eFax 2011 Annual Report Download - page 63

Depreciation and amortization expense was $6.3 million, $5.7 million and $6.7 million for the years ended December 31, 2011, 2010
and 2009, respectively.
During the fourth quarter of 2009, the Company determined based upon its current and future business needs that the rights to certain
external administrative software would not provide any future benefit. Accordingly, j2 Global recorded a disposal in the amount of $2.4 million
to the consolidated statement of operations representing the capitalized cost as of December 31, 2009. Total disposals of long-
lived assets for the
year ended December 31, 2011, 2010 and 2009 were approximately $0.3 million, $0.2 million and $2.5 million, respectively.
7. Goodwill and Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in
a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are
recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships,
trademarks and trade names, developed technologies and other intangible assets. The fair values of these identified intangible assets are based
upon expected future cash flows or income, which take into consideration certain assumptions such as customer turnover, tradenames and patent
lives. These determinations are primarily based upon the Company’
s historical experience and expected benefit of the intangible asset. If it is
determined that such assumptions are not accurate, then the resulting change will impact the fair value of the intangible asset. Identifiable
intangible assets are amortized using the straight-line method over estimated useful lives ranging from one to 20 years.
The changes in carrying amounts of goodwill for the year ended December 31, 2011 and 2010 are as follows (in thousands):
See Note 3 – Business Acquisitions for discussion related to purchase accounting adjustments.
Intangible assets are summarized as of December 31, 2011 and 2010 as follows (in thousands):
Intangible assets with indefinite lives:
The Company determined that a certain tradename no longer has an indefinite life as of the fourth quarter 2011. Accordingly, the
Company has reclassified $1.4 million from intangible assets with indefinite lives to intangible assets subject to amortization during fiscal year
2011. The Company has determined that this intangible asset has a remaining useful life of 5 years and it will be amortized accordingly.
As of December 31, 2011, intangible assets subject to amortization relate primarily to the following (in thousands):
Balance as of January 1, 2010
$
81,258
Goodwill acquired
200,863
Purchase Accounting Adjustments
(108
)
Foreign Exchange Translation
(165
)
Balance as of December 31, 2010
$
281,848
Goodwill acquired
2,522
Purchase Accounting Adjustments
(5,140
)
Foreign Exchange Translation
(214
)
Balance as of December 31, 2011
$
279,016
2011
2010
Tradename
$
28,254
$
27,418
Other
5,317
4,992
Total
$
33,571
$
32,410
Weighted
-
Average
Amortization
Period
Historical
Cost
Accumulated
Amortization
Net
Tradenames
12.6 years
$
10,584
$
4,147
$
6,437
Patent and patent licenses
8.4 years
38,229
20,712
17,517
Customer relationships
6.7 years
49,245
13,380
35,865
Other purchased intangibles 4.7 years
11,545
6,868
4,677
Total
$
109,603
$
45,107
$
64,496
-
47
-