Annual report pursuant to Section 13 and 15(d)

Goodwill

v3.8.0.1
Goodwill
 12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill
Goodwill

The changes in the carrying amounts of goodwill by segment are as follows (in thousands):

 
Aviation Connectivity
 
Maritime & Land Connectivity
 
Media & Content
 
Total
Balance as of December 31, 2014
$
—

 
$
—

 
$
53,014

 
$
53,014

Goodwill related to acquisitions
19,298

 
—

 
21,795

 
41,093

Foreign currency translation and other
(25
)
 
—

 
(286
)
 
(311
)
Balance as of December 31, 2015
19,273

 
—

 
74,523

 
93,796

Goodwill related to the EMC acquisition
78,764

 
210,380

 
9,703

 
298,847

Impairment loss
—

 
(64,000
)
 
—

 
(64,000
)
Adjustment to RMG goodwill
—

 
—

 
(812
)
 
(812
)
Foreign currency translation
—

 
—

 
5

 
5

Balance as of December 31, 2016


 


 


 


Gross carrying amount
98,037

 
210,380

 
83,419

 
391,836

Accumulated impairment loss
—

 
(64,000
)
 
—

 
(64,000
)
Balance as of December 31, 2016, net
$
98,037

 
$
146,380

 
$
83,419

 
$
327,836



Refer to Note 3. Business Combinations for the details of goodwill that arose from the EMC Acquisition in 2016 and WOI, RMG, navAero and masFlight acquisitions in 2015 and for changes during the years ended December 31, 2016 and 2015 affecting goodwill. During the year ended December 31, 2016, the Company determined that the goodwill relating to the Maritime & Land Connectivity reporting unit was impaired due to the conclusion during the fourth quarter that the estimated internal financial projections for this reporting unit would be lower than previously anticipated. Refer to Note 2. Basis of Presentation and Summary of Significant Accounting Policies for the details on further reasons of impairment. Therefore, the Company recognized an impairment loss of $64.0 million during the year ended December 31, 2016. There was no goodwill impairment recognized in the years ended December 31, 2015 and 2014.

Subsequent to December 31, 2016, due to the significant decline in our stock price and other events that had occurred during the first quarter of 2017, the Company assessed its goodwill for impairment as of March 31, 2017 by applying the recently adopted accounting standard ASU 2017-04, which eliminated the Step Two from the goodwill impairment test. The Company will recognize goodwill impairment preliminarily estimated between $75.0 million and $80.0 million in the Maritime & Land Connectivity reporting unit as of March 31, 2017. The Company has not closed its books for any periods subsequent to December 31, 2016.  As stated above, the Company expects to have a significant impairment during the quarter ended March 31, 2017 and may have additional impairment charges in later periods after completing its impairment assessments for these periods.

Had ASU 2017-04 been available for adoption for the year ended December 31, 2016, the Company would have recognized a goodwill impairment charge of $91.1 million during the year-ended December 31, 2016.