Note 3 – Acquisitions and Dispositions

Business Acquisitions. During the second quarter of 2012, we acquired a travel management company in the Nordics. The following table summarizes the fair value of the assets acquired and liabilities assumed in conjunction with this acquisition, in thousands:


	September 30, 2012
Goodwill	$	127,029
Intangible assets with definite lives(1)		110,284
Net liabilities(2)		(26,170	)

Total	$	211,143

(1)	The weighted average life of acquired intangible assets was 8.1 years.

(2)	Includes cash acquired of $13 million.

The business combination accounting is preliminary for up to 12 months after the acquisition date and subject to revision, and any change to the fair value of net assets acquired would be expected to lead to a corresponding change to the amount of goodwill recorded on a retroactive basis. The results of operations of the acquired business has been included in our consolidated results from transaction closing date forward; its effect on consolidated revenue and operating income during the three and nine months ended September 30, 2012 was not significant. For the nine months ended September 30, 2012, the acquisition accounted for approximately 2% of consolidated revenue and 1% of consolidated operating income.

Discontinued Operations. On December 20, 2011, we completed the spin-off of TripAdvisor, Inc., which included its flagship brand as well as 18 other travel media brands. Accordingly, we have presented the financial condition and results of operations of our former TripAdvisor Media Group segment in the consolidated financial statements through December 20, 2011 as discontinued operations. Additionally, the first quarter 2012 loss incurred to extinguish our 8.5% senior notes due 2016 (the “8.5% Notes”) as a result of the spin-off was recorded as discontinued operations. See below for a full description of the extinguishment. Financial data for the discontinued operations for the three and nine months ended September 30, 2012 and 2011 was as follows:


	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012			2011
	(In thousands)
Revenue	$	—	$	180,802		$	—		$	498,330
Income (loss) before income taxes		—		68,746			(37,568	)		209,217
Provision for income taxes		1,543		(30,180	)		15,222			(71,588	)

Net income (loss)		1,543		38,566			(22,346	)		137,629
Net income attributable to noncontrolling interest		—		21			—			(118	)

Net income (loss) attributable to discontinued operations	$	1,543	$	38,587		$	(22,346	)	$	137,511

Earnings (loss) per share:
Basic	$	0.01	$	0.28		$	(0.17	)	$	1.01
Diluted		0.01		0.28			(0.16	)		0.99
Shares used in computing earnings per share:
Basic		135,968		136,176			133,919			136,632
Diluted		141,423		139,684			139,650			139,271

The indenture governing our $400 million aggregate principal amount of 8.5% Notes contained certain covenants that could have restricted implementation of the spin-off. On December 20, 2011, prior to consummation of the spin-off, we gave “Notice of Redemption” to the bondholders, the effect of which was the bonds became due and payable on the redemption date at the redemption price. The redemption price was equal to 100% of the principal amount plus a make-whole premium as of, and accrued and unpaid interest to, the redemption date. The redemption date was defined as 30 days after the Notice of Redemption was given. In order to complete the Notice of Redemption, we were required to irrevocably deposit, with the Trustee, funds sufficient to pay the redemption price plus accrued interest on the 8.5% Notes (approximately $451 million). The 8.5% Notes were fully redeemed on January 19, 2012, the redemption date, for approximately $450 million. In connection with the redemption, we incurred a pre-tax loss from early extinguishment of debt of approximately $38 million (or $24 million net of tax), which included an early redemption premium of $33 million and the write-off of $5 million of unamortized debt issuance and discount costs. This loss was recorded within discontinued operations in the first quarter of 2012, as that was the period in which the bonds were legally extinguished.

As a result of the above, at December 31, 2011, we had a current asset of discontinued operations of $456 million primarily related to the deposit for the redemption price of the 8.5% Notes as well as a current liability of discontinued operations of $420 million for the 8.5% Notes, accrued interest expense related to the 8.5% Notes and accrued spin-off costs. At September 30, 2012, the current asset of discontinued operations included a $16 million tax benefit primarily related to the loss on the extinguishment of debt.