RealPage, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Identified Intangible Assets

Changes in the carrying amount of goodwill during the years ended December 31, 2016 and 2015, were as follows, in thousands:



Balance at January 1, 2015	$	193,378
Goodwill acquired	26,719
Balance at December 31, 2015	220,097
Goodwill acquired	39,890
Other	(49		)
Balance at December 31, 2016	$	259,938

There was no impairment of goodwill recorded in 2016, 2015, or 2014.

Changes in identified intangible assets during the years ended December 31, 2016 and 2015 were as follows:



	December 31, 2015			Additions			Dispositions			Impairments			Transfers / Other		December 31, 2016
	(in thousands)
Finite-lived intangible assets:
Developed technologies	$	69,379		$	6,538		$	—		$	—		$	7	$	75,924
Client relationships	96,523			15,331			(3,386		)	—			—		108,468
Vendor relationships	5,650			—			—			—			—		5,650
Trade names	5,149			750			—			—			—		5,899
Total finite-lived intangible assets	176,701			22,619			(3,386		)	—			7		195,941
Less: Accumulated amortization	(110,882		)	(24,489		)	1,904			—			—		(133,467		)
Indefinite-lived intangible assets:
Trade names	15,461			—			(2,212		)	(750		)	3		12,502
Intangible assets, net	$	81,280		$	(1,870	)	$	(3,694	)	$	(750	)	$	10	$	74,976



	December 31, 2014			Additions			Dispositions		Impairments			Transfers / Other			December 31, 2015
	(in thousands)
Finite-lived intangible assets:
Developed technologies	$	55,212		$	14,194		$	—	$	—		$	(27	)	$	69,379
Client relationships	86,753			9,770			—		—			—			96,523
Vendor relationships	5,650			—			—		—			—			5,650
Trade names	—			83			—		—			5,066			5,149
Total finite-lived intangible assets	147,615			24,047			—		—			5,039			176,701
Less: Accumulated amortization	(88,880		)	(22,002		)	—		—			—			(110,882		)
Indefinite-lived intangible assets:
Trade names	41,350			—			—		(20,801		)	(5,088		)	15,461
Intangible assets, net	$	100,085		$	2,045		$	—	$	(20,801	)	$	(49	)	$	81,280

Amortization expense for finite-lived intangible assets totaled $24.5 million, $22.0 million, and $20.7 million during the years ended December 31, 2016, 2015, and 2014, respectively.

The following table sets forth the estimated amortization of intangible assets for the years ending December 31, in thousands:



2017	$	18,797
2018	13,380
2019	9,860
2020	8,159
2021	5,545

In March 2015, the Company completed the integration of the InstaManager and Kigo platforms into a single solution marketed under the Kigo name. Subsequent to this integration, the Company discontinued the use of the InstaManager trade name to market or identify the software. Due to this change in circumstance, the Company evaluated the InstaManager trade name for impairment and concluded an impairment in the amount of $0.5 million existed at March 31, 2015.

In connection with the preparation of the third quarter 2015 financial statements, the Company identified indicators requiring the assessment of certain indefinite-lived trade names for impairment, primarily associated with the Company's 2011 acquisition of MyNewPlace. Identified indicators included declines in actual and anticipated lead-generation revenues and a change in the Company's long-term marketing strategy. As a result, the Company analyzed these intangible assets and recorded a $20.3 million impairment charge during the third quarter of 2015, representing the amount by which the carrying value of the indefinite-lived trade names exceeded their estimated fair value. Given the change in the Company's long-term marketing strategy and anticipated use of the trade names, the remaining balance was reclassified to finite-lived intangible assets as of September 30, 2015. The trade names were assigned an estimated useful life of seven years, amortized on a straight-line basis.

The $3.7 million of net dispositions shown above reflect our sale of certain assets associated with our senior living referral services in the fourth quarter of 2016. Based on the status of the sale negotiations at the end of the third quarter, we determined there was a possibility that certain of the assets could be impaired and performed an impairment analysis. As a result of that analysis we recorded an impairment of the associated trade names at September 30, 2016, in the amount of $0.8 million, the amount by which the carrying value of the trade names exceeded their estimated fair value on the date of analysis.

The above impairment charges are included in "Impairment of identified intangible assets" in the accompanying Consolidated Statements of Operations. See Note 12 for discussion of the methodology and inputs utilized by the Company to estimate the fair value of these indefinite-lived trade names.

- 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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