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Table of Contents
2012 Acquisition of Corporate Headquarters Building
In April, 2012, we purchased our corporate headquarters building located in San Francisco, California from 650 Townsend Associates,
LLC to support the overall growth of our business.
In conjunction with the transaction we recorded a gain of $41.1 million. 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. 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 for the period ending December 31, 2012.
Pursuant to the agreement, we also acquired existing third-party leases and other intangible property and terminated our existing office
leases with the seller. 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
On February 11, 2014, we acquired 100% of the outstanding stock of NaturalMotion, a provider of games for mobile phones and tablets
domiciled in the U.K. We acquired NaturalMotion to leverage their strong portfolio of technology, assembled workforce and existing mobile
games in order to expand and enhance our game offerings particularly on mobile platforms. The acquisition date fair value of the purchase
consideration was $522.2 million, which included the following (in thousands):
The value of the purchase consideration attributed to the 28.2 million common shares issued was based on a $4.63 closing price of the
Company’s Class A Common Stock on the date of the closing of the acquisition.
The following table summarizes the preliminary acquisition date fair value of net tangible assets acquired and liabilities assumed from
NaturalMotion (in thousands, unaudited):
91
Fair Value of
Purchase
Consideration
Cash
$
391,000
Common stock (28,178,201 shares)
130,465
Fair value of stock options assumed
693
Total
$
522,158
Preliminary
Estimated
Fair Value
Preliminary
Estimated
Weighted
Average
Useful Life
Tangible net assets (liabilities) assumed(1)
$
1,259
N/A
Intangible assets
Developed technology
59,900
3 years
Branding and trade names
15,000
4.6 years
Goodwill(1)
445,999
N/A
Total
$
522,158