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Table of Contents
NetSpend Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
December 31, 2008, 2009 and 2010
NOTE 6: INTANGIBLE ASSETS (Continued)
Intangible assets consisted of the following at December 31, 2010:
As part of the Company's acquisition of Skylight in 2008, the Company acquired the "Skylight" trade name. Based on the reputation of the
Skylight tradename and the anticipated future benefits and cash flows the tradename is expected to contribute, the Company accounts for the
tradename as an indefinite lived intangible asset.
As part of the Company's annual impairment test, the Company considers whether factors have changed and whether the tradename
should be subject to amortization. In 2008, the Company incurred an impairment charge of approximately $3.3 million reflecting the
impairment of the Skylight tradename as the carrying amount of the tradename exceeded its fair value. The impairment was due to declining
market conditions and the adverse business environment in which the Paycard reporting unit was operating. As of December 31, 2010, the
Skylight tradename continues to have an indefinite life as the Company continues to use the Skylight tradename on certain of its products.
In 2009 and 2010 the Company performed its intangible asset impairment evaluations and determined that the fair value of the intangible
assets exceeded their carrying values. No impairment charges were recorded in the years ended December 31, 2009 or 2010.
Amortization expense for the years ended December 31, 2008, 2009 and 2010 was $3.2 million, $3.5 million, and $3.2 million,
respectively. At December 31, 2010, estimated amortization expense for the next five years and thereafter is as follows:
80
December 31, 2010
Gross
Carrying
Amount Accumulated
Amortization
Net
Carrying
Amount
(in thousands of dollars)
Distributor and partner
relationships
$
26,426
$
(12,449
)
$
13,977
Developed technology
7,261
(6,251
)
1,010
Other
172
(35
)
137
Amortized intangible
assets
$
33,859
$
(18,735
)
$
15,124
Unamortized intangible
assets:
Tradenames
10,615
—
10,615
Total intangible assets
$
44,474
$
(18,735
)
$
25,739
(in thousands of dollars)
2011
$
3,524
2012
2,272
2013
1,714
2014
1,714
2015
1,684
Thereafter
4,216
$
15,124