Classmates.com 2003 Annual Report Download - page 59

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Amortization expense for the six months ended December 31, 2003 and the years ended June 30, 2003, 2002 and 2001 was $7.9 million,
$16.4 million, $14.2 million and $16.8 million, respectively.
Estimated future amortization expense at December 31, 2003 is as follows (in thousands):
F-22
Intangible assets at December 31, 2003 consist primarily of pay subscribers and software and technology related to the Merger and the
acquisition of the Internet access assets of BlueLight. The Merger and the acquisition of the Internet access assets of BlueLight were accounted
for under the purchase method (see Note 2). Amortization of intangible assets is provided for on the straight-
line basis over the estimated useful
lives of the assets, which range from one to seven years. Goodwill acquired in connection with the Merger is not being amortized in accordance
with the provisions set forth in SFAS No. 142 (see Note 2).
During the March 2001 quarter, the Company identified indications of possible impairment of its long-lived assets, principally goodwill
and other acquired intangible assets related to the acquisitions of AimTV, Simpli, RocketCash and Freei (see Note 2). Specific events and
changes in circumstances that precipitated the impairment included the following:
•
Total $
69,589
$
(38,862
) $
30,727
June 30, 2003
Cost
Accumulated
Amortization
Net
Pay subscribers and free users
$
61,200
$
(27,387
)
$
33,813
Software and technology
3,750
(1,440
)
2,310
Patents, trademarks and other
4,639
(2,107
)
2,532
Total $
69,589
$
(30,934
) $
38,655
June 30, 2002
Cost
Accumulated
Amortization
Net
Pay subscribers and free users
$
53,700
$
(12,712
)
$
40,988
Software and technology
3,600
(600
)
3,000
Patents, trademarks and other
4,404
(1,213
)
3,191
Total $
61,704
$
(14,525
) $
47,179
Year Ending
December 31,
2004
$
15,855
2005
12,438
2006
2,146
2007
288
Total $
30,727
A significant and sustained decline in advertising and commerce revenues.
• The Company's determination that advertising and commerce revenues for Internet-based companies were unlikely to recover in
the near future or reach the levels initially projected.
• The Company's assessment of the effectiveness and the resulting impact on results of operations of certain acquired assets
(AimTV, Simpli, RocketCash and Freei) following their integration into the Company's service.
•
The loss of certain key customers and the renegotiation of certain existing advertising agreements.