Anuvu Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Equity Method Investments

Equity Method Investments

12 Months Ended

Dec. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

In connection with the EMC Acquisition, the Company acquired 49% interests in WMS and Santander. During the fourth quarter of 2017, in accordance with ASC 323, Investments—Equity Method and Joint Ventures, we completed an assessment of the recoverability of our equity method investments. We determined that the fair value of our investment in Santander exceeded the carrying value; however, the carrying value of our interest in our WMS joint venture exceeded the estimated fair value of our interest and accordingly we recorded an impairment charge of $16.7 million relating to our WMS equity investment. This WMS impairment was primarily as a result of lower than expected financial results for year ended December 31, 2017 due to the loss of a roaming partner. This resulted in a decline in revenue and margin which is not expected to recover in the foreseeable future, causing us to reduce our financial projections for the WMS business for 2018 and beyond.

Following is the summarized financial information for such equity method investments on an aggregated basis from the EMC Acquisition Date through December 31, 2017 (in thousands):



	December 31,
	2017		2016
Current assets	$	35,859	$	30,837
Non-current assets	21,009		21,822
Current liabilities	15,151		20,455
Non-current liabilities	1,056		1,307



	Year Ended December 31,
	2017		2016
Revenue	$	133,419	$	64,637
Operating expenses	111,458		51,240
Net income	21,961		13,397

The carrying values of the Company’s equity interests in WMS and Santander as of December 31, 2017 and 2016 were as follows (in thousands):



	Year Ended December 31,
	2017		2016
Carrying value in our equity method investments⁽¹⁾	$	137,299	$	156,527

⁽¹⁾ Includes the impact of the WMS impairment charge of $16.7 million.

As of December 31, 2017, there was an aggregate difference of $118.1 million between the carrying amounts (inclusive of the impact of the impairment loss) of these investments and the amounts of underlying equity in net assets in these investments. The difference was determined by applying the acquisition method of accounting in connection with the EMC Acquisition and is being amortized ratably over the life of the related acquired intangible assets. The weighted-average life of the intangible assets at the time of the EMC Acquisition in total was 14.9 years.