eTrade 2006 Annual Report Download - page 113

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NOTE 11—PROPERTY AND EQUIPMENT, NET
Property and equipment, net consists of the following (dollars in thousands):
December 31,
2006 2005
Software $ 390,091 $ 353,120
Equipment and transportation 197,295 193,051
Leasehold improvements 92,648 93,963
Buildings 72,352 71,927
Furniture and fixtures 31,749 19,040
Land 3,428 3,428
Total property and equipment, gross 787,563 734,529
Less accumulated depreciation and amortization (469,174) (435,273)
Total property and equipment, net $ 318,389 $ 299,256
Depreciation and amortization expense related to property and equipment was $73.8 million, $75.0 million
and $77.9 million for the years ended December 31, 2006, 2005 and 2004, respectively.
Software includes capitalized internally developed software costs. These costs were $37.3 million,
$34.7 million and $31.8 million for the years ended December 31, 2006, 2005 and 2004, respectively. Completed
projects are carried at cost and are amortized on a straight-line basis over their estimated useful lives, generally
four years. Amortization expense for the capitalized amounts was $26.1 million, $31.5 million and $33.7 million
for the years ended December 31, 2006, 2005 and 2004. Also included in software at December 31, 2006 is
$23.2 million of internally developed software in the process of development for which amortization has not
begun.
NOTE 12—GOODWILL AND OTHER INTANGIBLES, NET
The following table discloses the changes in the carrying value of goodwill for the periods presented
(dollars in thousands):
Balance at December 31, 2004 $ 395,043
Additions from 2005 acquisitions 1,612,928
Write-off related to discontinued operations (4,515)
Balance at December 31, 2005 2,003,456
Purchase accounting adjustments related to 2005 acquisitions 11,953
Additions from 2006 acquisition of RAA(1) 14,116
Additions from equity method investment in Investsmart 42,964
Other adjustments 431
Balance at December 31, 2006 $2,072,920
(1) Includes purchase accounting adjustments as of December 31, 2006.
110