LinkedIn 2014 Annual Report Download - page 99

equity awards. To retain the services of certain former employees, LinkedIn offered 79,604 shares of
unvested Class A common stock with a total fair value of $12.5 million that will be earned over two
years from the date of acquisition. As the equity awards are subject to post-acquisition employment,
the Company is accounting for them as post-acquisition compensation expense.
These acquisitions, including Bizo and Bright, have been accounted for as business combinations
under the acquisition method and, accordingly, the total purchase price is allocated to the tangible and
intangible assets acquired and the liabilities assumed based on their respective fair values on the
acquisition dates. The results of operations of these acquisitions have been included in the
consolidated financial statements from the date of each respective acquisition. The Company has
recognized $22.9 million in revenue related to its acquisition of Bizo. The following table presents the
purchase price allocations recorded in the Company’s consolidated balance sheets as of the acquisition
dates (in thousands):
Other
Bizo Bright acquisitions Total
Net tangible assets .......................... $ 8,159 $ 905 $ 221 $ 9,285
Goodwill(1) ................................ 113,551 73,851 18,445 205,847
Intangible assets(2) .......................... 47,800 32,200 5,299 85,299
Net deferred tax liability ...................... (9,257) (6,323) (195) (15,775)
Total purchase price(3) ...................... $160,253 $100,633 $23,770 $284,656
(1) The goodwill represents the excess value of the purchase price over both tangible and intangible
assets acquired. The goodwill in these transactions is primarily attributable to expected operational
synergies, assembled workforces, and the future development initiatives of the assembled
workforces. None of the goodwill is expected to be deductible for tax purposes.
(2) Identifiable definite-lived intangible assets were comprised of developed technology of $81.4 million
and customer relationships of $3.9 million. The overall weighted-average life of the identifiable
definite-lived intangible assets acquired in the purchase of the companies was 3.0 years, which will
be amortized on a straight-line basis over their estimated useful lives.
(3) Subject to adjustment based on (i) purchase price adjustment provisions contained in the
acquisition agreement and (ii) indemnification obligations of the acquired company stockholders.
Supplemental information on an unaudited pro forma basis, as if the Bright and Bizo acquisitions
had been consummated on January 1, 2013, is presented as follows (in thousands, except per share
amounts):
Year Ended
December 31,
2014 2013
Revenue ................................................ $2,247,187 $1,574,460
Net loss attributable to common stockholders ...................... $ (50,786) $ (9,007)
Net loss per share attributable to common stockholders—diluted ......... $ (0.41) $ (0.08)
These pro forma results are based on estimates and assumptions, which the Company believes
are reasonable. They are not necessarily indicative of the Company’s consolidated results of operations
in future periods or the results that actually would have been realized had the companies operated on
a combined basis during the periods presented. The pro forma results include adjustments primarily
related to amortization of developed technology, benefit arrangements in connection with the
acquisition, and stock-based compensation expenses for assumed unearned equity awards.
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