Classmates.com 2006 Annual Report Download - page 47

$9.0 million year-over-
year reduction in the change in accrued employee bonuses due to the timing of bonus payments, including the payment of
bonuses associated with the MyPoints acquisition; a $5.2 million year-over-year reduction in the change in sales and marketing accruals
primarily due to a reduction in media and other advertising costs associated with our Communications segment; and a net year-over-year
reduction in other payables and accrued liabilities primarily due to the timing of payments to vendors.
Net cash used for investing activities increased by $86.4 million for the year ended December 31, 2006 compared to the year ended
December 31, 2005. The increase was primarily the result of the following:
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a $52.5 million increase in cash paid for acquisitions. We acquired MyPoints in April 2006 for $49.5 million, net of cash acquired; The
Names Database in March 2006 for $9.5 million, net of cash acquired; and we paid the remaining $1.5 million due in connection with the
acquisition of our photo-sharing service in March 2006 compared to the initial payment of $8.6 million in March 2005;
•
a $31.6 million net decrease in proceeds from maturities and sales of short-term investments;
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a $4.8 million escrow deposit for the settlement of a pre-acquisition liability in the September 2006 quarter; and
•
a $2.7 million increase in purchases of property and equipment.
These increases in uses of cash were partially offset by a $5.1 million decrease in purchases of rights, patents and trademarks, primarily
related to the purchase of proprietary rights associated with the NetZero trademark for $6.0 million, $5.5 million of which was paid in the
March 2005 quarter. The remaining $0.5 million was paid in January 2006.
We have invested significantly in our network infrastructure, software licenses, leasehold improvements, and computer equipment and we
will need to make further significant investments in the future. Capital expenditures for the year ended December 31, 2006 were $24.3 million.
We anticipate that our total capital expenditures for 2007 will be in the range of $22 million to $27 million. The actual amount of future capital
expenditures may fluctuate due to a number of factors including, without limitation, potential future acquisitions and new business initiatives,
which are difficult to predict and could change significantly over time. Additionally, technological advances may require us to make capital
expenditures to develop or acquire new equipment or technology in order to replace aging or technologically obsolete equipment.
Net cash used for financing activities increased by $3.1 million, or 3%, for the year ended December 31, 2006 compared to the year ended
December 31, 2005. The increase was primarily the result of the following:
•
a $15.4 million increase in dividend payments; and
•
an $8.4 million increase in payments on the term loan. In January 2006, we paid, in full, the outstanding balance of the term loan of
approximately $54.2 million.
The increases in uses of cash were offset by:
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an $11.5 million decrease in repurchases of common stock;
•
a $5.4 million increase in proceeds from exercises of stock options and the employee stock purchase plan; and
• a $3.9 million increase in excess tax benefits from stock-based compensation as a result of the adoption of SFAS No. 123R, which
requires a portion of the tax benefits from stock-based compensation to be presented in financing activities versus its historical
presentation in operating activities.
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