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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Acquisitions (Continued)
2005 Acquisitions
ebookers On February 28, 2005, Cendant acquired ebookers, a leading full service travel company in Europe. ebookers offered a wide range of discount
and standard price travel products and services including air travel, hotels, car rentals, cruises and travel insurance. The table below summarizes the final
purchase price allocation:
Amount
(in millions)
Cash $ 77
Other current assets 37
Property and equipment 24
Intangibles assets(a) 187
Goodwill(b) 369
Other non-current assets 13
Total assets 707
Total current liabilities 157
Total non-current liabilities 96
Total liabilities 253
Fair value of net assets acquired $ 454
(a)
This amount represents $135 million of indefinite-lived trademarks associated with the exclusive right to use the ebookers name,
$41 million of customer relationships with an estimated weighted-average life of five years and $11 million of other intangible
assets with an estimated weighted-average life of ten years.
(b)
Cendant based the net purchase price for the acquisition on historical as well as forecasted performance metrics, which included
earnings before interest, tax, depreciation and amortization ("EBITDA") and cash flow, as well as synergies expected from the
benefits of expanding its online presence geographically. As a result, the predominant portion of the purchase price was based on
the expected financial performance of the business, rather than the value of the identified net assets at the time of the acquisition.
As a result, a significant amount of the purchase price was allocated to goodwill.
As part of the ebookers acquisition, Cendant formally committed to various strategic initiatives primarily aimed at creating synergies between the cost
structures of Orbitz and ebookers, which were expected to be achieved through the involuntary termination of certain ebookers employees and the termination of
certain lease obligations. Cendant formally communicated the termination of employment to approximately 110 employees, representing a wide range of
employee groups, and as of December 31, 2005, substantially all of these employees had been terminated. As a result of these actions, Cendant established
personnel-related and facility-related liabilities of $6 million and $4 million, respectively. As of December 31, 2005, cash payments of $6 million had been made,
which reduced the personnel-related liability to almost nil. Additionally, during 2005, other adjustments of $1 million were made to the facility-related liability,
which reduced the facility-related liabilities to $3 million as of December 31, 2005. During 2006, cash payments of $1 million and other adjustments
80
Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008