INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

The Company's intangible assets at December 31, 2016 and 2015 consisted of the following (in thousands):



	December 31, 2016							December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Amortization Period	Weighted Average Useful Life

Supply and distribution agreements	$	809,287	$	(270,813	)	$	538,474	$	824,932	$	(227,994	)	$	596,938	10 - 20 years	16 years

Technology	112,141		(80,549		)	31,592		112,639		(61,404		)	51,235		1 - 5 years	5 years

Patents	1,623		(1,598		)	25		1,623		(1,562		)	61		15 years	15 years

Internet domain names	39,495		(25,089		)	14,406		40,352		(20,954		)	19,398		2 - 20 years	8 years

Trade names	1,667,221		(261,412		)	1,405,809		1,671,356		(183,101		)	1,488,255		4-20 years	20 years

Non-compete agreements	21,900		(18,321		)	3,579		22,847		(11,201		)	11,646		3-4 years	3 years

Other	—		—			—		135		(135		)	—
Total intangible assets	$	2,651,667	$	(657,782	)	$	1,993,885	$	2,673,884	$	(506,351	)	$	2,167,533

Intangible assets are amortized on a straight-line basis. Amortization expense was approximately $169.1 million, $171.0 million and $129.6 million for the years ended December 31, 2016, 2015 and 2014, respectively.

The annual estimated amortization expense for intangible assets for the next five years and thereafter is expected to be as follows (in thousands):



2017	$	159,451
2018	141,161
2019	130,997
2020	124,216
2021	119,469
Thereafter	1,318,591
	$	1,993,885

A roll-forward of goodwill for the years ended December 31, 2016 and 2015 consisted of the following (in thousands):



	2016			2015
Balance, beginning of year	$	3,375,000		$	3,326,474
Acquisitions	—			74,584
Impairment	(940,700		)	—
Currency translation adjustments	(37,394		)	(26,058		)
Balance, end of year	$	2,396,906		$	3,375,000

A substantial portion of the intangibles and goodwill relates to the acquisitions of OpenTable in July 2014 and KAYAK in May 2013. See Note 18 for further information on the acquisition of OpenTable.

As of September 30, 2016, the Company performed its annual goodwill impairment testing. Other than OpenTable, the fair values of the Company’s reporting units substantially exceeded their respective carrying values. For OpenTable, the Company recognized a non-cash impairment charge to goodwill of $940.7 million, which is not tax deductible, resulting in an adjusted carrying value of OpenTable goodwill of $580.1 million as of September 30, 2016. The goodwill impairment charge was included in operating expenses in the Consolidated Statement of Operations for the year ended December 31, 2016. OpenTable’s estimated fair value was determined using a combination of standard valuation techniques, including an income approach (discounted cash flows) and market approaches (EBITDA multiples of comparable publicly-traded companies and precedent transactions). Also, the Company tested the recoverability of OpenTable’s other long-lived assets and concluded there was no impairment as of September 30, 2016. Since the annual impairment test, there have been no further events or changes in circumstances to indicate a potential impairment.

The goodwill impairment was primarily the result of a change in OpenTable’s business strategy that occurred during the third quarter 2016. OpenTable’s post-acquisition strategy was premised on significant and rapid investment in international expansion and various other growth initiatives, resulting in near-term reduced earnings and profit margins but with the goal of achieving significantly increased revenues and profitability in the long term. This strategy had resulted in limited progress as of September 30, 2016. As a result, while OpenTable intends to continue to pursue and invest in international expansion and its other growth initiatives, it intends to do so in a more measured and deliberate manner. This change in strategy resulted in OpenTable updating its forecasted financial results to reflect (a) a material reduction in forecasted long-term financial results from these initiatives, partially offset by (b) improved earnings and profit margins in the near term as a result of the reduced investments. Based on the updated forecast, the Company estimated a significant reduction in the fair value of the OpenTable business and recorded the goodwill impairment discussed above.

- 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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