Navy Federal Credit Union 2005 Annual Report Download - page 42

Download and view the complete annual report

Please find page 42 of the 2005 Navy Federal Credit Union annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 49

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49

12
Note 8: Fixed Assets
Property and equipment is summarized as follows
(dollars in thousands):
At December 31, 2005, Navy Federal was obligated under
operating leases for office space. Rent expense was $6,856,000
and $5,645,000 in 2005 and 2004, respectively. Income from
sublease contracts totaled $94,000 and $115,000 in 2005 and
2004, respectively.
The required minimum rental payments on property under the
terms of the leases at December 31, 2005 are as follows
(dollars in thousands):
Note 9: Intangible Assets
Navy Federal accounts for intangible assets in accordance with FAS
142,
Goodwill and Other Intangible Assets.
Navy Federal discontinued
its amortization of indefinite lived intangibles with an estimated
carrying amount of $13,700,000 that resulted from membership
expansions in 2000. In December 2003, Navy Federal entered into
another membership expansion which resulted in an intangible
asset of $2,250,000. The intangible asset that resulted from this
transaction was determined to be finite and based on that decision,
Navy Federal amortized $225,000 of the intangible asset in 2005
and 2004 and will continue to amortize it at the rate of $225,000
per year over its estimated useful life of 10 years.
Navy Federal prepares a quarterly analysis to test indefinite lived
intangible assets for impairment in accordance with FAS 144,
Accounting for the Impairment or Disposal of Long-Lived Assets.
Based on its quarterly analysis, Navy Federal determined that the
intangible asset associated with a membership expansion in the
Norfolk, Virginia area became impaired in 2005 when a decrease
in the number of new accounts opened at these locations appeared
to be other-than-temporary. Navy Federal made an adjustment
of $29,000 for impairment in 2005 but did not recognize any
impairment in 2004.
The carrying value of intangible assets was $15,439,000 and
$15,693,000 at December 31, 2005 and 2004, respectively, and
is included in the total for “Other assets” in the Consolidated
Statements of Financial Condition.
Years Ending December 31 Amount
2006 $ 8,929
2007 9,402
2008 9,654
2009 10,119
2010 10,606
Thereafter 11,116
Total $ 59,826
December 31 2005 2004
Land and buildings $ 209,408 $ 199,861
Equipment, furniture
and fixtures 322,566 288,227
Leasehold improvements 47,229 37,778
Subtotal 579,203 525,866
Less: Accumulated
depreciation (321,332) (288,154)
Total fixed assets $257,871 $237,712