INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

The Company's intangible assets at December 31, 2017 and 2016 consisted of the following (in thousands):



December 31, 2017	Weighted average amortization period (years)	Cost		Accumulated amortization		Net carrying value
In-process research and development	*	$	5,600	$	—	$	5,600
Developed technology	6.90	153,380		24,211		129,169
Customer relationships	9.32	120,840		12,015		108,825
Trade names	3.00	900		80		820
Internal use software	3.00	730		730		—
	7.77	$	281,450	$	37,036	$	244,414



December 31, 2016	Weighted average amortization period (years)	Cost		Accumulated amortization		Net carrying value
Developed technology	6.54	$	34,980	$	16,453	$	18,527
Customer relationships	5.78	19,540		7,870		11,670
Internal use software	3.00	730		730		—
	6.23	$	55,250	$	25,053	$	30,197

* An in-process research and development intangible asset has an indefinite life until the product is generally available, at which time such asset is typically reclassified to developed technology.

Amortization expense for intangible assets for the years ended December 31, 2017, 2016 and 2015 was as follows (in thousands):



	Year ended December 31,						Statement of operations classification
	2017		2016		2015		Statement of operations classification
Developed technology	$	18,358	$	6,038	$	5,222	Cost of revenue - product
Customer relationships	4,145		1,462		1,723		Sales and marketing
Trade names	80		—		—		Sales and marketing
Internal use software	—		—		162		Cost of revenue - product
	$	22,583	$	7,500	$	7,107

In connection with the preparation of its financial statements for the fourth quarter of 2017, the Company reviewed its intangible assets and other long-lived assets for impairment indicators. The Company determined that a triggering event had occurred relative to one of its developed technology intangible assets that had been previously acquired. During 2017, the Company discontinued its ongoing development of this technology and determined that there were no alternative uses of the technology within either its existing or future product lines. As a result, the Company recorded an impairment charge of $5.5 million to write down the carrying value of the asset to zero. This expense is included as a component of Cost of revenue - product in the Company's consolidated statements of operations for the year ended December 31, 2017.

Estimated future amortization expense for the Company's intangible assets at December 31, 2017 was as follows (in thousands):



Years ending December 31,
2018	$	46,013
2019	39,109
2020	38,590
2021	32,472
2022	26,534
Thereafter	61,696
	$	244,414

Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. The changes in the carrying value of the Company's goodwill in the years ended December 31, 2017 and 2016 were as follows (in thousands):



	Year ended December 31,
	2017			2016
Balance at January 1
Goodwill	$	52,499		$	43,416
Accumulated impairment losses	(3,106		)	(3,106		)
	49,393			40,310
Acquisition of GENBAND	285,825			—
Acquisition of Taqua and subsequent purchase accounting adjustments	498			9,083
Balance at December 31	$	335,716		$	49,393

The components of the Company's goodwill balances at December 31, 2017 and 2016 were as follows:



	December 31,
	2017			2016
Goodwill	$	338,822		$	52,499
Accumulated impairment losses	(3,106		)	(3,106		)
	$	335,716		$	49,393

- 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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