Zynga 2011 Annual Report Download - page 35

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Table of Contents
the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Revenue Recognition.”
We use bookings to evaluate the results of our operations, generate future operating plans and assess the performance of our company.
While we believe that this non-GAAP financial measure is useful in evaluating our business, this information should be considered as
supplemental in nature and is not meant as a substitute for revenue recognized in accordance with GAAP. In addition, other companies,
including companies in our industry, may calculate bookings differently or not at all, which reduces its usefulness as a comparative measure.
The following table is a reconciliation of revenue to bookings for each of the periods presented:
In July 2010, we began migrating to Facebook Credits as the primary payment method for our games played through Facebook, and by
April 2011, we had completed this migration. Facebook remits to us an amount equal to 70% of the face value of Facebook Credits purchased by
our players for use in our games. We record bookings and recognize revenue net of amounts retained by Facebook. Prior to the adoption of
Facebook Credits, we recorded a majority of our online game revenue at the gross price charged to the customer.
Adjusted EBITDA
To provide investors with additional information about our financial results, we disclose within this Annual Report on Form 10-K adjusted
EBITDA, a non-GAAP financial measure. We have provided below a reconciliation between adjusted EBITDA and net income (loss), the most
directly comparable GAAP financial measure.
We have included adjusted EBITDA in this Annual Report on Form 10-K because it is a key measure we use to evaluate our operating
performance, generate future operating plans, and make strategic decisions for the allocation of capital. Accordingly, we believe that adjusted
EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our
management and board of directors. While we believe that this non-GAAP financial measure is useful in evaluating our business, this
information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared in
accordance with GAAP.
31
Year Ended December 31,
Period from Inception
(April 19, 2007) to
December 31,
2007
2011
2010
2009
2008
(in thousands)
Reconciliation of Revenue to Bookings:
Revenue
$
1,140,100
$
597,459
121,467
19,410
$
693
Change in deferred revenue
15,409
241,437
206,603
16,538
658
Bookings
$
1,155,509
$
838,896
328,070
35,948
$
1,351