eBay 2002 Annual Report Download - page 116

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
The components of acquired identiÑable intangible assets are as follows (in thousands):
December 31, 2001 December 31, 2002
Gross Net Gross Net
Carrying Accumulated Carrying Carrying Accumulated Carrying
Amount Amortization Amount Amount Amortization Amount
Intangible assets:
Developed
technologies ÏÏÏÏÏ $ 9,076 $(3,643) $ 5,433 $ 27,825 $ (8,353) $ 19,472
Customer listsÏÏÏÏÏÏ 6,525 (2,306) 4,219 208,811 (10,723) 198,088
TrademarksÏÏÏÏÏÏÏÏ 1,390 (350) 1,040 65,140 (3,235) 61,905
All other ÏÏÏÏÏÏÏÏÏÏ 973 (855) 118 733 (733) Ì
$17,964 $(7,154) $10,810 $302,509 $(23,044) $279,465
All of our acquired identiÑable intangible assets are subject to amortization. Acquired identiÑable
intangible assets are comprised of developed technologies, customer lists, trademarks, and other acquired
intangible assets including contractual agreements. Developed technologies are being amortized over a
weighted average period of approximately three years. Customer lists are being amortized over a weighted
average period of approximately seven years. Trademarks are being amortized over a weighted average
period of approximately seven years. No signiÑcant residual value is estimated for the intangible assets.
Aggregate amortization expense for intangible assets totaled $4.0 million and $16.3 million for the years
ended December 31, 2001 and 2002, respectively.
As of December 31, 2002, expected future intangible asset amortization expense is as follows (in
thousands):
Fiscal Years:
2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 47,555
2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47,052
2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 43,844
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 38,297
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 37,212
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 65,505
$279,465
Note 4 Ì Segment Information:
Segment selection is based upon our internal organization structure, the manner in which our
operations are managed, the measurement of the performance of our operations evaluated by management
in the chief operating decision-maker capacity, the availability of separate Ñnancial information, and overall
materiality considerations.
During the fourth quarter of 2002, the growth of our international operations and our acquisition of
PayPal prompted us to change the basis for measuring our Ñnancial performance and evaluating resource
allocations, and therefore our reportable segments. We changed our business segments from Online and
OÉine services to U.S., International, and Payments operations. This new segment structure reÖects the
new composition of our business. Additionally, we changed the internal measurement basis of segment
performance from operating income before certain items to a direct contribution measure of proÑtability.
114