LOGM 2017 Annual Report

Unaudited Pro Forma Financial Information Years Ended December 31, (unaudited) (In millions, except per share data) 2016 2017 Pro forma revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $983.6 $1,060.7 Pro forma net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . $ (95.4) $ 129.3 Pro forma income (loss) per share: Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1.83) $ 2.46 Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1.83) $ 2.41 Pro forma weighted average shares outstanding Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.2 52.7 Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.2 53.7 2016 Acquisition AuthAir, Inc. On October 31, 2016, the Company acquired all of the outstanding equity interests in AuthAir, a Woodbridge, Connecticut-based provider of proximity-based security and wireless authentication solutions, for $6.0 million plus contingent retention-based bonuses totaling up to $0.5 million to be paid to former AuthAir employees over a two-year period following the date of the acquisition. The results of operations of AuthAir have been included in the Company’s consolidated financial results since the acquisition date and have not been material. 2015 Acquisition Marvasol, Inc., d/b/a “LastPass” On October 15, 2015, the Company acquired all of the outstanding equity interests in LastPass, a Fairfax, Virginia-based provider of an identity and password management service, for $107.6 million, net of cash acquired, plus contingent payments totaling $15.0 million which were paid over a two-year period following the date of acquisition. The stock purchase agreement also included non-retention based payments of $2.5 million to LastPass stockholders which were contingent on the achievement of certain bookings goals, which the Company concluded was contingent consideration and was accounted for as part of the purchase price. This contingent consideration liability was recorded at its fair value of $2.0 million at the acquisition date. The Company assessed the probability of the bookings goals being met and at what level each reporting period. The contingent consideration liability of $2.5 million was paid in October 2016. 5. Goodwill and Intangible Assets The changes in the carrying amounts of goodwill for the years ended December 31, 2016 and 2017 are due to the addition of goodwill resulting from the acquisition of AuthAir in 2016 and the Merger with the GoTo Business and the acquisition of Nanorep in 2017 (See Note 4 to the Consolidated Financial Statements). Changes in goodwill for the years ended December 31, 2016 and 2017 are as follows (in thousands): Balance, January 1, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 117,545 Goodwill related to the acquisition of AuthAir . . . . . . . . . . . . . . . . 4,215 Balance, December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,760 Goodwill related to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,059,363 Goodwill related to the acquisition of Nanorep . . . . . . . . . . . . . . . 26,933 Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . 669 Balance, December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,208,725 72