Discontinued Operations (Notes)

3 Months Ended

Mar. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations, Policy [Policy Text Block]

5. DISCONTINUED OPERATIONS

On January 9, 2018, the Company completed the Big Fish Transaction which had a purchase price of $990.0 million.  The Company received cash proceeds of $970.7 million which was net of $5.2 million of working capital adjustments and $14.1 million of transaction costs. The Company derecognized the following upon the Big Fish Transaction:

(in millions)
Cash and cash equivalents	$	0.3
Accounts receivable	34.7
Game software development, net	6.7
Other current assets	17.0
Property and equipment, net	17.8
Game software development, net	13.8
Goodwill	530.7
Other intangible assets, net	238.4
Other assets	24.0
Accounts payable	(8.5		)
Accrued expense	(22.6		)
Deferred revenue	(44.2		)
Deferred income taxes	(52.0		)
Other liabilities	(4.9		)
Carrying value of disposal group	$	751.2

The Company recognized a gain of $219.5 million upon the sale recorded in income from discontinued operations on the condensed consolidated statements of comprehensive income for the three months ended March 31, 2018. The gain consisted of cash proceeds of $970.7 million offset by the carrying value of the disposal group of $751.2 million. The income tax provision on the gain was $51.2 million, resulting in an after tax gain of $168.3 million.

The following table presents the financial results of Big Fish Games included in “income from discontinued operations, net of tax”:

	Three Months Ended March 31,
(in millions)	2018			2017
Net revenue	$	13.2		$	112.0
Operating expenses	8.4			87.0
Selling, general and administrative expense	4.3			5.5
Research and development	0.9			10.3
Transaction expense, net	—			0.2
Total operating expense	13.6			103.0
Operating (loss) income	(0.4		)	9.0
Other income (expense)
Gain on sale of Big Fish Games	219.5			—
Other expense	(0.1		)	—
Total other income	219.4			—
Income from discontinued operations before provision for income taxes	219.0			9.0
Income tax provision	(51.1		)	(3.9		)
Income from discontinued operations, net of tax	$	167.9		$	5.1

Stock-Based Compensation

For the three months ended March 31, 2018, the Company recognized $3.3 million of stock-based compensation expense related to Big Fish Games, which included the impact of the accelerated vesting dates of restricted stock awards held by Big Fish Games' employees in conjunction with the Big Fish Transaction.

Earnout Liabilities

As of December 31, 2017, we had $34.2 million of deferred earnout consideration and $28.4 million of deferred payments due to the founder of Big Fish Games, both of which were paid on January 3, 2018.