Zynga 2012 Annual Report Download - page 47

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The following table presents a reconciliation of net income (loss) to adjusted EBITDA for each of the
periods indicated:
Year Ended December 31,
2012 2011 2010 2009 2008
Reconciliation of Net Income (Loss) to Adjusted
EBITDA:
Net income (loss) ............................ $(209,448) $(404,316) $ 90,595 $ (52,822) $(22,115)
(Provision for) / benefit from income taxes ........ 49,873 (1,826) 36,464 12 38
Other income (expense), net ................... (18,647) 2,206 (365) 209 (187)
Interest income .............................. (4,749) (1,680) (1,222) (177) (319)
Gain (loss) from legal settlements ............... 3,024 (2,145) (39,346) — 7,000
Depreciation and amortization .................. 141,479 95,414 39,481 10,372 2,905
Stock-based expense ......................... 281,986 600,212 25,694 3,990 689
Impairment of intangible assets ................. 95,493 — — — —
Restructuring expense ........................ 7,862 — — — —
Change in deferred revenue .................... (133,640) 15,409 241,437 206,603 16,538
Adjusted EBITDA ........................... $213,233 $ 303,274 $392,738 $168,187 $ 4,549
Limitations of Bookings and Adjusted EBITDA
Some limitations of bookings and adjusted EBITDA are:
• adjusted EBITDA does not include the impact of stock-based expense;
• bookings and adjusted EBITDA do not reflect that we defer and recognize online game revenue and
revenue from certain advertising transactions over the estimated average life of virtual goods or as
virtual goods are consumed;
• adjusted EBITDA does not reflect income tax expense;
• adjusted EBITDA does not include other income and expense (net), which includes foreign exchange
gains and losses, interest income, and the net gain on termination of our lease and the purchase of our
corporate headquarters building;
• adjusted EBITDA excludes depreciation and amortization and although these are non-cash charges, the
assets being depreciated and amortized may have to be replaced in the future;
• adjusted EBITDA does not include the impairment of intangible assets previously acquired in
connection with the company’s purchase of OMGPOP;
• adjusted EBITDA does not include losses associated with restructuring charges;
• adjusted EBITDA does not include gains and losses associated with legal settlements; and
• other companies, including companies in our industry, may calculate bookings and adjusted EBITDA
differently or not at all, which reduces their usefulness as a comparative measure.
Because of these limitations, you should consider bookings and adjusted EBITDA along with other financial
performance measures, including revenue, net income (loss) and our other financial results presented in
accordance with U.S. GAAP.
39