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59
OUTERWALL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2014 2013 2012
Operating Activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 106,618 $ 174,792 $ 150,230
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195,162 193,700 179,147
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,692 10,933 5,378
Share-based payments expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,384 16,831 19,362
Windfall excess tax benefits related to share-based payments . . . . . . . . . . . . . . . . . (1,964) (3,698) (5,740)
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22,611) (10,933) 87,573
Impairment expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 32,732 —
(Income) loss from equity method investments, net . . . . . . . . . . . . . . . . . . . . . . . . . 28,734 (19,928) 5,184
Amortization of deferred financing fees and debt discount . . . . . . . . . . . . . . . . . . . 4,116 6,394 9,235
Loss from early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,018 6,013 953
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,750) (2,039) (5,053)
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,671 7,978 (17,061)
Content library. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,747 (22,459) (30,693)
Prepaid expenses and other current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,282 (50,542) (6,963)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,702 230 858
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (68,912) 1,491 60,104
Accrued payable to retailers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,847) (4,088) 10,461
Other accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,309 (9,573) 2,787
Net cash flows from operating activities(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338,351 327,834 465,762
Investing Activities:
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (97,924) (161,412) (209,910)
Proceeds from sale of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,977 13,344 1,131
Acquisition of ecoATM, net of cash acquired. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (244,036) —
Receipt of note receivable principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 22,913 —
Acquisition of NCR DVD kiosk business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (100,000)
Cash paid for equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (24,500) (28,000) (39,727)
Extinguishment payment received from equity investment . . . . . . . . . . . . . . . . . . . . . . . 5,000 — —
Net cash flows used in investing activities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115,447) (397,191) (348,506)
Financing Activities:
Proceeds from issuance of senior unsecured notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295,500 343,769 —
Proceeds from new borrowing on Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 642,000 400,000 —
Principal payments on Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (680,125) (215,313) (10,938)
Financing costs associated with Credit Facility and senior unsecured notes(2) . . . . . . . . . (2,911) (2,203) —
Settlement and conversion of convertible debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (51,149) (172,211) (20,575)
Repurchases of common stock(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (545,091) (195,004) (139,724)
Principal payments on capital lease obligations and other debt . . . . . . . . . . . . . . . . . . . . (13,996) (14,834) (16,392)
Windfall excess tax benefits related to share-based payments . . . . . . . . . . . . . . . . . . . . . 1,964 3,698 5,740
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of
stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 8,460 4,592
Net cash flows from (used in) financing activities(1) . . . . . . . . . . . . . . . . . . . . . . . $ (354,328) $ 156,362 $ (177,297)