WATSCO INC false 0000105016 0000105016 2023-02-16 2023-02-16 0000105016 us-gaap:CommonStockMember 2023-02-16 2023-02-16 0000105016 us-gaap:CommonClassBMember 2023-02-16 2023-02-16





Washington, D.C. 20549







Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 16, 2023






(Exact name of registrant as specified in its charter)




(State or other jurisdiction of incorporation)


1-5581   59-0778222


File Number)

  (IRS Employer
Identification No.)

2665 South Bayshore Drive, Suite 901

Miami, Florida 33133

(Address of principal executive offices, including zip code)

(305) 714-4100

(Registrant’s telephone number, including area code)


(Former name or former address, if changed since last report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class




Name of each exchange

on which registered

Common stock, $0.50 par value   WSO   New York Stock Exchange
Class B common stock, $0.50 par value   WSOB   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐




Item 2.02.

Results of Operations and Financial Condition

On February 16, 2023, Watsco, Inc., a Florida corporation (the “Company”), issued a press release reporting its financial results for the quarter and year ended December 31, 2022. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated by reference in this Item 2.02.


Item 7.01.

Regulation FD Disclosure

The information set forth in Item 2.02 of this Current Report on Form 8-K is incorporated by reference in this Item 7.01.

The information contained in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall be deemed “furnished” and not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any Company filing under the Securities Act of 1933, as amended.


Item 9.01.

Financial Statements and Exhibits

(d)    Exhibits






99.1    Press release dated February 16, 2023 issued by Watsco, Inc.
104    Cover Page Interactive Date File (embedded within the Inline XBRL document)


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Dated: February 16, 2023     By:  

/s/ Ana M. Menendez

      Ana M. Menendez,
      Chief Financial Officer



Exhibit 99.1

Watsco Reports Record Fourth Quarter and Record 2022 Performance



Record Fourth Quarter EPS Generated by Record Sales, Gross Margins and Operating Efficiencies.

Full-Year 2022 16% Sales Growth Leads to Record Profits, Operating Margin, EPS and Cash Flow.

MIAMI, FLORIDA – (GLOBENEWSWIRE), February 16, 2023 – Watsco, Inc. (NYSE: WSO) announced record operating results for the fourth quarter and full year periods ended December 31, 2022 and provided commentary on the Company’s business trends, growth opportunities, technology innovation and financial position.

Through its entrepreneurial and technology-driven culture, Watsco has established itself as the largest participant in the highly fragmented $50+ billion North American HVAC/R distribution market. Since entering distribution in 1989, sales and operating income have grown at compounded annual growth rates (CAGRs) of 15% and 19%, respectively, reflecting strong and consistent performance across various macroeconomic and industry cycles. Over this period, Watsco’s dividends have grown at a 21% CAGR while maintaining a healthy balance sheet and strong cash flow.

Today’s results establish new records for sales, gross profit, operating income, net income, earnings per share (EPS) and operating cash flow for the fourth quarter and full year periods ended December 31, 2022. These results also reflect steady progress to grow and scale adoption of Watsco’s industry-leading technology platforms, which collectively transform the customer experience, enhance operational efficiencies and help contractors grow faster as they deliver a more contemporary experience to homeowners and businesses. As our customers adapt to using more technology and embrace the on-going digital transformation, Watsco is uniquely positioned to benefit from its investments in the industry’s most robust assortment of technology platforms for HVAC/R contractors.    

Albert H. Nahmad, Watsco’s Chairman and CEO, commented: “Watsco delivered another exceptional year of performance. Our leaders and associates in the field have accomplished extraordinary things and we thank them for their commitment and remarkable efforts to serve customers under challenging circumstances. Our culture is one of continuous improvement, so we continue to encourage our leaders to innovate and build on this success, particularly given the meaningful growth opportunities that we believe remain ahead of us.”

Mr. Nahmad added: “We also finished the year with a strong balance sheet consistent with our core philosophy to remain conservative and risk averse, while maintaining the capacity and flexibility to invest in organic and inorganic growth opportunities at a low cost of capital. We continue to seek acquisitions to partner with successful entrepreneurs and we are encouraged by current conditions. We also look to use our strength to expand our product portfolio and build on key OEM and supplier relationships to provide new opportunities for organic growth within our existing network of 673 locations across North America.”

Fourth Quarter Results



76% increase in EPS to a record $3.55 (includes tax benefit of $1.20 per share from restricted stock vesting)



16% increase in EPS to $2.35 on an adjusted, non-GAAP basis (excludes tax benefit)



5% increase in sales to a record $1.58 billion



5% increase in gross profit to a record $434 million (10 basis-point increase in gross margin to a record 27.4%)



3% increase in SG&A expenses



11% increase in operating income to a record $137 million (14% increase to $141 million on an adjusted basis)



60 basis-point increase in operating margins to a record 8.7% (80 basis-point increase to 8.9% on an adjusted basis)



75% increase in net income attributable to Watsco to $138 million (17% increase excluding tax benefit)



Record operating cash flow of $213 million

Sales trends



2% increase in HVAC equipment (67% of sales), including 4% growth in the U.S.



6% increase in other HVAC products (29% of sales)



19% increase in commercial refrigeration products (4% of sales)



Mr. Nahmad stated: “Our record fourth quarter performance is rewarding given the exceptional, comparative performance achieved last year when same-store sales grew 21% and EPS grew 77%. Our leadership teams have reacted to changing market conditions and produced terrific results through innovation and discipline, as evidenced by the enhanced gross margin and improved operating efficiencies.”    

Tax Benefit from Fourth Quarter Vesting of Restricted Stock

Fourth quarter and full-year results reflect the vesting of 975,622 shares of Class B restricted stock previously granted to the Company’s Chairman & CEO during the period from 1997 to 2011. The vesting occurred on October 15, 2022 and provided a $49 million tax benefit to 2022 results pursuant to Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, as well as $3.6 million in incremental SG&A expenses, primarily related to employment-related taxes. The net benefit to fourth quarter EPS and full-year EPS was $1.20 and $1.21, respectively. Due to the infrequent nature of this event, certain key performance metrics in 2022 are presented on an “adjusted basis” to exclude the impact. Please see “Use of Non-GAAP Financial Information” below.

It is important to note that the fourth and first quarters of each calendar year are highly seasonal due to the nature and timing of the replacement of HVAC systems. Results are typically strongest in the second and third quarters and the Company’s fourth quarter financial results are disproportionately affected by seasonality.

Full Year Results



43% increase in EPS to a record $15.41 (includes tax benefit of $1.21 per share from restricted stock vesting)



32% increase in EPS to $14.20 on an adjusted basis, non-GAAP basis (excludes tax benefit)



16% increase in sales to a record $7.27 billion (14% increase on a same-store basis)



22% increase in gross profit to a record $2.03 billion (130 basis-point increase in gross margin to a record 27.9%)



15% increase in SG&A expenses (13% increase on a same-store basis)



10 basis-point decline in SG&A as a percentage of sales



32% increase in operating income to a record $832 million (33% increase to $835 million on an adjusted basis)



140 basis-point increase in operating margin to a record 11.4% (11.5% on an adjusted basis)



43% increase in net income attributable to Watsco to $601 million (33% increase excluding tax benefit)



64% increase in operating cash flow to a record $572 million

Sales trends (excluding acquisitions)



13% increase in HVAC equipment (68% of sales), including 14% growth in the U.S.



15% increase in other HVAC products (28% of sales)



24% increase in commercial refrigeration products (4% of sales)

Industry Catalysts & Trends

Watsco believes there are several company-specific and industry-wide factors that will provide incremental future growth opportunities. Watsco’s scale, leading technology platforms, financial strength, entrepreneurial culture and OEM relationships – along with the essential nature of HVAC/R products – are important competitive advantages that provide stability to the Company’s performance over the long-term.

Regulatory Changes Impacting Climate Change. New U.S. Federal regulatory standards became effective in 2023 that raise the minimum required efficiency for HVAC systems nationwide. Generally, higher-efficiency systems are sold at a higher price and provide homeowners and businesses the opportunity to reduce energy costs. New regulations are also in effect that institute a phase down of global warming properties of refrigerants currently used in older HVAC systems and a transition to new refrigerants beginning in 2025. Historically, refrigerant transitions have resulted in an increase in the cost to service and repair older HVAC systems, which in turn can provide a catalyst for replacement.

Federal Tax Credits and State Incentives. Demand for higher-efficiency products, such as variable-speed systems and heat pumps, is also expected to benefit following the passage of the Inflation Reduction Act of 2022 (IRA). The legislation is intended to promote replacement of older HVAC systems in favor of high-efficiency heat pump systems that reduce greenhouse gas emissions and thereby combat climate change. Programs include enhanced tax credits for homeowners who install new qualifying HVAC equipment and tax deductions for owners of commercial buildings that are upgraded to achieve defined energy savings. The IRA also sets aside $4.3 billion for state-administered consumer rebate programs



designed to promote energy savings for low and medium-income households, including HVAC systems. Further details, including qualifying products, specific programs and other regulatory requirements contemplated by the IRA are being determined and are expected to be finalized during 2023.                

Movement Toward Heat Pumps & Electrification of Fossil-Fuel Heating. The HVAC industry has improved the operating characteristics of heat pumps, which offer the potential for growth as an alternative to the millions of fossil fuel-burning heating systems used throughout North America, particularly in Northern climates. Heat pump systems provide a combination of air conditioning and heating, may be ducted or ductless, generally sell at higher average unit prices and are available in a wide array of energy efficiencies. Watsco’s sales of residential heat pumps in 2022 increased 25% (a 21% increase during the fourth quarter) outpacing overall HVAC equipment growth rates.

Product Breadth and End-Market Diversity. Watsco possesses the broadest and deepest assortment of products in the industry to support a wide array of customers and end-markets. The Company serves a contractor’s complete product needs ranging from residential ducted and ductless products, rooftops, VRF and engineered/applied systems. The Company serves various end-markets including residential, multi-family, commercial, institutional and more. In addition, Watsco maintains a deep catalog of OEM and aftermarket parts to support contractors and sustain competitiveness in any environment.

OEM and Supplier Relationships. As the leading distributor of HVAC/R products, Watsco sources from approximately 20 domestic and international OEMs and more than 1,300 other suppliers globally. Unlike most competitors, Watsco sells multiple name-brands of equipment at a wide variety of price points that appeal to a broad cross-section of contractors and consumers. We believe that close collaboration with manufacturing partners enhances Watsco’s competitive positioning across its markets.

Geographic Positioning & Density in Key Markets. Approximately 55% of Watsco’s revenues are derived in core Sunbelt markets such as Florida, Texas, the Southeast and the Mid-Atlantic. Such markets also account for the greatest share of industry demand. Recent and ongoing demographic shifts within the U.S. toward Sunbelt states favor continued growth in Watsco’s core markets.

Network Expansion. Watsco’s network has grown by 67 locations over the last three years, primarily from six acquisitions of market-leading businesses, located primarily in markets that Watsco did not previously serve. Through its market-leading 673 locations across North America, Watsco’s network supports more than 350,000 contractors, technicians and installers with critical technical assistance, training and other resources to enhance their daily activities.

Advent of Ductless, High-Efficiency HVAC Products. Watsco is the leading distributor of ductless HVAC products used in both residential and commercial applications in North America. Watsco’s sales of ductless products grew 22% in 2022 to approximately $560 million. We believe that the movement toward higher-efficiency ductless products (primarily heat pumps), the long-term upgrading of critical commercial infrastructure, along with the increasing acceptance of ductless technology by contractors and consumers, should benefit the sale of these products now and over the long-term.

Culture of Innovation

Watsco has developed the industry’s most advanced, user-friendly and customer-focused technology platforms, transforming how its contractor-customers engage with the Company and, increasingly, how those contractors engage with consumers and businesses. Watsco’s community of active technology users grew sales faster than overall sales and experienced approximately 63% less annual attrition. The Company believes future results will benefit from continued customer adoption, new customer acquisition, reduced attrition and lower costs to serve. To that end, Watsco boosted its technology spending in 2022 by 14% to $49 million.

Specific technology-related updates include:



Product Information Management (PIM) is Watsco’s leading repository of product information delivered seamlessly through Watsco’s mobile apps and e-commerce platform. Watsco’s PIM database contains approximately 1 million SKUs accessed by more than 350,000 contractors and technicians annually.



HVAC Pro+ Mobile Apps provide customers real-time access to critical information that improves speed and productivity. This includes real time technical support, product detail, inventory availability, warranty look-up, system match ups, e-commerce and more. The authenticated user community (mobile app users linked to an e-commerce account) grew 20% year-to-date to more than 51,000 users.




E-Commerce Sales grew 17% in 2022, outpacing organic sales growth rates, to more than $2.3 billion. E-commerce sales were 32% of total sales inclusive of acquired revenues.



OnCall Air®, Watsco’s digital sales platform and CreditForComfort®, its companion consumer financing platform, both increased penetration among HVAC/R contractors as more customers engage digitally with homeowners. During 2022, OnCall Air® presented quotes to approximately 225,000 households, a 37% increase over last year, and generated $939 million in gross merchandise value, a 49% increase over the same period last year.

A.J. Nahmad, Watsco’s President, added: “Our technology platforms – which are unique to the industry – have transformed nearly every aspect of our business. The contractor-based platforms, like our HVAC Pro+ suite of apps and OnCallAir, combined with our internal-facing technologies, have bolstered Watsco’s market share, energized new customer acquisition and driven margin expansion. We continue to see higher growth rates, lower attrition and lower costs to serve among active users of our technology. Consistent with our long-term focus, we are investing more to accelerate adoption and sustain our leadership position. As the industry evolves to operating in the digital age, Watsco’s technology tools will provide added value to an ever-growing number of contractors.”

Cash Flow & Dividends

Watsco’s full-year operating cash flow in 2022 increased 64% to a record $572 million (a record $213 million in operating cash flow for the fourth quarter). The Company’s philosophy is to share increasing amounts of cash flow through higher dividends while maintaining a conservative financial position with continued capacity to build its distribution network. The Company’s Board of Directors authorized an 11% increase in Watsco’s annual dividend rate effective in January 2023 to $9.80 per share. Future dividend increases will be considered in light of investment opportunities, general economic conditions and the Company’s overall financial position.

Fourth Quarter Earnings Conference Call Information

Date and time: February 16, 2023 at 10:00 a.m. (ET)

Webcast: http://investors.watsco.com (a replay will be available on the Company’s website)

Dial-in number: United States (844) 883-3908 / International (412) 317-9254

Use of Non-GAAP Financial Information

In this release, the Company discloses certain performance measures on a “same-store basis”, which are non-GAAP and exclude the effects of locations closed, acquired, or locations opened, in each case during the immediately preceding 12 months, unless such locations are within close geographical proximity to existing locations. The Company also discloses operating income, operating margins and diluted EPS on an adjusted, non-GAAP basis to exclude the impact caused by the vesting of restricted stock on October 15, 2022 as described above. The Company believes that this information provides greater comparability regarding its ongoing operating performance. These measures should not be considered an alternative to measurements required by U.S. GAAP.

Reconciliation of operating income, a GAAP measure, to operating income on an adjusted basis, a non-GAAP measure:


     Quarter Ended December 31,     Year Ended December 31,  
     2022     2021     2022     2021  

Operating income

   $ 137,179     $ 123,066     $ 831,578     $ 628,528  

Primarily employment taxes related to the vesting of restricted stock

     3,636       —         3,636       —    













Operating income on an adjusted basis

   $ 140,815     $ 123,066     $ 835,214     $ 628,528  













Operating margin on an adjusted basis

     8.9     8.1     11.5     10.0















Reconciliation of diluted EPS for Common and Class B common stock, a GAAP measure, to diluted EPS for Common and Class B common stock on an adjusted basis, a non-GAAP measure:


     Quarter Ended December 31,      Year Ended December 31,  
     2022      2021      2022      2021  

Diluted earnings per share for Common and Class B common stock

   $ 3.55      $ 2.02      $ 15.41      $ 10.78  

Primarily employment taxes related to the vesting of restricted stock

     0.08        —          0.08        —    

Tax related benefit from the vesting of restricted stock

     (1.28      —          (1.29      —    













Diluted earnings per share for Common and Class B common stock on an adjusted basis

   $ 2.35      $ 2.02      $ 14.20      $ 10.78  













About Watsco

Watsco is the largest distribution network for heating, air conditioning and refrigeration (HVAC/R) products with locations in the United States, Canada, Mexico and Puerto Rico, and on an export basis to Latin America and the Caribbean. Watsco estimates that over 350,000 contractors and technicians visit or call one of its 673 locations each year to get information, obtain technical support and buy products.

Watsco’s has the opportunity to be a significant and important contributor toward climate change as its business plays an important role in the drive to lower CO2e emissions. According to the Department of Energy, HVAC systems account for roughly half of U.S. household energy consumption. As such, replacing HVAC systems at higher efficiency levels is one of the most meaningful steps homeowners can take to reduce electricity consumption and carbon footprint over time. The overwhelming majority of new HVAC systems sold by Watsco replace systems that likely operate well below current minimum efficiency standards in the U.S. As consumers replace HVAC systems with new, higher-efficiency systems, homeowners will consume less energy, save costs and reduce the carbon footprint over time.

Based on estimates validated by independent sources, Watsco averted an estimated 15.8 million metric tons of CO2e emissions from January 1, 2020 to December 31, 2022 through the sale of replacement HVAC systems at higher-efficiency standards (an equivalent of removing 3.4 million gas powered vehicles off the road for a year). More information, including sources and assumptions used to support the Company’s estimates, can be found at www.watsco.com.

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” or “intend,” the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within Watsco’s industry, the seasonality of sales of Watsco’s products, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments. Detailed information about these factors and additional important factors can be found in the documents filed by Watsco with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. Watsco assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.




Condensed Consolidated Results of Operations

(In thousands, except per share data)



     Quarter Ended December 31,     Year Ended December 31,  
     2022     2021     2022     2021  


   $ 1,581,223     $ 1,511,865     $ 7,274,344     $ 6,280,192  

Cost of sales

     1,147,673       1,099,746       5,244,055       4,612,647  













Gross profit

     433,550       412,119       2,030,289       1,667,545  

Gross profit margin

     27.4     27.3     27.9     26.6













SG&A expenses

     301,753       292,085       1,221,382       1,058,316  













Other income

     5,382       3,032       22,671       19,299  

Operating income

     137,179       123,066       831,578       628,528  

Operating margin

     8.7     8.1     11.4     10.0













Interest expense, net

     14       239       2,165       996  













Income before income taxes

     137,165       122,827       829,413       627,532  

Income taxes

     (19,965     27,196       125,717       128,797  













Net income

     157,130       95,631       703,696       498,735  

Less: net income attributable to non-controlling interest

     19,459       16,745       102,529       79,790  













Net income attributable to Watsco

   $ 137,671     $ 78,886     $ 601,167     $ 418,945  













Diluted earnings per share:


Net income attributable to Watsco shareholders

   $ 137,671     $ 78,886     $ 601,167     $ 418,945  

Less: distributed and undistributed earnings allocated to non-vested restricted common stock

     9,390       7,092       51,294       37,222  













Earnings allocated to Watsco shareholders

   $ 128,281     $ 71,794     $ 549,873     $ 381,723  













Weighted-average Common and Class B common shares and equivalent shares used to calculate diluted earnings per share

     36,141,047       35,493,822       35,683,634       35,423,838  

Diluted earnings per share for Common and Class B common stock

   $ 3.55     $ 2.02     $ 15.41     $ 10.78  
















Condensed Consolidated Balance Sheets

(Unaudited, in thousands)


     December 31,      December 31,  
     2022      2021  

Cash and cash equivalents

   $ 147,505      $ 118,268  

Accounts receivable, net

     747,110        698,456  

Inventories, net

     1,370,173        1,115,469  


     33,951        29,207  







Total current assets

     2,298,739        1,961,400  

Property and equipment, net

     125,424        111,019  

Operating lease right-of-use assets

     317,314        268,528  

Goodwill, intangibles, net and other

     746,737        744,914  







Total assets

   $ 3,488,214      $ 3,085,861  







Accounts payable and accrued expenses

   $ 759,525      $ 642,221  

Current portion of long-term obligations

     90,597        84,501  

Borrowings under revolving credit agreement

     56,400        —    







Total current liabilities

     906,522        726,722  

Borrowings under revolving credit agreement

     —          89,000  

Operating lease liabilities, net of current portion

     232,144        187,024  

Deferred income taxes and other liabilities

     101,270        85,700  







Total liabilities

     1,239,936        1,088,446  







Watsco’s shareholders’ equity

     1,889,237        1,664,948  

Non-controlling interest

     359,041        332,467  







Shareholders’ equity

     2,248,278        1,997,415  







Total liabilities and shareholders’ equity

   $ 3,488,214      $ 3,085,861  










Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)


     Year Ended December 31,  
     2022     2021  

Cash flows from operating activities:


Net income

   $ 703,696     $ 498,735  

Non-cash items

     64,960       52,524  

Changes in working capital, net of effects of acquisitions


Accounts receivable, net

     (60,154     (130,414

Inventories, net

     (259,860     (243,660

Accounts payable and other liabilities

     121,993       182,819  

Other, net

     1,329       (10,438







Net cash provided by operating activities

     571,964       349,566  







Cash flows from investing activities:


Capital expenditures, net

     (33,789     (24,108

Business acquisitions, net of cash acquired

     (47     (129,462

Proceeds from sale of equity securities

     —         5,993  

Investment in PreFix Inc.

     —         (1,000







Net cash used in investing activities

     (33,836     (148,577







Cash flows from financing activities:


Dividends on Common and Class B Common stock

     (332,447     (294,522

Repurchases of common stock to satisfy employee withholding tax obligations

     (87,107     (1,092

Distributions to noncontrolling interest

     (69,184     (61,980

Net (repayments) proceeds under revolving credit agreement

     (32,600     89,000  


     17,380       18,952  

Proceeds from NCI for investment in TEC Distribution LLC

     —         21,040  







Net cash used in financing activities

     (503,958     (228,602







Effect of foreign exchange rate changes on cash and cash equivalents

     (4,933     (186







Net increase (decrease) in cash and cash equivalents

     29,237       (27,799

Cash and cash equivalents at beginning of year

     118,268       146,067  







Cash and cash equivalents at end of year

   $ 147,505     $ 118,268