eBay 2005 Annual Report Download - page 102

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Investments accounted for under the equity method of accounting are classified on our balance sheet as
long-term investments. Such investments include identifiable intangible assets, deferred tax liabilities and
goodwill. Goodwill related to our equity method investments totaled approximately $27.4 million as of
December 31, 2004 and 2005.
Intangible Assets
The components of acquired identifiable intangible assets are as follows (in thousands):
December 31, 2004 December 31, 2005
Gross Net Weighted Gross Net Weighted
Carrying Accumulated Carrying Average Useful Carrying Accumulated Carrying Average Useful
Amount Amortization Amount Economic Life Amount Amortization Amount Economic Life
(years) (years)
Intangible assets:
Customer lists
and user base $300,929 $ (80,097) $220,832 7 $ 526,657 $(145,397) $381,260 6
Trademarks and
trade names ÏÏ 139,239 (30,811) 108,428 6 443,565 (75,571) 367,994 5
Developed
technologies ÏÏ 40,686 (28,488) 12,198 3 101,971 (45,882) 56,089 4
All other ÏÏÏÏÏÏÏ 33,895 (7,534) 26,361 4 36,450 (14,761) 21,689 4
$514,749 $(146,930) $367,819 $1,108,643 $(281,611) $827,032
All of our acquired identifiable intangible assets are subject to amortization. Acquired identifiable
intangible assets are comprised of customer lists and user base, trademarks and trade names, developed
technologies, and other acquired intangible assets including patents and contractual agreements. No signifi-
cant residual value is estimated for the intangible assets. The increase in intangible assets during the year
ended December 31, 2005 resulted primarily from certain intangible assets acquired as part of our acquisition
of the outstanding shares of Rent.com, International classifieds websites, Shopping.com, Skype and VeriSign's
payment gateway business totaling approximately $61.8 million, $13.8 million, $133.6 million, $280.3 million,
and $106.6 million, respectively. The net carrying amount of intangible assets related to our investments
totaled approximately $4.9 million and $3.8 million, as of December 31, 2004 and 2005, respectively.
Aggregate amortization expense for intangible assets totaled $53.2 million, $70.2 million and $136.4 million
for the years ended December 31, 2003, 2004 and 2005, respectively.
Expected future intangible asset amortization from acquisitions completed as of December 31, 2005 is as
follows (in thousands):
Fiscal Years:
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $198,474
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 185,929
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 178,201
2009 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 159,791
2010 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 88,479
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,158
$827,032
98