August 11, 2011 / 7:03 PM / 7 years ago

Zynga revises accounting practices; has credit line

NEW YORK (Reuters) - Zynga Inc, developer of popular Facebook games such as Farmville, said it is changing how it measures the average playing time for its paying users and has arranged a $1 billion revolving line of credit.

Zynga, which filed for an initial public offering on July 1 of up to $1 billion, said in a regulatory filing on Thursday that it had found a material weakness in its financial reporting.

It has revised how it accounts for the average playing time of its paying users. As part of the adjustment, it added $7.5 million in revenue for the quarter ended March 31, 2011.

For the first time, the company said it had a revolving credit agreement with lenders to borrow up to $1 billion. It said it paid $2.5 million in fees up front as part of the terms of the agreement and will pay fees of $625,000 per quarter.

In the filing, Zynga showed its revenue mix was become more balanced and less reliant on its top titles. Its top three games accounted for 93 percent of its revenue in 2008, 83 percent in 2009, and 78 percent in 2010. For the first quarter of 2011, its top three games accounted for 63 percent of its revenue.

It also said it now has 2,543 employees, up from 2,268 in the last filing.

Reporting by Liana Baker and Clare Baldwin; editing by John Wallace

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