Stamps.com 2013 Annual Report Download - page 65

STAMPS.COM INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
3.
Intangible Assets
We have amortizable and non-amortizable intangible assets consisting of patents, trademarks, other intellectual property and lease-in-place
intangible assets with a gross carrying value of $9.4 million as of December 31, 2013 and 2012, and accumulated amortization of $8.3 million
and $8.1 million as of December 30, 2013 and 2012, respectively. During 2012, we completed our purchase of our new corporate headquarters
for an aggregate purchase price of $13.4 million. As a result of the purchase we also acquired existing leases of building tenants, and $700,000
of the initial purchase price was allocated to lease-in-place intangible assets and is being amortized over the remaining actual lease terms, which
are as long as 5.5 years. The expected useful lives of our amortizable intangible assets range from approximately 5 to 17 years. As of December
31, 2013, the remaining weighted average amortization period for our amortizable intangible assets is approximately 4.2 years. During 2013, we
assessed whether events or changes in circumstances occurred that could potentially indicate that the carrying amount of our intangible assets
may not be recoverable. We concluded that there were no such events or changes in circumstances during 2013 and determined that the fair
value of our intangible assets was in excess of their carrying value as of December 31, 2013. Aggregate amortization expense on patents,
trademarks and lease-in-
place intangible asset was approximately $215,000, $269,000 and $47,000 for the years ended December 31, 2013, 2012
and 2011, respectively. Our average expected yearly amortization expense for the next five years is approximately $107,000.
4. Cash, Cash Equivalents and Investments
Our cash equivalents and investments consist of money market, U.S. government obligations, asset-backed securities and public corporate debt
securities at December 31, 2013 and 2012. We consider all highly liquid investments with an original or remaining maturity of three months or
less at the date of purchase to be cash equivalents. All of our investments are classified as available for sale and are recorded at market value
using the specific identification method. Realized gains and losses are reflected in other income, net using the specific identification method.
There was no material realized gain or loss with respect to our investments during 2013, 2012 and 2011. Unrealized gains and losses are
included as a separate component of stockholders' equity. We do not intend to sell investments with an amortized cost basis exceeding fair value,
and it is not likely that we will be required to sell the investments before recovery of their amortized cost bases. We have seven securities with a
total fair value of $2.9 million that have unrealized losses of approximately $10,000 as of December 31, 2013.
On at least a quarterly basis, we evaluate our available for sale securities and record an “other-than-temporary impairment” (“OTTI”) if we
believe their fair value is less than historical cost and it is probable that we will not collect all contractual cash flows. We did not record any
OTTI during 2013, 2012 and 2011 after evaluating a number of factors including, but not limited to:
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• How much fair value has declined below amortized cost
• The financial condition of the issuers
• Significant rating agency changes on the issuers
• Our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value