Pandora 2016 Annual Report Download - page 69

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the capped call transaction, with such reduction and/or offset subject to a cap based on the cap price of the capped call
transactions. The strike price of the capped call transactions corresponds to the initial conversion price of the Notes and is
subject to certain adjustments under the terms of the capped call transactions. The capped call transactions have an initial cap
price of $25.26 per share and are subject to certain adjustments under the terms of the capped call transactions. The capped call
transactions have been included as a net reduction to additional paid-in capital within stockholders’ equity.
Capital Expenditures
€
Consistent with previous periods, future capital expenditures will primarily focus on acquiring additional hosting and
general corporate infrastructure. Our access to capital is adequate to meet our anticipated capital expenditures for our current
plans.
€
Historical Trends
€
The following table summarizes our cash flow data for the eleven months ended December 31, 2013 and the twelve
months ended December€31, 2014 and 2015. Our cash flow data for the twelve months ended December€31, 2015 include cash
flow data of Ticketfly for the two months ended December€31, 2015.
Eleven Months Ended€
€December 31,
Twelve Months Ended€
€December 31,
2013 2014 2015
(in thousands)
Net cash provided by (used in)
operating activities $(2,986) $ 21,029 $(42,082)
Net cash used in investing
activities (211,919)(112,200)(102,266)
Net cash provided by
financing activities 394,997 21,661 303,135
Operating activities
In the twelve months ended December€31, 2015, net cash used by operating activities was $42.1 million and primarily
consisted of our net loss of $169.7 million and increases in accounts receivable and prepaid and other assets of $55.9 million
and $18.9 million, offset by decreases in accounts payable, accrued and other current liabilities and accrued royalties of $18.1
million and $23.7 million, and non-cash charges of $141.2 million, primarily related to $111.6 million in stock-based
compensation charges and $24.5 million in depreciation and amortization charges. Cash provided by operating activities
decreased $63.1 million from the twelve months ended December 31, 2014, primarily due to a $139.3 million increase in our
net loss, offset by a $24.6 million increase in stock-based compensation expense as a result of an increase in headcount.
In the twelve months ended December 31, 2014, net cash provided by operating activities was $21.0 million€and
primarily consisted of non-cash charges of€$106.3 million, primarily related to€$87.1 million€in stock-based compensation
charges, offset by an increase in accounts receivable of€$55.5 million€driven by an increase in revenue and our net loss of€$30.4
million. Net cash provided by operating activities also included a€$28.2 million€decrease in deferred revenue from December
31, 2013, primarily due to the one-time recognition of the accumulation of deferred revenue related to certain subscriptions
purchased through mobile app stores of $14.2 million and due to a decrease in deferred revenue as a result of the elimination of
the annual subscription option from March through December 2014, as we collected less cash upfront under the one-month
subscription period as opposed to the twelve-month subscription period under the annual subscription option. Cash provided by
operating activities increased€$24.0 million€from the€eleven months ended December 31, 2013, primarily due to a€$47.0
million€increase in stock-based compensation expense as a result of an increase in headcount, offset by a€$3.4 million€increase
in our net loss.
In the eleven months ended December 31, 2013, net cash used in operating activities was $3.0 million, including our net
loss of $27.0€million, which was offset by non-cash charges of $50.6€million primarily related to $40.0 million in stock‑based
compensation expense. Net cash used in operating activities benefited from a $13.4 million increase in deferred revenue from
the prior period primarily due to an increase in subscriptions, partially driven by the temporary implementation of the mobile
listening limit and an increase in accrued royalties of $13.0 million due to schedule rate increases, offset by a $60.6 million
increase in accounts receivable driven by an increase in revenue.
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