NetZero 2011 Annual Report Download - page 60

Table of Contents
Technology and Development
Technology and development expenses include expenses for product development, maintenance of existing software, technology and
websites, and development of new or improved software and technology, including personnel-related expenses for our technology group in
various office locations. Costs incurred by us to manage and monitor our technology and development activities are expensed as incurred. Costs
relating to the acquisition and development of internal-use software are capitalized when appropriate and depreciated over their estimated useful
lives, generally three to five years.
General and Administrative
General and administrative expenses, which include unallocated corporate expenses, consist of personnel-related expenses for executive,
finance, legal, human resources, facilities, internal audit, investor relations, internal customer support personnel and personnel associated with
operating our corporate network systems. In addition, general and administrative expenses include, among other costs, professional fees for
legal, accounting and financial services; insurance; occupancy and other overhead-related costs; office relocation costs; non-income taxes; gains
and losses on the sale of assets; and reserves or expenses incurred as a result of settlements, judgments, fines, penalties, assessment, or other
resolutions related to litigation, arbitration, investigations, disputes, or similar matters. General and administrative expenses also include
expenses resulting from actual or potential transactions such as business combinations, mergers, acquisitions, and financing transactions,
including expenses for advisors and representatives such as investment bankers, consultants, attorneys, and accounting firms.
Amortization of Intangible Assets
Amortization of intangible assets includes amortization of acquired pay accounts and free accounts; certain acquired trademarks and trade
names; purchased software and technology; acquired customer and advertising contracts and related relationships; acquired rights, content and
intellectual property; and other acquired identifiable intangible assets. In accordance with the provisions set forth in ASC 350, Intangibles—
Goodwill and Other , goodwill and indefinite-lived intangible assets are not being amortized but are tested for impairment at a reporting unit
level on an annual basis and between annual tests if an event occurs or circumstances change that would indicate the fair value of a reporting unit
is below its carrying value.
Restructuring and Other Exit Costs
Restructuring and other exit costs consist of costs associated with the realignment and reorganization of our operations and other employee
termination events. Restructuring and other exit costs include employee termination costs, facility closure and relocation costs, and contract
termination costs. The timing of associated cash payments is dependent upon the type of exit cost and can extend over a 12-month period. The
Company records restructuring and other exit cost liabilities in accrued liabilities in the consolidated balance sheets.
Interest Income
Interest income consists primarily of earnings on our cash and cash equivalents and interest on long-term receivables from FTD's
technology system sales.
Interest Expense
Interest expense consists of interest expense on our credit facilities, including accretion of discounts and amortization of debt issue costs,
loss on extinguishment of debt, and interest expense relating to capital leases and our interest rate cap.
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