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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
69
Finite-Lived Intangibles
Finite-lived intangible assets consisted of the following:
December 31, 2011 December 31, 2010
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(in thousands) (in thousands)
Finite-Lived Intangible Assets:
Customer relationships . . . . . . . . . . $ 8,000 $ (5,375) $ 2,625 $ 12,000 $ (6,625) $ 5,375
Vendor relationships and other . . . . 5,379 (3,842) 1,537 5,779 (3,505) 2,274
Total Finite-Lived Intangible Assets (a) $ 13,379 $ (9,217) $ 4,162 $ 17,779 $ (10,130) $ 7,649
(a) We wrote off the gross carrying amount and corresponding accumulated amortization related to $4.4 million of fully
amortized finite-lived intangible assets whose useful lives expired during the year ended December 31, 2011.
For the years ended December 31, 2011, 2010 and 2009, we recorded amortization expense related to finite-lived
intangible assets in the amount of $3.5 million, $11.2 million and $17.0 million, respectively. These amounts were included in
depreciation and amortization expense in our consolidated statements of operations.
The estimated amortization expense related to our finite-lived intangible assets will be $1.7 million, $1.7 million and
$0.8 million for the years ended December 31, 2012, 2013 and 2014, respectively.
As a result of our decision in the fourth quarter of 2010 to migrate HotelClub to the global technology platform, and as
part of our annual impairment test, we tested the HotelClub finite-lived intangible assets for impairment. We used an income
based valuation approach to estimate the fair value of the finite-lived intangible assets as of October 1, 2010 and determined
that there was no impairment.
5. Accrued Expenses
Accrued expenses consisted of the following:
December 31, 2011 December 31, 2010
(in thousands)
Advertising and marketing (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,461 $ 21,243
Employee costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,220 20,367
Tax sharing liability (see Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,579 19,813
Contract exit costs (b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,017 7,732
Customer service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,337 6,306
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,458 5,900
Technology costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,406 4,894
Customer refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,328 5,126
Airline rebates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,534 4,907
Unfavorable contracts (see Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,440 2,490
Customer incentive costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,861 2,541
Other (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,321 4,479
Total accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 120,962 $ 105,798
(a) We reclassified accrued affiliate commissions of $3.0 million at December 31, 2010 from other to advertising and
marketing to conform to the current year presentation (see Note 1 - Basis of Presentation).
(b) In connection with the early termination of an agreement with Trilegiant Corporation (now Affinion Group) in 2007, we
are required to make termination payments totaling $18.5 million from January 1, 2008 to December 31, 2016. We
accreted interest expense of $0.6 million, $1.0 million and $1.3 million related to the termination liability for the years