Expedia 2007 Annual Report Download - page 85

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The following table presents the changes in goodwill:
2007 2006
(In thousands)
Beginning Balance as of January 1 ............................. $5,861,292 $5,859,730
Additions .............................................. 140,629 12,483
Deductions............................................. (9,402) (28,702)
Foreign exchange translation ............................... 13,819 17,781
Ending Balance as of December 31 ............................ $6,006,338 $5,861,292
As of December 31, 2007 and 2006, approximately 81% and 80% of our goodwill was assigned to our
North American segment and approximately 17% to our European segment at each balance sheet date.
In 2007, the additions to goodwill relate primarily to our acquisitions as described in Note 3 — Acquisitions
and Other Investments as well as the basis adjustments resulting from the implementation of FIN 48. In 2006, the
additions to goodwill relate primarily to the remaining purchase of TripAdvisor shares and other miscellaneous
business acquisitions. The deductions from goodwill for both 2007 and 2006 primarily 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.
The following table presents the components of our intangible assets with definite lives as of
December 31, 2007 and 2006:
Cost
Accumulated
Amortization Net
Weighted
Average
Life Cost
Accumulated
Amortization Net
Weighted
Average
Life
December 31, 2007 December 31, 2006
(In thousands) (In years) (In thousands) (In years)
Distribution
agreements ......... $177,426 $(154,091) $ 23,335 5.5 $177,426 $(132,643) $ 44,783 5.5
Supplier relationship . . . . 212,514 (206,464) 6,050 4.2 212,101 (186,399) 25,702 4.2
Technology . . ........ 203,028 (183,082) 19,946 4.5 196,197 (157,186) 39,011 4.5
Customer lists ........ 26,549 (20,723) 5,826 4.6 25,396 (19,175) 6,221 4.7
Affiliate agreements . . . . 33,049 (14,899) 18,150 10.0 33,049 (11,594) 21,455 10.0
Domain names ........ 10,940 (5,729) 5,211 5.7 10,871 (3,812) 7,059 5.7
Other ............... 61,809 (36,816) 24,993 6.0 49,052 (31,032) 18,020 6.5
Total ............. $725,315 $(621,804) $103,511 5.0 $704,092 $(541,841) $162,251 5.1
Amortization expense was $77.6 million, $110.8 million and $126.1 million for the years ended December 31,
2007, 2006 and 2005. The estimated future amortization expense related to intangible assets with definite lives as
of December 31, 2007, assuming no subsequent impairment of the underlying assets, is as follows:
Amortization of
Intangible Assets
(In thousands)
2008 ........................................................... $ 57,166
2009 ........................................................... 17,975
2010 ........................................................... 9,736
2011 ........................................................... 7,584
2012 ........................................................... 6,317
2013 and thereafter ................................................. 4,733
Total.......................................................... $103,511
F-19
Expedia, Inc.
Notes to Consolidated Financial Statements — (Continued)