LOGM 2017 Annual Report

to refinement. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company recorded adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill to reflect additional information received about facts and circumstances that existed at the date of acquisition. The Company recorded these adjustments to the assets acquired and liabilities assumed subsequent to the purchase price allocation period in the Company’s operating results in the period in which the adjustments were determined. The size and breadth of the Merger, as well as the fact that the GoTo Business represented a carve out from Citrix into primarily newly formed legal entities in 2016, neces- sitated the use of this measurement period to adequately analyze and assess a number of the factors used in estab- lishing the fair value of certain tangible and intangible assets acquired and liabilities assumed as of the acquisition date and the related tax impacts of any changes made. The purchase accounting assessment, which was finalized in the fourth quarter of 2017, resulted in a change in the valuation of assets acquired and liabilities assumed and a corresponding decrease in goodwill of $43.2 million (2% of total goodwill initially recorded). In the fourth quarter of 2017, the 2016 tax return filings for the GoTo Business were finalized by Citrix and the Company obtained access to the tax returns and supporting documentation. These tax returns and the supporting documentation allowed the Company to review tax elections made and to identify acquisition-date deferred income tax attributes. In most instances, these were the first tax returns prepared and filed for the respective GoTo Business entities. As a result, the Company decreased deferred tax liabilities, net, by $46.2 million due primarily to the GoTo Business’ pre-Merger acquisitions with tax attributes that are deductible for tax purposes post-Merger. The following table summarizes the fair value (in thousands) of the assets acquired and liabilities assumed at the date of acquisition: Purchase consideration: Company common shares issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,904,487 (1) Restricted stock units issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,692 (2) Cash consideration paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,317 (3) Total purchase consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,924,496 Estimated fair value of assets acquired and liabilities assumed: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,215 Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,957 (4) Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,715 Prepaid expense and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,824 (4) Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,448 Intangible assets (weighted average useful life): (5) Completed technology (9 years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385,600 (4) Customer relationships (8 years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756,700 (4) Tradenames and trademark (9 years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,100 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,030) Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,886) Deferred revenue, current and noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82,643) Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (996) Deferred tax liability, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (379,871) Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,059,363 (1) Represents the fair value of the 26.9 million new shares of the Company’s common stock (plus cash in lieu of fractional shares) issued to Citrix stockholders, based on the fair value per share of the Company’s 70