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F-7 VONAGE ANNUAL REPORT 2013
VONAGE HOLDINGS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
(In thousands) 2013 2012 2011
Cash flows from operating activities:
Net income $ 27,801 $36,627 $409,044
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization and impairment charges 31,208 30,949 35,776
Amortization of intangibles 4,858 2,375 1,275
Loss from abandonment of software assets — 25,262 —
Deferred tax expense (benefit) 16,795 19,488 (325,601)
Change in fair value of embedded features in notes payable and stock warrant — — 950
Loss on extinguishment of notes ——
11,806
Amortization of discount on notes ——
914
Allowance for doubtful accounts (256)926 (4)
Allowance for obsolete inventory 663 527 773
Amortization of debt related costs 1,515 1,235 1,391
Share-based expense 17,843 11,975 14,279
Changes in operating assets and liabilities:
Accounts receivable 1,236 (3,461)(2,663)
Inventory (5,835) 748 (1,362)
Prepaid expenses and other current assets (662)1,345 412
Deferred customer acquisition costs 621 (66)1,891
Other assets 1,970 (788)163
Accounts payable (26,335) 7,801 29,090
Accrued expenses 17,869 (10,719) (21,216)
Deferred revenue (1,111) (3,517)(5,167)
Other liabilities 63 (864)(4,965)
Net cash provided by operating activities 88,243 119,843 146,786
Cash flows from investing activities:
Capital expenditures (9,889) (13,763) (12,636)
Purchase of intangible assets ——
(3,725)
Acquisition and development of software assets (12,291) (12,987) (22,292)
Acquisition of business, net of cash acquired (100,057)— —
Decrease in restricted cash 1,252 1,278 1,049
Net cash used in investing activities (120,985) (25,472) (37,604)
Cash flows from financing activities:
Principal payments on capital lease obligations and other liability (3,471) (2,104)(1,783)
Principal payments on notes (23,334) (28,333) (229,166)
Proceeds from issuance of notes payable and revolving credit facility 102,500 — 100,000
Extinguishment of notes ——
(1,054)
Debt related costs (2,056) — (2,697)
Common stock repurchases (56,294) (27,545) —
Acquisition of redeemable noncontrolling interest 455 ——
Proceeds from exercise of stock options and stock warrant 4,091 1,725 4,562
Net cash provided by (used in) financing activities 21,891 (56,257) (130,138)
Effect of exchange rate changes on cash (1,596) 133 885
Net change in cash and cash equivalents (12,447) 38,247 (20,071)
Cash and cash equivalents, beginning of period 97,110 58,863 78,934
Cash and cash equivalents, end of period $ 84,663 $97,110 $58,863
Supplemental disclosures of cash flow information:
Cash paid during the periods for:
Interest $ 4,722 $4,653 $15,563
Income taxes $ 2,323 $2,329 $2,289
Non-cash financing transactions during the periods for:
Common stock repurchases $ 736 $644 $—
Issuance of Common Stock in connection with acquisition of business $ 26,186 $—$—
The accompanying notes are an integral part of these financial statements
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