2010 10-K: Part II Morningstar, Inc. and Subsidiaries  Consolidated Statements of Cash Flows See notes to consolidated financial statements. 104 Year ended December 31 (in thousands)  2010 2009  2008 Operating activities Consolidated net income  $ 86,457 $  81,997  $ 90,026 Adjustments to reconcile consolidated net income to net cash flows from operating activities: Depreciation and amortization  39,664 31,961  25,996 Deferred income tax expense (benefit)  211 (2,207)  11,901 Stock-based compensation  13,793 11,593  11,281 Provision for bad debt  413 1,292  242 Equity in net income of unconsolidated entities  (1,422) (1,165)  (1,321) Excess tax benefits from stock-option exercises and vesting of restricted stock units (7,507) (8,693)  (26,638) Holding gain upon acquisition of additional ownership of equity method investments (4,564) (352)  — Other, net  (90) 575  727 Changes in operating assets and liabilities, net of effect of acquisitions: Accounts receivable  (23,652) 12,364  (658) Other assets  (2,341) 2,521  1,573 Accounts payable and accrued liabilities  (759) (9,476)  691 Accrued compensation  12,166 (26,729)  (2,333) Deferred revenue  5,752 (8,704)  (1,595) Income taxes payable  4,569 11,676  22,078 Deferred rent  1,364 5,679  18,906 Other liabilities  (638) (1,076)  (1,537) Cash provided by operating activities  123,416 101,256   149,339 Investing activities Purchases of investments  (186,283)  (176,770)   (134,117) Proceeds from maturities and sales of investments  214,929 92,851   109,172 Capital expenditures  (14,771) (12,372)  (48,519) Acquisitions, net of cash acquired  (102,324) (74,175)   (105,410) Other, net  500 (4,209)  (250) Cash used for investing activities  (87,949)  (174,675)   (179,124) Financing activities Proceeds from stock-option exercises  9,220 16,439  23,428 Excess tax benefits from stock-option exercises and vesting of restricted stock units  7,507 8,693  26,638 Common shares repurchased  (3,785) —  — Other, net  (417) 188  671 Cash provided by financing activities  12,525 25,320  50,737 Effect of exchange rate changes on cash and cash equivalents 1,688 4,704  (6,637) Net increase (decrease) in cash and cash equivalents  49,680 (43,395)  14,315 Cash and cash equivalents—Beginning of year 130,496 173,891   159,576 Cash and cash equivalents—End of year  $ 180,176 $ 130,496  $ 173,891 Supplemental disclosures of cash flow information Cash paid for income taxes  $ 37,624 $ 38,009  $ 19,782 Supplemental information of non-cash investing and financing activities Unrealized gain (loss) on available-for-sale investments  $  394 $  (177)  $  672