Expedia 2011 Annual Report Download - page 93

occupancy tax. The ultimate resolution in all jurisdictions cannot be determined at this time. We have established
a reserve for the potential settlement of issues related to hotel occupancy taxes when determined to be probable
and estimable. See Note 16 — Commitment and Contingencies for further discussion.
New Accounting Pronouncements
In June 2011, the FASB issued new guidance on the presentation of comprehensive income. Specifically,
the new guidance allows an entity to present components of net income and other comprehensive income in one
continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive
statements. The new guidance eliminates the current option to report other comprehensive income and its
components in the statement of changes in stockholders’ equity. While the new guidance changes the
presentation of comprehensive income, there are no changes to the components that are recognized in net income
or other comprehensive income from that of current accounting guidance. This new guidance is effective for
fiscal years and interim periods beginning after December 15, 2011. Upon adoption, we will present our
consolidated financial statements under this new guidance.
NOTE 3 — Acquisitions and Other Investments
During 2011, 2010 and 2009, we acquired a number of travel product and service companies. The following
table summarizes the allocation of the purchase price for all acquisitions made in the three years ended
December 31, 2011, in thousands:
2011 2010 2009
Goodwill $22,522 $13,305 $ 22,442
Intangible assets with definite lives(1) 21,567 5,211 14,897
Net liabilities and non-controlling interests acquired(2) (590) (1,558) (15,265)
Total(3) $43,499 $16,958 $ 22,074
(1) The weighted average life of acquired intangible assets during 2011, 2010 and 2009 was 3.7 years, 3.5 years
and 5.1 years.
(2) Includes cash acquired of $6 million, $1 million and $5 million during 2011, 2010 and 2009.
(3) As of December 31, 2011, $3 million of the total purchase price was accrued with the remainder paid in
cash during the respective years. For 2009, the total purchase price includes noncash consideration of $20
million related to the removal of an equity method investment upon our acquisition of a controlling interest,
as discussed below, with the remainder paid in cash during the year.
The purchase price allocation of the 2011 acquisitions is preliminary for up to 12 months after the
acquisition dates and subject to revision, and any change to the fair value of net assets acquired will lead to a
corresponding change to the purchase price allocable to goodwill on a retroactive basis. The results of operations
of each of the acquired businesses have been included in our consolidated results from each transaction closing
date forward; their effect on consolidated revenue and operating income during 2011, 2010 and 2009 was not
significant.
In 2009, we acquired an additional interest in an equity method investment for $3 million in cash, which
was included within the 2009 total purchase price above, and which resulted in a 60% majority ownership
interest and our consolidation of this entity. In conjunction with our acquisition of additional interest, we
remeasured our previously held equity interest to fair value and recognized a loss of $5 million in other, net
during the period. The fair value of the 40% noncontrolling interest in the company was estimated to be $15
million at the time of acquisition. Both fair value assessments were determined based on various valuation
techniques, including market comparables and discounted cash flow projections. In addition, the noncontrolling
interest contains certain rights, whereby we may acquire and the minority shareholders may sell to us the
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