CLB 2018 Annual Report

25 Free cash flow as a percent of income from continuing operations of 113.3% continued to be strong in 2018. The decrease in free cash flow in 2018 compared to 2017 was primarily due to increases in both working capital and capital expenditures in 2018 as the activity levels in the oil industry improved. The decrease in free cash flow in 2017 compared to 2016 was primarily due to increases in both working capital and capital expenditures in 2017 as the activity levels in the oil industry improved. Cash Flows The following table summarizes cash flows for the years ended December 31, 2018, 2017 and 2016 (in thousands): 2018 2017 2016 Cash provided by/(used in): Operating activities $ 111,827 $ 124,271 $ 131,887 Investing activities (70,639) (20,557) (14,721) Financing activities (42,472) (104,078) (124,896) Net change in cash and cash equivalents $ (1,284) $ (364) $ (7,730) The decreases in cash provided by operating activities in 2018 compared to 2017 and 2017 compared to 2016 was primarily due to increases in working capital and changes in net income as the activity levels in the oil industry improved. Working capital was impacted by the increase in inventories during 2018 which was due to more raw materials and finished goods being held in our distribution network to support the anticipated growth in product sales. Cash used in investing activities in 2018 increased $50.1 million compared to 2017 primarily as a result of an acquisition for $49.1 million in 2018 as well as increased capital expenditures in 2018 as activity levels in the oil industry improved. Cash used in investing activities in 2017 increased $5.8 million compared to 2016 primarily as a result of increased capital expenditures. Cash used in financing activities in 2018 decreased $61.6 million compared to 2017. Cash used in financing activities in 2017 decreased $20.8 million compared to 2016. During 2018, we used $7.5 million to repurchase our common shares, $97.3 million to pay dividends, and increased our debt balance by $64 million. During 2017, we used $16.9 million to repurchase our common shares, $97.1 million to pay dividends, and increased our debt balance by $10 million. During 2016, we used $7.2 million to repurchase our common shares, $95.1 million to pay dividends, and decreased our debt balance by $215 million through the issuance of new shares. During the year ended December 31, 2018, we repurchased 85,985 shares of our common stock for an aggregate amount of $7.5 million, or an average price of $86.66 per share. The repurchase of shares in the open market is at the discretion of management pursuant to shareholder authorization. We regard these treasury shares as a temporary investment which may be used to fund restricted shares that vest or to finance future acquisitions. Under Dutch law and subject to certain Dutch statutory provisions and shareholder approval, we can hold a maximum of 50% of our issued shares in treasury. We currently have shareholder approval to hold 10% of our issued share capital in treasury. On May 24, 2018 at our annual shareholders meeting, our shareholders authorized the extension of our share repurchase program until November 24, 2019 to purchase up to 10% of our issued share capital. We believe this share repurchase program has been beneficial to our shareholders. Our share price has increased from $4.03 per share in 2002, when we began to repurchase shares, to $59.66 per share on December 31, 2018, an increase of over 1,380%. Credit Facility and Available Future Liquidity In 2011, we issued two series of senior notes with an aggregate principal amount of $150 million ("Senior Notes") in a private placement transaction. Series A consists of $75 million in aggregate principal amount of notes that bear interest at a fixed rate of 4.01% and are due in full on September 30, 2021. Series B consists of $75 million in aggregate principal amount of notes that bear interest at a fixed rate of 4.11% and are due in full on September 30, 2023. Interest on each series of the Senior Notes is payable semi-annually on March 30 and September 30. On June 18, 2018, we entered into an agreement to amend our revolving credit facility ("Credit Facility"). To appropriately size the facility, the aggregate borrowing commitment was reduced from $400 million to $300 million. The Credit Facility provides an option to increase the commitment under the Credit Facility by an additional $100 million to bring the total borrowings available to $400 million if certain prescribed conditions are met by the Company. The Credit Facility bears interest at variable rates from LIBOR plus 1.375% to a maximum of LIBOR plus 2.0%.