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94
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31, 2013
(in thousands)
Outerwall
Inc.
Combined
Guarantor
Subsidiaries
Combined
Non-
Guarantor
Subsidiaries
Eliminations
and
Consolidation
Reclassifications Total
Operating Activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 174,792 $ 109,682 $ (11,037) $ (98,645) $ 174,792
Adjustments to reconcile net income to net cash flows:
Depreciation and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,640 158,801 5,259 — 193,700
Amortization of intangible assets and deferred financing fees . . . 4,773 8,688 — — 13,461
Share-based payments expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,903 6,928 — — 16,831
Excess tax benefits on share-based payments . . . . . . . . . . . . . . . . (3,698) — — — (3,698)
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,228 (15,727) (4,434) — (10,933)
Impairment expense(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,444 288 — — 32,732
(Income) loss from equity method investments, net . . . . . . . . . . . (65,063) 45,135 — — (19,928)
Non-cash interest on convertible debt . . . . . . . . . . . . . . . . . . . . . . 3,866 — — — 3,866
Loss from extinguishments of callable convertible debt . . . . . . . . 6,013 — — — 6,013
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827 (2,951) 31 54 (2,039)
Equity in (income) losses of subsidiaries. . . . . . . . . . . . . . . . . . . . (109,682) 11,037 — 98,645 —
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,144) 10,639 (1,517) — 7,978
Content library . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,093 (23,357) (195) — (22,459)
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . (43,762) (6,280) (500) — (50,542)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 400 (371) — 230
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,319 (4,151) 226 354 (2,252)
Accrued payable to retailers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,181) 1,633 460 — (4,088)
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,184 (22,751) (6) — (9,573)
Net cash flows from operating activities . . . . . . . . . . . . . . . . . . 57,753 278,014 (12,084) 408 324,091
Investing Activities:
Acquisition of ecoATM, net of cash acquired . . . . . . . . . . . . . . . . . . . . (244,036) — — — (244,036)
Purchases of property and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . (58,763) (84,688) (14,218) — (157,669)
Proceeds from sale of property and equipment. . . . . . . . . . . . . . . . . . . . 12,147 1,189 8 — 13,344
Receipt of note receivable principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,913 — — — 22,913
Cash paid for equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (28,000) — — (28,000)
Investments in and advances to affiliates . . . . . . . . . . . . . . . . . . . . . . . . 125,856 (156,659) 30,857 (54) —
Net cash flows from investing activities . . . . . . . . . . . . . . . . . . . (141,883) (268,158) 16,647 (54) (393,448)
Financing Activities:
Proceeds from issuance of senior unsecured notes. . . . . . . . . . . . . . . . . 343,769 — — — 343,769
Proceeds from new borrowing of Credit Facility . . . . . . . . . . . . . . . . . . 400,000 — — — 400,000
Principal payments on Credit Facility. . . . . . . . . . . . . . . . . . . . . . . . . . . (215,313) — — — (215,313)
Financing costs associated with Credit Facility and senior unsecured
notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,203) — — — (2,203)
Repurchase of convertible debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (172,211) — — — (172,211)
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (195,004) — — — (195,004)
Principal payments on capital lease obligations and other debt . . . . . . . (14,200) (217) (417) — (14,834)
Excess tax benefits related to share-based payments . . . . . . . . . . . . . . . 3,698 — — — 3,698
Proceeds from exercise of stock options, net . . . . . . . . . . . . . . . . . . . . . 8,460 — — — 8,460
Net cash flows from financing activities. . . . . . . . . . . . . . . . . . . 156,996 (217) (417) — 156,362
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . (105) — 1,643 — 1,538
Increase (decrease) in cash and cash equivalents(1) . . . . . . . . . . . . . . 72,761 9,639 5,789 354 88,543
Cash and cash equivalents:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242,489 — 40,759 (354) 282,894
End of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 315,250 $ 9,639 $ 46,548 $ — $ 371,437
(1) During 2013 we discontinued four ventures previously included in our New Ventures operating segment, Orango, Rubi, Crisp Market, and Star Studio. Cash flows from
these discontinued operations are not segregated from cash flows from continuing operations in all periods presented because they were not material.