ServiceMagic 2011 Annual Report Download - page 47

Download and view the complete annual report

Please find page 47 of the 2011 ServiceMagic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

of net capital losses generated from the sale of ARO stock in 2009 and the receipt of refundable New York State tax credits under the Brownfield
Cleanup Program Act, which were recorded as an income tax receivable in 2007 and principally related to the construction of the Company's
headquarters building in New York City. The increase in accounts payable and other current liabilities is primarily due to an increase in accrued
revenue share expense and an increase in accrued advertising expense. The increase in accrued revenue share expense is primarily due to an
increase in the proportion of revenue from customized browser-based applications and other arrangements with third parties who direct traffic to
our websites as well as a shift in partner mix to partners carrying higher traffic acquisition costs. The increase in accrued advertising expense is
primarily due to an increase in advertising and promotional expenditures in the fourth quarter of 2010 relative to the fourth quarter of 2009 at
Search and Match. The increase in deferred revenue is primarily due to the growth in subscription revenue at Match. The increase in accounts
receivable is primarily due to the growth in revenue earned from our paid listing supply agreement with Google; the related receivable from
Google was $70.5 million and $53.7 million at December 31, 2010 and 2009, respectively. While our Match, Media & Other and ServiceMagic
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.
Net cash used in investing activities attributable to continuing operations in 2010 of $118.1 million includes net purchases of marketable
debt securities of $74.8 million, capital expenditures of $39.8 million primarily related to the internal development of software to support our
offerings and our increased number of users, cash consideration used in acquisitions and investments of $19.6 million primarily related to the
acquisitions of Singlesnet and DailyBurn.com, partially offset by a cash dividend of $11.4 million received from Meetic.
Net cash used in financing activities attributable to continuing operations in 2010 of $717.2 million includes $539.6 million for the
repurchase of 23.1 million shares of common stock at an average price of $22.98 per share and $217.9 million in cash related to the Liberty
Exchange described below, partially offset by proceeds related to the issuance of common stock, net of withholding taxes of $25.9 million and
excess tax benefits from stock-based awards of $14.3 million. On December 1, 2010, the Company completed the tax-free exchange of Evite,
Gifts.com, IAC Advertising Solutions and $217.9 million in cash for substantially all of Liberty's equity stake in IAC, representing 8.5 million
shares of Class B common stock and 4.3 million shares of IAC common stock.
Net cash provided by operating activities attributable to continuing operations in 2009 was $348.5 million and consists of a loss from
continuing operations of $956.5 million, adjustments for non-cash items of $1.2 billion and cash provided by working capital of $130.4 million.
Adjustments for non-cash items primarily consists of $916.9 million of goodwill impairment, $157.0 million of amortization of intangibles,
which includes an impairment charge of $128.3 million, $70.1 million of non-cash compensation expense, $61.4 million of depreciation and a
$58.1 million decrease in the fair value of the derivative asset related to ARO stock, partially offset by the gains on the sale of Match Europe of
$132.2 million and the sales of long-term investments of $28.8 million. The increase in cash from changes in working capital activities primarily
consisted of an increase of $109.0 million in income taxes payable, an increase of $18.8 million in accounts payable and other current liabilities
and an increase in deferred revenue of $14.2 million, partially offset by an increase in accounts receivable of $18.1 million. The increase in
income taxes payable was primarily a result of income tax refunds received in 2009 related to the federal carryback of net capital losses
generated from the Company's investment in Tree.com, which were recorded as an income tax receivable in 2008 and the receipt of state income
tax refunds. The increases in accounts payable and other current liabilities and deferred revenue are primarily a result of the growth in our
businesses. The increase in accounts receivable is primarily due to the growth in revenue in the fourth quarter of 2009 relative to the fourth
quarter of
44