Expedia 2015 Annual Report Download - page 107

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Both the Convertible Notes and the Warrants outstanding as of December 31, 2015 were included in accrued
expenses and other current liabilities.
HomeAway was consolidated into our financial statements starting on the acquisition date and we have
recognized a related $20 million in revenue and $14 million in operating losses, including fees related to the
acquisition that are not allocated to the segment, for 2015.
In connection with the acquisition, HomeAway incurred fees paid to financial advisors totaling
approximately $33 million, which were contingent upon closing and were excluded from both Expedia’s
consolidated statement of operations and the pre-combination financial statements of HomeAway.
Orbitz Acquisition. On September 17, 2015, we completed our acquisition of Orbitz Worldwide, Inc.,
including all of its brands, including Orbitz, ebookers, HotelClub, CheapTickets, Orbitz Partner Network and
Orbitz for Business, for a total purchase consideration of $1.8 billion. The acquisition provides Expedia the
opportunity to deliver a better customer experience to Orbitz’ loyal customer base and to further enhance the
marketing and distribution capabilities we offer to our global supply partners.
The purchase consideration consisted primarily of $1.4 billion in cash, or $12 per share for all shares of
Orbitz common stock outstanding as of the purchase date, as well as the settlement of $432 million of pre-
existing Orbitz debt at the closing of the acquisition. Purchase consideration also included $17 million for the
portion of certain unvested employee restricted stock unit awards of Orbitz attributable to pre-combination
service, which were replaced with Expedia awards in conjunction with the acquisition and measured at fair value
on the acquisition date. The fair value for the portion of the awards attributable to post-combination service was
$49 million, net of estimated forfeitures, of which $34 million was recognized during 2015.
The purchase price allocation was based on a preliminary valuation of the assets acquired and liabilities
assumed and is subject to revision as more detailed analyses are completed and additional information about the
fair value of assets acquired and liabilities assumed become available. The final allocation may include changes
to the acquisition date fair value of intangible assets, goodwill, deferred taxes, deferred revenue, accounts
receivable, loyalty liabilities and other current liabilities as well as other items. The following summarizes the
preliminary allocation of the purchase price for Orbitz, in thousands:
Cash consideration for shares $1,362,362
Settlement of Orbitz debt 432,231
Replacement restricted stock units attributable to pre-acquisition service 16,717
Other consideration 2,214
Total purchase consideration $1,813,524
Cash $ 194,515
Accounts receivable, net(1) 147,517
Other current assets 33,728
Long-term assets 115,163
Intangible assets with definite lives(2) 515,384
Intangible assets with indefinite lives(3) 166,800
Goodwill 1,443,521
Current liabilities (635,209)
Other long-term liabilites (54,627)
Deferred tax liabilities, net (113,268)
Total $1,813,524
(1) Gross accounts receivable was $157 million, of which $9 million was estimated to be uncollectible.
F-22