ServiceMagic 2013 Annual Report Download - page 41

Table of Contents
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2013, the Company had $1.1 billion of cash and cash equivalents, $6.0 million of marketable securities, and $1.1 billion
of long-term debt. Domestically, cash equivalents primarily consist of AAA rated money market funds and commercial paper rated A2/P2 or
better. Internationally, cash equivalents primarily consist of time deposits and AAA rated money market funds. Marketable securities consist of
equity securities and a short-to-medium-term debt security issued by an investment grade corporate issuer. 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 is comprised 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. The proceeds received from the issuance of our 2013 and 2012 Senior Notes will be used for general corporate purposes.
At December 31, 2013, $313.4 million of the $ 1.1 billion of cash and cash equivalents was held by the Company's foreign subsidiaries. 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 and we have not provided for any such tax. However, 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, as well as gain on sales of long-term investments and gain on sales of assets, and the effect of
changes in working capital activities. Net cash provided by operating activities attributable to continuing operations in 2013 consists of earnings
from continuing operations of $281.8 million , adjustments for non-cash items and gains on sales of long-term investments and assets totaling $
110.8 million , and cash provided by working capital activities of $18.4 million . Adjustments for non-cash items and sales of long-term
investments and assets primarily consist of $59.8 million of amortization of intangibles, $58.9 million of depreciation, $53.0 million of non-cash
compensation expense, partially offset by $32.9 million of excess tax benefits from stock-based awards, $35.9 million of gain on sales of long-
term investments and $14.8 million of gain on sales of assets. The increase in cash from changes in working capital activities primarily consists
of an increase in income taxes payable of $49.2 million and a decrease in accounts receivable of $10.4 million , partially offset by an increase of
$34.6 million in other assets. The increase in income taxes payable is due to current year income tax accruals in excess of current year income
tax payments. The decrease in accounts receivable is primarily due to a $14.8 million decrease in accounts receivable related to Newsweek's
transition to a digital only publication and our services agreement with Google; the related receivable from Google was $112.3 million and
$125.3 million at December 31, 2013 and 2012, respectively. These decreases were partially offset by an increase in accounts receivable at
Electus due to higher revenue. The increase in other assets is primarily due to an increase in short-term and long-term production costs at certain
of our media businesses that are capitalized as the television program, video or film is being produced.
Net cash used in investing activities attributable to continuing operations in 2013 includes cash consideration used in acquisitions and
investments of $91.8 million , which includes the acquisition of Twoo, and capital expenditures of $80.3 million , which includes $23.6 million
related to the purchase of a 50% ownership interest in an aircraft, partially offset by net maturities and sales of marketable debt securities and
sales of long-term investments of $82.5 million .
Net cash provided by financing activities attributable to continuing operations in 2013 includes $500.0 million in proceeds from the
issuance of our 2013 Senior Notes and excess tax benefits from stock-based awards of $32.9 million , partially offset by $264.2 million for the
repurchase of 4.5 million shares of common stock at an average price of $50.63 per share, $79.2 million
related to the payment of cash dividends
to IAC shareholders, $71.5 million held in escrow related to the Meetic tender offer, $67.9 million for the purchase of noncontrolling interests in
Meetic and a subsidiary of HomeAdvisor,
32
December 31,
2013
2012 2011
(In thousands)
Net cash provided by operating activities
$
410,961
$
354,527
$
372,386
Net cash used in investing activities
(80,017
)
(352,088
)
(25,186
)
Net cash provided by (used in) financing activities
17,922
44,301
(372,233
)