LOGM 2017 Annual Report

and unrealized foreign currency gains and losses resulting from multi-currency settlements occurring during the period. Income Taxes . We recorded a provision for federal, state and foreign income taxes of $3.0 million on profit before income taxes of $17.5 million and $0.6 million on profit before taxes of $3.2 million for the years ended December 31, 2015 and 2016, respectively, resulting in an effective tax rate of 17% and 18%, respectively. Our effective tax rate is lower than the U.S. federal statutory rate of 35% primarily due to profits earned in certain foreign jurisdictions, primarily our Irish subsidiaries, which are subject to significantly lower tax rates than the U.S. federal statutory rate. Net Income . We recognized net income of $14.6 million and $2.6 million for the years ended December 31, 2015 and 2016, respectively. Liquidity and Capital Resources The following table sets forth the major sources and uses of cash for each of the periods set forth below: Years Ended December 31, 2015 2016 2017 (In thousands) Net cash provided by operations . . . . . . . . . . . . . . . . . . . . . . $ 85,770 $ 92,315 $ 316,197 Net cash provided by (used in) investing activities . . . . . . . (107,974) 7,460 (31,138) Net cash provided by (used in) financing activities . . . . . . . 49,592 (79,448) (181,493) Effect of exchange rate changes . . . . . . . . . . . . . . . . . . . . . . (5,205) (2,714) 8,080 Net increase in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,183 $ 17,613 $ 111,646 At December 31, 2017, our principal source of liquidity was cash and cash equivalents totaling $252.4 million, of which $135.1 million was in the United States and $117.3 million was held by our international subsidiaries. Cash Flows From Operating Activities Net cash provided by operating activities was $85.8 million, $92.3 million and $316.2 million for the years ended December 31, 2015, 2016 and 2017, respectively. Net cash inflows from operating activities during the year ended December 31, 2015 were mainly attributable to a $28.9 million increase in deferred revenue associated with upfront payments received from our customers, net income of $14.6 million, a $2.7 million increase in other long-term liabilities, a $2.3 million increase in accrued liabilities, a $2.2 million decrease in accounts receivable and a $1.4 million increase in accounts payable. These cash inflows are partially offset by a $2.8 million increase in prepaid expenses and other current assets. Additionally, included in net cash inflows from operating activities are add-backs of non-cash charges, including $26.5 million for stock-based compensation expense and $13.7 million for depreciation and amortization. The increase related to other long-term liabilities includes the impact of contingent retention-based bonuses asso- ciated with our acquisitions (see Note 4 to the Consolidated Financial Statements). Net cash inflows from operating activities during the year ended December 31, 2016 were mainly attributable to a $27.0 million increase in deferred revenue associated with upfront payments received from our customers, a $6.1 million increase in accounts payable, an $8.4 million increase in accrued expenses, and a $6.0 million decrease in prepaid expenses and other current assets, primarily due to $5.7 million in tax refunds received in the fourth quarter of 2016. These cash inflows were partially offset by a $10.2 million increase in accounts receiv- able. Accrued expenses and accounts payable included $6.2 million in acquisition-related professional fees, including transaction, transition, and integration-related fees and expenses. Additionally, included in net cash inflows from operating activities were add-backs of non-cash charges, including $38.4 million for stock-based compensation expense, $21.5 million for depreciation and amortization and $0.5 million for the change in fair value of the contingent consideration liability related to the LastPass acquisition, partially offset by $6.5 million related to excess tax benefits realized from stock-based awards and a $3.3 million benefit from deferred income taxes resulting from differing treatment of items for tax and accounting purposes. 45