Cogent Communications Reports Second Quarter 2019 Results and Increases Regular Quarterly Dividend on Common Stock

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

Summary of Financial and Operational Results

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Metric ($ in 000's, except share and per share data) – unaudited

On-Net revenue

$92,387

$93,026

$93,790

$95,351

$97,183

$97,472

  % Change from previous Qtr.

0.7%

0.8%

1.7%

1.9%

0.3%

Off-Net revenue

$36,144

$36,107

$36,202

$36,551

$36,843

$37,191

  % Change from previous Qtr.

1.4%

-0.1%

0.3%

1.0%

0.8%

0.9%

Non-Core revenue (1)

$175

$163

$147

$147

$111

$126

  % Change from previous Qtr.

-7.9%

-6.9%

-9.8%

-%

-24.5%

13.5%

Service revenue – total

$128,706

$129,296

$130,139

$132,049

$134,137

$134,789

  % Change from previous Qtr.

2.8%

0.5%

0.7%

1.5%

1.6%

0.5%

Constant currency total revenue quarterly growth rate – sequential
quarters (6)

2.0%

1.1%

1.1%

1.8%

1.7%

0.7%

Constant currency total revenue quarterly growth rate – year over
year quarters (6)

7.0%

6.3%

6.2%

6.2%

5.8%

5.4%

Network operations expenses (2) 

$54,686

$54,147

$54,365

$55,436

$53,970

$54,181

  % Change from previous Qtr.

1.8%

-1.0%

0.4%

2.0%

-2.6%

0.4%

GAAP gross profit (3)

$54,043

$54,701

$55,248

$55,437

$59,724

$60,403

  % Change from previous Qtr.

4.0%

1.2%

1.0%

0.3%

7.7%

1.1%

GAAP gross margin (3)

42.0%

42.3%

42.5%

42.0%

44.5%

44.8%

Non-GAAP gross profit (4) (6)

$74,020

$75,149

$75,774

$76,613

$80,167

$80,608

  % Change from previous Qtr.

3.6%

1.5%

0.8%

1.1%

4.6%

0.6%

Non-GAAP gross margin (4) (6)

57.5%

58.1%

58.2%

58.0%

59.8%

59.8%

Selling, general and administrative expenses (5)

$29,928

$29,241

$28,838

$29,034

$32,568

$33,503

  % Change from previous Qtr.

6.0%

-2.3%

-1.4%

0.7%

12.2%

2.9%

Depreciation and amortization expense

$19,788

$20,216

$20,276

$20,952

$20,263

$19,979

  % Change from previous Qtr.

2.3%

2.2%

0.3%

3.3%

-3.3%

-1.4%

Equity-based compensation expense

$3,784

$4,695

$4,821

$4,408

$3,434

$5,289

  % Change from previous Qtr.

2.7%

24.1%

2.7%

-8.6%

-22.1%

54.0%

Operating income

$20,637

$21,354

$22,255

$22,311

$24,400

$22,022

  % Change from previous Qtr.

0.5%

3.5%

4.2%

0.3%

9.4%

-9.7%

Interest expense

$12,408

$12,373

$12,767

$13,508

$13,456

$13,595

  % Change from previous Qtr.

1.5%

-0.3%

3.2%

5.8%

-0.4%

1.0%

Net income

$6,784

$6,552

$8,231

$7,100

$9,217

$7,136

Basic net income per common share

$0.15

$0.15

$0.18

$0.16

$0.20

$0.16

Diluted net income per common share

$0.15

$0.14

$0.18

$0.16

$0.20

$0.16

Weighted average common shares – basic

44,923,973

45,016,767

45,105,830

45,284,481

45,223,157

45,354,327

  % Change from previous Qtr.

0.2%

0.2%

0.2%

0.4%

-0.1%

0.3%

Weighted average common shares – diluted

45,294,697

45,536,473

45,699,635

45,803,418

45,644,236

45,912,291

  % Change from previous Qtr.

1.0%

0.5%

0.4%

0.2%

-0.3%

0.6%

EBITDA (6)

$44,092

$45,908

$46,936

$47,579

$47,561

$47,105

  % Change from previous Qtr.

2.0%

4.1%

2.2%

1.4%

-%

-1.0%

EBITDA margin

34.3%

35.5%

36.1%

36.0%

35.5%

34.9%

Gains on asset related transactions

$117

$357

$416

$92

$536

$185

EBITDA, as adjusted (6)

$44,209

$46,265

$47,352

$47,671

$48,097

$47,290

  % Change from previous Qtr.

1.5%

4.7%

2.3%

0.7%

0.9%

-1.7%

EBITDA, as adjusted, margin

34.3%

35.8%

36.4%

36.1%

35.9%

35.1%

 Fees – net neutrality

$14

$39

$108

$16

$-

$-

Net cash provided by operating activities

$30,179

$31,271

$31,745

$40,726

$28,637

$40,632

  % Change from previous Qtr.

-3.8%

3.6%

1.5%

28.3%

-29.7%

41.9%

Capital expenditures

$14,905

$11,988

$12,107

$10,937

$13,288

$11,720

  % Change from previous Qtr.

40.4%

-19.6%

1.0%

-9.7%

21.5%

-11.8%

Principal payments on capital (finance) leases

$2,304

$3,755

$2,099

$2,128

$3,030

$1,976

  % Change from previous Qtr.

25.7%

63.0%

-44.1%

1.4%

42.4%

-34.8%

Dividends paid

$22,819

$23,788

$24,764

$26,516

$26,565

$27,741

Purchases of common stock

$ -

$ -

$ -

$ 6,564

$ -

$ -

Gross Leverage Ratio

4.33

4.22

4.46

4.36

4.28

5.08

Net Leverage Ratio

2.94

2.93

2.89

2.87

2.92

2.93

Customer Connections – end of period

On-Net

63,366

65,407

67,370

68,770

71,066

72,415

  % Change from previous Qtr.

3.3%

3.2%

3.0%

2.1%

3.3%

1.9%

Off-Net

10,241

10,480

10,698

10,974

11,138

11,321

  % Change from previous Qtr.

2.9%

2.3%

2.1%

2.6%

1.5%

1.6%

Non-Core (1)

307

306

307

362

318

318

  % Change from previous Qtr.

-5.8%

-0.3%

0.3%

17.9%

-12.2%

-%

Total customer connections

73,194

76,193

78,375

80,106

82,522

84,054

  % Change from previous Qtr.

3.2%

3.1%

2.9%

2.2%

3.0%

1.9%

On-Net Buildings – end of period

Multi-Tenant office buildings

1,672

1,710

1,720

1,735

1,746

1,751

Carrier neutral data center buildings

816

837

863

889

908

933

Cogent data centers

53

52

52

52

52

53

Total on-net buildings

2,541

2,599

2,635

2,676

2,706

2,737

Square feet – multi-tenant office buildings – on-net

911,283,287

927,410,239

934,535,144

944,232,756

949,486,923

951,031,709

Network  – end of period

Intercity route miles

57,403

57,403

57,403

57,426

57,426

57,426

Metro fiber miles

31,850

31,953

32,579

32,946

33,664

34,163

Connected networks – AS's

6,247

6,363

6,510

6,588

6,668

6,762

Headcount – end of period

Sales force – quota bearing

432

438

453

487

501

519

Sales force - total

555

566

583

619

639

656

Total employees

908

917

938

974

997

1,026

Sales rep productivity – units per full time equivalent sales rep
("FTE") per month

5.7

5.7

5.8

5.7

5.1

4.9

FTE – sales reps

427

413

418

436

464

478

(1)  Consists of legacy services of companies whose assets or businesses were acquired by Cogent, primarily including voice services (only provided in Toronto, Canada).

(2)  Network operations expense excludes equity-based compensation expense of $189, $232, $250, $224, $180 and $226 in the three month periods ended March 31, 2018 through June 30, 2019, respectively.  Network operations expense includes excise taxes, including Universal Service Fund fees of $3,157, $3,108, $3,010 and $3,234, $3,391 in the three and $3,191 ended March 31, 2018 through June 30, 2019, respectively. 

(3)  GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity based compensation included in network operations expense.  GAAP gross margin is defined as GAAP gross profit divided by total service revenue.

(4)   Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation expense). Non-GAAP gross margin is defined as non-GAAP gross profit divided by total service revenue.  Management believes that non-GAAP gross profit and non-GAAP gross profit margin are relevant metrics to provide investors, as they are metrics that management uses to measure the margin available to the company after network service costs, in essence a measure of the efficiency of the Company's network.

(5)   Excludes equity-based compensation expense of $3,595, $4,463, $4,571, $4,184, $3,254 and $5,063 in the three month periods ended March 31, 2018 through June 30, 2019, respectively. 

(6)   See schedule of non-GAAP metrics below for definitions and reconciliations to GAAP measures below.

Schedules of Non-GAAP Measures
EBITDA and EBITDA, as adjusted
EBITDA represents net cash flows from operating activities plus changes in operating assets and liabilities, cash interest expense and cash income tax expense.  Management believes the most directly comparable measure to EBITDA calculated in accordance with generally accepted accounting principles in the United States, or GAAP, is cash flows provided by operating activities. The Company also believes that EBITDA is a measure frequently used by securities analysts, investors, and other interested parties in their evaluation of issuers.  EBITDA, as adjusted, represents EBITDA plus net gains (losses) on asset related transactions.

The Company believes that EBITDA, and EBITDA, as adjusted, are useful measures of its ability to service debt, fund capital expenditures and expand its business.  EBITDA, and EBITDA, as adjusted are an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information. EBITDA, and EBITDA, as adjusted are not recognized terms under GAAP and accordingly, should not be viewed in isolation or as a substitute for the analysis of results as reported under GAAP, but rather as a supplemental measure to GAAP. For example, these metrics are not intended to reflect the Company's free cash flow, as it does not consider certain current or future cash requirements, such as capital expenditures, contractual commitments, and changes in working capital needs, interest expenses and debt service requirements. The Company's calculations of these metrics may also differ from the calculations performed by its competitors and other companies and as such, its utility as a comparative measure is limited.

EBITDA, and EBITDA, as adjusted, are reconciled to cash flows provided by operating activities in the table below.

Q1
2018

Q2
2018

Q3
2018

Q4
2018

Q1
2019

Q2 
2019

($ in 000's) – unaudited

Net cash flows provided by operating activities

$30,179

$31,271

$31,745

$40,726

$28,637

$40,632

Changes in operating assets and liabilities

2,919

2,408

4,254

6,727

(5,729)

Cash interest expense and income tax expense

10,994

12,229

10,937

11,214

12,197

12,202

EBITDA

$44,092

$45,908

$46,936

$47,579

$47,561

$47,105

PLUS: Gains on asset related transactions

117

357

416

92

536

185

EBITDA, as adjusted

$44,209

$46,265

$47,352

$47,671

$48,097

$47,290

EBITDA margin

35.5%

36.1%

36.0%

35.5%

34.9%

EBITDA, as adjusted, margin

34.3%

35.8%

36.4%

36.1%

35.9%

35.1%

Constant currency impact on revenue changes – sequential periods

($ in 000's) – unaudited

Q1

2018

Q2

2018

Q3

2018

Q4

2018

Q1
2019

Q2
2019

Service revenue, as reported – current
period

$128,706

$129,296

$130,139

$132,049

$134,137

$134,789

Impact of foreign currencies on service
revenue

(981)

802

613

465

135

260

Service revenue - as adjusted  for
currency impact (1)

$127,725

$130,098

$130,752

$132,514

$134,272

$135,049

Service revenue, as reported – prior
sequential period

$125,226

$128,706

$129,296

$130,139

$132,049

$134,137

Constant currency increase

$2,499

$1,392

$1,456

$2,375

$2,223

$912

Constant currency percent increase

2.0%

1.1%

1.1%

1.8%

1.7%

0.7%

(1)  Service revenue, as adjusted for currency impact, is determined by translating the service revenue for the current period at the average foreign currency exchange rates for the prior sequential period. The Company believes that disclosing quarterly sequential revenue growth without the impact of foreign currencies on service revenue is a useful measure of sequential revenue growth. Service revenue, as adjusted for currency impact, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.

Constant currency impact on revenue changes – prior year periods

Q1
2018

Q2
2018

Q3
2018

Q4
2018

Q1
2019

Q2
2019

Service revenue, as reported – current
period

$128,706

$129,296

$130,139

$132,049

$134,137

$134,789

Impact of foreign currencies on service
revenue

(3,280)

(1,937)

445

896

2,078

1,505

Service revenue - as adjusted for
currency impact  (2)

$125,426

$127,359

$130,584

$132,945

$136,215

$136,294

Service revenue, as reported – prior
year period

$117,203

$119,777

$122,969

$125,226

$128,706

$129,296

Constant currency increase

$8,223

$7,582

$7,615

$7,719

$7,509

$6,998

Percent increase

7.0%

6.3%

6.2%

6.2%

5.8%

5.4%

Non-GAAP gross profit and Non-GAAP gross margin

Non-GAAP gross profit and Non-GAAP gross margin are reconciled to GAAP gross profit and GAAP gross margin in the table below.

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Q2 2019

($ in 000's) – unaudited

Service revenue total

$128,706

$129,296

$130,139

$132,049

$134,137

$134,789

Minus - Network operations expense
including equity-based compensation
and including depreciation and
amortization expense

74,663

74,595

74,891

76,612

74,413

74,386

GAAP Gross Profit (1)

$54,043

$54,701

$55,248

$55,437

$59,724

$60,403

Plus  - Equity-based compensation –
network operations expense

189

232

250

224

180

226

Plus – Depreciation and amortization
expense

19,788

20,216

20,276

20,952

20,263

19,979

Non-GAAP Gross Profit (2)

$74,020

$75,149

$75,774

$76,613

$80,167

$80,608

GAAP Gross Margin (1)

42.0%

42.3%

42.5%

42.0%

44.5%

44.8%

Non-GAAP Gross Margin (2)

57.5%

58.1%

58.2%

58.0%

59.8%

59.8%

(1)  GAAP gross profit is defined as total service revenue less network operations expense, depreciation and amortization and equity based compensation included in network operations expense.  GAAP gross margin is defined as GAAP gross profit divided by total service revenue.

(2)  Non-GAAP gross profit represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation and amortization expense). Non-GAAP gross margin is defined as non-GAAP gross profit divided by total service revenue.  Management believes that non-GAAP gross profit and non-GAAP gross margin are relevant metrics to provide to investors, as they are metrics that management uses to measure the margin and amount available to the Company after network service costs, in essence these are measures of the efficiency of the Company's network.

Gross and Net Leverage Ratios

Gross leverage ratio is defined as total debt divided by the trailing last 12 months EBITDA, as adjusted.  Net leverage ratio is defined as total net debt (total debt minus cash and cash equivalents) divided by the trailing last 12 months EBITDA, as adjusted.  Cogent's gross leverage ratio and net leverage ratio are shown below.

($ in 000's) – unaudited

As of March 31, 2019

As of June 30, 2019

Cash and cash equivalents

$259,138

$409,279

Debt

Capital (finance) leases – current portion

7,293

7,700

Capital (finance) leases – long term

157,541

160,487

Senior unsecured notes

189,225

189,225

Senior secured notes

445,000

445,000

Senior unsecured Euro notes

-

153,508

Note payable

12,286

11,948

Total debt

811,345

967,868

Total net debt

552,207

558,589

Trailing 12 months EBITDA, as adjusted

189,385

190,410

Gross leverage ratio

4.28

5.08

Net leverage ratio

2.92

2.93

Cogent's SEC filings are available online via the Investor Relations section of www.cogentco.com or on the Securities and Exchange Commission's website at www.sec.gov.

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS 

AS OF JUNE 30, 2019 AND DECEMBER 31, 2018

(IN THOUSANDS, EXCEPT SHARE DATA)

June 30,
2019

December 31,
2018

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

409,279

$

276,093

Accounts receivable, net of allowance for doubtful accounts of $1,782 and $1,263,
respectively

40,684

41,709

Prepaid expenses and other current assets

36,030

32,535

Total current assets

485,993

350,337

Property and equipment, net

375,936

375,325

Right-of-use leased assets

72,255

—

Deferred tax assets

—

2,733

Deposits and other assets

14,881

11,455

Total assets

$

949,065

$

739,850

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

11,570

$

8,519

Accrued and other current liabilities

51,615

51,431

Installment payment agreement, current portion, net of discount of $396 and $395,
respectively

8,693

8,283

Current maturities, operating lease liabilities

10,639

—

Current maturities, finance lease obligations

7,700

7,074

Total current liabilities

90,217

75,307

Senior secured 2022 notes, net of unamortized debt costs of $2,301 and $2,695,
respectively and including premium of $1,197 and $1,405, respectively

443,896

443,710

Senior unsecured 2024 Euro notes, net of unamortized debt costs of $1,550

151,957

—

Senior unsecured 2021 notes, net of unamortized debt costs of $1,171 and $1,476,
respectively

188,054

187,749

Operating lease liabilities, net of current maturities

83,456

—

Finance lease obligations, net of current maturities

160,487

156,706

Other long term liabilities

7,588

25,380

Total liabilities

1,125,655

888,852

Commitments and contingencies:

Stockholders' equity:

Common stock, $0.001 par value; 75,000,000 shares authorized; 46,806,370 and
46,336,499 shares issued and outstanding, respectively

47

46

Additional paid-in capital

481,734

471,331

Accumulated other comprehensive income — foreign currency translation

(10,967)

(10,928)

Accumulated deficit

(647,404)

(609,451)

Total stockholders' deficit

(176,590)

(149,002)

Total liabilities and stockholders' deficit

$

949,065

$

739,850

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

FOR THE THREE MONTHS ENDED JUNE 30, 2019 AND JUNE 30, 2018

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Three Months
Ended
June 30, 2019

Three Months
Ended
June 30, 2018

(Unaudited)

(Unaudited)

Service revenue

$

134,789

$

129,296

Operating expenses:

Network operations (including $226 and $232 of equity-based compensation
expense, respectively, exclusive of depreciation and amortization shown
separately below)

54,407

54,379

Selling, general, and administrative (including $5,063 and $4,463 of equity-
based compensation expense, respectively)

38,566

33,704

Depreciation and amortization

19,979

20,216

Total operating expenses

112,952

108,299

Gains on equipment transactions

185

357

Operating income

22,022

21,354

Interest income and other, net

1,753

189

Interest expense

(13,595)

(12,373)

Income before income taxes

10,180

9,170

Income tax provision

(3,044)

(2,618)

Net income

$

7,136

$

6,552

Comprehensive income:

Net income

$

7,136

$

6,552

Foreign currency translation adjustment

1,786

(6,198)

Comprehensive income

$

8,922

$

354

Net income per common share:

Basic net income per common share

$

0.16

$

0.15

Diluted net income per common share

$

0.16

$

0.14

Dividends declared per common share

$

0.60

$

0.52

Weighted-average common shares - basic

45,354,327

45,016,767

Weighted-average common shares - diluted

45,912,291

45,536,473

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND JUNE 30, 2018

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Six Months
Ended
June 30, 2019

Six Months
Ended
June 30, 2018

(Unaudited)

(Unaudited)

Service revenue

$

268,930

$

258,002

Operating expenses:

Network operations (including $406 and $421 of equity-based compensation
expense, respectively, exclusive of depreciation and amortization shown
separately below)

108,557

109,252

Selling, general, and administrative (including $8,318 and $8,058 of equity-
based compensation expense, respectively)

74,427

67,227

Depreciation and amortization

40,240

40,004

Total operating expenses

223,224

216,483

Gains on equipment transactions

721

475

Operating income

46,427

41,994

Interest income and other, net

3,572

1,879

Interest expense

(27,051)

(24,780)

Income before income taxes

22,948

19,093

Income tax provision

(6,595)

(5,757)

Net income

$

16,353

$

13,336

Comprehensive income:

Net income

$

16,353

$

13,336

Foreign currency translation adjustment

(39)

(3,587)

Comprehensive income

$

16,314

$

9,749

Net income per common share:

Basic net income per common share

$

0.36

$

0.30

Diluted net income per common share

$

0.36

$

0.29

Dividends declared per common share

$

1.18

$

1.02

Weighted-average common shares - basic

45,349,397

45,011,616

Weighted-average common shares - diluted

45,838,918

45,456,831

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

FOR THE THREE MONTHS ENDED JUNE 30, 2019 AND JUNE 30, 2018

(IN THOUSANDS)

Three months
Ended
June 30, 2019

Three months
Ended
June 30, 2018

(Unaudited)

(Unaudited)

Cash flows from operating activities:

Net income

$

7,136

$

6,552

Adjustments to reconcile net income to net cash provided by operating
activities:

     Depreciation and amortization

19,977

20,216

     Amortization of debt costs and premium

428

381

     Equity-based compensation expense (net of amounts capitalized)

5,290

4,695

     Gains — equipment transactions and other, net

(253)

46

     Deferred income taxes

2,259

2,192

Changes in operating assets and liabilities:

     Accounts receivable

(1,259)

(2,096)

     Prepaid expenses and other current assets

(360)

582

     Accounts payable, accrued liabilities and other long-term liabilities

7,866

(414)

     Deposits and other assets

(452)

(883)

     Net cash provided by operating activities

40,632

31,271

Cash flows from investing activities:

Purchases of property and equipment

(11,720)

(11,988)

Net cash used in investing activities

(11,720)

(11,988)

Cash flows from financing activities:

Dividends paid

(27,741)

(23,788)

Net proceeds from issuance of senior unsecured 2024 Euro Notes

152,128

—

Proceeds from exercises of stock options

746

705

Principal payments on installment payment agreement

(2,387)

(2,289)

Principal payments of capital lease obligations

(1,976)

(3,755)

Net cash provided by (used in) financing activities

120,770

(29,127)

Effect of exchange rates changes on cash

459

(1,900)

Net increase (decrease) in cash and cash equivalents

150,141

(11,744)

Cash and cash equivalents, beginning of period

259,138

236,026

Cash and cash equivalents, end of period

$

409,279

$

224,282

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND JUNE 30, 2018

(IN THOUSANDS)

Six months
Ended
June 30, 2019

Six months
Ended
June 30, 2018

(Unaudited)

(Unaudited)

Cash flows from operating activities:

Net income

$

16,353

$

13,336

Adjustments to reconcile net income to net cash provided by operating
activities:

     Depreciation and amortization

40,240

40,004

     Amortization of debt costs and premium

842

751

     Equity-based compensation expense (net of amounts capitalized)

8,724

8,479

     Gains — equipment transactions and other, net

(484)

(439)

     Deferred income taxes

4,831

4,815

Changes in operating assets and liabilities:

     Accounts receivable

1,005

(741)

     Prepaid expenses and other current assets

(3,547)

(631)

     Accounts payable, accrued liabilities and other long-term liabilities

5,088

(2,418)

     Deposits and other assets

(3,783)

(1,706)

     Net cash provided by operating activities

69,269

61,450

Cash flows from investing activities:

Purchases of property and equipment

(25,008)

(26,893)

Net cash used in investing activities

(25,008)

(26,893)

Cash flows from financing activities:

Dividends paid

(54,306)

(46,607)

Net proceeds from issuance of senior unsecured 2024 Euro Notes

152,128

—

Proceeds from exercises of stock options

919

1,002

Principal payments on installment payment agreement

(4,774)

(4,254)

Principal payments of capital lease obligations

(5,006)

(6,059)

Net cash provided by (used in) financing activities

88,961

(55,918)

Effect of exchange rates changes on cash

(36)

(1,368)

Net increase (decrease) in cash and cash equivalents

133,186

(22,729)

Cash and cash equivalents, beginning of period

276,093

247,011

Cash and cash equivalents, end of period

$

409,279

$

224,282