218/264 Notes to the 2017 consolidated financial statements Included in the arrangements are payments that are contingent on continued employment. The payments are remuneration for postcombination services and are automatically forfeited if employment terminates. A total of €2 million of postcombination cash payouts will be recorded as compensation expense over the service period of three years. Acquisitions in 2016 During 2016, the Group acquired the operations of three separate businesses. The acquisitions were accounted for under the acquisition method. The total purchase consideration was €8 million, of which €7 million was recorded to goodwill, and €1 million to acquired intangibles assets. Included in the arrangements are payments that are contingent on continued employment. The payments are recognized as remuneration for post combination services and are automatically forfeited if employment terminates. A total of €3 million of postcombination cash payouts will be recorded as compensation expense over the service periods of up to three years. The results of operations for each of the acquisitions have been included in the Group’s consolidated statements of operations since the respective dates of acquisitions. Actual and pro forma revenue and results of operations for the acquisitions have not been presented because they do not have a material impact to the consolidated revenue and results of operations, either individually or in aggregate. Acquisitions in 2017 During 2017, the Group acquired the operations of five separate businesses. The acquisitions were accounted for under the acquisition method. The total purchase consideration paid was €85 million, of which €52 million was in cash and €33 million in equity. Of the total purchase consideration, €71 million has been recorded to goodwill, €17 million to acquired intangible assets, €4 million to deferred tax liabilities, and €1 million to tangible assets. The goodwill of €71 million represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including an experienced workforce and expected future synergies. Included in the arrangements are payments that are contingent on continued employment. The payments are recognized as remuneration for post combination services and are automatically forfeited if employment terminates. A total of up to €22 million of postcombination cash payouts will be recorded as compensation expense over service periods of up to three years. Included in one of the arrangements are 61,880 restricted stock awards that are contingent on continued employment and are accounted for as equity settled sharebased payment transactions. A total of €6 million of postcombination expense will be recorded over the service period of two and three years from the acquisition date if not forfeited by the employees (see Note 17). The results of operations for each of the acquisitions have been included in the consolidated statements of operations since the respective acquisition dates. Actual and pro forma revenue and results of operations for the acquisitions have not been presented because they do not have a material impact to the consolidated revenue and results of operations, either individually or in aggregate. 6. Segment information The Group has two reportable segments: Premium and AdSupported. The Premium Service is a paid service in which customers can listen ondemand and offline. Revenue is generated through subscription fees. The Ad F25
Spotify F1 | Interactive Prospectus Page 217 Page 219