Yahoo 2013 Annual Report Download - page 63

See Note 2—“Investments and Fair Value Measurements” in the Notes to our consolidated financial statements
for additional information.
Cash Flow Changes
Cash provided by operating activities is driven by our net income, adjusted for non-cash items, working capital
changes and dividends received from equity investees. Non-cash adjustments include depreciation, amortization
of intangible assets, accretion of convertible notes discount, stock-based compensation expense, non-cash
restructuring charges, non-cash goodwill impairment charges, tax benefits from stock-based awards, excess tax
benefits from stock-based awards, deferred income taxes, and earnings in equity interests. For the year ended
December 31, 2013, operating activities provided $1.2 billion in cash. We generated adjusted EBITDA of $1.6
billion and received dividends of $135 million, which were partially offset by changes in working capital:
accrued expenses and other liabilities decreased $99 million, accounts payable decreased $8 million, and deferred
revenue decreased $150 million, partially offset by a decrease in accounts receivable of $26 million and a
decrease in prepaid expenses and other of $27 million. We had a net use of cash in the year ended December 31,
2012 primarily due to a cash tax payment of $2.3 billion related to the sale of Alibaba Group Shares. Offsetting
this use, we generated adjusted EBITDA of $1.7 billion, received a payment from Alibaba Group of $550 million
in satisfaction of certain future royalty payments, and received dividends from Yahoo Japan of $84 million. For
the year end December 31, 2011, operating activities provided $1.3 billion in cash. We generated adjusted
EBITDA of $1.7 billion and received dividends of $75 million, which was partially offset by changes in working
capital: accrued expenses and other liabilities decreased $290 million, deferred revenue decreased $74 million,
partially offset by a decrease in accounts receivable of $38 million and a decrease in prepaid expenses and other
of $98 million.
Cash provided by (used in) investing activities is primarily attributable to sales and maturities of marketable
securities, sales of other assets, including our strategic investments, acquisitions, purchases of marketable
securities, capital expenditures, and purchases of intangible assets. During the year ended December 31, 2013,
the $23 million used in investing activities was due to purchases of marketable securities of $3.2 billion, $338
million used for capital expenditures, $1.2 billion used for acquisitions, $3 million used for purchases of
intangible assets, and $2 million used for other investing activities, net offset by net proceeds from sales and
maturities of marketable securities of $3.6 billion, $800 million received from the redemption of the Alibaba
Group Preference Shares, $80 million from sales of patents, and $290 million from the settlement of foreign
exchange contracts (including the settlement of certain foreign exchange forward contracts designated as net
investment hedges). During the year ended December 31, 2012, the $3.4 billion provided by investing activities
was due to cash proceeds, net of fees, of $6.2 billion received from our sale of Alibaba Group Shares and
proceeds from the sale of investments and other investing activities of $26 million. This was partially offset by
$2.4 billion utilized for net purchases of marketable securities, $506 million used from capital expenditures, $6
million used for acquisitions, and $4 million used for the purchase of intangible assets. During the year ended
December 31, 2011, the $202 million provided by investing activities was due to net proceeds from sales,
maturities, and purchases of marketable securities of $1.1 billion, and proceeds from sale of investments of $21
million. This was partially offset by $593 million used from capital expenditures, $324 million used for
acquisitions, $12 million used for the purchase of intangible assets, and $7 million used for other investing
activities.
Cash used in financing activities is driven by stock repurchases offset by employee stock option exercises and
employee stock purchases. During the year ended December 31, 2013, the $1.7 billion used in financing
activities was due to $3.3 billion used for the repurchase of 129 million shares of common stock at an average
price of $25.95 per share, $206 million used to purchase note hedges, and $149 million used for tax withholding
payments related to net share settlements of restricted stock units and other financing activities. This use of cash
was partially offset by $1.4 billion in cash proceeds from issuance of the Notes, $125 million in cash proceeds
from the issuance of warrants, $353 million in cash proceeds received from employee stock option exercises and
employee stock purchases made through our employee stock purchase plan, and an excess tax benefit from stock-
based awards of $64 million. During the year ended December 31, 2012, the $2 billion used in financing
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