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Discontinued Operations | 12 Months Ended
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Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 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 Big Fish Games | $ | 751.2 |
The Company recognized a gain of $219.5 million upon the sale recorded in income from discontinued operations in the accompanying consolidated statements of comprehensive income in 2018. The gain consisted of cash proceeds of $970.7 million offset by the carrying value of Big Fish Games 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" in the accompanying consolidated statements of comprehensive income:
| Years Ended December 31,
(in millions) | 2018 |  | 2017 |  | 2016
Net revenue | $ | 13.2 |  |  | $ | 466.0 |  |  | $ | 486.2 |
Operating expenses | 8.4 |  |  | 369.0 |  |  | 398.9 |
Selling, general and administrative expense | 6.0 |  |  | 27.8 |  |  | 20.9 |
Research and development | 0.9 |  |  | 39.6 |  |  | 39.0 |
Transaction expense, net | — |  |  | 4.7 |  |  | 5.8 |
Total operating expense | 15.3 |  |  | 441.1 |  |  | 464.6 |
Operating (loss) income | (2.1 | ) |  | 24.9 |  |  | 21.6 |
Other income (expense) |  |  |  |  |
Gain on sale of Big Fish Games | 219.5 |  |  | — |  |  | — |
Other expense | 0.1 |  |  | (1.7 | ) |  | (0.9 | )
Total other income (loss) | 219.6 |  |  | (1.7 | ) |  | (0.9 | )
Income from discontinued operations before provision for income taxes | 217.5 |  |  | 23.2 |  |  | 20.7 |
Income tax provision | (47.3 | ) |  | (5.1 | ) |  | (9.3 | )
Income from discontinued operations, net of tax | $ | 170.2 |  |  | $ | 18.1 |  |  | $ | 11.4 |
The following table presents the major classes of assets and liabilities presented as held for sale related to the Big Fish Transaction as of December 31, 2017:
(in millions) | December 31, 2017
ASSETS |
Current assets: |
Cash and cash equivalents | $ | 2.6 |
Accounts receivable | 42.9 |
Game software development, net | 6.9 |
Other current assets | 16.7 |
Current assets of discontinued operations held for sale | 69.1 |
Property and equipment, net | 16.4 |
Game software development, net | 13.5 |
Goodwill | 530.7 |
Other intangible assets, net | 238.8 |
Other assets | 24.0 |
Long-term assets of discontinued operations held for sale | 823.4 |
Total assets | $ | 892.5 |
LIABILITIES |
Current liabilities: |
Accounts payable | $ | 5.5 |
Accrued expense | 35.0 |
Deferred revenue | 85.1 |
Big Fish Games deferred payment | 28.4 |
Big Fish Games earnout liability | 34.2 |
Current liabilities of discontinued operations held for sale | 188.2 |
Deferred income taxes | 47.6 |
Other liabilities | 7.2 |
Non-current liabilities of discontinued operations held for sale | 54.8 |
Total liabilities | $ | 243.0 |
Stock-Based Compensation As part of the Big Fish Transaction, the vesting dates for all outstanding unvested restricted stock awards, restricted stock unit awards, and performance share units awards (collectively the "Stock Awards") for certain Big Fish Games' employees were accelerated to vest on the closing date. Most of these Stock Awards would not have vested prior to the closing date of the Big Fish Transaction. Therefore, the related stock-based compensation expense previously recognized through the modification date was reduced to zero and a new fair value of the Stock Awards was established on the date of the announcement of the Big Fish Transaction. The expense was amortized during the period from the date of the announcement to the closing of the Big Fish Transaction. The incremental stock-based compensation expense recognized during 2017 due to the acceleration of vesting was $3.4 million, which is included in income from discontinued operations, net of tax in the accompanying consolidated statements of comprehensive income. Total stock-based compensation expense related to Big Fish Games, which includes the accelerated vesting of the Stock Awards and stock options associated with the Company's employee stock purchase plan, was $3.4 million in 2018, $11.1 million in 2017, and $5.6 million in 2016. Fair Value of Liabilities We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The following tables present our liabilities measured at fair value on a recurring basis related to our discontinued operations and liabilities held for sale:
| Level 3
(in millions) | December 31, 2017
Big Fish Games deferred payments | $ | 28.4 |
Big Fish Games earnout liability | 34.2 |
Total | $ | 62.6 |
The following table presents the change in fair value of our instruments classified within Level 3 related to our discontinued operations and liabilities held for sale:
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(in millions) | Big Fish Games Deferred Payments |  | Big Fish Games Earnout Liability |  | Total
Balance as of December 31, 2017 | $ | 28.4 |  |  | $ | 34.2 |  |  | $ | 62.6 |
Payments | (28.4 | ) |  | (34.2 | ) |  | (62.6 | )
Balance as of December 31, 2018 | $ | — |  |  | $ | — |  |  | $ | — |
On March 27, 2017, the Company amended the Agreement and Plan of Merger, dated as of December 16, 2014, pursuant to which the Company acquired Big Fish Games, to extend the deferral of the earnout consideration payable and the Big Fish Games' founder deferred payment on December 15, 2017 to January 3, 2018. The estimated fair value of the Big Fish Games deferred payment and earnout liability as of December 31, 2017 was equal to the cash paid on January 3, 2018. The increase in fair value of the Big Fish Games deferred payment and earnout liability of $1.1 million in 2017 and $5.7 million in 2016 is included in discontinued operations in the accompanying consolidated statements of comprehensive income.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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