Chegg 2015 Annual Report Download - page 114

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Table of Contents
75
The following table summarizes the change in the fair value of our Level 3 liabilities (in thousands):
Level 3
December 31,
2015 December 31,
2014
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,079 $ 1,521
Vesting of put options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 271
Exercise of put options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,079)(460)
Fair value adjustment related to put options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —(253)
Total financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 1,079
As of December 31, 2014, we did not have observable inputs for the valuation of our put option liability, which relates to
a previous acquisition, and provided certain employees of the acquired company the right to require us to acquire vested
common shares at a stated contractual price. As shares associated with these put options vested, the liability was recognized as
share-based compensation expense in our consolidated statements of operations and results in a change in our Level 3
liabilities. The liability had been fully exercised and the shares were repurchased from employees in the first quarter of 2015.
We no longer hold any Level 3 assets or liabilities as of December 31, 2015.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or
reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other
market participants, the use of different methodologies or assumptions to determine the fair value of certain financial
instruments could result in a different fair value measurement at the reporting date.
Note 5. Long-Lived Assets
Textbook Library, Net
Textbook library, net consisted of the following (in thousands):
December 31,
2015 2014
Textbook library . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100,783 $ 169,463
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (71,055)(88,701)
Textbook library, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,728 $ 80,762
Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
December 31,
2015 2014
Computer and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,313 $ 1,083
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,591 3,842
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,652 2,259
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,983 5,153
Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,359 21,262
37,898 33,599
Less accumulated depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . (17,927)(15,230)
Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,971 $ 18,369