We recorded a tax benefit of
Liquidity and Capital Resources
July 31, 2013, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $930.0 millionand accounts receivable of $599.5 million. 51
Table of Contents
Net cash provided by operating activities was
$183.2 millionduring the three months ended July 31, 2013and $136.2 millionduring the same period a year ago. Cash provided by operating activities has historically been affected by: the amount of net loss adjusted for non-cash expense items such as depreciation and amortization, amortization of purchased intangibles from business combinations, amortization of debt discount, and the expense associated with stock-based awards; the reclassification of excess tax benefits from employee stock plans to cash flows from financing activities; the timing of employee related costs including commissions and bonus payments; the timing of collections from our customers, which is our largest source of operating cash flows; and changes in working capital accounts. Our working capital accounts consist of accounts receivables and prepaid assets and other current assets. Claims against working capital include accounts payable, accrued expenses and other current liabilities and our convertible notes. Our working capital may be impacted by factors in future periods, certain amounts and timing of which are seasonal, such as billings to customers for subscriptions and support services and the subsequent collection of those billings. As described above in "Seasonal Nature of Deferred Revenue and Accounts Receivable," our fourth quarter has historically been our strongest quarter for new business and renewals. The year on year compounding effect of this seasonality in both billing patterns and overall business causes the value of invoices that we generate in the fourth quarter to increase as a proportion of our total annual billings. We generally invoice our customers for our subscription and services contracts in advance in annual or quarterly installments. We typically issue renewal invoices 30 days in advance of the renewal service period, and depending on timing, the initial invoice for the subscription and services contract and the subsequent renewal invoice may occur in different quarters. Such invoice amounts are initially reflected in accounts receivable and deferred revenue, which is reflected on the balance sheet. The operating cash flow benefit of increased billing activity generally occurs in the subsequent quarter when we collect from our customers. Net cash provided by operating activities during the six months ended July 31, 2013increased $117.0 millionover the same period a year ago primarily due to higher net income after adjusting for depreciation and amortization, stock-based compensation and a $25.2 milliondecrease in the excess tax benefits from employee stock plans which improved operating cash results. Net cash provided by operating activities was also impacted by approximately $30.0 millionof payments made for the transaction fees incurred by ExactTargetand us related to the acquisition.