Mercury Insurance 2010 Annual Report Download - page 97

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MERCURY GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
(Amounts in thousands)
As of December 31, 2009:
Customer relationships ..................................... $51,640 $(4,872) $46,768
Trade names ............................................. 15,400 (642) 14,758
Software and technology .................................... 4,850 (705) 4,145
Favorable leases .......................................... 1,725 (573) 1,152
Total intangible assets, net .............................. $73,615 $(6,792) $66,823
Intangible assets are amortized on a straight-line basis over their useful lives. The amortization periods for
intangible assets with definite lives, by asset class, are: 24 years for trade names, 11 years for customer
relationships, 10 years for technology, 2 years for software, and 3 years for lease agreements. Intangible assets
amortization expenses were $6.8 million for each of the years ended December 31, 2010 and 2009. There were
no intangible assets as of December 31, 2008. None of the intangible assets are anticipated to have a residual
value. The following table presents the estimated future amortization expense related to intangible assets as of
December 31, 2010:
Year Ending December 31, Amortization Expense
(Amounts in thousands)
2011 ........................................................... $ 6,375
2012 ........................................................... 6,160
2013 ........................................................... 5,986
2014 ........................................................... 5,980
2015 ........................................................... 5,980
Thereafter ....................................................... 29,643
Total ....................................................... $60,124
10. Income Taxes
Income tax provision
The Company and its subsidiaries file a consolidated federal income tax return. The provision for income
tax expense (benefit) consists of the following components:
Year Ended December 31,
2010 2009 2008
(Amounts in thousands)
Federal
Current .................................................... $23,699 $ 31,676 $ 14,090
Deferred ................................................... 9,964 131,839 (196,902)
$33,663 $163,515 $(182,812)
State
Current .................................................... $(3,225) $ 1,793 $ (22,000)
Deferred ................................................... (246) 3,161 (3,930)
$ (3,471) $ 4,954 $ (25,930)
Total
Current .................................................... $20,474 $ 33,469 $ (7,910)
Deferred ................................................... 9,718 135,000 (200,832)
Total ...................................................... $30,192 $168,469 $(208,742)
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