Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

v3.7.0.1
Goodwill and Intangible Assets
 6 Months Ended
Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets

During the three and six months ended June 30, 2017, we entered into agreements to sell Ticketfly and KXMZ and met the requirements to classify the assets and liabilities of Ticketfly and KXMZ as held for sale. As a result of the Ticketfly agreement, we recognized a goodwill impairment of $131.7 million for the Ticketfly assets held for sale, which was based on the fair value of these net assets as implied by the estimated purchase price of $184.5 million, which includes an aggregate purchase price of $200.0 million, less estimated purchase price adjustments of $10.9 million for certain indemnification provisions and costs to sell of $4.6 million. As a result of the KXMZ agreement, we recognized a goodwill impairment of $0.3 million for the KXMZ assets held for sale, which was based on the fair value of these net assets as implied by the estimated purchase price. We performed goodwill impairment testing on our remaining goodwill, noting no additional impairment.

The changes in the carrying amount of goodwill in each of our reporting segments for the six months ended June 30, 2017, are as follows:

 
Pandora
 
Ticketfly
 
Total
 
(in thousands)
Balance as of December 31, 2016
$
71,650

 
$
235,041

 
$
306,691

Goodwill impairment
(300
)
 
(131,697
)
 
(131,997
)
Goodwill classified as held for sale
(107
)
 
(103,367
)
 
(103,474
)
Effect of currency translation adjustment
—

 
23

 
23

Balance as of June 30, 2017
$
71,243

 
$
—

 
$
71,243



The following summarizes information regarding the gross carrying amounts and accumulated amortization of intangible assets.
 
 
As of December 31, 2016
 
As of June 30, 2017
 
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Value
 
Gross Carrying Amount
 
Accumulated Amortization
 
Intangible Assets Held for Sale
 
Net Carrying Value
 
 
(in thousands)
 
(in thousands)
Finite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Patents
 
$
8,030

 
$
(2,556
)
 
$
5,474

 
$
8,030

 
$
(2,923
)
 
$
—

 
$
5,107

Developed technology
 
56,162

 
(13,599
)
 
42,563

 
56,162

 
(19,293
)
 
(19,235
)
 
17,634

Customer relationships—clients
 
37,399

 
(5,487
)
 
31,912

 
37,399

 
(7,449
)
 
(29,950
)
 
—

Customer relationships—users
 
1,940

 
(1,288
)
 
652

 
1,940

 
(1,732
)
 
(208
)
 
—

Trade names
 
11,735

 
(2,104
)
 
9,631

 
11,735

 
(2,895
)
 
(8,346
)
 
494

Total finite-lived intangible assets
 
$
115,266

 
$
(25,034
)
 
$
90,232

 
$
115,266

 
$
(34,292
)
 
$
(57,739
)
 
$
23,235

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indefinite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FCC license - Broadcast Radio
 
$
193

 
$
—

 
$
193

 
$
193

 
$
—

 
$
(193
)
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total intangible assets
 
$
115,459

 
$
(25,034
)
 
$
90,425

 
$
115,459

 
$
(34,292
)
 
$
(57,932
)
 
$
23,235

Note: Amounts may not recalculate due to rounding

Amortization expense of intangible assets was $5.1 million and $4.1 million for the three months ended June 30, 2016 and 2017. Amortization expense of intangible assets was $10.3 million and $9.3 million for the six months ended June 30, 2016 and 2017.

The following is a schedule of future amortization expense related to finite-lived intangible assets as of June 30, 2017.

 
As of 
 June 30, 
 2017
 
(in thousands)
Remainder of 2017
$
3,827

2018
6,066

2019
5,546

2020
5,251

2021
727

Thereafter
1,818

Total future amortization expense
$
23,235