FORM 20-F - Check Point

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year ended December 31,
2007 2008 2009
Cash flows from operating activities :
Net income
Adjustments required to reconcile net income to net cash provided by
operating activities:
$ 281,064 $ 323,966 $ 357,523
Depreciation and amortization of property and equipment
Amortization of marketable securities premium and (accretion of discount),
8,541 8,648 8,885
net
Other than temporary impairment net of gain on sale of marketable securities
(247) 3,099 8,414
previously impaired - 11,221 1,277
Realized loss on sale of marketable securities, net 983 1,494 1,896
Acquisition of in-process research and development 17,000 - -
Amortization of intangible assets 39,984 36,982 50,653
Stock-based compensation 34,052 32,327 30,907
Foreign currency on amount due to Protect Data shareholders - (463) -
Deferred income taxes, net
Increase in trade receivables, net of allowances for doubtful accounts and
(19,323) (14,034) (11,386)
sales reserves
Decrease (increase) in prepaid expenses and other current assets and other
(29,003) (50,256) (11,256)
assets 4,761 (3,521) 1,285
Increase (decrease) in trade payables (3,929) 744 (2,405)
Increase (decrease) in employees and payroll accruals (977) 1,289 20,163
Increase (decrease) in accrued expenses and other liabilities (7,594) 38,423 63,026
Increase in deferred revenues 56,000 57,104 46,006
Excess tax benefit from stock-based compensation (6,828) (13,019) (7,502)
(Decrease) increase in accrued severance pay, net 521 25 (379)
Net cash provided by operating activities 375,005 434,029 557,107
Cash flows from investing activities :
Cash paid in conjunction with acquisitions, net of acquired cash (594,964) - (58,787)
Payments made in connection with prior years acquisitions (2,674) (8,579) -
Proceeds from maturity of marketable securities 345,389 311,134 427,660
Proceeds from sale of marketable securities 250,201 259,803 27,006
Investment in marketable securities (187,720) (736,781) (1,002,305)
Investment in short term deposits - (26,302) -
Proceeds from maturity of short term deposits - - 26,302
Purchase of property and equipment (16,727) (8,301) (4,283)
Net cash used in investing activities (206,495) (209,026) (584,407)
Cash flows from financing activities :
Proceeds from issuance of shares under stock purchase plan and upon exercise
of options 24,640 35,046 92,978
Purchase of treasury shares at cost (209,757) (239,542) (202,285)
Excess tax benefit from stock-based compensation 6,828 13,019 7,502
Net cash used in financing activities (178,289) (191,477) (101,805)
Increase (decrease) in cash and cash equivalents (9,779) 33,526 (129,105)
Cash and cash equivalents at the beginning of the year 519,443 509,664 543,190
Cash and cash equivalents at the end of the year $ 509,664 $ 543,190 $ 414,085
Supplemental disclosure of cash flow information :
Cash paid during the year for income taxes $ 55,345 $ 63,251 $ 55,440
Supplemental disclosures of non cash financing and investing activities
Net change in unrealized gain (loss) on marketable securities $ 9,956 $ (7,535) $ 22,521
Fair value of vested Protect Data’s options assumed $ 1,069 $ - $ -
Amount due to shareholders in connection with Protect Data’s acquisition (see
Note 3 for liabilities assumed in acquisitions) $ 8,579 $ - $ -
The accompanying notes are an integral part of the consolidated financial statements.
F-11