Expedia 2015 Annual Report Download - page 105

In April 2015, the FASB issued an ASU that requires debt issuance costs related to a recognized debt
liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability,
consistent with debt discounts. The guidance is effective for annual and interim reporting periods beginning after
December 15, 2015, but early adoption is permitted. We anticipate adopting this new guidance on January 1,
2016 with no material impact on our consolidated financial statements.
In April 2015, the FASB issued guidance to clarify the accounting for fees paid by a customer in a cloud
computing arrangement. This standard clarifies whether a customer should account for a cloud computing
arrangement as an acquisition of a software license or as a service arrangement by providing characteristics that a
cloud computing arrangement must have in order to be accounted for as a software license acquisition. This
guidance is effective for annual periods beginning after December 15, 2015, but early adoption is permitted.
Upon adoption, an entity may apply the new guidance prospectively or retrospectively to all prior periods
presented in the financial statements. We anticipate adopting this new guidance prospectively on January 1, 2016
with no material impact on our consolidated financial statements.
In January 2016, the FASB issued new guidance related to accounting for equity investments, financial
liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments.
In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing
deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is
effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017.
We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial
statements.
NOTE 3 — Acquisitions and Other Investments
2015 Acquisition and Other Investment Activity
HomeAway Acquisition. On December 15, 2015, we completed our acquisition of HomeAway, Inc.,
including all of its brands, for total purchase consideration of $3.6 billion primarily in cash and Expedia common
stock. With Expedia’s expertise in powering global transactional platforms and our industry-leading technology
capabilities, we will partner with HomeAway to accelerate their shift from a classified marketplace to an online,
transactional model to create even better experiences for HomeAway’s global traveler audience and the owners
and managers of its properties around the world.
Each outstanding share of common stock of HomeAway immediately prior to the acquisition was
exchanged for $10.15 in cash and 0.2065 of a share of Expedia common stock, with cash paid in lieu of fractional
shares. The preliminary aggregate purchase consideration for HomeAway is as follows (in thousands):
Fair value of shares of Expedia common stock issued to HomeAway
stockholders and equity award holders $2,515,755
Cash consideration paid to HomeAway stockholders and equity award holders 1,027,061
Replacement restricted stock units and stock options attributable to pre-
acquisition service 19,513
Total purchase consideration $3,562,329
The fair value of common stock shares issued was based on the closing price of Expedia’s common stock at
December 14, 2015 and included the fair value of shares of Expedia common stock issued to (i) HomeAway
stockholders based on approximately 97 million HomeAway shares outstanding as of December 14, 2015 and
(ii) holders of equity awards vested as of December 14, 2015. Approximately 20 million shares of Expedia
common stock were issued in connection with the acquisition of HomeAway. Purchase consideration also
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