John,
It's really rather simple. Start with the cash flow statement in the 10-K or 10-Q.
Find the subtotal entitled "Cash Flow From Operating Activities".
To that number subtract certain items from the section entitled "Cash used in investing activities".
The three I subtracted are cash used for acquisitions, cash used for purchase of property and equipment,
and cash used for license agreements.
Nine Months Ended
September 30,
--------------------------
1999 1998
--------------------------
(in thousands)
Operating activities
Net income $ 82,899 $ 38,796
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 18,694 10,991
Provision for (recovery of) doubtful accounts 58
Provision for product returns 1,400 633
Tax benefit related to the exercise of non-statutory stock options and
disqualified dispositions of incentive stock options 29,945 14,698
Accretion of original issue discount 8,460 --
In-process research and development 2,300 18,416
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable (16,087) (20,579)
Inventories (4,401) (2,074)
Prepaid expenses (896) (440)
Other assets (7,840) --
Deferred tax assets (17,995) (12,419)
Deferred revenue 13,033 3,921
Deferred revenue on contract with stockholder 179 3,274
Accounts payable and other accrued expenses 20,484 2,404
Accrued royalties and other accounts payable to stockholder (1,956) (480)
Income taxes payable (671) 3,387
--------------------------
Net cash provided by operating activities 124,606 60,399
Investing activities
Purchases of investments (502,511) (155,128)
Proceeds from sale of investments 140,983 159,297
Cash paid for acquisitions (32,784) (63,449)
Cash paid for licensing agreement (750) (5,375)
Purchases of property and equipment (13,099) (11,238)
--------------------------
Net cash used in investing activities (408,161) (75,893)
Financing activities
Net proceeds from issuance of common stock 43,563 8,517
Net proceeds from issuance of convertible subordinated debentures 292,458 --
Other (74) 14
--------------------------
Net cash provided by financing activities 335,947 8,531
--------------------------
Increase/(decrease) in cash and cash equivalents 52,392 (6,963)
Cash and cash equivalents at beginning of period 127,546 140,081
--------------------------
Cash and cash equivalents at end of period $ 179,938 $ 133,118
==========================
So:
1999 1998
------------------
Cash Flow From Operations $124,606 $60,399
Cash Paid for Acquisitions (32,784) (63,449)
Cash Paid for Licensing Agreement (750) ( 5,375)
Purchase of Property and Equipment (13,099) (11,238)
------------------
Free Cash Flow $ 77,973 (19,663)
I hope this helps.
TTFN,
CTC |
