GOODWILL

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

4. GOODWILL

During the three months ended March 31, 2016, we changed our operating segments, as discussed in note 8 “Operating segments,” and, subsequently, our reporting units. We now have the following five reporting units: IP services, IP products, data center services ("DCS"), cloud and hosting services and hosting products. We allocated goodwill to our new reporting units using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to and after the reallocation and determined that no impairment existed. However, the fair value of DCS exceeded its carrying value by only 13% as of January 1, 2016. If revenue or other significant assumptions for such reporting unit declines, we may be at risk for future impairment. At March 31, 2016, goodwill attributable to DCS was $38.2 million. In addition, if market conditions decline, and there was no expectation that conditions would improve within a reasonable period of time, we may be required to recognize an impairment charge in future periods, which could be material.

During the three months ended March 31, 2016, we re-allocated goodwill as follows (in thousands): 

	December 31,  2015		Re-allocations			March 31, 2016
Operating segments:
Data center services	$	90,849	$	(90,849	)	$	—
IP services		39,464		(39,464	)		—
Data center and network services		—		77,631			77,631
Cloud and hosting services		—		52,682			52,682
Total	$	130,313	$	—		$	130,313