Zynga 2015 Annual Report Download - page 96

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Table of Contents
assembled workforce of the acquired business and expected synergies at the time of the acquisition. The information above provides a reasonable basis for
estimating the fair values of assets acquired and liabilities assumed.
On the acquisition date, we assumed unvested NaturalMotion employee stock options and exchanged them for options to purchase shares of our Class A
Common Stock with a preliminary fair value of $29.7 million. $0.7 million of this value was allocated to purchase consideration and the remaining $29.0 million
was allocated to future compensation expense which will be recorded as stock-based expense over the vesting period of the awards. Also on the acquisition date,
we granted to continuing employees 11.6 million shares of our Class A Common Stock that vest over a period of three years from the grant date, subject to
continued employment with Zynga. The value of these shares on the acquisition date was $53.6 million and will be recorded as stock-based expense over the
requisite service period in accordance with the vesting terms. Transaction costs incurred by the Company in connection with the acquisition, including professional
fees and transaction taxes, were $6.4 million and are included in our statement of operations for the twelve months ended December 31, 2014.
The amounts of revenue and net loss of NaturalMotion included in the Company’s condensed consolidated statement of operations for the post acquisition
period from February 12, 2014 to December 31, 2014 are as follows (unaudited, in thousands):
February 12, 2014 to
December 31, 2014
Total revenues $ 26,800
Net loss 74,891
The net loss includes approximately $29.5 million of stock-based expense and $19.7 million related to the amortization of acquired intangibles, net of tax.
The following pro forma financial information summarizes the combined results of operations for the Company and NaturalMotion, which was significant
for the purposes of unaudited pro forma financial information disclosure, as though the companies were combined as of the beginning of the Company’s fiscal
years presented.
The pro forma financial information was as follows (unaudited, in thousands):
12 Months Ended
December 31,
2014 2013
Total revenues $ 698,608 $912,880
Net loss (233,036) (96,048)
The pro forma financial information for all periods presented has been calculated after adjusting the results of NaturalMotion to reflect the business
combination accounting effects resulting from this acquisition including fair value adjustments resulting from purchase accounting, the amortization expenses from
acquired intangible assets, the stock-based expense for unvested stock options assumed and restricted stock awards granted and the related tax effects as though the
acquisition occurred as of the beginning of the periods presented. The pro forma financial information is for informational purposes only and is not indicative of the
results of operations that would have been achieved based on these assumptions.
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