ServiceMagic 2012 Annual Report Download - page 35

Table of Contents
services, partially offset by net maturities and sales of marketable debt securities and sales of long-term investments of $ 155.7 million .
Net cash provided by financing activities attributable to continuing operations in 2012 of $ 44.3 million includes $500.0 million in
proceeds from the issuance of our 2012 Senior Notes, proceeds related to the issuance of common stock, net of withholding taxes, of
$262.8 million, and excess tax benefits from stock-based awards of $57.1 million, partially offset by $691.8 million for the repurchase of
15.5 million shares of common stock at an average price of $46.09 per share and $68.2 million related to the payment of cash dividends to IAC
shareholders. Included in the proceeds related to the issuance of common stock are proceeds of $284.1 million from the exercise of warrants to
acquire 11.7 million shares of IAC common stock, some of which were exercised on a cashless or net basis. The weighted average strike price of
the warrants was $28.40 per share.
Net cash provided by operating activities attributable to continuing operations in 2011 was $ 372.4 million and consists of earnings from
continuing operations of $ 175.6 million , adjustments for non-cash items of $176.9 million and cash provided by working capital activities of
$19.9 million. Adjustments for non-cash items primarily consists of $ 88.6 million of non-cash compensation expense, $ 56.7 million of
depreciation, $ 36.3 million of equity in losses of unconsolidated affiliates, which includes a non-cash charge of $11.7 million to re-measure the
carrying value of our investment in Meetic to fair value in connection with our acquisition of a controlling interest, partially offset by $ 35.5
million of deferred income taxes. The deferred income tax benefit primarily relates to the reversal of a previously established deferred tax
liability in connection with the acquisition of a controlling interest in Meetic. The increase in cash from changes in working capital activities
primarily consists of an increase of $ 57.2 million in accounts payable and other current liabilities and an increase of $48.9 million in deferred
revenue, partially offset by an increase in accounts receivable of $ 58.3 million and a decrease in income taxes payable of $ 29.2 million . The
increase in accounts payable and other current liabilities is primarily due to an increase in accrued advertising expense, an increase in accrued
employee compensation and benefits and an increase in accrued revenue share expense. The increase in accrued advertising expense is primarily
due to an increase in advertising and promotional expenditures at Search & Applications. The increase in accrued employee compensation and
benefits is primarily due to the increase in the 2011 bonus accrual which was paid entirely in the first quarter of 2012 as compared to the 2010
bonus accrual which was partially paid in December of 2010 and the remainder in the first quarter of 2011. The increase in accrued revenue
share expense is primarily due to an increase in traffic acquisition costs at Search & Applications. The increase in deferred revenue is primarily
due to the growth in subscription revenue at Match, which includes an increase of $29.5 million in deferred revenue at Meetic, as well as growth
at Electus, Vimeo and Notional. The increase in accounts receivable is primarily due to the growth in revenue earned from our services
agreement with Google; the related receivable from Google was $ 105.7 million and $ 70.5 million at December 31, 2011 and 2010,
respectively. While our Match, Media and HomeAdvisor businesses experienced strong growth, the accounts receivable at these businesses are
principally credit card receivables and, accordingly, are not significant in relation to the revenue of these businesses. The decrease in income
taxes payable is primarily attributable to excess tax benefits of $22.2 million from stock-based awards that were recorded in 2011 related to the
income tax benefit realized from the exercise of stock options and the vesting of restricted stock units. To the extent such deductions reduce
income taxes payable, they are reported as financing activities in the consolidated statement of cash flows. In addition, current year income tax
payments in 2011 were in excess of current year income tax accruals.
Net cash used in investing activities attributable to continuing operations in 2011 of $ 25.2 million includes cash consideration used in
acquisitions and investments of $368.7 million primarily related to the acquisitions of Meetic and OkCupid and the investment in Zhenai Inc.
and capital expenditures of $ 40.0 million primarily related to the internal development of software to support our products and services,
partially offset by net maturities and sales of marketable debt securities and sales of long-term investments of $396.2 million.
Net cash used in financing activities attributable to continuing operations in 2011 of $ 372.2 million includes $ 507.8 million for the
repurchase of 13.6 million shares of common stock at an average price of $38.20 per share and $10.7 million related to the payment of cash
dividends to IAC shareholders, partially offset by proceeds related to the issuance of common stock, net of withholding taxes, of $ 132.8
million , and excess tax benefits from stock-based awards of $ 22.2 million . Included in the proceeds related to the issuance of common stock
are proceeds of $76.0 million from the exercise of warrants to acquire 3.2 million shares of IAC common stock. The weighted average strike
price of the warrants was $26.90 per share.
Net cash provided by operating activities attributable to continuing operations in 2010 was $ 340.7 million and consists of a loss from
continuing operations of $ 9.4 million , adjustments for non-cash items of $241.0 million and cash provided by working capital activities of
$109.1 million. Adjustments for non-cash items primarily consists of $ 84.3 million of non-cash compensation expense, $ 63.9 million of
depreciation, $ 28.0 million of goodwill impairment, $ 27.5 million of amortization of intangibles, which includes an impairment charge of
$15.5 million and $ 25.7 million of equity in losses of unconsolidated affiliates. The increase in cash from changes in working capital activities
primarily consists of an increase of $ 76.7 million in
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