Stamps.com 2011 Annual Report Download - page 68

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STAMPS.COM INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
6. Accounts Payable and Accrued Expenses
The following table summarizes our accounts payable and accrued expenses as of December 31, 2011 and 2010 (in thousands):
7. Allowance for Doubtful Accounts
As of December 31, 2011 and 2010, our allowance for doubtful accounts totaled approximately $117,000 and $108,000, respectively. Increases
in our allowance for doubtful accounts totaled approximately $9,000 and $12,000 for 2011 and 2010, respectively. There were no material write-
offs against the allowance for doubtful accounts during 2011 or 2010.
8. Property and Equipment
Property and equipment is summarized as follows (in thousands):
During 2011, 2010 and 2009, depreciation expense was approximately $838,000, $881,000 and $1.2 million, respectively. In prior years we
incurred $634,000 in capitalized fixed assets related to a project to launch a new third party billing system. During 2010, we made a decision to
abandon this project before it was completed and went live. As a result, we wrote-
off $634,000 of fixed assets in the fourth quarter of 2010. We
did not have any similar write-off in 2011 or 2009.
9. Income Taxes
During 2011, our net income tax benefit consisted of a reduction of a portion of our valuation allowance on our deferred tax asset as described
further below. Our effective income tax rate differs from the statutory income tax rate primarily as a result of the reduction of a portion of our
valuation allowance. A full valuation allowance was originally recorded against our gross deferred tax assets as we determined the realization of
these assets did not meet the more likely than not criteria. During 2008, we determined that a full valuation allowance against our gross deferred
tax assets was not necessary and recorded a partial reversal of the deferred tax valuation allowance of $3.7 million based on the following
discrete events: (1) our attainment of three consecutive years of taxable income and (2) indication from the USPS that the market test for our
PhotoStamps business, which constituted 21% of total revenue in 2007, would be extended for another year into 2009.
Table of Contents
2011
2010
Payroll and related accrual
$
3,252
$
2,568
Legal and related accrual
598
609
Sales and marketing related accrual
2,529
1,772
Other accruals
5,696
4,062
Accounts payable and accrued expenses
$
12,075
$
9,011
2011
2010
Furniture and equipment
$
2,178
$
1,789
Computers and software
14,494
13,575
Leasehold improvements
1,769
1,768
18,441
17,132
Less accumulated depreciation and amortization
(16,276
)
(15,438
)
Property and equipment, net
$
2,165
$
1,694
F
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18