Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

v3.6.0.2
Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2016
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, 2015

 

$

3,691

 

 —

 

3,691

 

Acquisition (1)

 

 

17

 

 —

 

17

 

Other (2)

 

 

(19)

 

 —

 

(19)

 

Balance at December 31, 2015

 

 

3,689

 

 —

 

3,689

 

Acquisition (1)

 

 

17

 

 —

 

17

 

Other (2)

 

 

(12)

 

 —

 

(12)

 

Balance at December 31, 2016

 

$

3,694

 

 —

 

3,694

 

 


(1)

Additions to goodwill relate to TripAdvisor’s acquisitions.  See “Note 4 – TripAdvisor, Inc. Acquisitions and Dispositions,” for further information.

(2)

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

As presented in the accompanying consolidated balance sheets, 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, 2016

 

December 31, 2015

 

 

    

Weighted

    

 

 

    

 

    

 

    

 

    

 

    

 

 

 

 

Average

 

Gross

 

 

 

Net

 

Gross

 

 

 

Net

 

 

 

Remaining

 

carrying

 

Accumulated

 

carrying

 

carrying

 

Accumulated

 

carrying

 

 

 

Useful Life

 

amount

 

amortization

 

amount

 

amount

 

amortization

 

amount

 

 

 

in years

 

amounts in millions

 

Customer relationships

 

5

 

 

866

 

(615)

 

251

 

965

 

(599)

 

366

 

Other

 

3

 

 

480

 

(244)

 

236

 

444

 

(185)

 

259

 

Total

 

 

 

 

1,346

 

(859)

 

487

 

1,409

 

(784)

 

625

 

 

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

Amortization expense was $198 million, $245 million and $279 million for the years ended December 31, 2016,  2015 and 2014, respectively.

The estimated future amortization expense for the next five years related to intangible assets with definite lives as of December 31, 2016, assuming no subsequent impairment of the underlying assets, is as follows (amounts in millions):

 

 

 

 

 

 

2017

 

$

176

 

2018

 

$

118

 

2019

 

$

115

 

2020

 

$

109

 

2021

 

$

94

 

 

Impairments

During the years ended December 31, 2015 and 2014, 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. 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, 2016 the accumulated impairment losses for BuySeasons was $46 million.