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.

Illumina Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
Consolidated net income	656)	990)	782)	678)	428)
Depreciation expense	156)	151)	140)	110)	90)
Amortization of intangible assets	31)	37)	39)	46)	51)
Share-based compensation expense	194)	194)	193)	164)	129)
Accretion of debt discount	40)	46)	41)	30)	30)
Incremental tax benefit related to share-based compensation	—)	—)	—)	—)	(91)
Deferred income taxes	117)	11)	(18)	81)	94)
Payment of accreted debt discount	—)	(84)	—)	—)	—)
Unrealized gains on marketable equity securities	(270)	(53)	(21)	—)	—)
Gains on deconsolidation	—)	(54)	—)	(453)	—)
Loss on derivative assets related to terminated acquisition	116)	8)	—)	—)	—)
Impairment of intangible assets	—)	—)	—)	23)	—)
Other	(33)	(1)	4)	1)	2)
Accounts receivable	89)	(58)	(105)	(26)	3)
Inventory	(12)	25)	(53)	(33)	(30)
Prepaid expenses and other current assets	(20)	(14)	5)	8)	(1)
Operating lease right-of-use assets and liabilities, net	(11)	(5)	—)	—)	—)
Other assets	(33)	(30)	(9)	(5)	(7)
Accounts payable	40)	(35)	45)	10)	(2)
Accrued liabilities	(7)	(44)	103)	81)	(24)
Other long-term liabilities	27)	(33)	(4)	160)	16)
Changes in operating assets and liabilities	73)	(194)	(18)	195)	(45)
Adjustments to reconcile net income to net cash provided by operating activities	424)	61)	360)	197)	259)
Net cash provided by operating activities	1,080)	1,051)	1,142)	875)	687)
Maturities of available-for-sale securities	493)	1,387)	860)	321)	140)
Purchases of available-for-sale securities	(1,802)	(1,010)	(2,859)	(742)	(894)
Sales of available-for-sale securities	1,298)	629)	597)	322)	543)
Purchases of property and equipment	(189)	(209)	(296)	(310)	(260)
Net purchases of strategic investments	(124)	(20)	(15)	(29)	(14)
Cash paid for derivative assets related to terminated acquisition	(132)	(18)	—)	—)	—)
Deconsolidation of Helix and GRAIL cash	—)	(29)	—)	(52)	—)
Proceeds from the deconsolidation of GRAIL	—)	15)	—)	278)	—)
Net cash paid for acquisitions	(98)	—)	(100)	—)	(18)
Cash paid for intangible assets	—)	—)	—)	(2)	(11)
Net cash (used in) provided by investing activities	(554)	745)	(1,813)	(214)	(515)
Payments on financing obligations	—)	(550)	(4)	(9)	(66)
Net proceeds from issuance of debt	—)	—)	735)	5)	5)
Incremental tax benefit related to share-based compensation	—)	—)	—)	—)	91)
Common stock repurchases	(736)	(324)	(201)	(251)	(249)
Proceeds from issuance of common stock	61)	59)	46)	71)	48)
Taxes paid related to net share settlement of equity awards	(91)	(82)	(74)	(68)	(100)
Contributions from noncontrolling interest owners	—)	—)	92)	79)	89)
Payments on acquisition-related contingent consideration liability	—)	—)	—)	(3)	(29)
Proceeds from early exercise of equity awards from a subsidiary	—)	—)	—)	—)	7)
Net cash provided by (used in) financing activities	(766)	(897)	594)	(176)	(205)
Effect of exchange rate changes on cash and cash equivalents	8)	(1)	(4)	5)	(2)
Net increase (decrease) in cash and cash equivalents	(232)	898)	(81)	490)	(34)
Cash and cash equivalents at beginning of year	2,042)	1,144)	1,225)	735)	769)
Cash and cash equivalents at end of year	1,810)	2,042)	1,144)	1,225)	735)

Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).

Consolidated Net Income: Net income showed a significant upward trend from 2016 to 2019, rising from $428 million to a peak of $990 million. However, in 2020, net income declined to $656 million, indicating potential challenges or one-time impacts affecting profitability in the most recent year.
Depreciation and Amortization: Depreciation expense consistently increased each year, reaching $156 million in 2020 from $90 million in 2016. In contrast, amortization of intangible assets steadily decreased from $51 million in 2016 to $31 million in 2020, suggesting possible completion of earlier intangible asset amortization or reduced intangible asset additions.
Share-based Compensation Expense: Share-based compensation expenses rose sharply from $129 million in 2016 to $194 million in 2018 and remained stable through 2020. This indicates sustained employee incentive compensation expenditures over the years.
Other Income and Expense Items: There were notable fluctuations in miscellaneous gains and losses. Unrealized losses on marketable equity securities grew larger in magnitude, from no recorded loss in 2016 to a substantial $270 million loss in 2020. Gains on deconsolidation were significant in 2017 but less so in subsequent years. The company recorded impairment of intangible assets only in 2017 for $23 million. A loss related to terminated acquisition appeared in 2019 and increased in 2020, reflecting challenges in acquisition-related activities.
Working Capital Components: Accounts receivable saw negative changes through most years, as did inventory except for a positive change in 2019. Accounts payable and accrued liabilities were volatile, showing both increases and decreases, which contributed to fluctuations in changes in operating assets and liabilities. The largest negative swing in this item occurred in 2019.
Operating Cash Flow: Net cash provided by operating activities grew steadily from $687 million in 2016 to over $1 billion in 2018, then stabilized around this level through 2020. Adjustments to reconcile net income to net cash provided by operating activities varied year to year, but the strong operating cash flow supports the company's core business stability.
Investing Activities: Investing cash flows were generally negative except for a positive spike in 2019, largely due to maturities and sales of available-for-sale securities. Purchases of securities fluctuated greatly with high investment in 2018 and 2020. Property and equipment purchases decreased slightly over time, indicating some reduction in capital expenditures. Strategic investments also increased notably in 2020. Net cash used in investing activities was significantly negative in 2018 and 2020, reflecting heavy investment or disinvestment activities.
Financing Activities: Cash flows from financing activities were negative in most years except 2018, when there was a significant net inflow of $594 million, likely driven by debt issuance of $735 million. Common stock repurchases were persistent and increased, peaking at $736 million in 2020, showing a consistent return of capital to shareholders. Proceeds from issuing common stock were relatively steady but minor compared to repurchases. Payments on financing obligations spiked in 2019, possibly related to debt repayments.
Liquidity Position: Cash and cash equivalents showed overall growth from 2016 through 2019, nearly tripling from $735 million to $2,042 million before declining to $1,810 million in 2020. The net increase in cash was positive and notably high during 2019, reflecting effective cash flow management despite operational and investing challenges.

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Illumina Inc. (NASDAQ:ILMN)

Cash Flow Statement