Enom 2014 Annual Report Download - page 55

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Cash Flow from Operating Activities
Year ended December 31, 2014
Net cash inflows from our operating activities was $34.7 million, a decrease of $41.5 million, or 54%, compared to the prior
year. Our net loss during the period was $267.4 million, which included non-cash charges of $232.3 million for goodwill impairment
and $82.9 million related to depreciation, amortization, stock-based compensation and debt extinguishment, partially offset by
deferred taxes, gain on disposals, gain on other assets, net and other of $22.6 million. The remainder of our sources of net cash flow
from operating activities was from changes in our working capital, including changes in accounts receivable and deferred revenue of
$22.8 million, offset in part by changes in accounts payable and accrued expenses, deferred registration costs, other long term assets
and deposits with registries of $13.3 million. The increase in our deferred revenue was primarily due to growth in our former registrar
service during the period. The decrease in accrued expenses is reflective of increases in amounts due to certain vendors and our
employees resulting from growth in our business, while the change in our accounts receivable and accounts payable was primarily due
to the timing of payments and collections.
Year ended December 31, 2013
Net cash inflows from our operating activities was $76.2 million, a decrease of $14.8 million, or 16%, compared to the prior year.
Our net loss during the period was $20.2 million, which included non-cash charges of $96.2 million related to depreciation, amortization,
stock-based compensation, gain on other assets, net, deferred taxes and other, partially offset by gain on other assets, net and other of $5.1
million. The remainder of the movement in our cash flow from operating activities was from changes in our working capital, including
changes in accounts receivable, deferred revenue and accounts payable of $24.8 million offset in part by changes in prepaid expenses and
other current assets, accrued expenses, other long-term assets, deferred registration costs, and deposits with registries of $19.6 million.
The increases in our deferred revenue and deferred registry costs were primarily due to growth in our former registrar business during the
period, while the decrease in our accounts receivable balances was primarily due to timing of collections.
Year ended December 31, 2012
Net cash inflows from our operating activities was $91.0 million, an increase of $5.6 million, or 7%, compared to the prior year.
Our net income during the period was $6.2 million, which included non-cash charges of $93.4 million related to depreciation,
amortization, stock-based compensation, deferred taxes and other. The remainder of the movement in our cash flow from operating
activities was from changes in our working capital, including changes in deferred revenue, accounts payable, deposits with registries,
prepaid expenses, other current assets and accrued expenses of $12.4 million, offset by changes in accounts receivable and deferred
registration costs of $21.0 million. The increases in our deferred revenue and deferred registry fees were primarily due to growth in
our former registrar business during the period. The increase in accrued expenses is reflective of increases in amounts due to certain
vendors and our employees resulting from growth in our business. The increase in our accounts receivable reflects growth in
advertising revenue including a higher mix of balances from brand advertising sales.
Cash Flow from Investing Activities
Years ended December 31, 2014, 2013 and 2012
Net cash used in investing activities was $14.9 million, $114.5 million and $67.5 million during the years ended December 31,
2014, 2013 and 2012, respectively, primarily relating to cash used to purchase property and equipment and intangible assets, cash
received or used in connection with acquisitions and dispositions of businesses, and payments relating to our investment in gTLDs in
connection with our former domain name business. Cash used in investing activities during the years ended December 31, 2014, 2013
and 2012, respectively, included investments in intangible assets, primarily comprised of media content, of $5.7 million, $16.8 million
and $13.2 million, and investments in property and equipment, primarily comprised of investments in servers and IT equipment,
fixtures and fittings, leasehold improvements and internally developed software, of $8.9 million, $26.7 million and $17.7 million.
Cash flows from investing activities for the year ended December 31, 2014 included cash inflows of $13.7 million from the sales of
businesses, including Creativebug and CoverItLive, as well as outflows of $2.2 million cash as partial consideration to acquire Saatchi
Art and $3.1 million of restricted cash comprised of a $1.7 million holdback amount paid by us as part of the Saatchi Art consideration
and $1.4 million for a standby letter of credit we cash collateralized in connection with the payment arrangement for our Santa Monica
office lease. Cash flows used in investing activities during the year ended December 31, 2013 included $73.6 million of cash paid as
partial consideration to acquire Society6 and Creativebug. Cash flows used in investing activities during the year ended December 31,
2012 included $17.5 million of cash for acquisitions, which primarily related to our acquisition of Name.com in fiscal 2012 and also
included $1.3 million of deferred consideration for acquisitions made in prior years. In connection with our former domain name
business, we made net payments for gTLD applications of $15.8 million, $3.9 million and $18.2 million during the years ended
December 31, 2014, 2013 and 2012, respectively, and we received cash proceeds of $6.1 million and $5.6 million from the
withdrawals of our interest in certain gTLD applications during the years ended December 31, 2014 and 2013, respectively.