FORM 20-F - Check Point

Liquidity and Capital Resources
During 2008 and 2009, we financed our operations through cash generated from operations. Our total cash
and cash equivalents, short-term deposits, short-term investments, and long-term interest bearing investments, were
$1,443.8 million as of December 31, 2008, and $1,847.0 million as of December 31, 2009. Our cash and cash
equivalents and short-term investments were $914.4 million as of December 31, 2008, and $884.0 million as of
December 31, 2009. Our long-term interest bearing investments were $529.4 million as of December 31, 2008, and
$963.0 million as of December 31, 2009. At the end of 2002, we established a wholly owned subsidiary in
Singapore that serves as a vehicle for a significant portion of our international investments and manages those
financial assets.
We generated net cash from operations of $375.0 million in 2007, $434.0 million in 2008 and $557.1
million in 2009. Net cash from operations for 2007 consisted primarily of net income adjusted for non-cash
activity, including in-process research and development, stock-based compensation expenses, amortization of
intangible assets, and an increase in deferred income taxes, net plus an increase in deferred revenue, offset by a
decrease in accrued expenses and other liabilities and trade payables and an increase in trade receivables, net. Net
cash from operations for 2008 consisted primarily of net income adjusted for non-cash activity, including otherthan-temporary
impairment on marketable securities, stock-based compensation expenses, depreciation,
amortization of intangible assets and deferred income taxes benefit plus an increase in deferred revenue and
accrued expenses and other liabilities, partially offset by an increase in trade receivables, net. Net cash from
operations for 2009 consisted primarily of net income adjusted for non-cash activity, including other-thantemporary
impairment on marketable securities, stock-based compensation expenses, depreciation, amortization of
intangible assets and deferred income taxes benefit plus an increase in deferred revenue and accrued expenses and
employee benefit liabilities, partially offset by increases in trade receivables and other current assets.
Net cash used in investing activities was $206.5 million in 2007, $209.0 million in 2008 and $584.4 million
in 2009. In 2007, net cash used in investing activities consisted primarily of net cash paid in conjunction with the
acquisition of Protect Data, investments in marketable securities and renovations to our office building in Israel
offset by proceeds from sales and maturity of marketable securities. In 2008, net cash used in investing activities
consisted primarily of investments in marketable securities and short term deposits offset by proceeds from sale and
maturities of marketable securities. In 2009, net cash used in investing activities consisted primarily of investments
in marketable securities and net cash paid in conjunction with 2009 acquisitions, partially offset by proceeds from
sale and maturities of marketable securities. Our capital expenditures amounted to $16.7 million in 2007, $8.3
million in 2008 and $4.3 million in 2009. In 2007, our capital expenditures consisted primarily of renovation of our
office building in Israel, computer equipment and software for our research and development and technical services
organization’s efforts, as well as an increasing infrastructure to enable operation expansions. In 2008, our capital
expenditures consisted primarily of renovation of our office building in Israel, computer equipment and software
for our research and development and technical services organization’s efforts, as well as an increased
infrastructure to enable operation expansions. In 2009, our capital expenditure consisted primarily of computer
equipment and software for research and development and leasehold improvement and furniture.
We funded the acquisition of Protect Data in 2007 for approximately $614 million from our cash and cash
equivalents balances, as well as our marketable securities portfolio. We funded roughly 62% of the acquisition
price with our money market funds balances, and the remainder was funded by selling a small portion of our
marketable securities portfolio. During 2009 we funded the acquisitions of Nokia Security Appliance business and
Facetime for approximately $59 million from our cash and cash equivalents balances.
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