Zynga 2015 Annual Report Download - page 113

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Table of Contents
LossesResultingfromWindingDownLicensingAgreements
At the time of our Q2 2015 Restructuring Plan, we held licensing agreements requiring future contractual commitments for games in categories we decided
to exit (“Exited Games”) as part of that plan. During the three months ended June 30, 2015, we recognized a loss of $1.2 million associated with the Exited Games,
which consisted of $0.9 million for the write-off of prepaid licenses and $0.3 million in estimated contract reassignment fees, both of which were recorded as
restructuring expense within research and development. At the time and as of December 31, 2015, we were engaged in negotiations with third parties to reassign
those licensing agreements (the “Negotiations”), resulting in those third parties assuming the future contractual commitments. On or about February 12, 2016, the
Negotiations ended unfavorably and resulted in a material change to our original estimates. As a result, we recognized an additional loss of $4.3 million, which
consisted of $3.7 million in estimated contract termination fees and $0.6 million for the write-off of prepaid licenses. This loss has been classified as restructuring
expense within research and development and included in our consolidated statement of operations for the twelve months ended December 31, 2015.
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