Chegg 2014 Annual Report Download - page 87

Download and view the complete annual report

Please find page 87 of the 2014 Chegg annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 133

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133

Table of Contents
49
Cash Flows from Financing Activities
Net cash used in financing activities during the year ended December 31, 2014 was $1.9 million and was primarily
related to the payment of $4.0 million in taxes related to the net share settlement of RSUs which became fully vested during the
period offset by the issuance of common stock from our 2013 ESPP and proceeds from the exercise of stock options totaling
$2.7 million as well as the repurchase of common stock of $0.6 million associated with a put option granted in connection with
a prior acquisition.
Net cash provided by financing activities during the year ended December 31, 2013 was $145.2 million and was
related to net proceeds received from our IPO and the exercise of stock options, partially offset by the pay-off of our revolving
credit facility.
Net cash provided by financing activities during the year ended December 31, 2012 was $19.8 million and was
primarily related to proceeds from the issuance of convertible preferred stock of $25.0 million, partially offset by the
repurchase of common stock and vested stock options of $5.2 million associated with a put option granted in connection with
prior acquisitions.
Contractual Obligations and Other Commitments
The following is a summary of the contractual commitments associated with our debt and lease obligations (which
include the related interest) as of December 31, 2014 (in thousands):
Less than More than
Total 1 Year 1-3 Years 3-5 Years 5 Years
Commitment fee on unused portion of revolving credit facility . . . . . . $ 229 $ 141 $ 88 $ — $ —
Operating lease obligations (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,860 4,157 5,670 2,421 612
Total contractual obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,089 $ 4,298 $ 5,758 $ 2,421 $ 612
__________________
(1) Our office and warehouse facilities are leased under operating leases, which expire at various dates through 2019.
In addition, within 90 days following the voluntary or involuntary termination of employment of certain employees
acquired in our 2010 acquisition of CourseRank, the employees have the option to sell any vested shares back to us at a fixed
price of $11.94 per share. The fair value of vested restricted shares outstanding of $1.1 million has been classified as a liability
in accrued liabilities on our consolidated balance sheet as of December 31, 2014, as our obligation to purchase the shares from
the employees will occur in 2015 as all employees have exercised their option.
In addition, our other liabilities include $1.8 million related to uncertain tax positions as of December 31, 2014. The
timing of the resolution of these positions is uncertain and we are unable to make a reasonably reliable estimate of the timing of
payments in individual years beyond one year. As a result, this amount is not included in the above table.
Off-Balance Sheet Arrangements
Through December 31, 2014, we did not have any relationships with unconsolidated organizations or financial
partnerships, such as structured finance or special purpose entities that would have been established for the purpose of
facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Critical Accounting Policies, Significant Judgments and Estimates
Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these
consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, costs and expenses and related disclosures. These estimates form the basis for judgments we make about the
carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and
judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances.
On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under
different assumptions or conditions.
We believe that of our significant accounting policies, which are described in Note 2 to our consolidated financial
statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the