Name: Illumina Inc. (NASDAQ:ILMN) | 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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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).

Operating cash flow demonstrates a consistent upward trajectory from 2016 to 2020, with net cash provided by operating activities increasing from 687 million USD to 1,080 million USD. This growth indicates a strong capacity to generate cash from core business operations, which remained resilient even when consolidated net income experienced a decline in 2020.

Operating Cash Flow Dynamics: The gap between consolidated net income and net cash provided by operating activities is largely attributed to non-cash expenses. Depreciation expense showed a steady increase, rising from 90 million USD in 2016 to 156 million USD in 2020, suggesting an expansion of the physical asset base. Share-based compensation expenses also increased and stabilized at approximately 194 million USD annually from 2019 through 2020. Working capital movements were volatile, with notable fluctuations in accounts receivable and accrued liabilities impacting the annual cash totals.
Investing Activities and Capital Allocation: Investing activities were characterized by significant volatility and a heavy focus on the management of available-for-sale securities. A substantial spike in security purchases occurred in 2018, totaling 2,859 million USD, which contributed to a net cash outflow from investing activities of 1,813 million USD that year. Capital expenditures for property and equipment trended slightly downward, from 260 million USD in 2016 to 189 million USD in 2020. Strategic investments and acquisitions remained a consistent use of cash, with specific activity related to the deconsolidation of GRAIL and Helix influencing the 2017 and 2019 results.
Financing Activities and Shareholder Returns: Financing activities shifted from modest outflows to significant movements in later years. A notable increase in liquidity was achieved in 2018 through 735 million USD in net proceeds from the issuance of debt. Conversely, there is a clear trend of increasing shareholder returns via common stock repurchases, which escalated from 249 million USD in 2016 to a peak of 736 million USD in 2020. The net cash used in financing activities became more pronounced in 2019 and 2020, reflecting higher repurchases and payments on financing obligations.

The overall cash position improved substantially over the five-year period, with cash and cash equivalents ending at 1,810 million USD in 2020 compared to 735 million USD in 2016. The organization utilized its strong operational cash flow to fund both strategic investments and aggressive share buyback programs while maintaining a robust liquidity cushion.

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