Chegg 2015 Annual Report Download - page 95

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Table of Contents
56
Recent Accounting Pronouncements
For relevant recent accounting pronouncements, see Note 2-Significant Accounting Policies of our accompanying Notes
to Consolidated Financial Statements included in Part II, Item 8, "Consolidated Financial Statements and Supplementary Data"
of this Annual Report on Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk, including changes to interest rates, foreign currency exchange rates and inflation.
Foreign Currency Exchange Risk
International revenues as a percentage of net revenues is not significant, and our sales contracts are denominated
primarily in U.S. dollars. A portion of our operating expenses are incurred outside the United States and are denominated in
foreign currencies, which are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in
the Chinese Renminbi and Indian Rupee. To date, we have not entered into derivatives or hedging strategies as our exposure to
foreign currency exchange rates has not been material to our historical operating results. There were no significant foreign
exchange gains or losses in the years ended December 31, 2015, 2014 and 2013.
Interest Rate Sensitivity
We had cash and cash equivalents and investments totaling $89.1 million and $90.9 million as of December 31, 2015
and 2014, respectively. Our cash and cash equivalents and investments consist of cash, money market funds, corporate
securities and commercial paper. Our investment policy and strategy are focused on preservation of capital, supporting our
liquidity requirements, and delivering competitive returns subject to prevailing market conditions. Changes in U.S. interest
rates affect the interest earned on our cash and cash equivalents and investments and the market value of those securities. A
hypothetical 100 basis point increase in interest rates would not result in a material impact in the fair value of our available-for-
sale securities as of December 31, 2015. Any realized gains or losses resulting from such interest rate changes would only
occur if we sold the investments prior to maturity. We were not exposed to material risks due to changes in market interest rates
given the liquidity of the cash and money market accounts and investments in which we invested our cash.
Interest rate risk also reflects our exposure to movements in interest rates associated with our revolving credit facility.
The interest bearing credit facility is denominated in U.S. dollars and the interest expense is based on the Federal Funds Rate,
Prime or LIBOR interest rate plus an additional margin. As of December 31, 2015, we did not have an outstanding balance on
this credit facility.