LinkedIn 2012 Annual Report Download - page 83

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level,
within the fair value hierarchy as of December 31, 2012 and 2011, are summarized as follows (in
thousands):
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets:
Cash equivalents:
Money market funds ....... $148,384 $ — $— $148,384 $277,463 $ — $— $277,463
Corporate debt securities .... — 18,488 — 18,488 — — — —
Short-term investments:
U.S. treasury securities ...... 18,197 — — 18,197 17,325 — — 17,325
Agency securities .......... — 303,450 — 303,450 — 221,131 — 221,131
Corporate debt securities .... — 155,883 — 155,883 — — — —
Municipal securities ........ — 1,611 — 1,611 — — — —
Other current assets:
Foreign currency forward
contracts .............. — 146 — 146 — 190 — 190
Total assets ............ $166,581 $479,578 $— $646,159 $294,788 $221,321 $— $516,109
Accrued liabilities:
Foreign currency forward
contracts .............. $ — $ 1,040 $— $ 1,040 $ — $ 183 $— $ 183
Total liabilities .......... $ — $ 1,040 $— $ 1,040 $ — $ 183 $— $ 183
The fair value of the Company’s Level 1 financial instruments, which are traded in active markets,
are based on quoted market prices for identical instruments. The fair value of the Company’s Level 2
fixed income securities are obtained from an independent pricing service, which may use quoted market
prices for identical or comparable instruments or model driven valuations using observable market data or
inputs corroborated by observable market data. The Company’s procedures include controls to ensure that
appropriate fair values are recorded, including comparing the fair values obtained from the Company’s
pricing service against fair values obtained from another independent source. The Company’s derivative
instruments are valued using pricing models that use observable market inputs and, therefore, are
classified as Level 2.
3. Acquisitions
Fiscal 2012 Acquisitions
Slideshare
On May 17, 2012, LinkedIn completed its acquisition of Slideshare, Inc. (‘‘Slideshare’’), a San
Francisco, California-based privately held provider of a professional and educational content platform that
allows users to upload documents to share ideas, conduct research, connect with others, and generate
leads for their businesses. LinkedIn’s purchase price of $74.1 million for all the outstanding shares of
capital stock of Slideshare consisted of approximately $32.2 million paid in cash consideration and 375,956
shares of LinkedIn Class A common stock. LinkedIn also issued 82,108 stock options and 14,146 restricted
stock units (‘‘RSUs’’) related to assumed Slideshare equity awards. The fair value of the earned portion of
assumed stock options and RSUs of $2.4 million is included in the purchase price, with the remaining fair
value of $6.9 million resulting in post-acquisition compensation expense that will generally be recognized
ratably over two years from the date of acquisition.
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