Priceline 2011 Annual Report Download - page 86

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A substantial amount of the Company’s goodwill relates to its acquisition of Booking.com. In addition, the acquisition
of TravelJigsaw Holdings Limited in May 2010 (now known as rentalcars.com) increased goodwill by $105.3 million (refer to
Note 13) and contingent purchase price consideration recorded in December 2010 related to the acquisition of priceline.com
Mauritius Company Limited (formerly known as Agoda) in 2007 increased goodwill by $60.1 million (refer to Note 16).
As of September 30, 2011, the Company performed its annual goodwill impairment testing using standard valuation
techniques. The estimated fair value of Booking.com, as well as the Company’s other reporting units, substantially exceeded
their respective carrying values. Since the annual impairment test, there have been no events or changes in circumstances to
indicate a potential impairment.
10. OTHER ASSETS
Other assets at December 31, 2011 and 2010 consist of the following (in thousands):
Deferred debt issuance costs
Other
Total
2011
$ 10,560
12,930
$ 23,490
2010
$ 9,576
4,842
$ 14,418
Deferred debt issuance costs arose from (i) a $1.0 billion revolving credit facility in October 2011; (ii) the Company’s
issuance, in March 2010, of the $575.0 million aggregate principal amount of 1.25% Convertible Senior Notes due 2015 (the
"2015 Notes"); (iii) the Company’s issuance, in September 2006, of $172.5 million aggregate principal amount of 2013 Notes;
and (iv) a $175.0 million revolving credit facility in September 2007. Deferred debt issuance costs are being amortized using
the effective interest rate method over the term of approximately five years, except for the 2013 Notes, which were amortized
over their term of seven years. The period of amortization for the Company’s debt issue costs was determined at inception of
the related debt agreements to be the stated maturity date. Unamortized debt issuance costs written off to interest expense in
the year ended December 31, 2010 related to early conversion of convertible debt amounted to $1.4 million. Unamortized debt
issuance costs written off in the year ended December 31, 2011 for debt conversions were insignificant.
11. DEBT
Revolving Credit Facility
In October 2011, the Company entered into a $1.0 billion five-year unsecured revolving credit facility with a group of
lenders. Borrowings under the revolving credit facility will bear interest, at the Company's option, at a rate per annum equal to
either (i) the adjusted LIBOR for the interest period in effect for such borrowing plus an applicable margin ranging from 1.00%
to 1.50%; or (ii) the greatest of (a) JPMorgan Chase Bank, National Association's prime lending rate, (b) the federal funds rate
plus 0.50%, and (c) an adjusted LIBOR for an interest period of one month plus 1.00%, plus an applicable margin ranging from
0.00% to 0.50%. Undrawn balances available under the revolving credit facility are subject to commitment fees at the
applicable rate ranging from 0.10% to 0.25%.
The revolving credit facility provides for the issuance of up to $100 million of letters of credit as well as borrowings
of up to $50 million on same-day notice, referred to as swingline loans. Borrowings under the revolving credit facility may be
made in U.S. dollars, Euros, Pounds Sterling and any other foreign currency agreed to by the lenders. The proceeds of loans
made under the facility will be used for working capital and general corporate purposes. As of December 31, 2011, there were
no borrowings under the facility, and approximately $1.9 million of letters of credit were issued under the facility.
Upon entering into this new revolving credit facility, the Company terminated its $175.0 million five-year committed
revolving credit facility entered into in September 2007. This revolving credit facility provided for the issuance of up to $50.0
million of letters of credit as well as swingline loans. As of December 31, 2010, there were no borrowings outstanding and
approximately $1.6 million of letters of credit issued under this revolving credit facility. Undrawn balances available under the
revolving credit facility were subject to commitment fees at the applicable rate ranging from 0.25% to 0.375%.