Goodwill and Intangible Assets

3 Months Ended

12 Months Ended

Mar. 31, 2016

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 6—GOODWILL AND INTANGIBLE ASSETS

Goodwill

As of March 31, 2016 and December 31, 2015, the Company had a goodwill balance of $836.1 million and $834.4 million, respectively. The change in the carrying amount of goodwill during the three months ended March 31, 2016 was the result of foreign currency translation adjustments.

Intangible assets, net

The following table presents intangible asset balances (in thousands):


	March 31, 2016							December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Estimated Useful Lives
Definite-lived intangible assets:
Customer contracts	$	967,653	$	(460,040	)	$	507,613	$	962,842	$	(430,803	)	$	532,039	10 years
2GIG 2.0 technology		17,000		(7,918	)		9,082		17,000		(7,064	)		9,936	8 years
CMS and other technology		7,067		(3,850	)		3,217		7,067		(3,438	)		3,629	5 years
Space Monkey technology		7,100		(1,138	)		5,962		7,100		(761	)		6,339	6 years
Patents		7,813		(2,502	)		5,311		7,524		(2,094	)		5,430	5 years
Non-compete agreements		1,200		(950	)		250		1,200		(800	)		400	2-3 years

Total definite-lived intangible assets:		1,007,833		(476,398	)		531,435		1,002,733		(444,960	)		557,773

Indefinite-lived intangible assets:
IP addresses		564		—			564		564		—			564
Domain names		58		—			58		58		—			58

Total Indefinite-lived intangible assets		622		—			622		622		—			622

Total intangible assets, net	$	1,008,455	$	(476,398	)	$	532,057	$	1,003,355	$	(444,960	)	$	558,395

The Company recognized amortization expense related to the capitalized software development costs of $0.3 million during each of the three months ended March 31, 2016 and 2015. Amortization expense related to intangible assets was approximately $29.2 million and $31.6 million for the three months ended March 31, 2016 and 2015, respectively.

Estimated future amortization expense of intangible assets, excluding approximately $0.4 million in patents currently in process, is as follows as of March 31, 2016 (in thousands):


2016—Remaining Period	$	87,447
2017		101,340
2018		89,755
2019		78,114
2020		67,351
Thereafter		107,061

Total estimated amortization expense	$	531,068

NOTE 10—GOODWILL AND INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014, were as follows (in thousands):


Balance as of January 1, 2014	$	836,318
Goodwill resulting from Wildfire acquisition		504
Goodwill resulting from Space Monkey acquisition		7,402
Effect of Foreign Currency Translation		(2,702	)

Balance as of December 31, 2014		841,522
Goodwill Impaired due to Wireless Restructuring (see Note 3)		(2,270	)
Effect of Foreign Currency Translation		(4,836	)

Balance as of December 31, 2015	$	834,416

As of December 31, 2015 and December 31, 2014, the Company had a goodwill balance of $834.4 million and $841.5 million, respectively. In connection with the Wireless Restructuring (See Note 3), the Company fully impaired goodwill related to its Wireless Internet business. The resulting impairment charge of $2.3 million is included in restructuring and asset impairment charges on the consolidated statement of operations during the year ended December 31, 2015. Accumulated impairment losses were $2.3 million and $0 as of December 31, 2015 and December 31, 2014, respectively. The remaining change in the carrying amount of goodwill during the year ended December 31, 2015 was the result of foreign currency translation adjustments.

Intangible assets, net

The following table presents intangible asset balances as of December 31, 2015 and 2014 (in thousands):


	December 31,						Estimated Useful Lives
	2015			2014
Definite-lived intangible assets:
Customer contracts	$	962,842		$	978,776		10 years
2GIG 2.0 technology		17,000			17,000		8 years
Patents		7,524			6,518		5 years
Space Monkey technology		7,100			7,100		6 years
CMS and other technology		7,067			7,067		5 years
Non-compete agreements		1,200			2,000		2-3 years
Wireless internet technologies		—			4,690		2-3 years

		1,002,733			1,023,151
Accumulated amortization		(444,960	)		(320,198	)

Definite-lived intangible assets, net		557,773			702,953
Indefinite-lived intangible assets:
IP addresses		564			214
Domain names		58			59

Total indefinite-lived intangible assets		622			273

Total intangible assets, net	$	558,395		$	703,226

Identifiable intangible assets acquired by the Company in connection with the Smartrove acquisition consisted of $4.0 million of Smartrove technology and $0.7 million of other related technologies. Identifiable intangible assets acquired by the Company in connection with the Wildfire acquisition were $2.1 million of customer contracts and $0.8 million associated with non-compete agreements entered into by certain former members of Wildfire management. In connection with the Wireless Restructuring (See Note 3), the Company fully impaired the remaining unamortized definite-lived intangible assets related to its Wireless Internet business. The resulting impairment charge of $2.9 million is included in restructuring and asset impairment charges on the consolidated statement of operations during the year ended December 31, 2015.

Identifiable intangible assets acquired by the Company in connection with the Space Monkey acquisition were $7.1 million of Space Monkey technology and $1.2 million associated with non-compete agreements entered into by certain former members of Space Monkey management.

During the year ended December 31, 2015, the Company acquired $1.4 million of intangibles related to patents, domain names and Internet Protocol (“IP”) addresses.

During the years ended December 31, 2015, 2014 and 2013, respectively, the Company recognized $1.3 million, $1.3 million and $0.1 million of amortization expense related to the capitalized software development costs.

Amortization expense related to intangible assets was $134.8 million, $151.3 million and $164.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Estimated future amortization expense of intangible assets, excluding approximately $0.4 million in patents currently in process, is as follows as of December 31, 2015 (in thousands):


2016	$	116,096
2017		100,808
2018		89,277
2019		77,696
2020		66,984
Thereafter		106,526

Total estimated amortization expense	$	557,387

- 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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