eBay 2003 Annual Report Download - page 107

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
Goodwill and Intangible Assets
Goodwill information for each reportable segment is as follows (in thousands):
December 31, Goodwill Goodwill December 31,
2002 Acquired Disposals Adjustments 2003
Segments:
U.S. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 118,649 $ 5,587 $ Ì $(3,197) $ 121,039
InternationalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 294,761 196,159 Ì 33,994 524,914
Payments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,061,867 Ì Ì 11,491 1,073,358
$1,475,277 $201,746 $ Ì $42,288 $1,719,311
The increase in goodwill acquired during the year ended December 31, 2003, resulted primarily from
our acquisition of the remaining capital stock of EachNet and an additional ownership interest in Internet
Auction as noted above as well as our other insigniÑcant acquisitions. Adjustments to goodwill during the
year ended December 31, 2003, resulted primarily from foreign currency translation adjustments in
addition to purchase price adjustments on prior period acquisitions. Foreign currency translation
adjustments, reÖecting movements in the underlying entities' foreign currency exchange rate, totaled
approximately $44.9 million for the year ended December 31, 2003.
The components of acquired identiÑable intangible assets are as follows (in thousands):
December 31, 2002 December 31, 2003
Gross Net Gross Net
Carrying Accumulated Carrying Carrying Accumulated Carrying
Amount Amortization Amount Amount Amortization Amount
Intangible assets:
Customer lists ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $208,811 $(10,723) $198,088 $223,158 $(42,093) $181,065
Trademarks and trade names ÏÏÏ 65,140 (3,235) 61,905 75,269 (13,992) 61,277
Developed technologies ÏÏÏÏÏÏÏÏ 27,825 (8,353) 19,472 30,396 (16,147) 14,249
All other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 733 (733) Ì 19,605 (2,139) 17,466
$302,509 $(23,044) $279,465 $348,428 $(74,371) $274,057
Acquired identiÑable intangible assets are subject to amortization and are comprised of customer lists,
trademarks and trade names, developed technologies, and other acquired intangible assets including patents
and contractual agreements. IdentiÑable intangible assets are amortized using the straight-line method over
weighted average periods of seven years for customer lists, seven years for trademarks and tradenames,
three years for developed technologies and three years and Ñve years for all other intangible assets. No
signiÑcant residual value is estimated for the intangible assets. The increase in intangible assets during the
year ended December 31, 2002, resulted primarily from the acquisition of PayPal totaling approximately
$277.0 million. The increase in intangible assets during the year ended December 31, 2003, resulted
primarily from the acquisition of the remaining ownership interest in EachNet, totaling approximately
$12.6 million, including $1.4 million recorded as an investment upon the original acquisition, the
acquisition of an additional ownership interest in Internet Auction totaling approximately $15.0 million, the
acquisition of a license and contractual covenants related to certain patented technologies totaling
approximately $14.4 million and foreign currency translation adjustments totaling approximately $1.8 mil-
lion. Aggregate amortization expense for intangible assets totaled $4.0 million, $16.3 million and
$53.2 million for the years ended December 31, 2001, 2002 and 2003, respectively.
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