Shutterfly 2014 Annual Report Download - page 88

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Intangible Assets
Intangible assets are comprised of the following:
Weighted Average December 31,
Useful Life
2014 2013
(in thousands)
Purchased technology ............................ 10 years $ 104,738 $ 104,553
Less: accumulated amortization ..................... (51,794) (35,653)
52,944 68,900
Customer relationships ........................... 5 years 75,146 74,576
Less: accumulated amortization ..................... (42,086) (27,452)
33,060 47,124
Licenses and other .............................. 3 years 7,202 6,692
Less: accumulated amortization ..................... (5,256) (4,095)
1,946 2,597
Total ........................................ $ 87,950 $ 118,621
Purchased technology is amortized over a period ranging from one to sixteen years. Customer
relationships are amortized over a period ranging from one to seven years. Licenses and other is amortized
over a period ranging from two to five years.
Intangible asset amortization expense for the years ended December 31, 2014, 2013 and 2012 was
$32.3 million, $29.5 million and $19.7 million, respectively. Amortization of existing intangible assets is
estimated to be as follows (in thousands):
Year Ending:
2015 .............................................................. $ 25,719
2016 .............................................................. 18,888
2017 .............................................................. 13,699
2018 .............................................................. 4,802
2019 .............................................................. 3,408
Thereafter .......................................................... 21,434
$ 87,950
Goodwill
In the fourth quarter of 2014, the Company reassessed its reportable segments. As part of this review,
the Company determined that it had two reporting units; and that those two reporting units are also
reportable segments. Refer to Note 13 — Segment Reporting of the financial statements for discussion of
these two segments. In conjunction with the change to two reporting units, the Company allocated goodwill
to each reporting unit based on their relative fair values. The Company performed step one of the annual
goodwill impairment test for the years ended December 31, 2014 and 2013. The enterprise value exceeded
the carrying value for both periods and accordingly, no impairment was recorded.
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