Expedia 2014 Annual Report Download - page 102

NOTE 3 — Acquisitions
2014 Acquisition Activity
In November 2014, we acquired Wotif Group, an Australian-based online travel company. The total
consideration received by Wotif Group shareholders of $703 million Australian dollars (“A$”) or A$3.30 per
share (approximately $612 million or $2.87 per share based on November 13, 2014 exchange rates) was
comprised of A$51 million special dividend distributed by the Wotif Group to its shareholders prior to the
acquisition by Expedia, Inc. and A$652 million (or approximately $568 million) in cash from Expedia, Inc. The
Wotif Group adds to our collection of travel’s most trusted brands and enhances our supply in the Asia-Pacific
region, while allowing Expedia to expose the Wotif Group to our world-class technology and its customers to our
extensive global supply.
The aggregate purchase price consideration of $568 million was allocated to the fair value of assets acquired
and liabilities assumed as follows, in thousands:
Goodwill $350,093
Intangible assets with indefinite lives 125,762
Intangible assets with definite lives(1) 138,292
Net liabilities(2) (43,429)
Deferred tax liabilities (2,908)
Total $567,810
(1) Acquired definite-lived intangible assets primarily consist of supplier contracts and customer relationships
and have estimated useful lives of between less than one year and 10 years with a weighted average life of
7.8 years.
(2) Includes cash acquired of $36 million.
The goodwill of $350 million is primarily attributed to assembled workforce and operating synergies. The
goodwill has been allocated to the Leisure segment and is expected to be deductible for tax purposes.
Acquisition-related costs were expensed as incurred within general and administrative expenses and were
approximately $7 million.
During 2014, we completed three other acquisitions, including a leading online car rental reservation
company in Europe, for a total consideration of $85 million, which included cash paid of $77 million and
existing equity interest of $7 million. As a result of these acquisitions, we acquired net liabilities of $19 million,
including cash of $48 million, as well as recorded deferred tax liabilities of $17 million, $70 million in goodwill
and $51 million of intangible assets with definite lives with a weighted average amortization life of 6.1 years. In
conjunction with our acquisition of consolidating interest in one of the companies, we remeasured our previously
held equity interest to fair value at the acquisition date and recognized a gain of $3 million in other, net during
the period.
Business combination accounting is preliminary and subject to revision while we accumulate all relevant
information regarding the fair values of net assets acquired, and any change to the fair value of net assets
acquired would be expected to lead to a corresponding change to the amount of goodwill recorded on a
retroactive basis. The results of operations of the acquired companies, including the Wotif Group, have been
included in our consolidated results from the transaction closing dates forward; the effect on consolidated
revenue and operating income during 2014 was not significant. Pro forma results of operations have not been
presented as such pro forma financial information would not be materially different from historical results.
2013 Acquisition Activity
During 2013, we completed the purchase of a 63% equity position (61.6% on a fully diluted basis) in trivago
GmbH, a leading hotel metasearch company based in Germany. trivago was acquired due to the quality and
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