) amortization of non-cash compensation expense, (3) amortization of intangible assets and goodwill impairment, if applicable and (4) certain one-time items, if applicable. Management believes this measure is useful to investors because it represents the combined operating results of Expedia, Inc.’s businesses, taking into account depreciation, which we believe is an ongoing cost of doing business, but excluding the effects of other non-cash expenses. Operating Income Before Amortization has certain limitations in that it does not take into account the impact to Expedia, Inc.’s statements of income of certain expenses, including non-cash compensation, non-cash payments to partners, and acquisition-related accounting. Due to the high variability and difficulty in predicting certain items that affect net income, such as interest rates and tax rates, Expedia, Inc. is unable to provide reconciliation to net income on a forward-looking basis without unreasonable efforts.<\/p>\n
<\/p>\n
Adjusted Net Income generally captures all items on the statements of income that have been, or ultimately will be, settled in cash and is defined as net income available to common stockholders plus (1) amortization of non-cash distribution and marketing expense, (2) amortization of non-cash compensation expense, (3) amortization of intangible assets and goodwill impairment, if applicable, (4) one-time items, net of related tax, and minority interest, (5) mark to market gains and losses on derivative liabilities and (6) discontinued operations, net of tax. We believe Adjusted Net Income is useful to investors because it represents Expedia, Inc.’s combined results, taking into account depreciation, which management believes is an ongoing cost of doing business, but excluding the impact of other non- cash expenses and items not directly tied to the recurring core operations of our businesses.<\/p>\n
<\/p>\n
Adjusted EPS is defined as Adjusted Net Income divided by weighted fully diluted shares outstanding for Adjusted EPS purposes. We include dilution from options and warrants per the treasury stock method and include all shares relating to restricted stock units (“RSU”) in shares outstanding for Adjusted EPS. This differs from the GAAP method for including RSUs, which treats them on a treasury method basis. Shares outstanding for Adjusted EPS purposes are therefore higher than shares outstanding for GAAP EPS purposes. We believe Adjusted EPS is useful to investors because it represents, on a per share basis, Expedia’s consolidated results, taking into account depreciation, which we believe is an ongoing cost of doing business, as well as other charges which are not allocated to the operating businesses such as interest expense, taxes and minority interest, but excluding the effects of other non-cash expenses not directly tied to the recurring core operations of our businesses. Adjusted Net Income and Adjusted EPS have the same limitations as Operating Income Before Amortization. Therefore, we think it is important to evaluate these measures along with our consolidated statements of income.<\/p>\n
<\/p>\n
Free Cash Flow is defined as net cash flow provided by operating activities less capital expenditures. Management believes Free Cash Flow is useful to investors because it represents the operating cash flow that our operating businesses generate, less capital expenditures but before taking into account other cash movements that are not directly tied to the core operations of our businesses, such as financing activities or certain investing activities. Free Cash Flow has certain limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent the residual cash flow for discretionary expenditures. Therefore, it is important to evaluate Free Cash Flow along with the consolidated statements of cash flows.<\/p>\n
<\/p>\n
We endeavor to compensate for the limitation of the non-GAAP measures presented by also providing comparable GAAP measures, GAAP financial statements, and descriptions of the reconciling items and adjustments, to derive the non-GAAP measures.<\/p>\n
<\/p>\n
Tabular Reconciliations for Non-GAAP Measures\n (figures in $000s)<\/pre>\nOperating Income Before Amortization<\/p>\n
Three months ended Nine months ended
\nSeptember 30, September 30,
\n2005 2004 2005 2004
\n:::____ ::::
\nOperating Income
\nBefore Amortization $183,524 $159,610 $494,501 $410,401
\nAmortization of non-cash
\ndistribution and marketing (5,138) (3,256) (9,055) (13,027)
\nAmortization (recovery) of
\nnon-cash compensation 1,009 (44,350) (79,899) (134,394)
\nAmortization of intangibles (30,756) (31,743) (94,204) (92,520)
\n:____ :____ :____ ::ampersand_lt;br \/> Operating Income 148,639 80,261 311,343 170,460<\/p>\nNet interest income 17,968 9,303 47,479 23,611
\nWrite-off of
\nlong-term investment (23,426) — (23,426) —
\nOther 7,379 5,398 11,889 2,906
\nIncome tax expense (69,026) (37,455) (143,895) (77,737)
\nMinority interest in loss of
\nconsolidated subsidiaries 501 585 106 113
\n:____ :____ :____ ::ampersand_lt;br \/> Net Income $82,035 $58,092 $203,496 $119,353
\n========= ========= ========= =========<\/p>\nAdjusted Net Income & EPS
\nThree months ended Nine months ended
\nSeptember 30, September 30,
\n2005 2004 2005 2004
\n:::____ ::::<\/p>\nNet income $82,035 $58,092 $203,496 $119,353
\nAmortization of non-cash
\ndistribution and marketing 5,138 3,256 9,055 13,027
\nAmortization (recovery) of
\nnon-cash compensation (1,009) 44,350 79,899 134,394
\nAmortization of intangibles 30,756 31,743 94,204 92,520
\nWrite-off of
\nlong-term investment 23,426 — 23,426 —<\/p>\nUnrealized gain on
\nderivatives instruments (12,000) — (12,000) —<\/p>\nMinority interest (535) (219) (1,448) (332)
\nIncome tax expense (863) (27,040) (53,345) (83,923)
\n:____ :____ :____ ::ampersand_lt;br \/> Adjusted net income $126,948 $110,182 $ 343,287 $275,039
\n========= ========= ========= =========<\/p>\nGAAP diluted weighted
\naverage shares outstanding 353,351 340,549 344,819 340,549
\nAdditional restricted
\nstock units 4,814 — 1,605 —
\n:____ :____ :____ ::ampersand_lt;br \/> Adjusted weighted
\naverage shares outstanding 358,165 340,549 346,424 340,549
\n========= ========= ========= =========<\/p>\nDiluted earnings per share $0.23 $0.17 $0.59 $0.35
\n========= ========= ========= =========
\nAdjusted earnings per share $0.35 $0.32 $0.99 $0.81
\n:____ :____ :____ ::ampersand_lt;br \/><\/p>\nFree Cash Flow<\/p>\n
Nine months ended September 30,
\n2005 2004
\n::::::_<\/p>\nNet cash flow provided by operating activities $943,653 $714,540
\nLess: capital expenditures (40,859) (37,499)
\n:____ ::ampersand_lt;br \/> Free cash flow $902,794 $677,041
\n:____ ::ampersand_lt;br \/><\/p>\nConference Call<\/p>\n
<\/p>\n
Expedia, Inc. will audiocast its conference call with investors and analysts discussing its third quarter financial results and certain forward-looking information on Thursday, November 3, 2005 at 2:00 p.m. Pacific Time (PT). The audiocast will be open to the public and available via http:\/\/www.expediainc.com\/ir<\/a>.<\/p>\n
<\/p>\n
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995<\/p>\n
<\/p>\n
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance. These forward-looking statements are based on management’s current expectations and assumptions which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. The use of words such as “anticipates,” “estimates,” “expects,” “intends,” “plans” and “believes,” among others, generally identify forward-looking statements. However, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements and may include statements relating to future revenues, expenses, margins, profitability, net income, earnings per share and other measures of results of operation and the prospects for future growth of Expedia, Inc.’s business.<\/p>\n
<\/p>\n
Actual results and the timing and outcome of events may differ materially from those expressed or implied in the forward-looking statements for a variety of reasons, including, among others: Expedia, Inc.’s ability to effectively update, automate and integrate disparate financial and accounting systems and approaches among its brands and businesses; adverse changes in senior management; the rate of growth of the Internet and online travel; changes in global economic conditions, consumer spending, the competitive environment, the e-commerce industry and broadband access; world events (including adverse weather, health risks or terrorism); the rate of online migration in the various geographies and markets in which Expedia, Inc. operates; fluctuations in foreign exchange rates; the ability to effectively operate the newly consolidated businesses as an independent entity from IAC\/InterActiveCorp; the health of the travel industry, including consumer and business spending on travel; Expedia, Inc.’s ability to expand successfully in international markets; possible one-time charges resulting from, among other events, integration activities, platform migration and shared services efforts; failure to realize cost efficiencies; the successful completion of pending corporate transactions and the integration of acquired businesses; the accuracy, integrity, security and redundancy of systems, including financial and accounting systems, and networks of Expedia, Inc.; and other risks detailed in Expedia, Inc.’s public filings with the Securities and Exchange Commission, including Expedia, Inc.’s amended Registration Statement on Form S-4 (Commission file number 333-124303-01), filed on June 17, 2005. Except as required by law, Expedia, Inc. undertakes no obligation to update any forward- looking or other statements in this press release, whether as a result of new information, future events or otherwise.<\/p>\n
<\/p>\n
Basis of Presentation<\/p>\n
<\/p>\n
On December 21, 2004, IAC announced its plan to separate into two independent public companies in order to better achieve certain strategic objectives of its various businesses. This transaction is referred to as the “Spin-Off.” On August 9, 2005, Expedia, Inc. became an independent public company and began trading on the Nasdaq under the symbol “EXPE.” These unaudited consolidated financial statements present our results of operations, financial position, stockholders’ equity and cash flows of Expedia, Inc. on a combined basis up through the Spin-Off and on a consolidated basis thereafter. The unaudited financial statements relating to periods prior to August 9, 2005 were prepared on a combined basis because there was no direct ownership relationship among any or all of the businesses that comprised Expedia, Inc. upon Spin-Off.<\/p>\n
<\/p>\n
About Expedia, Inc.<\/p>\n
<\/p>\n
Expedia, Inc. is one of the world’s leading travel service companies. With its portfolio of leading travel brands, Expedia, Inc. empowers business and leisure travelers with the tools and information they need to easily research, plan, book and experience travel. The Company also provides wholesale travel to offline retail travel agents. Expedia, Inc.’s main companies include: Expedia.com, Hotels.com, Hotwire, Expedia Corporate Travel, TripAdvisor and Classic Vacations. Expedia, Inc.’s companies also operate internationally with sites in Canada, the United Kingdom, Germany, France, Italy, the Netherlands and China, through its investment in eLong. For more information visit http:\/\/www.expediainc.com\/<\/a>. (NASDAQ: EXPE).<\/p>\n
<\/p>\n
SOURCE: Expedia, Inc.<\/p>\n
<\/p>\n
CONTACT: Stu Haas, Investor Relations, +1-425-679-7852, or
\nir@expedia.com<\/a>, or Wendy Grover, Communications, +1-425-679-7874, both of
\nExpedia Inc.<\/br\/><\/br\/><\/p>\n<\/p>\n
Web site: http:\/\/www.expedia.com\/<\/a><\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"