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Table of Contents
acquired existing third-party leases and other intangible property and terminated our existing office leases with the seller. In accordance with
ASC 805, Business Combinations , we accounted for the building purchase as a business combination. The purchase consideration for the
corporate headquarters building was as follows (in thousands):
The gain on the termination of the below-market lease represents the difference between the contractual minimum rental payments owed
under our previously-existing leases and the market rates of those same leases. The following table summarizes the fair values of net tangible
and intangible assets acquired (in thousands):
In addition to the gain recognized on the termination of the below-market lease, we recognized a gain of $25.1 million from the write-off
of deferred rent liability and we recognized a loss of $46.2 million resulting from the write-off of leasehold improvements, as any value ascribed
to these leasehold improvements were reflected in the fair value of the net tangible and intangible assets acquired. These amounts have been
included in other income (expense), net in our consolidated statements of operations.
We have included the rental income from third party leases with other tenants in the building, and the proportionate share of building
expenses for those leases, in other income (expense), net in our consolidated results of operations from the date of acquisition. These amounts
were not material for the periods presented. The estimated useful life for the building is 39 years and is being amortized on a straight-line basis.
5. Acquisitions
2013 Acquisitions
On June 19, 2013, we acquired Spooky Cool Labs LLC (“Spooky Cool Labs”), a developer of social casino games, for purchase
consideration of approximately $30.6 million, which consisted of cash paid of $19.8 million and contingent consideration with an acquisition
date fair value of $10.8 million (see Note 3 for changes in this estimate). The contingent consideration may be payable based on the achievement
of certain future performance targets during the two year period following the acquisition date and could be up to $100 million.
For further details on our fair value methodology with respect to contingent consideration liabilities, see Note 3 — Fair Value.
The following table summarizes the purchase date fair value of net tangible and intangible assets acquired from Spooky Cool Labs (in
thousands, unaudited):
86
Cash
$
233,700
Gain on termination of below
-
market lease
41,058
Total purchase consideration
$
274,758
Building
$
182,644
Land
89,130
Acquired lease intangibles
2,984
Total
$
274,758
Total
Developed technology
$
7,500
Net tangible assets acquired (liabilities assumed)
2,612
Goodwill
20,441
Total
$
30,553