Orbitz 2014 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 of the 2014 Orbitz annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
64
As a result of our decision during the first quarter of 2013 to exit the Away Network business, we recorded a $2.6
million non-cash charge to impair property and equipment associated with that business. This charge was included in
Impairment of property and equipment and other assets in our Consolidated Statement of Operations.
5. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill during the years ended December 31, 2014 and 2013 were as follows:
Amount
(in thousands)
Balance at January 1, 2013, net of accumulated impairment of $832,626 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 345,388
Balance at December 31, 2013, net of accumulated impairment of $832,626 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345,388
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,710
Balance at December 31, 2014, net of accumulated impairment of $832,626 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 351,098
Trademarks and trade names, which are not subject to amortization, totaled $89.9 million and $90.4 million as of
December 31, 2014 and 2013, respectively.
Impairment of Goodwill and Trademarks and Trade Names
We estimate the fair value of our reporting units to which goodwill is allocated using generally accepted valuation
methodologies, including market and income based approaches, and relevant data available through and as of December 31. We
use the income based approach to estimate the fair value of our reporting units that have goodwill balances and use the market
approach to corroborate these estimates. We considered the market approach from a reasonableness standpoint by comparing
the multiples of guideline companies with the implied multiples from the income based approach, and we also consider our
market capitalization to assess reasonableness of the income based approach valuations. The key assumptions we use in
determining the estimated fair value of our reporting units are the terminal growth rates, forecasted cash flows and the discount
rates.
At December 31 we used an income based valuation approach to separately estimate the fair values of all of our
trademarks and trade names and compared those estimates to the respective carrying values. The key assumptions we use in
determining the estimated fair value of our trademarks and trade names are the terminal growth rates, forecasted revenues,
assumed royalty rates and discount rates. Significant judgment is required to select these inputs based on observed market data.
There were no impairment charges in 2014 and 2013.
In connection with our annual impairment test as of December 31, 2012, and as a result of lower than expected
performance and future cash flows for the Americas reporting unit, we recorded a non-cash impairment charge of $319.5
million during the year ended December 31, 2012, of which $301.9 million was related to the goodwill of the Americas
reporting unit and $17.6 million was related to the trademarks and trade names associated with Orbitz and CheapTickets. These
charges were included in Impairment of goodwill and intangible assets in our Consolidated Statements of Operations.
Finite-Lived Intangibles
The changes in the carrying amounts of finite-lived intangible assets during the years ended December 31, 2014 and 2013
were as follows: