Stamps.com 2002 Annual Report Download - page 42

Table of Contents
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Stockholders of Stamps.com Inc.:
We have audited the accompanying consolidated balance sheet of Stamps.com Inc. (a Delaware corporation) and subsidiaries as of
December31, 2002 and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss) and cash flows
for the year ended December31, 2002. These financial statements are the responsibility of the Company’ s management. Our responsibility is to
express an opinion on these financial statements based on our audit. The consolidated financial statements of Stamps.com Inc., for the fiscal
years ended December31, 2001 and 2000, were audited by other auditors who have ceased operations. Those auditors expressed an unqualified
opinion on those statements in their report dated February7, 2002.
We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of
Stamps.com Inc. and subsidiaries as of December31, 2002 and the consolidated results of their operations and their cash flows for the year
ended December31, 2002 in conformity with accounting principles generally accepted in the United States.
As discussed in Note 3 to the consolidated financial statements, Stamps.com Inc. changed its method of accounting for purchased goodwill and
other intangible assets in accordance with Statement of Financial Accounting Standards (“SFAS”) No.142 during the first quarter of fiscal
2002. As discussed above, the financial statements of Stamps.com Inc. as of December31, 2001 and 2000, and for the years then ended were
audited by other auditors who have ceased operations. As described in Note 3, these financial statements have been updated to include the
transitional disclosures required by SFAS No.142, “Goodwill and Other Intangible Assets,” which was adopted by the Company as of January1,
2002. Our audit procedures with respect to the disclosures in Note3 for fiscal 2001 and 2000 included (i)agreeing the previously reported net
loss to the previously issued financial statements and the adjustments to reported net loss representing amortization expense recognized in those
periods related to goodwill that are no longer being amortized to the Company’ s underlying records obtained from management, and (ii)testing
the mathematical accuracy of the reconciliation of adjusted net loss to reported net loss, and the related net loss-per-share amounts. Our audit
procedures with respect to the disclosures in Note 3 for fiscal 2001 and 2000 included (i)agreeing the goodwill and amortization amounts and
the gross intangible assets and accumulated amortization amounts to the Company’ s underlying records obtained from management, and (ii)
testing the mathematical accuracy of the tables. In our opinion, the disclosures for fiscal 2001 and 2000 in Note3 related to the transitional
disclosures of SFAS No.142 are appropriate. However, we were not engaged to audit, review, or apply any procedures to the Company’ s
financial statements for fiscal 2001 and 2000 other than with respect to such disclosures and, accordingly, we do not express an opinion or any
other form of assurance on the Company’ s fiscal 2001 and 2000 financial statements taken as a whole.
/s/E RNST & Y OUNG LLP
Los Angeles, California
February 6, 2003
F-1
2003. EDGAR Online, Inc.