LIQUIDITY AND CAPITAL RESOURCES
We finance our operations, co-investment activity, share repurchases and dividend payments, capital expenditures and business acquisitions with internally generated funds, borrowings on our Facility, and through issuance of Long-term debt.
Cash Flows from Operating Activities
Operating activities provided $295.7 million of cash in the first nine months of 2017, as compared to $151.9 million used during the same period in 2016. The year-over-year improvement in cash provided by (used in) operating activities primarily reflects enhanced working capital management processes implemented in 2017 as well as lower incentive compensation paid to employees in 2017 as compared with 2016, reflecting the Company’s performance in the previous annual periods. The $9.7 million increase in Net income for the first nine months of 2017 as compared with 2016 also contributed to the improvement in operating cash flows year-over-year.
Cash Flows from Investing Activities
We used $119.7 million of cash for investing activities during the first nine months of 2017, a decrease of $497.7 million from the $617.4 million used during the same period in 2016. The year-over-year decrease was primarily driven by decreases in cash used for (a) payments for business acquisitions, (b) property and equipment net capital additions (including acquisitions of investment properties by consolidated less-than-wholly-owned subsidiaries), and (c) net capital contribution/distribution activity related to co-investments in real estate ventures. We discuss these key drivers individually below in further detail.
Cash Flows from Financing Activities
Financing activities used $165.4 million of cash during the first nine months of 2017, as compared to providing $779.3 million during the same period in 2016. The net change of $944.7 million is substantially driven by $475.0 million of net payments on our Facility during 2017 compared with net borrowings on our Facility of $850.0 million in 2016. Partially offsetting this change was the receipt of $395.7 million of proceeds from the issuance of the Euro Notes in the second quarter of 2017.
Our $2.75 billion Facility matures on June 21, 2021. As of September 30, 2017, we had outstanding borrowings under the Facility of $450.0 million and outstanding letters of credit of $12.0 million. As of December 31, 2016, we had outstanding borrowings under the Facility of $925.0 million and outstanding letters of credit of $18.2 million. The average outstanding borrowings under the Facility were $712.3 million and $1,211.3 million during the three months ended September 30, 2017 and 2016, respectively, and $1,042.7 million and $904.2 million during the nine months ended September 30, 2017 and 2016, respectively. The third quarter decrease in average borrowings, as compared with the prior-year quarter, was driven by improved working capital discipline together with higher net income in 2017. The year-over-year increase in average outstanding borrowings was driven by acquisition-related payment activity, partially offset by the issuance of the Euro Notes in June of 2017 and improved operating cash flows this year.
We will continue to use the Facility for working capital needs (including payment of accrued incentive compensation), co-investment activities, dividend payments, share repurchases, capital expenditures and business acquisitions.
In addition to our Facility, we had the capacity to borrow up to an additional $97.2 million under local overdraft facilities as of September 30, 2017. We had Short-term borrowings (including capital lease obligations, overdrawn bank accounts and local overdraft facilities) of $64.2 million and $89.5 million as of September 30, 2017 and December 31, 2016, respectively, of which $28.2 million and $31.6 million as of September 30, 2017 and December 31, 2016, respectively, were attributable to local overdraft facilities.
On June 29, 2017, we issued and sold an aggregate principal amount of €350.0 million of senior unsecured notes ("Euro Notes") as a private placement to certain institutional investors. The proceeds, net of debt issuance costs, were $393.2 million, using June 29, 2017 exchange rates, and were used to reduce outstanding borrowings on our Facility.
See Note 8, Debt, of the Notes to Condensed Consolidated Financial Statements for additional information on our Facility, Long-term debt and Short-term borrowings.