Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Note 7. Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of an acquired business over the estimated fair values of the underlying net tangible and intangible assets. Goodwill consisted of the following:

	2016		2015
Balance at January 1,	$	112,425	$	39,870
Additions through acquisitions		1,409		72,528
Measurement period adjustments		199		27
Balance at December 31,	$	114,033	$	112,425

During the year ended December 31, 2016, the following key items impacted goodwill:

•

The Company recognized goodwill of $1,409 in connection with the Skygistics Acquisition

During the year ended December 31, 2015, the following key items impacted goodwill:

•

The Company recognized goodwill of $56,511 in connection with the SkyWave Acquisition

•

The Company recognized goodwill of $5,491 in connection with the InSync Acquisition

•

The Company recognized goodwill of $10,724 in connection with the WAM Acquisition

Goodwill is allocated to the Company’s one reportable segment which is its only reporting unit.

The Company’s intangible assets consisted of the following:

		December 31, 2016							December 31, 2015
	Useful life (years)	Cost		Accumulated amortization			Net		Cost		Accumulated amortization			Net
Customer lists	5 - 14	$	91,757	$	(20,026	)	$	71,731	$	90,212	$	(11,319	)	$	78,893
Patents and technology	5 - 10		16,556		(5,990	)		10,566		16,390		(4,090	)		12,300
Trade names and trademarks	1-2		2,885		(2,637	)		248		2,885		(906	)		1,979
		$	111,198	$	(28,653	)	$	82,545	$	109,487	$	(16,315	)	$	93,172

At December 31, 2016, the weighted-average amortization period for the intangible assets is 9.9 years. At December 31, 2016, the weighted-average amortization periods for customer lists, patents and technology and trademarks are 10.3, 9.2 and 1.2 years, respectively.

During the year ended December 31, 2015, the Company noted anticipated revenue from SENS to be lower than originally forecasted. The fair value of trademark and technology intangible assets are determined based on the “relief from royalty method”, under the income approach, which is a valuation technique that provides an estimate of the fair value of an asset based on the costs savings that are available through ownership of the asset by the avoidance of paying royalties to license the use of the assets from another owner. This method is comprised of applying an estimated royalty rate to projected revenues. The estimated fair value of the customer lists is determined using the “excess earnings method” under the income approach, which represents the total income to be generated by the asset. Some of the more significant assumptions inherent in the development of those asset valuations include the projected revenue associated with the asset, the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, as well as other factors. As a result, and in accordance with FASB ASC 360 “Impairment and Disposal of Long-Lived Assets,” the Company adjusted the carrying amount of the SENS trademark, technology and customer list intangible assets to a fair value of $0, $30 and $280, respectively. As a result, the Company recorded an impairment charge of $564 as part of depreciation and amortization in the consolidated statement of operations for the year ended December 31, 2015.

Amortization expense for the years ended December 31, 2016, 2015 and 2014 was $12,338, $10,636 and $2,795, respectively.

Estimated amortization expense for intangible assets is as follows:

Years ending December 31,
2017	$	10,761
2018		10,508
2019		10,472
2020		10,189
2021		9,727
Thereafter		30,888
	$	82,545

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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