Zynga 2015 Annual Report Download - page 94
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Table of Contents
4. Property and Equipment
Property and equipment consist of the following (in thousands):
December 31,
2015
December 31,
2014
Computer equipment $ 36,373 $ 141,946
Software 30,950 31,778
Land 89,130 89,130
Building 195,372 194,574
Furniture and fixtures 10,348 10,616
Leasehold improvements 7,748 9,694
369,921 477,738
Less accumulated depreciation (96,700) (179,819)
Total property and equipment, net $ 273,221 $ 297,919
During the fourth quarter of 2015, we completed the exit of one of our data centers in Santa Clara, and initiated the sale of certain computer data center
equipment, resulting in the assets meeting held for sale criteria. Accordingly, these assets were written down to their fair value and reclassified from property and
equipment to other current assets, with $83.9 million and $80.7 million being reclassified from computer equipment and accumulated depreciation respectively, for
a net amount of $3.2 million. The $3.2 million reflects the fair value of the assets less estimated costs to sell.
5. Acquisitions
2015Acquisitions
On September 11, 2015, we acquired Rising Tide Games, a provider of social games that we plan to use to release new social casino titles, for purchase
consideration of approximately $44.2 million, which consisted of cash paid of $22.4 million and contingent consideration with a fair value of $21.8 million as of
September 30, 2015 (see Note 3—“Fair Value Measurements” for changes in this estimate). The contingent consideration may be payable based on the
achievement of certain future performance targets during the three year period following the acquisition date and could be up to $140.0 million. We will record
changes in the fair value of contingent consideration liabilities within operating expenses in our consolidated statement of operations each future reporting period.
For further details on our fair value methodology with respect to contingent consideration liabilities, see Note 3—“Fair Value Measurements.”
The following table summarizes the acquisition date fair value of net tangible and intangible assets acquired from Rising Tide Games (in thousands,
unaudited):
Total
Developed technology, useful life of 5 years $ 27,000
Net tangible assets acquired (liabilities assumed) 2,445
Goodwill 25,050
Deferred tax liabilities (10,300)
Total $ 44,195
Goodwill, which is not deductible for tax purposes, represents the excess of the purchase price over the fair value of the net tangible and intangible assets
acquired, and is primarily attributable to the assembled workforce of the acquired business and expected synergies at the time of the acquisition.
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