Balance Sheet Components

Intellectual Property Prepaid Royalties

Total amortization for these license agreements in 2015 and 2014 were $1.3 million and $1.6 million, respectively. As of December 31, 2015, the Company had a balance of $7.3 million in unamortized prepaid royalties. Amortization of these licenses is estimated as follows (in thousands):



Year Ending:
2016	$	1,182
2017	799
2018	799
2019	675
2020	503
Thereafter	3,359
	$	7,317

Prepaid Expenses and Other Current Assets



	December 31,
	2015		2014
	(in thousands)
Prepaid service contracts – current portion	$	12,539	$	6,754
Deferred costs	3,849		6,911
Prepaid postage	3,047		1,492
Rebates	3,004		3,164
Prepaid marketing	1,197		446
Other prepaid expenses and current assets	9,511		6,216
	$	33,147	$	24,983

Other Assets



	December 31,
	2015		2014
	(in thousands)
Other assets	$	11,176	$	13,976

Other assets includes the long-term portion of intellectual property prepaid royalties, the long-term portion of issuance costs related to the Company's 0.25% Convertible Notes, the long-term portion of prepaid service contracts, and deposits on long-term leases and other contracts.

Property and Equipment



	December 31,
	2015			2014
	(in thousands)
Computer equipment and software	$	172,048		$	159,370
Manufacturing equipment	148,820			119,495
Capitalized software and website development costs	108,837			89,311
Buildings under build-to-suit leases	56,468			39,307
Leasehold improvements	21,519			20,876
Rental equipment	17,414			14,591
Furniture and fixtures	11,351			10,683
	536,457			453,633
Less: Accumulated depreciation and amortization	(254,678		)	(211,891		)
Net property and equipment	$	281,779		$	241,742

Building value of $56.5 million under build-to-suit leases represents the estimated fair market value of buildings under build-to-suit leases of which the Company is the "deemed owner" for accounting purposes only. See Note 7 - Commitments and Contingencies for further discussion of the Company's build-to-suit leases.

Included within Manufacturing equipment is approximately $72.9 million and $44.2 million of capital lease obligations for various pieces of manufacturing facility equipment in 2015 and 2014, respectively. Accumulated depreciation of assets under capital lease totaled $14.1 million at December 31, 2015 compared to $3.1 million at December 31, 2014.

Rental equipment includes camera lenses, camera bodies, video equipment and other camera peripherals which are rented through the BorrowLenses' website.

Depreciation and amortization expense totaled $86.3 million, $64.9 million, and $43.9 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Total capitalized software and website development costs, net of accumulated amortization totaled $38.4 million and $35.7 million at December 31, 2015 and 2014, respectively. Amortization of capitalized costs totaled approximately $18.7 million, $14.9 million and $10.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Intangible Assets

Intangible assets are comprised of the following:



	Weighted Average Useful Life	December 31,
	Weighted Average Useful Life	2015			2014
		(in thousands)
Purchased technology	10 years	$	104,869		$	104,738
Less: accumulated amortization		(62,011		)	(51,794		)
		42,858			52,944

Customer relationships	5 years	75,146			75,146
Less: accumulated amortization		(56,756		)	(42,086		)
		18,390			33,060

Licenses and other	3 years	7,202			7,202
Less: accumulated amortization		(6,127		)	(5,256		)
		1,075			1,946

Total		$	62,323		$	87,950

Purchased technology is amortized over a period ranging from one to sixteen years. Customer relationships are amortized over a period ranging from one to seven years. Licenses and other is amortized over a period ranging from two to five years.

Intangible asset amortization expense for the years ended December 31, 2015, 2014 and 2013 was $25.8 million, $32.3 million and $29.5 million, respectively. Amortization of existing intangible assets is estimated to be as follows (in thousands):



Year Ending:
2016	$	18,903
2017	13,743
2018	4,835
2019	3,408
2020	3,407
Thereafter	18,027
	$	62,323

Goodwill

In the fourth quarter of 2014, the Company reassessed its reportable segments. As part of this review, the Company determined that it had two reporting units; and that those two reporting units are also reportable segments. Refer to Note 13 - Segment Reporting of the financial statements for discussion of these two segments. The Company allocated goodwill to each reporting unit based on their relative fair values.

The Company conducted its annual qualitative assessment (Step Zero Analysis) test as of December 31, 2015 to determine whether it would be necessary to perform the two-step goodwill impairment test. Among other things, the Company considered the i) excess in fair value of the reporting unit over its carrying amount from the most recent step one calculation, ii) macroeconomic conditions, iii) industry and market trends, and iv) overall financial performance. The Company determined based on the Step Zero Analysis that it is more likely than not that the fair value of the reporting units exceeded their carrying amounts.

The Company performed step one of the annual goodwill impairment test for the year ended December 31, 2014. The Enterprise value exceeded the carrying value for both periods and accordingly, no impairment was recorded.

The following table presents goodwill balances and adjustments to those balances for each of our reportable segments (in thousands):



	Consumer		Enterprise		Corporate			Total
Balance, December 31, 2013	$	—	$	—	$	397,306		$	397,306
Acquisition of business	—		—		12,033			12,033
Goodwill adjustments	—		—		(364		)	(364		)
Goodwill allocation	372,072		36,903		(408,975		)	—
Balance, December 31, 2014	372,072		36,903		—			408,975
Acquisition of business	—		—		—			—
Goodwill adjustments	—		—		—			—
Balance, December 31, 2015	$	372,072	$	36,903	$	—		$	408,975

For the year ended December 31, 2014, adjustments to goodwill reflected final adjustments to net working capital acquired under provisions of certain business combination purchase agreements. There were no adjustments to goodwill for the year ended December 31, 2015.

Accrued Liabilities



	December 31,
	2015		2014
	(in thousands)
Accrued production costs	$	44,825	$	32,814
Accrued marketing expenses	26,793		30,835
Accrued compensation	20,703		16,337
Accrued income and sales tax	17,843		18,149
Capital lease obligations	14,090		8,905
Accrued purchases	6,651		11,809
Accrued consulting	5,872		6,418
Accrued other	12,357		10,218
	$	149,134	$	135,485

Other Liabilities



	December 31,
	2015		2014
	(in thousands)
Financing obligations	$	56,771	$	38,529
Capital lease obligations	44,428		32,297
Deferred revenue	6,564		—
Other liabilities	2,902		3,352
	$	110,665	$	74,178

Financing obligations relate to the Company's build-to-suit leases as further discussed in Note 7 - Commitments and Contingencies.