ServiceMagic 2011 Annual Report Download - page 45

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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2011, the Company had $704.2 million of cash and cash equivalents, $165.7 million of marketable securities and
$95.8 million of long-term debt. Domestically, cash equivalents primarily consist of AAA rated treasury and government agency money market
funds and commercial paper rated A2/P2 or better. Internationally, cash equivalents primarily consist of AAA prime and government money
market funds and time deposits. Marketable securities primarily consist of short-to-intermediate-term debt securities issued by states of the U.S.
and subdivisions thereof and investment grade corporate issuers. The Company only invests in marketable securities with active secondary or
resale markets to ensure portfolio liquidity and the ability to readily convert investments into cash to fund current operations or satisfy other cash
requirements as needed. From time to time, the Company may invest in marketable equity securities as part of its investment strategy. Long-
term
debt is comprised of $80.0 million in Liberty Bonds due September 1, 2035 and $15.8 million in Senior Notes due January 15, 2013.
At December 31, 2011, $158.3 million of the $704.2 million of cash and cash equivalents and none of the $165.7 million of marketable
securities were held by the Company's foreign subsidiaries. No U.S. federal or state income taxes have been provided on the permanently
reinvested earnings of certain of the Company's foreign subsidiaries that hold this cash and cash equivalents. If needed for our operations in the
U.S., most of the cash and cash equivalents held by the Company's foreign subsidiaries could be repatriated to the U.S., but under current law,
would be subject to U.S. federal and state income taxes. However, the Company's intent is to permanently reinvest these funds outside of the
U.S. and, currently, the Company does not anticipate a need to repatriate them to fund our U.S. operations.
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, deferred income taxes, asset
impairment charges, equity in income or losses of unconsolidated affiliates and gains or losses on the sales of investments, and the effect of
changes in working capital. 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 of $19.9 million. Adjustments for non-cash items primarily consisted of $88.6 million of non-cash compensation expense,
$56.7 million of depreciation, $36.3 million of equity in losses of unconsolidated affiliates, partially offset by $35.5 million of deferred income
taxes. The deferred income tax benefit primarily relates to the release of a previously established deferred tax liability in connection with the
acquisition of 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 due to increased online marketing related to its destination websites and new
42
December 31,
2011 2010 2009
(In thousands)
Net cash provided by operating activities
$
372,386
$
340,707
$
348,547
Net cash used in investing activities
(25,186
)
(118,096
)
(422,640
)
Net cash used in financing activities
(372,233
)
(717,210
)
(405,797
)