EBAY » Topics » Amortization of Acquired Intangible Assets

This excerpt taken from the EBAY 10-K filed Feb 17, 2010.

Amortization of Acquired Intangible Assets

 

     2007     2008     2009  
     (In thousands, except percentages)  

Amortization of acquired intangible assets

   $ 204,104      $ 234,916      $ 262,686   

As a percentage of net revenues

     2.7     2.8     3.0

From time to time we have purchased, and we expect to continue to purchase, assets or businesses that are intended to help accelerate category and geographic expansion, increase the features, functions, and formats available to our users and maintain a leading role in ecommerce and online payments. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired amortizable intangibles during 2009 and 2008 compared to prior years is due to the business acquisitions consummated during 2009, 2008 and 2007. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in the amortization expense in future periods. The sale of our Communications business segment, Skype, will reduce amortization of acquired intangibles over the course of the next year. See “Note 5 — Goodwill and Intangible Assets” to the consolidated financial statements included in this report.

This excerpt taken from the EBAY 10-Q filed Apr 28, 2009.

Amortization of Acquired Intangible Assets

 

     Three Months Ended  
     March 31, 2008     March 31, 2009  
     (In thousands, except percentages)  

Amortization of acquired intangible assets

   $ 54,834     $ 63,468  

As a percentage of net revenues

     2.5 %     3.1 %

From time to time we have purchased, and we expect to continue to purchase, assets or businesses to accelerate category and geographic expansion, improve the features, functions, and formats available to our users and maintain a leading role in ecommerce, online payments and online communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in our amortization expense in future periods. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired amortizable intangibles during the first quarter of 2009, compared to the same period of the prior year, was due to the business acquisitions that we completed during the year ended December 31, 2008.

These excerpts taken from the EBAY 10-K filed Feb 20, 2009.
Amortization of Acquired Intangible Assets
 
                         
    2006     2007     2008  
    (in thousands, except percentages)  
 
Amortization of acquired intangible assets
  $ 197,078     $ 204,104     $ 234,916  
As a percentage of net revenues
    3.3 %     2.7 %     2.8 %
 
From time to time we have purchased, and we expect to continue to purchase, assets or businesses to accelerate category and geographic expansion, increase the features, functions, and formats available to our users and maintain a leading role in ecommerce, online payments and online communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in the amortization expense in future periods. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired amortizable intangibles during 2008 and 2007 compared to prior years is due to the business acquisitions consummated during 2008, 2007 and 2006. See “Note 3 — Business Combinations, Goodwill and Intangible Assets” to the consolidated financial statements included in this report.
 
Amortization
of Acquired Intangible Assets



 







































































                         

 

 

2006

 

 

2007

 

 

2008

 

 

 

(in thousands, except percentages)

 
 


Amortization of acquired intangible assets


 

$

197,078

 

 

$

204,104

 

 

$

234,916

 


As a percentage of net revenues


 

 

3.3

%

 

 

2.7

%

 

 

2.8

%






 



From time to time we have purchased, and we expect to continue
to purchase, assets or businesses to accelerate category and
geographic expansion, increase the features, functions, and
formats available to our users and maintain a leading role in
ecommerce, online payments and online communications. These
purchase transactions generally result in the creation of
acquired intangible assets with finite lives and lead to a
corresponding increase in the amortization expense in future
periods. We amortize intangible assets over the period of
estimated benefit, using the straight-line method and estimated
useful lives ranging from one to eight years. The increase in
amortization of acquired amortizable intangibles during 2008 and
2007 compared to prior years is due to the business acquisitions
consummated during 2008, 2007 and 2006. See
“Note 3 — Business Combinations, Goodwill
and Intangible Assets” to the consolidated financial
statements included in this report.


 




This excerpt taken from the EBAY 10-Q filed Oct 23, 2008.
Amortization of Acquired Intangible Assets
 
                                                 
    Three Months Ended           Nine Months Ended        
    September 30,
    September 30,
    Percent
    September 30,
    September 30,
    Percent
 
    2007     2008     Change     2007     2008     Change  
    (In thousands, except percentages)  
 
Amortization of acquired intangible assets
  $ 51,888     $ 52,720       2 %   $ 150,791     $ 162,472       8 %
As a percentage of net revenues
    2.7 %     2.5 %             2.7 %     2.5 %        
 
From time to time we have purchased, and we expect to continue to purchase, assets or businesses to accelerate category and geographic expansion, increase the features, functions and formats available to our users and maintain a leading role in ecommerce, payments and communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in our amortization expense in future periods. We amortize intangible assets over the period of estimated benefit using the straight-line method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired intangibles during the third quarter and first nine months of 2008 as compared to the same periods of the prior year is due primarily to the business acquisitions we consummated during 2007 and 2008. Significant acquisitions completed during the first nine months of 2008 include the acquisition of Fraud Sciences.
 
For the remainder of 2008, compared to the same period of 2007, we expect amortization of acquired intangible assets to increase due to the acquisitions of Den Blå Avis and Bilbasen and the anticipated acquisition of Bill Me Later.
 
This excerpt taken from the EBAY 10-Q filed Jul 24, 2008.
Amortization of Acquired Intangible Assets
 
                                                 
    Three Months Ended       Six Months Ended    
    June 30,
  June 30,
  Percent
  June 30,
  June 30,
  Percent
    2007   2008   Change   2007   2008   Change
    (In thousands, except percentages)
 
Amortization of acquired intangible assets
  $ 51,554     $ 54,918       7 %   $ 98,903     $ 109,752       11 %
As a percentage of net revenues
    2.8 %     2.5 %             2.7 %     2.5 %        
 
From time to time we have purchased, and we expect to continue to purchase, assets or businesses to accelerate category and geographic expansion, increase the features, functions and formats available to our users and maintain a leading role in ecommerce, payments and communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in our amortization expense in future periods. We amortize intangible assets over the period of estimated benefit using the straight-line


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method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired intangibles during the second quarter and first six months of 2008 as compared to the same periods of the prior year is due primarily to the business acquisitions we consummated during 2007 and 2008. Acquisitions completed during the first six months of 2008 include the acquisition of Fraud Sciences.
 
Amortization of acquired intangible assets will likely increase should we continue to make acquisitions in the future.
 
This excerpt taken from the EBAY 10-Q filed Apr 24, 2008.
Amortization of Acquired Intangible Assets
 
                 
    Three Months Ended
    March 31,
  March 31,
    2007   2008
    (In thousands, except percentages)
 
Amortization of acquired intangible assets
  $ 47,349     $ 54,834  
As a percentage of net revenues
    2.7 %     2.5 %
 
From time to time we have purchased, and we expect to continue to purchase, assets or businesses to accelerate category and geographic expansion, increase the features, functions and formats available to our users and maintain a leading role in ecommerce, payments and communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in our amortization expense in future periods. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired intangibles during the first quarter of 2008 as compared to the same period of the prior year is due primarily to the business acquisitions we consummated during 2007 and 2008. In the first quarter of 2008, we acquired Fraud Sciences.
 
Amortization of acquired intangible assets will likely increase should we continue to make acquisitions in the future.
 
This excerpt taken from the EBAY 10-Q filed Apr 24, 2008.
Amortization of Acquired Intangible Assets
 
                 
    Three Months Ended
    March 31,
  March 31,
    2007   2008
    (In thousands, except percentages)
 
Amortization of acquired intangible assets
  $ 47,349     $ 54,834  
As a percentage of net revenues
    2.7 %     2.5 %
 
From time to time we have purchased, and we expect to continue to purchase, assets or businesses to accelerate category and geographic expansion, increase the features, functions and formats available to our users and maintain a leading role in ecommerce, payments and communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in our amortization expense in future periods. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired intangibles during the first quarter of 2008 as compared to the same period of the prior year is due primarily to the business acquisitions we consummated during 2007 and 2008. In the first quarter of 2008, we acquired Fraud Sciences.
 
Amortization of acquired intangible assets will likely increase should we continue to make acquisitions in the future.
 
These excerpts taken from the EBAY 10-K filed Feb 29, 2008.
Amortization of Acquired Intangible Assets
 
                         
    2005     2006     2007  
    (in thousands, except percentages)  
 
Amortization of acquired intangible assets
  $ 128,941     $ 197,078     $ 204,104  
As a percentage of net revenues
    2.8 %     3.3 %     2.7 %
 
From time to time we have purchased, and we expect to continue the purchase of, assets or businesses to accelerate category and geographic expansion, increase the features, functions, and formats available to our users and maintain a leading role in online ecommerce, payments and communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in the amortization expense in future periods. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired amortizable intangibles during 2007 and 2006 compared to prior years is due to the business acquisitions consummated during 2007, 2006 and 2005.
 
Amortization of acquired intangible assets will increase as we make additional acquisitions in the future.


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Table of Contents

Amortization
of Acquired Intangible Assets



 







































































                         

 

 

2005

 

 

2006

 

 

2007

 

 

 

(in thousands, except percentages)

 
 


Amortization of acquired intangible assets


 

$

128,941

 

 

$

197,078

 

 

$

204,104

 


As a percentage of net revenues


 

 

2.8

%

 

 

3.3

%

 

 

2.7

%






 



From time to time we have purchased, and we expect to continue
the purchase of, assets or businesses to accelerate category and
geographic expansion, increase the features, functions, and
formats available to our users and maintain a leading role in
online ecommerce, payments and communications. These purchase
transactions generally result in the creation of acquired
intangible assets with finite lives and lead to a corresponding
increase in the amortization expense in future periods. We
amortize intangible assets over the period of estimated benefit,
using the straight-line method and estimated useful lives
ranging from one to eight years. The increase in amortization of
acquired amortizable intangibles during 2007 and 2006 compared
to prior years is due to the business acquisitions consummated
during 2007, 2006 and 2005.


 



Amortization of acquired intangible assets will increase as we
make additional acquisitions in the future.





59





Table of Contents







This excerpt taken from the EBAY 10-Q filed Oct 29, 2007.
Amortization of Acquired Intangible Assets
 
                                                 
    Three Months Ended           Nine Months Ended        
    September 30,
    September 30,
    Percent
    September 30,
    September 30,
    Percent
 
    2006     2007     Change     2006     2007     Change  
    (In thousands, except percentages)  
 
Amortization of acquired intangible assets
  $ 47,196     $ 51,888       10 %   $ 151,680     $ 150,791       (1 )%
As a percentage of net revenues
    3.3 %     2.7 %             3.6 %     2.7 %        
 
From time to time we have purchased, and we expect to continue to purchase, assets or businesses to accelerate category and geographic expansion, increase the features, functions, and formats available to our users and maintain a leading role in e-commerce, payments and communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in our amortization expense in future periods. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired intangibles during the third quarter of 2007, as compared to the same period of the prior year, is due primarily to the business acquisitions we consummated during 2007. The slight decrease in amortization of acquired intangibles for the first nine months of 2007, as compared to the same period of 2006, is due to a $10.4 million charge for in-process research and development taken in the second quarter of 2006 related to an acquisition completed during that period, offset by the amortization related to the business acquisitions we consummated during 2007.
 
Amortization of acquired intangible assets will likely increase should we continue to make acquisitions in the future.
 
This excerpt taken from the EBAY 10-Q filed Jul 27, 2007.
Amortization of Acquired Intangible Assets
 
                                                 
    Three Months Ended       Six Months Ended    
    June 30,
  June 30,
  Percent
  June 30,
  June 30,
  Percent
    2006   2007   Change   2006   2007   Change
    (In thousands, except percentages)
 
Amortization of acquired intangible assets
  $ 57,592     $ 51,554       (10 )%   $ 104,484     $ 98,903       (5 )%
As a percentage of net revenues
    4.1 %     2.8 %             3.7 %     2.7 %        
 
From time to time we have purchased, and we expect to continue to purchase, assets or businesses to accelerate category and geographic expansion, increase the features, functions, and formats available to our users and maintain a leading role in e-commerce, payments and communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in the amortization expense in future periods. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The slight decrease in amortization of acquired


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intangibles is due to a $10.4 million charge for in-process research and development taken in the second quarter of 2006 related to an acquisition completed during that period.
 
Amortization of acquired intangible assets may increase should we make additional acquisitions in the future.
 
This excerpt taken from the EBAY 10-Q filed Apr 25, 2007.
Amortization of Acquired Intangible Assets
 
                         
    Three Months Ended
    Percent
    Three Months Ended
 
    March 31, 2006     Change     March 31, 2007  
    (In thousands, except percentages)  
 
Amortization of acquired intangible assets
  $ 46,892       1 %   $ 47,349  
As a percentage of net revenues
    3.4 %             2.7 %
 
From time to time we have purchased, and we expect to continue to purchase, assets or businesses to accelerate category and geographic expansion, increase the features, functions, and formats available to our users and maintain a leading role in online e-commerce, payments and communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in the amortization expense in future periods. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The slight increase in amortization of acquired intangibles is due to the timing of acquisitions.
 
Amortization of acquired intangible assets may increase should we make additional acquisitions in the future.
 
This excerpt taken from the EBAY 10-K filed Feb 28, 2007.
Amortization of Acquired Intangible Assets
 
                         
    2004     2005     2006  
    (In thousands, except percentages)  
 
Amortization of acquired intangible assets
  $ 65,927     $ 128,941     $ 197,078  
As a percentage of net revenues
    2.0 %     2.8 %     3.3 %
 
From time to time we have purchased, and we expect to continue purchasing, assets or businesses to accelerate category and geographic expansion, increase the features, functions, and formats available to our users and maintain a leading role in online e-commerce, payments and communications. These purchase transactions generally result in the creation of acquired intangible assets with finite lives and lead to a corresponding increase in the amortization expense in future periods. We amortize intangible assets over the period of estimated benefit, using the straight-line method and estimated useful lives ranging from one to eight years. The increase in amortization of acquired amortizable intangibles during 2006 and 2005 compared to prior years is due to the business acquisitions consummated during 2006, 2005 and 2004.
 
Amortization of acquired intangible assets may increase should we make additional acquisitions in the future.
 
This excerpt taken from the EBAY 10-Q filed Jul 28, 2006.
Amortization of Acquired Intangible Assets
 
                                                 
    Three Months
      Three Months
  Six Months
      Six Months
    Ended
      Ended
  Ended
      Ended
    June 30,
  Percent
  June 30,
  June 30,
  Percent
  June 30,
    2005   Change   2006   2005   Change   2006
    (In thousands, except percentages)
 
Amortization of acquired intangible assets
  $ 25,794       140 %   $ 61,996     $ 48,317       136 %   $ 113,917  
As a percentage of net revenues
    2.4 %             4.4 %     2.3 %             4.1 %
 
From time to time we have purchased, and we expect to continue purchasing, assets or businesses to accelerate product and geographic expansion, increase the features, formats and services available to our users and maintain a leading role in online e-commerce. These purchase transactions generally result in the creation of acquired intangible assets and lead to a corresponding amortization expense in future periods. The increase in amortization of acquired intangibles during the second quarter and first six months of 2006 compared to the same periods of the prior year is due primarily to the business acquisitions we consummated during the second half of 2005 and the second quarter of 2006. Included in amortization of intangibles for the second quarter and first six months of 2006 is an expense of $10.4 million for in-process research and development related to an acquisition completed during the period.
 
Intangible assets include purchased customer lists and user base, trademarks and trade names, developed technologies, and other intangible assets. We amortize intangible assets, excluding goodwill, using the straight-line method over estimated useful lives ranging from one to eight years. We believe the straight-line method of amortization best approximates the distribution of the economic value of the identifiable intangible assets.
 
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. We evaluate goodwill, at a minimum, on an annual basis and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit, which may be for a discrete business within a particular reportable segment. The fair values of the reporting units are estimated using a combination of the income, or discounted cash flows, approach and the market approach, which utilizes comparable companies’ data. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of impairment loss, if any. We conduct our annual impairment test as of August 31 of each year. Based on our last impairment test as of August 31, 2005 we determined there was no impairment. There were no events or circumstances from that date through June 30, 2006 indicating that a further assessment was necessary.
 
We expect amortization of acquired intangible assets to increase in 2006 compared to 2005, as a result of the intangible assets associated with our acquisitions in 2005 and in the first six months of 2006. Amortization of acquired intangible assets may increase further should we make additional acquisitions in the future or estimated useful lives are reduced.


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