Digital River 2006 Annual Report Download - page 94

Estimated amortization expense for the remaining life of the intangible assets, based on intangible assets
as of December 31, 2006, is as follows (in thousands):
Year
2007 ................................................................ $ 6,683
2008 ................................................................ 4,192
2009 ................................................................ 3,281
2010 ................................................................ 1,836
2011 ................................................................ 1,246
Thereafter ............................................................ 3,868
Total .............................................................. $21,106
Following is an allocation of the net assets acquired from the acquisitions consummated and amounts
paid under earn-out arrangements in 2006 and 2005 (in thousands) which includes subsequent year activity for
2005 acquisitions:
2006 2005
Tangible assets ............................................... $ 4,128 $ 8,694
Liabilities assumed ............................................ (11,759) (11,965)
Customer relationships ......................................... 8,110 9,386
Non-compete agreements ....................................... 40 —
Technology/tradename ......................................... 5,635 2,196
Goodwill (year of acquisition).................................... 30,202 47,827
Goodwill (subsequent to year of acquisition) ......................... — 985
Net assets acquired ............................................ $36,356 $ 57,123
6. Stock-Based Compensation:
Prior to the annual stockholders’ meeting held in May 2005, we had two stock-based employee
compensation plans. At the annual stockholders’ meeting held in May 2005, our stockholders approved an
amendment and restatement of our 1998 Stock Option Plan that combined the 1998 Plan with our 1999 Stock
Option Plan and gave us the flexibility to grant restricted stock awards, restricted stock unit awards and
performance shares, in addition to incentive and non-statutory stock options, to our directors, employees, and
consultants under the combined plan. We call our new amended and restated plan our 1998 Equity Incentive
Plan (the “1998 Plan”). Our current plan is described more fully in Note 11.
Prior to the adoption of SFAS 123(R), we presented deferred compensation as a separate component of
shareholders’ equity. In 2006, in accordance with the provisions of SFAS(R), we reclassified the balance in
deferred compensation to additional paid-in capital on our balance sheet.
Expense Information under SFAS 123(R)
On January 1, 2006, we adopted SFAS 123(R) which requires measurement and recognition of
compensation expense for all stock-based payments made to employees and directors including stock options,
restricted stock grants and employee stock purchases made through our Employee Stock Purchase Plan based
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DIGITAL RIVER, INC.
Notes to Consolidated Financial Statements — (Continued)