Overstock.com 2006 Annual Report Download - page 95

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fair value of net tangible and intangible assets acquired from Ski West and as a result, the Company recorded goodwill in connection
with this transaction.
Effective upon the closing, Ski West became a wholly-owned subsidiary of the Company, integrated the Ski West travel offerings
with the Company's existing travel offerings and changed its name to OTravel.com, Inc.
Purchase Price Allocations
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed on July 1, 2005 (in
thousands):
July 1,
2005
Cash $ 491
Current assets 986
Property and equipment 263
Goodwill 10,385
Intangible assets 14,313
Other assets 9
Assets acquired 26,447
Liabilities assumed (1,336)
Net assets acquired $25,111
The excess of the purchase price over the fair values of assets acquired and liabilities assumed was allocated to goodwill. Any
required earn out payments would further increase goodwill at the time the target operating results for the next four years are
successfully achieved. Of the $10.4 million initially recorded in goodwill, the full amount is expected to be deductible for tax
purposes, to the extent the Company has sufficient taxable income in the future.
The amounts allocated to intangible assets, and their estimated useful lives, was determined by management with the assistance
of an independent appraisal and were attributed to the following categories (in thousands):
Years
Enterprise information system $ 860 5
Customer list 2,339 4
Supplier contracts 6,271 12
Web sites and destination portal 2,887 5
Non-competition agreements 1,956 2
$14,313
During the years ended December 31, 2005 and 2006, the Company recorded amortization expense attributable to the above
intangible assets of approximately $1.3 million and $2.7 million, which is included in loss from discontinued operations.
Pro forma results of operations have not been presented because the effect of the acquisition was not material to the results of
prior periods presented.
Discontinued Operations
During the fourth quarter of 2006, in conjuction with the facilities consolidation and restructuring program described in Note 4,
management decided to sell OTravel within a twelve month period, and the
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