Yahoo 2010 Annual Report Download - page 51

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Liquidity and Capital Resources
As of and for each of the three years ended December 31, 2010 (dollars in thousands):
2008 2009 2010
Cash and cash equivalents ................................... $2,292,296 $ 1,275,430 $ 1,526,427
Short-term marketable debt securities .......................... 1,159,691 2,015,655 1,357,661
Long-term marketable debt securities .......................... 69,986 1,226,919 744,594
Total cash, cash equivalents, and marketable debt securities ........ $3,521,973 $ 4,518,004 $ 3,628,682
Percentage of total assets ................................... 26% 30% 24%
Cash Flow Highlights 2008 2009 2010
Net cash provided by operating activities ....................... $1,880,241 $ 1,310,346 $ 1,240,190
Net cash (used in) provided by investing activities ............... $(1,311,783) $(2,419,238) $ 509,915
Net cash provided by (used in) financing activities ............... $ 332,406 $ 34,597 $(1,501,706)
Our operating activities for each year in the three years ended December 31, 2010 have generated adequate cash
to meet our operating needs. As of December 31, 2010, we had cash, cash equivalents, and marketable debt
securities totaling $3.6 billion, compared to $4.5 billion as of December 31, 2009. The decrease is mainly due to
share repurchases we made during 2010. During the year ended December 31, 2010, we repurchased 119 million
shares for $1,749 million.
During the year ended December 31, 2010, we generated $1,240 million of cash from operating activities, net
proceeds from sales and maturities of marketable debt securities of $1,097 million, proceeds from the sales of
divested businesses of $325 million, and $167 million from the issuance of common stock as a result of the
exercise of employee stock options and employee stock purchases. This was offset by a net $714 million in
capital expenditures, a net $157 million for acquisitions, $1,749 million used in the direct repurchase of common
stock, and $49 million in tax withholding payments related to net share settlements of restricted stock units and
tax withholding-related reacquisition of shares of restricted stock.
During the year ended December 31, 2009, we invested $113 million in direct stock repurchases, a net $434
million in capital expenditures, and a net $195 million in acquisitions. The cash used for these investments was
offset by $1.3 billion of cash generated from operating activities, $265 million of proceeds from sales of
marketable equity securities, and $113 million from the issuance of common stock as a result of the exercise of
employee stock options. In 2009, $73 million was used for tax withholding payments related to the net share
settlement of restricted stock units and tax withholding-related reacquisition of shares of restricted stock.
We have accrued U.S. federal income taxes on the earnings of our foreign subsidiaries except to the extent the
earnings are considered indefinitely reinvested outside the U.S. As of December 31, 2010, approximately $2.6
billion of earnings held by our foreign subsidiaries and a corporate joint venture are designated as indefinitely
reinvested outside the U.S. If required for our operations in the U.S., most of the cash held abroad could be
repatriated to the U.S. but, under current law, would be subject to U.S. federal income taxes (subject to an
adjustment for foreign tax credits). Currently, we do not anticipate a need to repatriate these funds to our U.S.
operations.
We invest excess cash predominantly in marketable debt securities, money market funds, and time deposits that are
liquid, highly rated, and the majority of which have effective maturities of less than one year. Our marketable debt and
equity securities are classified as available-for-sale and are reported at fair value, with unrealized gains and losses, net
of tax, recorded in accumulated other comprehensive income. Realized gains or losses and declines in value judged to
be other-than-temporary, if any, on available-for-sale securities are reported in other income, net. The fair value for
securities is determined based on quoted market prices of the historical underlying security or from readily available
pricing sources for the identical underlying securities that may not be actively traded as of the valuation date. As of
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