ServiceMagic 2014 Annual Report Download - page 49

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Table of Contents
for the repurchase of 15.5 million shares of common stock at an average price of $46.09 per share, $68.2 million related to the payment of cash
dividends to IAC shareholders, $11.0 million of debt issuance costs associated with our 2012 Senior Notes and $10.8 million in contingent
consideration payments principally related to the 2011 OkCupid acquisition. 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.
The Company's principal sources of liquidity are its cash and cash equivalents and marketable securities as well as its cash flows generated
from operations. The Company has a $300.0 million revolving credit facility, which expires on December 21, 2017, and is available as an additional
source of financing. At December 31, 2014, there were no outstanding borrowings under the revolving credit facility.
The Company anticipates that it will need to make capital and other expenditures in connection with the development and expansion of its
operations. The Company expects that 2015 capital expenditures will be higher than 2014. At December 31, 2014, IAC had 8.6 million shares
remaining in its share repurchase authorization. IAC may purchase shares over an indefinite period of time on the open market and in privately
negotiated transactions, depending on those factors IAC management deems relevant at any particular time, including, without limitation, market
conditions, share price and future outlook. On February 3, 2015, IAC declared a quarterly cash dividend of $0.34 per share of common and Class B
common stock outstanding payable on March 1, 2015 to stockholders of record on February 15, 2015. Future declarations of dividends are subject
to the determination of IAC's Board of Directors.
The Company believes its existing cash, cash equivalents and marketable securities, together with its expected positive cash flows generated
from operations and available borrowing capacity under its $300.0 million revolving credit facility, will be sufficient to fund its normal operating
requirements, including capital expenditures, share repurchases, quarterly cash dividends, and investing and other commitments for the foreseeable
future. Our liquidity could be negatively affected by a decrease in demand for our products and services. The Company may make acquisitions and
investments that could reduce its cash, cash equivalents and marketable securities balances and as a result, the Company may need to raise
additional capital through future debt or equity financing to provide for greater financial flexibility. Additional financing may not be available at all
or on terms favorable to us. The indentures governing the 2013 and 2012 Senior Notes restrict our ability to incur additional indebtedness in the
event we are not in compliance with the maximum leverage ratio of 3.0 to 1.0. In addition, the terms of the revolving credit facility require that we
maintain a leverage ratio of not more than 3.0 to 1.0 and restrict our ability to incur additional indebtedness. As of December 31, 2014, the
Company was in compliance with all of these covenants.
36