Barnes and Noble 2011 Annual Report Download - page 53

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Cash Paid $ 15,729
Fair value of contingent consideration 8,165
Fair value of total consideration $ 23,894
Allocation of purchase price
Cash $ 255
Trade Name 340
Customer Relationships 2,410
Technology 5,610
Goodwill 18,051
Total assets acquired $ 26,666
Liabilities assumed (2,772)
$ 23,894
The fair value of the contingent consideration arrange-
ment of $8,165 was determined by estimating the expected
(probability–weighted) earn-out payments discounted
to present value. The actual fi nal earn-out payments for
Fictionwise were $7,508 and $2,612 for fi scal 2011 and fi s-
cal 2010, respectively.
Due to the purchase price allocation not being fi nalized at
the time of the Fictionwise acquisition, the excess purchase
price over net assets acquired of $15,941 had been allocated
to goodwill. Final purchase accounting adjustments to
goodwill of $2,110 were recorded during fi scal 2010. The
goodwill recognized is deductible for income tax purposes.
Acquired intangible assets consisted of the trade name,
technology and customer relationships. The trade name is
being amortized on a straight-line basis over three years.
Acquired technology is being amortized on a straight-line
basis over a range of fi ve to ten years. Customer relation-
ships are being amortized using an accelerated method over
their fi ve-year useful life. The Company recorded $1,445
and $2,176 in amortization related to these intangibles dur-
ing fi scal 2011 and fi scal 2010, respectively.
The Fictionwise results of operations for the period sub-
sequent to the Fictionwise acquisition date are included in
the consolidated fi nancial statements. The pro forma eff ect
assuming the acquisition of Fictionwise at the beginning of
the transition period is not material.
2011 Annual Report 51