ServiceMagic 2014 Annual Report Download - page 47

Table of Contents
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2014, the Company had $990.4 million of cash and cash equivalents, $160.6 million of marketable securities, and $1.1
billion of long-
term debt. Domestically, cash equivalents primarily consist of commercial paper rated A2/P2 or better and AAA rated money market
funds. Internationally, cash equivalents primarily consist of AAA rated money market funds and time deposits. Marketable securities consist of
short-to-medium-term debt securities issued by investment grade corporate issuers and an equity security. The Company invests in marketable debt
securities with active secondary or resale markets to ensure portfolio liquidity to fund current operations or satisfy other cash requirements as
needed. The Company also invests in equity securities as part of its investment strategy. Long-term debt consists of $500.0 million in 2013 Senior
Notes due November 30, 2018,
$500.0 million in 2012 Senior Notes due December 15, 2022 and $80.0 million in Liberty Bonds due September 1,
2035.
At December 31, 2014, $220.4 million of the $ 990.4 million of cash and cash equivalents was held by the Company's foreign subsidiaries. If
needed for our U.S. operations, most of the cash and cash equivalents held by the Company's foreign subsidiaries could be repatriated; however,
under current law, would be subject to U.S. federal and state income taxes. We have not provided for any such tax because the Company currently
does not anticipate a need to repatriate these funds to finance our U.S. operations and it is the Company's intent to indefinitely reinvest these funds
outside of the U.S.
In summary, the Company's cash flows attributable to continuing operations are as follows:
Net cash provided by operating activities attributable to continuing operations consists of earnings or loss from continuing operations adjusted
for non-cash items, including non-cash compensation expense, depreciation, amortization of intangibles, asset impairment charges, excess tax
benefits from stock-based awards, deferred income taxes, equity in earnings or losses of unconsolidated affiliates, acquisition-related contingent
consideration fair value adjustments, an adjustment related to gains on sales of long-term investments, assets and a business, and the effect of
changes from working capital activities. Net cash provided by operating activities attributable to continuing operations in 2014 consists of earnings
from continuing operations of $234.6 million , adjustments for non-cash items and gains on sales of a business and long-term investments totaling
$272.2 million , partially offset by a decrease from working capital activities of $82.7 million . Adjustments for non-cash items and gains on sales
of a business and long-term investments primarily consist of $76.9 million of deferred income taxes, $66.6 million of impairments related to long-
term investments, $61.2 million of depreciation, $59.6 million of non-cash compensation expense and $57.9 million of amortization of intangibles,
partially offset by $45.0 million of excess tax benefits from stock-based awards, a $ 21.9 million adjustment related to gains on sales of a business
and long-term investments and $13.4 million in acquisition-related contingent consideration fair value adjustments. The deferred income tax
provision primarily relates to a net reduction in deferred tax assets related to the expiration of statutes of limitations for federal income taxes for the
years 2001 through 2009. The changes from working capital activities consist of a decrease in income taxes payable of $94.5 million and an
increase in accounts receivable of $19.9 million , partially offset by an increase in deferred revenue of $30.1 million . The decrease in income taxes
payable is primarily due to a net reduction in tax reserves related to the expiration of statutes of limitations for federal income taxes for the years
2001 through 2009, partially offset by current year income tax accruals in excess of current year income tax payments. The increase in accounts
receivable is primarily due to revenue growth at HomeAdvisor. The increase in deferred revenue is due to increases related to acquisitions and
growth in subscription revenue at The Match Group and Vimeo.
Net cash used in investing activities attributable to continuing operations in 2014 includes acquisitions of $259.4 million , which include the
ValueClick O&O website businesses, The Princeton Review, SlimWare and FriendScout24, purchases of marketable debt securities, net of
proceeds from maturities and sales of $154.2 million , capital expenditures of $57.2 million primarily related to the internal development of
software to support our products and services, and investments of $24.3 million , partially offset by $58.4 million of proceeds from the sales of a
business and long-term investments.
Net cash used in financing activities attributable to continuing operations in 2014 includes $97.3 million related to the payment of cash
dividends to IAC shareholders, $33.2 million for the purchase of noncontrolling interests in Tinder and Meetic, $8.1 million in contingent
consideration payments related principally to the 2013 Twoo acquisition, partially offset by excess tax benefits from stock-based awards of $45.0
million and the return of $12.4 million of funds held in escrow related to the Meetic tender offer.
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December 31,
2014
2013 2012
(In thousands)
Net cash provided by operating activities
$
424,048
$
410,961
$
354,527
Net cash used in investing activities
(439,794
)
(79,761
)
(341,307
)
Net cash (used in) provided by financing activities
(80,980
)
17,666
33,520