Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

The Company accounts for acquisitions using purchase accounting with the results of operations for each acquiree included in the Company’s consolidated financial statements for the period subsequent to the date of acquisition. The pro forma effects of the acquisitions completed in 2015, 2014, and 2013 were not significant individually or in the aggregate. The Company did not have any significant acquisitions during the years ended December 31, 2015, 2014, and 2013.

Intangible Assets

Amortized intangible assets are comprised of the following:



	2015				2014
December 31	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Intangible assets:
Completed technology	$	60	$	32	$	37	$	27
Patents	8		5		8		4
Customer-related	23		10		15		8
Other intangibles	20		15		17		15
	$	111	$	62	$	77	$	54

Amortization expense on intangible assets, which is included within Other charges in the consolidated statements of operations, was $8 million, $4 million, and $1 million for the years ended December 31, 2015, 2014, and 2013, respectively. As of December 31, 2015, future amortization expense is estimated to be $9 million in 2016 and 2017, $8 million in 2018, and $7 million in 2019, and $4 million in 2020.

Amortized intangible assets, excluding goodwill, were comprised of the following by segment:



	2015				2014
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Products	$	89	$	60	$	77	$	54
Services	22		2		—		—
	$	111	$	62	$	77	$	54

Goodwill

The following table displays a rollforward of the carrying amount of goodwill by segment from January 1, 2014 to December 31, 2015:



	Products		Services		Total
Balance as of January 1, 2014
Aggregate goodwill acquired	$	249	$	112	$	361
Accumulated impairment losses	—		—		—
Goodwill, net of impairment losses	249		112		361
Goodwill acquired	15		7		22
Balance as of December 31, 2014
Aggregate goodwill acquired/disposed	264		119		383
Accumulated impairment losses	—		—		—
Goodwill, net of impairment losses	264		119		383
Goodwill acquired	6		31		37
Balance as of December 31, 2015
Aggregate goodwill acquired	270		150		420
Accumulated impairment losses	—		—		—
Goodwill, net of impairment losses	$	270	$	150	$	420

On December 31, 2013, the Company completed the acquisition of a communication software provider in push-to-talk-over-broadband applications for a gross purchase price of $48 million. As a result of the acquisition, the Company recognized $22 million of goodwill and $20 million of identifiable intangible assets in 2014 when the purchase accounting was completed.

On November 18, 2014, the Company completed the acquisition of an equipment provider for a purchase price of $22 million. During the nine months ended October 3, 2015, the Company completed the purchase accounting for this acquisition, recognizing $6 million of goodwill and $12 million of identifiable intangible assets. These identifiable intangible assets were classified as completed technology to be amortized over five years.

During the year ended December 31, 2015, the Company completed the acquisitions of two providers of public safety software-based solutions for an aggregate purchase price of $50 million, recognizing an additional $31 million of goodwill, $22 million of identifiable intangible assets, and $3 million of acquired liabilities related to these acquisitions. The $22 million of identifiable intangible assets were classified as: (i) $11 million completed technology, (ii) $8 million customer-related, and (iii) $3 million of other intangibles. These intangible assets will be amortized over periods ranging from five to ten years.

The results of operations for these acquisitions have been included in the Company’s consolidated statements of operations subsequent to the acquisition date. The pro forma effects of these acquisitions are not significant individually or in the aggregate.

On February 19, 2016, we completed the acquisition of 100% of the equity interest in Guardian Digital Communications Limited ("GDCL"), a holding company of Airwave Solutions Limited ("Airwave"), the largest private operator of a public safety network in the world. For the purposes of purchase accounting, the net purchase price was $1.1 billion, taking into account approximately $1 billion of net cash paid at closing and approximately $90 million of deferred consideration which will be due on November 15, 2018. The acquisition of Airwave enables the Company to grow revenue and geographically diversify its global Managed & Support services offerings within its Services segment, while offering a proven service delivery platform to build on for providing innovative, leading, mission-critical communications solutions and services to customers. As of the date of issuance of the Company's financial statements, the purchase accounting has not been completed.

The Company conducts its annual assessment of goodwill for impairment in the fourth quarter of each year. The goodwill impairment assessment is performed at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment. The Company has determined that the Products segment and Services segment each meet the definition of a reporting unit.

The Company performed a qualitative assessment to determine whether it was more-likely-than-not that the fair value of each reporting unit was less than its carrying amount for the fiscal years 2015, 2014, and 2013. In performing this qualitative assessment the Company assessed relevant events and circumstances including macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, changes in share price, and entity-specific events. For fiscal years 2015, 2014, and 2013, the Company concluded it was more-likely-than-not that the fair value of each reporting unit exceeded its carrying value. Therefore, the two-step goodwill impairment test was not required and there was no impairment of goodwill.

- 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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