BUSINESS COMBINATIONS (Tables) - LinkedIn Corporation

9 Months Ended

Mar. 31, 2017

Major Classes of Assets and Liabilities to Which We Have Preliminarily Allocated the Purchase Price

The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows:

(In millions)
Cash and cash equivalents	$	1,328
Short-term investments		2,110
Other current assets		697
Property and equipment		1,529
Intangible assets		7,887
Goodwill (a)		16,687
Short-term debt (b)		(1,323	)
Other current liabilities		(1,117	)
Deferred income taxes		(657	)
Other		(132	)
Total purchase price	$	27,009

(a) Goodwill was assigned to our Productivity and Business Processes segment. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of LinkedIn. None of the goodwill is expected to be deductible for income tax purposes.

(b) Convertible senior notes issued by LinkedIn on November 12, 2014, substantially all of which were redeemed after our acquisition of LinkedIn. The remaining $18 million of notes are not redeemable and are included in long-term debt on our consolidated balance sheets. See Note 11 – Debt for further information.

Acquired Intangible Assets

Following are the details of the purchase price allocated to the intangible assets acquired:

(In millions)	Amount		Weighted Average Life
Customer-related	$	3,607		7 years
Marketing-related (trade names)		2,148		20 years
Technology-based		2,109		3 years
Contract-based		23		5 years
Fair value of intangible assets acquired	$	7,887		9 years

Revenue and Operating Loss Attributable to Acquiree, Since the Date of Acquisition

Our consolidated income statements include the following revenue and operating loss attributable to LinkedIn since the date of acquisition:

(In millions)	Three Months Ended March 31, 2017			Nine Months Ended March 31, 2017
Revenue	$	975		$	1,203
Operating loss	$	(386	)	$	(587	)

Supplemental Consolidated Financial Results on Unaudited Pro Forma Basis, as If the Acquisition Had Been Consummated on Beginning of Period

Following are the supplemental consolidated financial results of Microsoft Corporation on an unaudited pro forma basis, as if the acquisition had been consummated on July 1, 2015:

(In millions, except earnings per share)	Three Months Ended March 31,				Nine Months Ended March 31,
	2017		2016			2017		2016
Revenue	$	22,086	$	21,377	$	68,357	$	67,116
Net income	$	4,820	$	3,402	$	14,283	$	12,547
Diluted earnings per share	$	0.62	$	0.43	$	1.82	$	1.56