Note 5. Goodwill and Intangible Assets

Goodwill

As of June 30, 2018, the Company has preliminarily recorded goodwill of $308.2 million related to the Ruckus Networks acquisition. The Company is in the process of assigning the assets and liabilities acquired to each of its identified reporting units and as such, the determination of this goodwill by reporting unit is incomplete as of June 30, 2018. The Company intends to finalize the assignment of the goodwill from the Ruckus Networks acquisition during fiscal year 2018.

The changes in the carrying amount of goodwill for the year to date period ended June 30, 2018 are as follows (in thousands):


	CPE			N & C			Enterprise			Total
Goodwill		1,386,680			1,003,654			318,034			2,708,368
Accumulated impairment losses		—			(429,856	)		—			(429,856	)

Balance as of December 31, 2017	$	1,386,680		$	573,798		$	318,034		$	2,278,512

Changes in year 2018:
Goodwill acquired, net		—			—			(9,792	)		(9,792	)
Impairment		—			(3,400	)		—			(3,400	)
Other		(6,143	)		—			—			(6,143	)

Balance as of June 30, 2018	$	1,380,537		$	570,398		$	308,242		$	2,259,177
Goodwill		1,380,537			1,003,654			308,242			2,692,433
Accumulated impairment losses		—			(433,256	)		—			(433,256	)

Balance as of June 30, 2018	$	1,380,537		$	570,398		$	308,242		$	2,259,177

During the six months ended June 30, 2018, the Company recorded measurement period adjustments of $9.8 million related to Ruckus acquisition and $6.1 million of currency translation on non-USD denominated goodwill.

In addition, during the six months ended June 30, 2018, the Company recorded partial impairment of goodwill of $3.4 million related to our Cloud TV reporting unit, respectively, of which $1.2 million is attributable to the noncontrolling interest. This impairment was a result of the indirect effect of a change in accounting principle related to the adoption of new accounting standard Revenue from Contracts with Customers, resulting in changes in the composition and carrying amount of the net assets of our Cloud TV reporting unit. The partial impairment was included in impairment of goodwill on the Consolidated Statements of Operations.

Intangible Assets

The gross carrying amount and accumulated amortization of the Company’s acquired intangible assets as of June 30, 2018 and December 31, 2017 are as follows (in thousands):


	June 30, 2018						December 31, 2017
	Gross Amount		Accumulated Amortization		Net Book Value		Gross Amount		Accumulated Amortization		Net Book Value
Definite-lived intangible assets:
Customer relationships	$	1,761,898	$	866,141	$	895,757	$	1,672,470	$	780,655	$	891,815
Developed technology, patents & licenses		1,479,200		873,420		605,780		1,521,893		771,200		750,693
Trademarks, trade and domain names		75,672		53,016		22,656		87,472		41,885		45,587
Backlog		15,300		14,500		800		35,000		5,833		29,167

Sub-total	$	3,332,070	$	1,807,077	$	1,524,993	$	3,316,835	$	1,599,573	$	1,717,262

Indefinite-lived intangible assets:
Tradenames		55,400		—		55,400		—		—		—
In-process research and development		—		—		—		54,100		—		54,100

Sub-total		55,400		—		55,400		54,100		—		54,100

Total	$	3,387,470	$	1,807,077	$	1,580,393	$	3,370,935	$	1,599,573	$	1,771,362

As of June 30, 2018, the Company preliminarily recorded intangible assets (other than goodwill) of $494.7 million related to the Ruckus Networks acquisition. In-process research and development of $4.1 million was reclassified to become a definite-lived asset upon completion of the associated research and development efforts during the three months ended June 30, 2018.

Amortization expense is reported in the consolidated statements of operations within cost of sales and operating expenses. The following table presents the amortization of acquired intangible assets (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Cost of sales	$	889	$	711	$	1,779	$	1,422
Selling, general and administrative expenses		986		949		1,983		1,899
Amortization of acquired intangible assets ⁽¹⁾		90,485		91,012		205,193		184,657

Total	$	92,360	$	92,672	$	208,955	$	187,978

⁽¹⁾	Reflects amortization expense for the intangible assets acquired through business combinations.

The estimated total amortization expense for finite-lived intangibles for each of the next five fiscal years is as follows (in thousands):


2018 (for the remaining six months)	$	180,112
2019		333,202
2020		321,357
2021		186,571
2022		149,312
Thereafter		354,439