Expedia 2005 Annual Report Download - page 79

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Expedia, Inc.
Notes to Consolidated Financial Statements Ì (Continued)
The following table presents the changes in goodwill:
2005 2004
(In thousands)
Beginning Balance as of January 1, ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $5,790,111 $5,650,322
AdditionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 140,482 345,373
Deductions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (50,777) (218,840)
Foreign exchange translation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (20,086) 13,256
Ending Balance as of December 31, ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $5,859,730 $5,790,111
In 2005, the additions to goodwill relate to new acquisitions, primarily eLong, as well as adjustments
to the carrying value of goodwill based upon the finalization of the valuation of intangible assets and their
related deferred tax impacts, and the deductions from goodwill relate to the income tax benefit realized
pursuant to the exercise of stock options assumed in business acquisitions that were vested at the
transaction date and are treated as a reduction in purchase price when the deductions are realized.
In 2004, the additions to goodwill principally relate to (1) acquisitions, primarily TripAdvisor and
Egencia, and (2) adjustments to the carrying value of goodwill based upon the finalization of the valuation
of intangible assets and their related deferred tax impacts. In 2004, the deductions from goodwill
principally relate to (1) the income tax benefit realized pursuant to the exercise of stock options assumed
in business acquisitions that were vested at the transaction date and are treated as a reduction in purchase
price when the deductions are realized; (2) adjustments to the carrying value of goodwill based upon the
finalization of the valuation of intangible assets and their related deferred tax impacts; and (3) the
elimination of valuation allowances recorded against purchased net operating losses.
The following table presents the components of our intangible assets with definite lives as of
December 31, 2005 and 2004.
December 31, 2005 December 31, 2004
Weighted Weighted
Average Average
Accumulated Life Accumulated Life
Cost Amortization Net (Years) Cost Amortization Net (Years)
(In thousands) (In thousands)
Distribution agreements $177,426 $(105,502) $ 71,924 5.5 $176,722 $ (78,362) $ 98,360 5.5
Supplier relationship ÏÏÏ 211,670 (150,324) 61,346 4.2 208,776 (104,985) 103,791 3.6
TechnologyÏÏÏÏÏÏÏÏÏÏÏ 187,540 (119,013) 68,527 4.6 187,753 (81,055) 106,698 4.7
Customer lists ÏÏÏÏÏÏÏÏ 25,163 (17,266) 7,897 4.7 21,662 (12,419) 9,243 4.7
Affiliate agreements ÏÏÏ 33,049 (8,289) 24,760 10.0 33,049 (4,984) 28,065 10.0
Domain namesÏÏÏÏÏÏÏÏ 10,871 (1,920) 8,951 9.7 10,865 (31) 10,834 9.7
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47,364 (27,238) 20,126 6.4 50,007 (23,083) 26,924 6.6
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $693,083 $(429,552) $263,531 5.2 $688,834 $(304,919) $383,915 5.0
F-22