|TTEC HOLDINGS, INC. filed this Form 10-K on 03/06/2019|
In October 2018 and December 2018, the Company paid dividends from its foreign operations to its U.S. parent in the amount of $280 million and $30 million, respectively, which were used to pay down portions of the Credit Facility.
We have global operations that expose us to foreign currency exchange rate fluctuations that may positively or negatively impact our liquidity. We are also exposed to higher interest rates associated with our variable rate debt. To mitigate these risks, we enter into foreign exchange forward and option contracts through our cash flow hedging program. Please refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk, Foreign Currency Risk, for further discussion.
We primarily utilize our Credit Facility to fund working capital, general operations, stock repurchases, dividends, and other strategic activities, such as the acquisitions described in Part II. Item 8. Financial Statements and Supplementary Data, Note 2 to the Consolidated Financial Statements. As of December 31, 2018 and 2017, we had borrowings of $282.0 million and $344.0 million, respectively, under our Credit Facility, and our average daily utilization was $514.7 million and $494.7 million for the years ended December 31, 2018 and 2017, respectively. After consideration for the current level of availability based on the covenant calculations, our remaining borrowing capacity was approximately $360.0 million as of December 31, 2018. As of December 31, 2018, we were in compliance with all covenants and conditions under our Credit Facility.
The amount of capital required over the next 12 months will depend on our levels of investment in infrastructure necessary to maintain, upgrade or replace existing assets. Our working capital and capital expenditure requirements could also increase materially in the event of acquisitions or joint ventures, among other factors. These factors could require that we raise additional capital through future debt or equity financing. We can provide no assurance that we will be able to raise additional capital with commercially reasonable terms acceptable to us.
The following discussion highlights our cash flow activities during the years ended December 31, 2018, 2017, and 2016.
Cash and Cash Equivalents
We consider all liquid investments purchased within 90 days of their original maturity to be cash equivalents. Our cash and cash equivalents totaled $78.2 million and $74.4 million as of December 31, 2018 and 2017, respectively. We diversify the holdings of such cash and cash equivalents considering the financial condition and stability of the counterparty institutions.
We reinvest our cash flows to grow our client base, expand our infrastructure, for investment in research and development, for strategic acquisitions, for the purchase of our outstanding stock and to pay dividends.
Cash Flows from Operating Activities
For the years 2018, 2017 and 2016 we reported net cash flows provided by operating activities of $168.3 million, $113.2 million and $111.8 million, respectively. The increase of $55.2 million from 2017 to 2018 was primarily due to an $89.3 million increase in cash collected from accounts receivable and an increase in net cash income from operations of $37.9 million offset by a $53.6 million decrease in deferred revenue and other liabilities and a $11.2 million decrease in prepaid assets. The increase of $1.3 million from 2016 to 2017 was primarily due to a $110.6 million decrease in payments made for operating expenses offset by a $51.4 million decrease in cash collected from accounts receivable, a decrease in net cash income from operations of $38.6 million, and an $19.2 million decrease in prepaid assets.
Cash Flows from Investing Activities
For the years 2018, 2017 and 2016, we reported net cash flows used in investing activities of $47.6 million, $169.0 million and $100.4 million, respectively. The net decrease in cash used in investing activities from 2017 to 2018 was primarily due to decreased spending on acquisitions of $113.6 million and a decrease in purchases of fixed assets of $8.5 million. The net increase in cash used in investing activities from 2016 to 2017 was primarily due to increased spending on acquisitions of $69.9 million.