Name: Diamondback Energy Inc. (NASDAQ:FANG) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Diamondback Energy Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income (loss)	2,276)	(4,672)	315)	945)	517)
Provision for (benefit from) deferred income taxes	606)	(1,042)	47)	169)	(21)
Impairment of oil and natural gas properties	—)	6,021)	790)	—)	—)
Depreciation, depletion, amortization and accretion	1,275)	1,311)	1,454)	625)	328)
Loss on extinguishment of debt	75)	5)	56)	—)	—)
(Gain) loss on derivative instruments, net	848)	81)	108)	(101)	84)
Cash received (paid) on settlement of derivative instruments	(1,247)	250)	80)	(121)	—)
Equity-based compensation expense	51)	37)	48)	27)	26)
Gain on sale of equity method investments	(23)	—)	—)	—)	—)
Restricted cash	—)	—)	(5)	—)	—)
Other	47)	30)	8)	15)	3)
Accounts receivable	(196)	217)	(187)	13)	(97)
Income tax receivable	152)	(62)	—)	—)	—)
Prepaid expenses and other	20)	2)	29)	25)	(11)
Accounts payable and accrued liabilities	(41)	(20)	(129)	(7)	37)
Revenues and royalties payable	148)	(41)	135)	12)	45)
Other	(47)	1)	(15)	(38)	(22)
Changes in operating assets and liabilities	36)	97)	(167)	5)	(48)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities	1,668)	6,790)	2,419)	620)	372)
Net cash provided by operating activities	3,944)	2,118)	2,734)	1,565)	889)
Drilling, completions and infrastructure additions to oil and natural gas properties	(1,457)	(1,719)	(2,677)	(1,461)	(793)
Additions to midstream assets	(30)	(140)	(244)	(204)	(68)
Property acquisitions	(812)	(185)	(776)	(1,811)	(2,368)
Acquisition of midstream assets	—)	—)	—)	—)	(50)
Proceeds from sale of assets	820)	63)	300)	80)	66)
Contributions to equity method investments	(114)	(102)	(485)	(1)	—)
Distributions from equity method investments	9)	40)	—)	—)	—)
Other	45)	(58)	(6)	(107)	81)
Net cash used in investing activities	(1,539)	(2,101)	(3,888)	(3,503)	(3,132)
Proceeds from borrowings under credit facilities	1,313)	1,130)	2,350)	2,652)	754)
Repayments under credit facilities	(1,000)	(1,478)	(3,718)	(1,242)	(384)
Repayment on Energen’s credit facility	—)	—)	—)	(559)	—)
Proceeds from senior notes	2,200)	997)	3,469)	1,062)	—)
Repayment of senior notes	(3,193)	(239)	(1,250)	—)	—)
Proceeds from (repayments to) joint venture	(20)	40)	39)	—)	—)
Premium on extinguishment of debt	(178)	(2)	(44)	—)	—)
Public offering costs	—)	—)	(41)	(3)	(1)
Proceeds from public offerings	—)	—)	1,106)	306)	370)
Repurchased shares under buyback program	(431)	(98)	(593)	—)	—)
Repurchased units under buyback program	(94)	(39)	—)	—)	—)
Dividends to stockholders	(312)	(236)	(112)	(37)	—)
Distributions to non-controlling interest	(112)	(93)	(122)	(98)	(41)
Financing portion of net cash received for derivative instruments	22)	—)	—)	—)	—)
Other	(36)	(19)	(22)	(40)	(9)
Net cash provided by (used in) financing activities	(1,841)	(37)	1,062)	2,041)	690)
Net increase (decrease) in cash and cash equivalents	564)	(20)	(92)	102)	(1,554)
Cash, cash equivalents and restricted cash at beginning of period	108)	128)	215)	112)	1,667)
Cash, cash equivalents and restricted cash at end of period	672)	108)	123)	215)	112)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The financial trajectory from 2017 to 2021 reveals a strategic transition from an aggressive growth and acquisition phase toward a period of operational optimization and capital return. This evolution is characterized by a substantial increase in cash generation from operations, a disciplined reduction in capital expenditures, and a pivot from external financing to debt reduction and shareholder distributions.

Operating Cash Flow Dynamics: Net cash provided by operating activities demonstrated a strong upward trend, growing from 889 million US$ in 2017 to 3,944 million US$ in 2021. A significant divergence between net income and operating cash flow occurred in 2020, where a reported net loss of 4,672 million US$ was offset by non-cash charges, most notably a 6,021 million US$ impairment of oil and natural gas properties. This indicates that while accounting losses were severe due to asset write-downs, the underlying cash-generating capacity of the business remained resilient.
Investing Activity and Capital Allocation: Investing activities show a clear deceleration in capital intensity. Net cash used in investing activities peaked at 3,888 million US$ in 2019 before declining to 1,539 million US$ by 2021. Property acquisitions, which were a primary driver of cash outflow in 2017 and 2018, decreased substantially over the period. Similarly, expenditures for drilling, completions, and infrastructure additions peaked in 2019 at 2,677 million US$ and contracted to 1,457 million US$ by 2021, suggesting a shift toward maintaining existing production rather than rapid expansion.
Financing and Capital Structure Evolution: The financing strategy shifted from capital raising to deleveraging and shareholder reward. From 2017 to 2019, the company relied heavily on proceeds from borrowings and senior notes to fund its investment program. However, by 2021, financing activities resulted in a net outflow of 1,841 million US$. This shift is evidenced by a significant repayment of senior notes totaling 3,193 million US$ in 2021 and an increasing commitment to shareholder returns, with dividends to stockholders growing annually from 37 million US$ in 2018 to 312 million US$ in 2021, complemented by an expanding share buyback program.
Liquidity and Cash Position: The company maintained a lean cash position for much of the analyzed period, with year-end cash and equivalents frequently remaining below 300 million US$. However, a notable increase in liquidity was observed at the end of 2021, with cash and restricted cash rising to 672 million US$, supported by the surge in operating cash flows during that fiscal year.

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