EX-99.3 5 a15-13755_1ex99d3.htm EX-99.3

Exhibit 99.3

 

LINKEDIN CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed combined financial information (the “pro forma financial statements”) and related notes present the historical condensed combined financial information of LinkedIn Corporation and its subsidiaries (“LinkedIn”, “its”, and similar terms unless otherwise indicated) and lynda.com, Inc. (“lynda.com”) after giving effect to LinkedIn’s acquisition of lynda.com that was completed on May 14, 2015 as well as the assumptions, reclassifications, and adjustments described in the accompanying notes to the unaudited pro forma financial statements.

 

The unaudited pro forma condensed combined balance sheet (the “pro forma balance sheet”) as of March 31, 2015 is presented as if the acquisition of lynda.com had occurred on March 31, 2015. The unaudited pro forma condensed combined statements of operations (the “pro forma statements of operations”) for the year ended December 31, 2014 and the three months ended March 31, 2015 are presented as if the acquisition had occurred on January 1, 2014. The historical financial information is adjusted in the unaudited pro forma financial statements to give effect to pro forma adjustments that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the pro forma statements of operations, expected to have a continuing impact on the combined results.

 

The preliminary purchase price allocation used in the accompanying unaudited pro forma financial statements is based on estimates as of the date of this report and will differ from the final purchase price allocation. The unaudited pro forma financial statements do not reflect the cost of any integration activities or the benefit that may result from the realization of future cost savings from operating synergies, or any revenue, tax, or other synergies between LinkedIn and lynda.com.

 

The unaudited pro forma financial statements are not necessarily indicative of, or intended to represent, the results that would have been achieved had the transaction been consummated as of the dates indicated or that may be achieved in the future.

 

The unaudited pro forma financial statements should be read in conjunction with LinkedIn’s historical consolidated financial statements and accompanying notes included in the LinkedIn’s Annual Report on Form 10-K for the year ended December 31, 2014, LinkedIn’s Quarterly Report on Form 10-Q for the three months ended March 31, 2015, the historical financial statements of lynda.com for the year ended December 31, 2014, and the historical unaudited condensed consolidated interim financial statements of lynda.com for the three months ended March 31, 2015.

 



 

LINKEDIN CORPORATION

PRO FORMA CONDENSED COMBINED BALANCE SHEETS

AS OF MARCH 31, 2015

(In thousands)

(Unaudited)

 

 

 

Historical

 

 

 

 

 

 

 

LinkedIn
Corporation

 

lynda.com

 

Pro Forma
Adjustments

 

Pro Forma
Combined

 

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,017,287

 

$

143,113

 

$

(800,912

)(a)

$

359,488

 

Marketable securities

 

2,512,588

 

 

 

2,512,588

 

Accounts receivable, net

 

424,787

 

8,847

 

 

433,634

 

Deferred commissions

 

60,259

 

 

 

60,259

 

Prepaid expenses and other current assets

 

204,598

 

8,112

 

899

(b)

213,609

 

Total current assets

 

4,219,519

 

160,072

 

(800,013

)

3,579,578

 

Property and equipment, net

 

755,396

 

29,426

 

(13,576

)(c)

771,246

 

Goodwill

 

359,739

 

6,721

 

1,109,724

(d)

1,476,184

 

Intangible assets, net

 

122,826

 

2,073

 

356,927

(e)

481,826

 

Other assets

 

80,684

 

409

 

 

81,093

 

TOTAL ASSETS

 

$

5,538,164

 

$

198,701

 

$

653,062

 

$

6,389,927

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

85,104

 

$

4,268

 

$

 

$

89,372

 

Accrued expenses and other current liabilities

 

206,826

 

20,451

 

14,623

(f)

241,900

 

Deferred revenue

 

585,812

 

66,691

 

(21,341

)(g)

631,162

 

Total current liabilities

 

877,742

 

91,410

 

(6,718

)

962,434

 

CONVERTIBLE SENIOR NOTES, NET

 

1,092,715

 

 

 

1,092,715

 

DEFERRED TAX LIABILITIES

 

 

4,032

 

82,705

(h)

86,737

 

OTHER LONG-TERM LIABILITIES

 

143,704

 

6,212

 

1,124

(i)

151,040

 

Total liabilities

 

2,114,161

 

101,654

 

77,111

 

2,292,926

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

REDEEMABLE NONCONTROLLING INTEREST

 

5,536

 

 

 

5,536

 

REDEEMABLE CONVERTIBLE PREFERRED STOCK

 

 

283,495

 

(283,495

)(j)

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

Common stock

 

 

69

 

(69

)(k)

 

Class A and Class B common stock

 

13

 

 

 

13

 

Additional paid-in capital

 

3,420,045

 

539

 

705,203

(l)

4,125,787

 

Accumulated other comprehensive income (loss)

 

1,085

 

(1,737

)

1,737

(m)

1,085

 

Accumulated deficit

 

(2,676

)

(185,319

)

152,575

(n)

(35,420

)

Total stockholders’ equity (deficit)

 

3,418,467

 

(186,448

)

859,446

 

4,091,465

 

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

$

5,538,164

 

$

198,701

 

$

653,062

 

$

6,389,927

 

 

See Notes to Unaudited Pro Forma Financial Statements

 



 

LINKEDIN CORPORATION

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2015

(In thousands, except per share data)

(Unaudited)

 

 

 

Historical

 

 

 

 

 

 

 

LinkedIn
Corporation

 

lynda.com

 

Pro Forma
Adjustments

 

Pro Forma
Combined

 

Net revenue

 

$

637,687

 

$

43,537

 

$

(831

)(o)

$

680,393

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation and amortization shown separately below)

 

88,406

 

5,790

 

169

(p)

94,365

 

Sales and marketing

 

229,636

 

16,001

 

(290

)(q)

245,347

 

Product development

 

165,580

 

6,632

 

867

(r)

173,079

 

General and administrative

 

97,313

 

11,079

 

(808

)(s)

107,584

 

Depreciation and amortization

 

73,972

 

4,414

 

26,747

(t)

105,133

 

Total costs and expenses

 

654,907

 

43,916

 

26,685

 

725,508

 

Loss from operations

 

(17,220

)

(379

)

(27,516

)

(45,115

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

Interest income

 

1,985

 

90

 

 

2,075

 

Interest expense

 

(12,597

)

(93

)

 

(12,690

)

Other, net

 

(4,035

)

67

 

 

(3,968

)

Other income (expense), net

 

(14,647

)

64

 

 

(14,583

)

Loss before income taxes

 

(31,867

)

(315

)

(27,516

)

(59,698

)

Provision for income taxes

 

10,572

 

13

 

(9,631

)(u)

954

 

Net loss

 

(42,439

)

(328

)

(17,885

)

(60,652

)

Accretion of redeemable noncontrolling interest

 

(109

)

 

 

(109

)

Net loss attributable to common stockholders

 

$

(42,548

)

$

(328

)

$

(17,885

)

$

(60,761

)

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.34

)

 

 

$

(0.13

)

$

(0.47

)

Diluted

 

$

(0.34

)

 

 

$

(0.13

)

$

(0.47

)

Weighted-average shares used to compute net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Basic

 

125,471

 

 

 

3,569

(v)

129,040

 

Diluted

 

125,471

 

 

 

3,569

(v)

129,040

 

 

See Notes to Unaudited Pro Forma Financial Statements

 



 

LINKEDIN CORPORATION

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2014

(In thousands, except per share data)

(Unaudited)

 

 

 

Historical

 

 

 

 

 

 

 

LinkedIn
Corporation

 

lynda.com

 

Pro Forma
Adjustments

 

Pro Forma
Combined

 

Net revenue

 

$

2,218,767

 

$

153,052

 

$

(2,381

)(o)

$

2,369,438

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation and amortization shown separately below)

 

293,797

 

22,703

 

689

(p)

317,189

 

Sales and marketing

 

774,411

 

47,234

 

(3,657

)(q)

817,988

 

Product development

 

536,184

 

25,858

 

3,544

(r)

565,586

 

General and administrative

 

341,294

 

99,203

 

23

(s)

440,520

 

Depreciation and amortization

 

236,946

 

16,993

 

128,486

(t)

382,425

 

Total costs and expenses

 

2,182,632

 

211,991

 

129,085

 

2,523,708

 

Income (loss) from operations

 

36,135

 

(58,939

)

(131,466

)

(154,270

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

Interest income

 

4,971

 

61

 

 

5,032

 

Interest expense

 

(6,797

)

(283

)

 

(7,080

)

Other, net

 

(3,104

)

135

 

 

(2,969

)

Other expense, net

 

(4,930

)

(87

)

 

(5,017

)

Income (loss) before income taxes

 

31,205

 

(59,026

)

(131,466

)

(159,287

)

Provision for income taxes

 

46,525

 

3,469

 

(46,013

)(u)

3,981

 

Net loss

 

(15,320

)

(62,495

)

(85,453

)

(163,268

)

Accretion of redeemable noncontrolling interest

 

(427

)

(333

)

 

(760

)

Net loss attributable to common stockholders

 

$

(15,747

)

$

(62,828

)

$

(85,453

)

$

(164,028

)

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.13

)

 

 

$

(1.17

)

$

(1.30

)

Diluted

 

$

(0.13

)

 

 

$

(1.17

)

$

(1.30

)

Weighted-average shares used to compute net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Basic

 

122,800

 

 

 

3,569

(v)

126,369

 

Diluted

 

122,800

 

 

 

3,569

(v)

126,369

 

 

See Notes to Unaudited Pro Forma Financial Statements

 



 

1.             Basis of Pro Forma Presentation

 

The unaudited pro forma balance sheet as of March 31, 2015 combines LinkedIn’s historical condensed balance sheet derived from the unaudited condensed consolidated financial statements from its Quarterly Report on Form 10-Q for the three months ended March 31, 2015 with the historical unaudited condensed consolidated interim balance sheet of lynda.com for the same period and has been prepared as if LinkedIn’s acquisition of lynda.com had occurred on March 31, 2015. The unaudited pro forma statements of operations for the three months ended March 31, 2015 and for the year ended December 31, 2014 were derived from the unaudited condensed consolidated financial statements from LinkedIn’s Quarterly Report on Form 10-Q for the three months ended March 31, 2015 and the audited consolidated financial statements from LinkedIn’s Annual Report on Form 10-K for the year ended December 31, 2014, respectively, with the historical consolidated statements of operations for lynda.com for the same periods and has been prepared as if LinkedIn’s acquisition had occurred on January 1, 2014.

 

lynda.com’s audited historical consolidated financial statements for the year ended December 31, 2014 and unaudited condensed consolidated financial statements for the three months ended March 31, 2015 are included in this Current Report on Form 8-K/A. These statements should be read in conjunction with such historical financial statements. The historical financial information is adjusted in the unaudited pro forma financial statements to give effect to pro forma adjustments that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the pro forma statements of operations, expected to have a continuing impact on the combined results.

 

LinkedIn has accounted for the acquisition of lynda.com under the acquisition method of accounting in accordance with the authoritative guidance on business combinations. As such, LinkedIn uses management’s best estimates and assumptions to allocate fair value to the tangible and intangible assets acquired and liabilities assumed as of the acquisition date. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of net tangible assets and identifiable intangible assets acquired. The pro forma financial statements and related notes include pro forma adjustments based on a preliminary valuation of acquired assets and assumed liabilities from lynda.com. The final purchase price allocation will differ from that reflected in the unaudited pro forma financial statements.

 

The unaudited pro forma financial statements are presented solely for informational purposes and are not necessarily indicative of the combined results of operations or financial position that might have been achieved for the periods or dates indicated, nor is it necessarily indicative of the future results of the combined company.

 

The unaudited pro forma financial statements do not reflect any integration activities or cost savings from future operating synergies, or any revenue, tax, or other synergies that could result from the acquisition.

 



 

Certain reclassification adjustments have been made to conform to the current presentation. The following reclassification adjustments have been made to lynda.com’s historical financial statements to conform to LinkedIn’s presentation (in thousands):

 

 

 

Historical
lynda.com Inc.
line items

 

Reclassification
adjustment to
conform to
LinkedIn
presentation

 

Revised
historical
lynda.com

 

BALANCE SHEET

 

 

 

 

 

 

 

As of March 31, 2015:

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

$

4,115

 

$

3,997

 

$

8,112

 

Deferred tax assets

 

3,997

 

(3,997

)

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

15,850

 

13,576

 

29,426

 

Capitalized production costs, net

 

9,998

 

(9,998

)

 

Intangible assets, net

 

5,651

 

(3,578

)

2,073

 

 

 

 

 

 

 

 

 

Accrued expenses and other current liabilities

 

20,100

 

351

 

20,451

 

Deferred rent

 

351

 

(351

)

 

 

 

 

 

 

 

 

 

Other long term liabilities

 

 

6,212

 

6,212

 

Deferred revenue, less current portion

 

5,375

 

(5,375

)

 

Deferred rent, less current portion

 

800

 

(800

)

 

Other liabilities

 

37

 

(37

)

 

 

 

 

 

 

 

 

 

INCOME STATEMENT

 

 

 

 

 

 

 

Three months ended March 31, 2015:

 

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation and amortization shown separately below)

 

$

7,943

 

$

(2,153

)

$

5,790

 

Sales and marketing

 

16,022

 

(21

)

16,001

 

Product development

 

7,318

 

(686

)

6,632

 

General and administrative

 

12,633

 

(1,554

)

11,079

 

Depreciation and amortization

 

 

4,414

 

4,414

 

 

 

 

 

 

 

 

 

Twelve months ended December 31, 2014:

 

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation and amortization shown separately below)

 

$

30,552

 

$

(7,849

)

$

22,703

 

Sales and marketing

 

47,384

 

(150

)

47,234

 

Product development

 

28,323

 

(2,465

)

25,858

 

General and administrative

 

105,732

 

(6,529

)

99,203

 

Depreciation and amortization

 

 

16,993

 

16,993

 

 

2.             Purchase Consideration and Preliminary Purchase Price Allocation

 

On May 14, 2015, LinkedIn completed its acquisition of lynda.com. LinkedIn’s purchase price of approximately $1.5 billion for all the outstanding shares of capital stock of lynda.com is expected to consist of approximately $778.6 million in cash and approximately 3,569,380 shares of LinkedIn Class A common stock. LinkedIn also issued 178,763 stock options related to assumed lynda.com equity awards. The fair value of the earned portion of assumed stock options of $11.5 million is included in the purchase price, with the remaining fair value of $18.6 million representing post-acquisition compensation expense that will be recognized over the requisite service period of approximately three years from the date of acquisition. LinkedIn accelerated the vesting of stock options for non-continuing employees and recognized $22.3 million in stock-based compensation expense immediately.

 



 

The following table presents the components of the purchase consideration transferred based on the closing price of $194.49 per share of LinkedIn’s Class A common stock as of the date of this report (in thousands):

 

Cash

 

$

778,566

 

Class A common stock

 

694,209

 

Earned portion of the assumed stock options

 

11,533

 

Purchase consideration

 

$

1,484,308

 

 

The following table presents the preliminary purchase price allocation of the assets acquired and liabilities assumed based on their estimated fair values as if the acquisition had occurred on March 31, 2015, which is the assumed acquisition date for purposes of the pro forma balance sheet, and the related useful lives for the amortizable identified intangible assets acquired (in thousands, except for the estimated useful lives):

 

 

 

 

 

Preliminary
estimated
useful life

 

Cash

 

$

143,113

 

 

 

Accounts receivable

 

8,847

 

 

 

Prepaid expenses and other current assets

 

9,011

 

 

 

Property and equipment

 

15,850

 

3 years

 

Goodwill

 

1,116,445

 

 

 

Definite-lived intangible assets:

 

 

 

 

 

Subscriber relationships - Enterprise

 

164,000

 

4 years

 

Subscriber relationships - Individual

 

57,000

 

2 years

 

Content

 

98,000

 

3 years (1)

 

Developed technology

 

39,000

 

2 years

 

Trade name

 

1,000

 

1 year

 

Other assets

 

409

 

 

 

Accounts payable

 

(4,268

)

 

 

Accrued liabilities

 

(24,676

)

 

 

Deferred revenue (2)

 

(45,350

)

 

 

Deferred tax liabilities

 

(86,737

)

 

 

Other long-term liabilities (2)

 

(7,336

)

 

 

Net assets acquired

 

$

1,484,308

 

 

 

 


(1)           The amortization method for the content intangible asset is 50% the first year, 30% the second year, and 20% in the third year. The remaining definite-lived intangible assets are amortized using the straight-line method.

(2)           Other long-term liabilities includes $3.7 million of long-term deferred revenue. Total deferred revenue of $49.0 million is expected to be amortized approximately 80% in 2015 and approximately 20% thereafter.

 

LinkedIn believes the amount of goodwill resulting from the allocation of purchase consideration is primarily attributable to expected operating synergies, assembled workforce, and the future development initiatives of the assembled workforce, which will position LinkedIn to be able to further expand its long-term content strategy and to realize its vision of building the world’s first economic graph. Goodwill is not expected to be deductible for tax purposes.

 



 

Upon completion of the fair value assessment, it is anticipated that the final purchase price allocation will differ from the preliminary assessment outlined above. Any changes to the preliminary estimates of the fair value of the assets acquired and liabilities assumed will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill.

 

LinkedIn expects to grant approximately 240,000 restricted stock units (“RSUs”) to certain lynda.com employees as part of their new hire employment agreements, which will be granted in the third quarter of 2015. This will result in estimated stock-based compensation of approximately $52.3 million, calculated using the closing stock price of our Class A common stock on June 25, 2015 of $217.89, and will be recognized over approximately four years. The amount of stock-based compensation will change depending on the stock price of our Class A common stock on the date of grant.

 

3.             Pro Forma Adjustments

 

The pro forma adjustments included in the unaudited pro forma condensed combined financial information are as follows (in thousands):

 

a)                                     Cash and cash equivalents

 

 

 

March 31,
2015

 

To record cash consideration paid to lynda.com shareholders

 

$

(778,566

)

To record cash settlement of lynda.com employee stock options for which vesting was accelerated

 

(22,346

)

Total adjustments to Cash and cash equivalents

 

$

(800,912

)

 

b)                                     Prepaid expenses and other current assets

 

 

 

March 31,
2015

 

To eliminate the historical deferred tax assets of lynda.com

 

$

(3,997

)

To record preliminary deferred tax assets in connection with the lynda.com acquisition

 

4,896

 

Total adjustments to Prepaid expenses and other current assets

 

$

899

 

 

c)                                     Property and equipment, net

 

To eliminate $13.6 million of historical net book value of lynda.com capitalized production costs, website development, and internal-use software costs for which the fair value was determined in purchase accounting and is included in intangible assets.

 

d)                                     Goodwill

 

 

 

March 31,
2015

 

To eliminate the historical goodwill of lynda.com

 

$

(6,721

)

To record preliminary goodwill for purchase consideration in excess of the fair value of net assets acquired in connection with the lynda.com acquisition

 

1,116,445

 

Total adjustments to Goodwill

 

$

1,109,724

 

 



 

e)                                     Intangible assets, net

 

 

 

March 31,
2015

 

To eliminate the historical net book value of lynda.com intangible assets

 

$

(2,073

)

To record the preliminary fair value of intangible assets acquired in connection with the lynda.com acquisition

 

359,000

 

Total adjustments to Intangible assets, net

 

$

356,927

 

 

f)                                        Accrued expenses and other current liabilities

 

 

 

March 31,
2015

 

To eliminate the historical deferred rent and income taxes payable of lynda.com

 

$

(1,435

)

To reclassify certain tax amounts to Other long-term liabilities

 

(378

)

To record fair value adjustments to acquired liabilities in connection with the lynda.com acquisition

 

6,038

 

To record employer taxes for cash settlement of certain lynda.com employee stock options

 

1,899

 

To accrue for additional transaction costs incurred by LinkedIn and lynda.com prior to the acquisition date

 

1,803

 

To accrue for severance related to certain lynda.com employees

 

6,696

 

Total adjustments to Accrued expenses and other current liabilities

 

$

14,623

 

 

g)                                     Deferred revenue

 

To record $21.3 million in preliminary fair value adjustments to deferred revenue to reflect the fair value to fulfill the remaining contractual obligations.

 

h)                                     Deferred tax liabilities

 

 

 

March 31,
2015

 

To eliminate certain historical long-term deferred tax liabilities of lynda.com

 

$

(3,766

)

To reclassify certain tax amounts to Other long-term liabilities

 

 

(266

)

To record estimated preliminary net deferred tax liabilities in connection with the acquisition

 

86,737

 

Total adjustments to Deferred tax liabilities

 

$

82,705

 

 

i)                                         Other long-term liabilities

 

 

 

March 31,
2015

 

To eliminate the historical long-term deferred rent of lynda.com

 

$

(800

)

To reclassify certain income tax amounts from Accrued expenses and other current liabilities and Deferred tax liabilities

 

644

 

To record preliminary fair value adjustments to deferred revenue to reflect the fair value to fulfill the remaining contractual obligations

 

(1,720

)

To record estimated preliminary income tax liabilities in connection with the acquisition

 

 

3,000

 

Total adjustments to Other long-term liabilities

 

$

1,124

 

 

j)                                         Redeemable convertible preferred stock

 

To eliminate $283.5 million of historical redeemable convertible preferred stock of lynda.com.

 

k)                                     Common stock

 

To eliminate $0.1 million of historical common stock of lynda.com.

 



 

l)                                         Additional paid-in capital

 

 

 

March 31,
2015

 

To eliminate the historical additional paid-in capital of lynda.com

 

$

(539

)

To record adjustments to additional paid-in capital related to stock consideration

 

694,209

 

To record the earned portion of assumed lynda.com stock options

 

11,533

 

Total adjustments to Additional paid-in capital

 

$

705,203

 

 

m)                                 Accumulated other comprehensive income (loss)

 

To eliminate $1.7 million of historical accumulated other comprehensive loss of lynda.com

 

n)                                     Accumulated deficit

 

 

 

March 31,
2015

 

To eliminate the historical accumulated deficit of lynda.com

 

$

185,319

 

To record adjustments to accumulated deficit related to acceleration of vesting of lynda.com employee options

 

(22,346

)

To record employer taxes for cash payments related to the acceleration of vesting of certain lynda.com employee stock options

 

(1,899

)

To record expense related to severance for certain lynda.com employees

 

(6,696

)

To record additional transaction costs incurred by LinkedIn and lynda.com

 

(1,803

)

Total adjustments to Accumulated deficit

 

$

152,575

 

 

o)                                     Revenue

 

 

 

March 31,
2015

 

December 31,
2014

 

To adjust for differences between LinkedIn and lynda.com’s accounting policies by eliminating revenue recorded for sales tax

 

$

(685

)

$

(2,067

)

To eliminate revenue for pre-existing subscription agreements between lynda.com and LinkedIn

 

(146

)

(314

)

Total adjustments to Revenue

 

$

(831

)

$

(2,381

)

 

p)                                     Cost of revenue

 

 

 

Three Months
Ended

March 31, 2015

 

Year Ended
December 31,
2014

 

To eliminate certain historical stock-based compensation expense recorded by lynda.com for stock options assumed in connection with the acquisition

 

$

(14

)

$

(53

)

To record stock-based compensation expense for unearned stock options assumed in connection with the acquisition

 

183

 

742

 

Total adjustments to Cost of revenue

 

$

169

 

$

689

 

 



 

q)                                     Sales and marketing

 

 

 

Three Months
Ended

March 31, 2015

 

Year Ended
December 31,
2014

 

To eliminate certain historical stock-based compensation expense recorded by lynda.com for stock options assumed in connection with the acquisition

 

$

(48

)

$

(131

)

To record stock-based compensation expense for unearned stock options assumed in connection with the acquisition

 

481

 

1,951

 

To adjust for differences between LinkedIn and lynda.com’s accounting policies by eliminating revenue recorded for sales tax

 

(685

)

(2,067

)

To adjust for differences between LinkedIn and lynda.com’s accounting policies by deferring certain historical sales commissions expenses of lynda.com

 

(908

)

(4,888

)

To record amortization of deferred commissions for lynda.com

 

983

 

1,676

 

To eliminate expense for pre-existing subscription agreements between lynda.com and LinkedIn

 

(113

)

(198

)

Total adjustments to Sales and marketing

 

$

(290

)

$

(3,657

)

 

r)                                        Product development

 

 

 

Three Months
Ended
March 31, 2015

 

Year Ended
December 31,
2014

 

To eliminate certain historical stock-based compensation expense recorded by lynda.com for stock options assumed in connection with the acquisition

 

$

(90

)

$

(304

)

To record stock-based compensation expense for unearned stock options assumed in connection with the acquisition

 

957

 

3,848

 

Total adjustments to Product development

 

$

867

 

$

3,544

 

 

s)                                     General and administrative

 

 

 

Three Months
Ended

March 31, 2015

 

Year Ended
December 31,
2014

 

To eliminate certain historical stock-based compensation expense recorded by lynda.com for stock options assumed in connection with the acquisition

 

$

(3

)

$

(8

)

To record stock-based compensation expense for unearned stock options assumed in connection with the acquisition

 

36

 

147

 

To eliminate transaction costs in connection with acquisition of lynda.com

 

(808

)

 

To eliminate expense for pre-existing subscription agreements between lynda.com and LinkedIn

 

(33

)

(116

)

Total adjustments to General and administrative

 

$

(808

)

$

23

 

 

t)                                        Depreciation and amortization

 

 

 

Three Months
Ended

March 31, 2015

 

Year Ended
December 31,
2014

 

To eliminate the historical depreciation and amortization expense related to capitalized website development and internal-use software, production costs, and intangible assets included within the operating results of lynda.com

 

$

(2,853

)

$

(10,514

)

To record amortization expense related to the acquired identifiable intangible assets calculated as if the acquisition had occurred on January 1, 2014

 

29,600

 

139,000

 

Total adjustments to Depreciation and amortization

 

$

26,747

 

$

128,486

 

 

u)                                     Provision for income taxes

 

To record the tax effect of pro forma adjustments recorded to decrease Loss before income taxes using an estimated statutory tax rate of 35.0%.

 

v)                                     Weighted-average shares used to compute net loss per share attributable to common stockholders

 

To record the Class A common stock issued as consideration to lynda.com’s stockholders. We have excluded the effects of certain awards issued or granted in connection with the acquisition from the diluted earnings per share calculation for the pro forma combined year ended December 31, 2014 and the three months ended March 31, 2015 because the impact would be anti-dilutive.