Enom 2014 Annual Report Download - page 51

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48
Product Development
Product development expenses decreased by $2.8 million, or 9%, to $29.4 million during the year ended December 31, 2014
compared to $32.2 million in the same period in 2013. The decrease was driven by a $2.5 million reduction in personnel related costs,
including stock-based compensation expense and net of internal costs capitalized as internal software developments, as well as a $0.3
million decrease in consulting expense.
Product development expenses increased by $1.0 million, or 3%, to $32.2 million during the year ended December 31, 2013
compared to $31.2 million in the same period in 2012. The increase was largely due to a $1.6 million increase in personnel related
costs, including stock-based compensation expense and net of internal costs capitalized as internal software development. These costs
were partially offset by a decrease of $0.6 million in consulting expense.
General and Administrative
General and administrative expenses decreased by $2.8 million, or 5%, to $50.2 million during the year ended December 31,
2014 compared to $53.0 million in the same period in 2013. The decrease was primarily due to a decrease of $2.3 million in facilities
and related costs, a decrease of $1.2 million in personnel and related costs and a decrease of $0.4 million in consulting costs, partially
offset by an increase of $0.9 million in depreciation.
General and administrative expenses decreased by $1.1 million, or 2%, to $53.0 million during the year ended December 31,
2013 compared to $54.1 million in the same period in 2012. The decrease was primarily due to a decrease of $2.9 million in personnel
and related costs, including stock-based compensation expense, and a decrease of $1.1 million in legal fees. These factors were
partially offset by an increase of $2.0 million for rent and facilities expense, largely due to incremental expense associated with our
new headquarters in Santa Monica, and an increase of $1.1 million in depreciation.
Amortization of Intangibles
Amortization expense for the year ended December 31, 2014 increased by $1.8 million, or 5%, to $38.3 million compared to
$36.5 million in the same period in 2013. The increase is primarily due to additional amortization expense from intangible assets
acquired from the Society6 acquisition in 2013, as well as an increase in accelerated amortization expense due to our content
remediation efforts initiated in the fourth quarter of 2014, partially offset by lower amortization expense due to our removal of certain
content in the fourth quarter of 2013, and reduced amortization due to business disposals.
Amortization expense for the year ended December 31, 2013 increased by $4.1 million, or 13%, to $36.5 million compared to
$32.4 million in the same period in 2012. The increase is primarily due to additional amortization expense from intangible assets
acquired in the acquisition of Society6 in 2013, as well as an increase in capitalized content assets.
Goodwill Impairment Charge
During the year ended December 31, 2014, we recorded a pretax impairment charge of $232.3 million on the carrying value of
our goodwill based on the results of an interim assessment of impairment of the goodwill in our content and media reporting unit. We
performed our annual impairment analysis in the fourth quarter of the year ended December 31, 2014, and based on the results of the
annual impairment test there were no additional goodwill impairment charges for the year ended December 31, 2014. We did not
record any impairment charges during the corresponding 2013 and 2012 periods. See “—Critical Accounting Policies and Estimates—
Goodwill” for additional details.
Interest Income
Interest income for the year ended December 31, 2014 increased by approximately $0.3 million compared to the same period in
the prior year, primarily due to a higher average cash balance during 2014.
Interest income for the year ended December 31, 2013 remained relatively flat compared to the same period in the prior year.
Interest Expense
Interest expense for the year ended December 31, 2014 increased by $3.0 million as compared to the same period in 2013
primarily due to the increased balance outstanding and the $1.7 million write off of debt issuance costs associated with terminating our
credit facility in November 2014.