LifeLock 2013 Annual Report Download - page 54

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For the year ended December 31, 2013, we used $42. 4 million of cash to acquire Lemon and $10.3 million of cash to acquire property and equipment
primarily related to investments in our network infrastructure to support our growth. We also invested a net $49.4 million of cash in marketable securities.
For the year ended December 31, 2012, we used $157.4 million of cash to acquire ID Analytics and $7.5 million of cash to acquire property and
equipment, primarily related to the establishment of an additional data center for ID Analytics and other investments in our network infrastructure to support
our growth. These were offset by a $1.7 million decrease in restricted cash, resulting from a change in our letters of credit, which are no longer required to be
fully funded.
For the year ended December 31, 2011, we used $2.0 million of cash for the purchase of business software, telecommunications equipment, and
network and other computer hardware, offset by a decrease in restricted cash of $0.5 million.
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For the year ended December 31, 2013, our financing activities generated net cash of $15.0 million as a result of cash received from the exercise of
stock options of $15.4 million offset by cash used of $0.4 million related to the payments of debt issuance costs associated with the refinancing of our credit
agreement.
For the year ended December 31, 2012, our financing activities generated net cash of $220.1 million. In March 2012, we raised $102.2 million from
the issuance of our Series E and E-2 convertible redeemable preferred stock, $4.4 million from the issuance of warrants to acquire Series E and E-2 convertible
redeemable preferred stock, and $68.0 million in a term loan, the proceeds of which were used to acquire ID Analytics. In October 2012, we raised $125.7
million in net proceeds from our IPO. We used a portion of the proceeds generated from our IPO to repay the outstanding balance of our term loan of $62.6
million. In addition, we paid $10.7 million to the former holders of our Series E-1 convertible redeemable preferred stock. We incurred $1.7 million in debt
issuance costs primarily related to our term loan and generated $0.3 million in cash inflows from stock option and warrant exercises.
For the year ended December 31, 2011, our financing activities generated net cash used of $11.5 million. During 2011, we repaid the $13.0 million
outstanding balance under our line of credit, incurred debt issuance costs of $0.1 million related to the extension and expansion of our line of credit, and used
$0.2 million related to payments under a capital lease. These were partially offset by $1.8 million in cash inflows from stock option exercises.
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On January 9, 2013, we refinanced our existing credit agreement and entered into a new credit agreement, or the Credit Agreement, with Bank of
America, N.A. as administrative agent, swing line lender and L/C issuer, Silicon Valley Bank as syndication agent, Merrill Lynch, Pierce, Fenner & Smith
Incorporated as sole lead arranger and sole book manager, and the lenders from time to time party thereto. We refer to the Credit Agreement and related
documents as the Senior Credit Facility.
The Senior Credit Facility provides for an $85.0 million revolving line of credit, which we can increase to $110.0 million subject to the conditions set
forth in the Credit Agreement. The revolving line of credit also includes a letter of credit subfacility of $10.0 million and a swing line loan subfacility of $5.0
million. The Senior Credit Facility has a maturity date of January 9, 2018. As of December 31, 2013, we had no debt outstanding under our Senior Credit
Facility. For the year ended December 31, 2013, we paid an unused commitment fee of $0.3 million, which is included in interest expense in the consolidated
statements of operations.
Borrowings under the Senior Credit Facility bear interest at a per annum rate equal to, at our option, either (a) a base rate equal to the highest of (i) the
Federal Funds Rate plus 0.50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,”
and (iii) the eurodollar rate for base rate loans plus 1.00%, plus an app licable rate ranging from 0.50% to 1.25%, or (b) the eurodollar rate for eurodollar rate
loans plus an applicable rate ranging from 1.50% to 2.25%. The initial applicable rate is 0.50% for base rate loans and 1.50% for eurodollar rate loans,
subject to adjustment from time to time based upon our achievement of a specified consolidated leverage ratio.
In addition to paying interest on the outstanding principal under the Senior Credit Facility, we are also required to pay a commitment fee to the
administrative agent at a rate per annum equal to the product of (a) an applicable rate ranging from 0.25% to 0.50% multiplied by (b) the actual daily amount
by which the aggregate revolving commitments exceed the sum of (1) the outstanding amount of revolving borrowi ngs, and (2) the outstanding amount of letter
of credit obligations. The initial applicable rate is 0.25%, subject to adjustment from time to time based upon our achievement of a specified consolidated
leverage ratio.
We also will pay a letter of credit fee to the administrative agent for the account of each lender in accordance with its applicable percentage of a letter of
credit for each letter of credit, which fee will be equal to the applicable rate then in effect, multiplied by the daily maximum amoun t available to be drawn
under the letter of credit. The initial applicable rate for the letter of credit is 1.50%, subject to adjustment from time to time based upon our achievement of a
specified consolidated leverage ratio.
We have the right to prepay our borrowings under the Senior Credit Facility from time to time in whole or in part, without premium or penalty, subject
to the procedures set forth in the Senior Credit Facility.
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