Zynga 2012 Annual Report Download - page 102

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We recorded stock-based expense related to grants of employee and consultant stock options, warrants, restricted
stock and restricted stock units (“ZSUs”) in our consolidated statements of operations as follows (in thousands):
Twelve Months Ended December 31,
2012 2011 2010
Cost of revenue ................................ $ 12,116 $ 17,660 $ 2,128
Research and development ....................... 200,640 374,920 10,242
Sales and marketing ............................ 24,684 81,326 7,899
General and administrative ...................... 44,546 126,306 5,425
Total stock-based expense ................... $281,986 $600,212 $25,694
In the twelve months ended December 31, 2012 we recognized $204.7 million of stock-based expense
associated with ZSUs. Unamortized stock-based compensation relating to ZSUs amounted to $312.7 million as
of December 31, 2012 over a weighted-average recognition period of 2.72 years.
In March 2012, we donated one million shares of Class A common stock to Zynga.org, an unaffiliated non-
profit organization that was formed in March 2012 to support charitable causes in the communities in which we
conduct business. Zynga.org is a separate legal entity in which we have no financial interest and do not exercise
control and, accordingly, is not consolidated in our consolidated financial statements. For our contribution of
Class A common stock we recorded $13.1 million of stock-based expense, which is included in general and
administrative expenses, equal to the fair value of the shares of Class A common stock issued.
As of December 31, 2012, total unrecognized stock-based expense of $44.3 million and $35.3 million
related to unvested stock options and restricted shares of common stock, respectively, is expected to be
recognized over a weighted-average recognition period of approximately 3.27 and 2.74 years, respectively.
The following table shows stock option activity for the year ended December 31, 2012 (in thousands, except
weighted-average exercise price and remaining contractual term):
Outstanding Options
Stock Options
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic Value of
Stock Options
Outstanding
Weighted-
Average
Contractual Term
(in years)
Balance as of December 31, 2011 .............. 102,314 $0.69 $892,135 7.04
Granted ............................... 29,401 2.80
Forfeited and cancelled ................... (10,337) 1.48
Exercised .............................. (40,559) 0.36
Balance as of December 31, 2012 .............. 80,819 $1.52 $100,225 7.43
As of December 31, 2012
Exercisable options .......................... 43,810 $0.53 $ 85,591 6.31
Vested and expected to vest ................... 72,297 $1.20 $ 98,867 7.29
The aggregate intrinsic value of options exercised during the years ended December 31, 2012, 2011, and
2010 was $222.4 million, $78.2 million, and $110.6 million, respectively. The total grant date fair value of
options that vested during the years ended December 31, 2012, 2011, and 2010 was $7.6 million, $17.5 million
and $12.9 million, respectively.
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