Acquisitions (Tables)

12 Months Ended

Dec. 31, 2016

The total aggregate purchase price for King was comprised of (amounts in millions):




Cash consideration for outstanding King common stock and vested equity options and awards (1)	$	5,730
Fair value of King’s existing vested and unvested stock options and awards assumed (2)	98
Total purchase price	$	5,828

(1) Represents the cash consideration paid based on $18.00 per share to common stock holders of King and the fair value of King's existing vested options and awards that were cash settled at the King Closing Date for the portion of the fair value related to pre-combination services. No future services are required.

(2) Represents the fair value of King’s existing vested and unvested stock options and awards that were assumed and replaced with Activision Blizzard equity or deferred cash awards. The purchase price includes the portion of fair value related to pre-combination services. The fair value of the options and awards assumed was determined using binomial-lattice and Monte Carlo models with the following assumptions: (a) volatility of 36%, (b) time-varying risk-free interest rates based on the U.S. Treasury yield curves, (c) an expected life ranging from approximately 0.1 years to 7.6 years, and (d) an expected dividend yield of 0.9%. See additional discussion under Share-Based Compensation below.

Schedule of Preliminary Purchase Price Allocation

The final purchase price allocation is as follows (in millions):



	February 23, 2016			Estimated useful lives
Tangible assets and liabilities assumed:
Cash and cash equivalents	$	1,151
Accounts receivable	162
Other current assets	72
Property and equipment	57			2 - 7 years
Deferred income tax assets, net	27
Other assets	47
Accounts payable	(9		)
Accrued expense and other liabilities	(272		)
Other liabilities	(110		)
Deferred income tax liabilities, net	(52		)
Intangible assets
Internally-developed franchises	845			3 - 5 years
Customer base	609			2 years
Developed software	580			3 - 4 years
Trade name	46			7 years

Goodwill	2,675
Total purchase price	$	5,828

Schedule of Pro Forma Financial Information

The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the King Acquisition, and any borrowings undertaken to finance the King Acquisition, had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results.



	For the Year Ended December 31,
(in millions)	2016		2015

Net revenues	$	6,888	$	6,677
Net income	$	1,005	$	639
Basic earnings per common share	$	1.35	$	0.87
Diluted earnings per common share	$	1.32	$	0.85

The amount of net revenue and earnings attributable to King in the Company’s consolidated statement of operations during the year ended December 31, 2016, are included in the table below. The amounts presented represent the net revenues and earnings after adjustments for purchase price accounting, inclusive of amortization of intangible assets, share-based payments, and deferral of revenues and related cost of revenues.



(in millions)	For the Year Ended December 31, 2016

Net revenues	$	1,523
Net loss	$	(230	)