Vonage 2012 Annual Report Download - page 42

36 VONAGE ANNUAL REPORT 2012
Cash used in investing activities for 2010 of $4,686 was
attributable to capital expenditures of $17,674 and development of
software assets of $22,712, partially offset by a decrease in restricted
cash of $35,700 due primarily to the reduction of $32,830 of reserves
held by our credit card processors as a result of improvements in credit
quality and the elimination of the concentration account under our prior
credit facilities of $3,277 as a result of our new Credit Facility.
Financing Activities
Cash used in financing activities for 2012 of $56,257 was
primarily attributable to $28,333 in 2011 Credit Facility principal
payments, $2,104 in capital lease payments, and $27,545 in common
stock repurchases, offset by $1,725 in proceeds received from the
exercise of stock options.
Cash used in financing activities for 2011 of $130,138 was
primarily attributable to $200,000 in 2010 Credit Facility and $29,166 in
2011 Credit Facility and revolving credit facility principal payments,
respectively, $1,783 in capital lease payments, and $2,697 in 2011
Credit Facility debt related cost payments, offset by $100,000 in
proceeds received from the issuance of the 2011 Credit Facility and
$4,562 in proceeds received from the exercise of stock options and a
common stock warrant.
Cash used in financing activities for 2010 of $143,762 was
attributable to $128,165 in prior senior secured first lien credit facility
principal payments, $104,349 in prior senior secured second lien credit
facility principal payments, including $32,320 representing paid-in-kind
(“PIK”) interest payments, payments of $99,938 to extinguish our prior
senior secured first lien credit facility, our prior senior secured second
lien credit facility and our prior third lien convertible notes, and $1,500
in capital lease payments partially offset by proceeds of the 2010 Credit
Facility of $200,000 offset by note discount of $6,000 and debt related
costs of $5,430, and proceeds of $1,620 from stock options exercised.
CONTRACTUAL OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS
The table below summarizes our contractual obligations at December 31, 2012, and the effect such obligations are expected to have on
our liquidity and cash flow in future periods.
Payments Due by Period
(dollars in thousands) Total
Less
than
1 year
2-3
years
4-5
years
After 5
years
(unaudited)
Contractual Obligations:
2011 Credit Facility $42,500 $28,333 $14,167 $—$—
Interest related to 2011 Credit Facility 1,591 1,303 288 ——
Capital lease obligations 20,726 4,284 8,826 7,616 —
Operating lease obligations 9,987 5,455 4,532 ——
Purchase obligations 63,590 49,810 12,713 1,067 —
Other obligations 2,750 1,000 1,750 ——
Total contractual obligations $ 141,144 $ 90,185 $42,276 $8,683 $—
Other Commercial Commitments:
Standby letters of credit $5,558 $5,558 $—$—$—
Total contractual obligations and other commercial commitments $ 146,702 $ 95,743 $42,276 $8,683 $—
Credit Facility. On July 29, 2011, we entered into the 2011
Credit Facility which consists of an $85,000 senior secured term loan
and a $35,000 revolving credit facility. On February 11, 2013 we entered
into Amendment No. 1 to the 2011 Credit Agreement (the "2013 Credit
Facility"). The 2013 Credit Facility consists of a $70,000 senior secured
term loan and a $75,000 revolving credit facility. See Note 6 in the notes
to the consolidated financial statements.
Capital lease obligations. At December 31, 2012, we had
capital lease obligations of $20,726 related to our corporate
headquarters in Holmdel, New Jersey.
Operating lease obligations. At December 31, 2012, we had
future commitments for operating leases for co-location facilities mainly
in the United States that accommodate a portion of our network
equipment, for kiosks leased in various locations throughout the United
States, for office space leased for our London, United Kingdom office,
for office space leased in Atlanta, Georgia for product development, for
office space leased in Tel Aviv, Israel for application development, and
for apartment space leased in New Jersey for certain executives.
Purchase obligations. The purchase obligations reflected
above are primarily commitments to vendors who will provide voice
termination services, provide voicemail to text transcription services,
provide local inbound services, process our credit card billings, provide
E-911 services to our customers, assist us with local number portability,
license patents to us, sell us communication devices, sell us data center
equipment, lease us collocation facilities, and provide carrier operation
services and provide in-store assisted sales labor. In certain cases, we
may terminate these arrangements early upon payment of specified
fees. These amounts do not represent our entire anticipated purchases
in the future, but represent only those items for which we are
contractually committed. We also purchase products and services as
needed with no firm commitment. For this reason, the amounts
presented do not provide a reliable indicator of our expected future cash
outflows or changes in our expected cash position. See also Note 10
to our consolidated financial statements.