Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

v2.4.1.9
Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2014
Goodwill and Other Intangible Assets  
Goodwill and Other Intangible Assets

(6)  Goodwill and Other Intangible Assets

Goodwill and Indefinite Lived Intangible Assets

Changes in the carrying amount of goodwill are as follows (amounts in millions):

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Corporate

    

 

 

 

 

TripAdvisor

 

and Other

 

Total

 

Balance at January 1, 2013

 

$

3,429 

 

 —

 

3,429 

 

Acquisition (1)

 

 

30 

 

 —

 

30 

 

Other (2)

 

 

 

 —

 

 

Balance at December 31, 2013

 

 

3,460 

 

 —

 

3,460 

 

Acquisition (1)

 

 

253 

 

 —

 

253 

 

Other (2)

 

 

(22)

 

 —

 

(22)

 

Balance at December 31, 2014

 

$

3,691 

 

 —

 

3,691 

 

 


(1)

Additions to goodwill relate to TripAdvisor’s acquisitions.  See “Note 4 – TripAdvisor Transactions,” for further information.

(2)

Other changes are primarily due to foreign currency translation on goodwill.

As presented in the accompanying consolidated balance sheet, trademarks are the other significant indefinite lived intangible asset and the change from the prior year is due to the change in foreign exchange rates.

Intangible Assets subject to amortization

Intangible assets subject to amortization are comprised of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

December 31, 2013

 

 

    

Weighted

    

 

 

    

 

    

 

    

 

    

 

    

 

 

 

 

Average

 

Gross

 

 

 

Net

 

Gross

 

 

 

Net

 

 

 

Remaining

 

carrying

 

Accumulated

 

carrying

 

carrying

 

Accumulated

 

carrying

 

 

 

Useful Life

 

amount

 

amortization

 

amount

 

amount

 

amortization

 

amount

 

 

 

(in years)

 

(in millions)

 

Customer relationships

 

 

 

979 

 

(456)

 

523 

 

996 

 

(258)

 

738 

 

Other

 

 

 

415 

 

(107)

 

308 

 

227 

 

(57)

 

170 

 

Total

 

 

 

 

1,394 

 

(563)

 

831 

 

1,223 

 

(315)

 

908 

 

 

Amortization of TripAdvisor intangible assets acquired during 2012 is expected to match the usage of the related assets and are being amortized on an accelerated basis as reflected in table below.

Amortization expense was $279 million, $303 million and $13 million for the years ended December 31, 2014,  2013 and 2012, respectively.

The estimated future amortization expense for the next five years related to intangible assets with definite lives as of December 31, 2014, assuming no subsequent impairment of the underlying assets, is as follows (amounts in millions):

 

 

 

 

 

 

2015

 

$

233 

 

2016

 

$

185 

 

2017

 

$

167 

 

2018

 

$

102 

 

2019

 

$

99 

 

 

Impairments

During the years ended December 31, 2014, 2013 and 2012, we recorded impairments related to BuySeasons, presented in the statements of operations, which is included in the Corporate and Other segment. The impairments are primarily related to trademarks and goodwill. Continued declining operating results as compared to budgeted results and certain trends required a quantitative impairment test and a determination of fair value for BuySeasons. This fair value, including the related intangibles and goodwill, was determined using projections of future operating performance and applying a combination of market multiples (market approach) and discounted cash flow (income approach) calculations (Level 3). As of December 31, 2014 the accumulated impairment losses for BuySeasons was $44 million.