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.

Microchip Technology Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Net income	1,285,500)	349,400)	570,600)	355,900)	255,400)	164,639)
Depreciation and amortization	1,143,500)	1,153,300)	1,215,600)	876,400)	615,900)	469,208)
Deferred income taxes	7,900)	(138,900)	(490,300)	(62,200)	51,200)	(126,888)
Share-based compensation expense related to equity incentive plans	210,200)	198,300)	170,200)	166,400)	93,200)	128,155)
Loss on settlement of debt	113,400)	299,600)	5,400)	12,600)	16,000)	43,879)
Amortization of debt discount	44,900)	71,100)	121,700)	114,600)	106,100)	56,075)
Amortization of debt issuance costs	11,500)	17,100)	17,100)	16,500)	6,600)	4,524)
Losses on equity method investments	—)	—)	—)	200)	200)	222)
Impairment of intangible assets	3,000)	—)	2,200)	3,100)	500)	11,904)
Realized gain on equity method investment	—)	—)	—)	—)	—)	(468)
Impairment of available-for-sale investment	—)	—)	—)	6,000)	15,500)	1,433)
Amortization of premium on available-for-sale investments	—)	—)	—)	(200)	300)	18)
Other non-cash adjustment	(11,400)	(6,400)	(2,000)	800)	(5,800)	2,582)
(Increase) decrease in accounts receivable	(74,900)	(63,700)	(53,300)	238,800)	(85,300)	(46,831)
(Increase) decrease in inventories	(177,800)	18,400)	28,800)	341,600)	(59,200)	223,711)
Increase (decrease) in deferred income on shipments to distributors	—)	—)	—)	—)	41,000)	109,383)
Increase (decrease) in accounts payable and accrued liabilities	192,700)	17,600)	11,400)	(180,700)	(13,900)	(16,070)
Change in other assets and liabilities	79,400)	(16,700)	(13,100)	(24,200)	14,000)	24,628)
Change in income tax payable	14,800)	17,400)	(40,500)	(190,800)	367,900)	—)
Changes in operating assets and liabilities, excluding impact of acquisitions	34,200)	(27,000)	(66,700)	184,700)	264,500)	294,821)
Adjustments to reconcile net income to net cash provided by operating activities	1,557,200)	1,567,100)	973,200)	1,318,900)	1,164,200)	885,465)
Net cash provided by operating activities	2,842,700)	1,916,500)	1,543,800)	1,674,800)	1,419,600)	1,050,104)
Purchases of available-for-sale investments	—)	—)	(2,000)	(167,700)	(1,594,800)	(500,309)
Maturities of available-for-sale investments	—)	—)	—)	78,000)	786,700)	400)
Sales of available-for-sale investments and marketable equity securities	—)	—)	4,700)	1,376,600)	—)	470,165)
Sale of equity method investment	—)	—)	—)	—)	—)	1,746)
Acquisition of Atmel, net of cash acquired	—)	—)	—)	—)	—)	(2,747,516)
Acquisition of Microsemi, net of cash acquired	—)	—)	—)	(7,850,600)	—)	—)
Proceeds from sales of assets	14,100)	8,300)	3,200)	200)	10,300)	23,069)
Investments in other assets	(121,700)	(89,000)	(71,500)	(18,600)	(7,100)	(10,218)
Capital expenditures	(370,100)	(92,600)	(67,600)	(228,900)	(206,800)	(75,310)
Net cash used in investing activities	(477,700)	(173,300)	(133,200)	(6,811,000)	(1,011,700)	(2,837,973)
Proceeds from borrowings on Revolving Credit Facility	4,176,000)	3,966,000)	1,026,000)	4,416,500)	187,000)	1,537,000)
Repayments of Revolving Credit Facility	(5,123,500)	(4,007,900)	(1,904,000)	(1,150,000)	(187,000)	(2,781,000)
Proceeds from issuance of senior notes	997,000)	3,577,800)	—)	1,989,500)	—)	2,645,000)
Repayment of senior notes	(1,000,000)	—)	—)	—)	—)	—)
Proceeds from borrowings on Bridge Loan Facility	—)	—)	611,900)	—)	—)	—)
Repayment of Bridge Loan Facility	—)	(615,000)	—)	—)	—)	—)
Proceeds from borrowings on Term Loan Facility	—)	—)	—)	3,000,000)	—)	—)
Repayments of Term Loan Facility	—)	(1,723,500)	(188,000)	(1,088,500)	—)	—)
Payments on settlement of convertible debt	(424,700)	(2,611,400)	(615,000)	—)	(73,400)	(436,205)
Repayment of debt assumed in Microsemi acquisition	—)	—)	—)	(2,056,900)	—)	—)
Deferred financing costs	(8,500)	(21,200)	(8,900)	(72,700)	(1,200)	(36,930)
Purchase of capped call options	—)	(35,800)	—)	—)	—)	—)
Proceeds from sale of common stock	70,500)	60,300)	58,800)	42,600)	42,000)	42,210)
Tax payments related to shares withheld for vested RSUs	(84,200)	(64,600)	(68,100)	(71,800)	(44,400)	(58,402)
Repurchase of common stock	(425,600)	—)	—)	—)	—)	—)
Payment of cash dividends	(503,800)	(388,300)	(350,100)	(344,400)	(337,500)	(315,429)
Capital lease payments	(800)	(600)	(800)	(800)	(800)	(783)
Net cash used in financing activities	(2,327,600)	(1,864,200)	(1,438,200)	4,663,500)	(415,300)	595,461)
Operating cash flows related to discontinued operations	—)	—)	—)	—)	—)	9,348)
Effect of foreign exchange rate changes on cash and cash equivalents	—)	—)	—)	—)	—)	(1,007)
Net increase (decrease) in cash and cash equivalents	37,400)	(121,000)	(27,600)	(472,700)	(7,400)	(1,184,067)
Cash and cash equivalents, and restricted cash at beginning of period	280,000)	401,000)	428,600)	901,300)	908,700)	2,092,751)
Cash and cash equivalents, and restricted cash at end of period	317,400)	280,000)	401,000)	428,600)	901,300)	908,684)

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

The financial data reveals several significant trends and fluctuations over the analyzed periods.

Net Income: Net income exhibited a general upward trend, growing from approximately $164.6 million in 2017 to $1.29 billion in 2022, with a notable dip in 2021.
Depreciation and Amortization: This expense steadily increased, starting at around $469 million in 2017 and reaching a peak of about $1.15 billion in 2021, then slightly declining in 2022.
Deferred Income Taxes: There were large swings in deferred income taxes, reflecting volatility with values swinging between negative and positive figures across the timeline, indicating varying tax impacts.
Share-based Compensation Expense: Consistent growth was observed, increasing from roughly $128 million in 2017 to over $210 million by 2022, indicating increased equity compensation expense over time.
Loss on Settlement of Debt: The loss on settlement of debt showed considerable variation, with a sharp increase in 2021 to nearly $300 million, before declining again in 2022.
Amortization of Debt Discount and Issuance Costs: Both metrics generally rose through 2020 and declined thereafter, with amortization of debt discount peaking around 2020 and reducing in subsequent years.
Impairment and Investment Gains/Losses: Various impairments and losses on investments appeared sporadically, though impairment charges notably diminished after 2020, indicating reduced write-downs of intangible and investment assets.
Changes in Working Capital: Accounts receivable fluctuated, showing increases and decreases without a clear trend, while inventories displayed volatility with significant fluctuations. Accounts payable and accrued liabilities showed mainly positive changes from 2020 onward, indicating some improvement in working capital management.
Net Cash Provided by Operating Activities: Operating cash flow increased over time, peaking at approximately $2.84 billion in 2022, evidencing strong cash generation capabilities.
Investing Activities: Substantial cash outflows were recorded, especially notable in 2019 with $6.8 billion used, primarily due to the Microsemi acquisition. Capital expenditures were uneven, with a notable increase to $370 million in 2022.
Financing Activities: Financing cash flows were highly variable, influenced by debt issuance and repayments, with proceeds from borrowings and repayments fluctuating sharply. Repurchases of common stock and dividend payments increased, with share repurchases reaching $426 million in 2022 and dividends rising steadily.
Overall Liquidity: Cash and cash equivalents generally declined from over $2 billion in 2017 to around $317 million by 2022, despite positive net cash from operating activities, largely due to large investing and financing outflows.

In summary, the data reflects robust growth in profitability and operating cash flow, paired with significant investing expenditures mainly linked to acquisitions and capital investments. Financing activities show active debt management and shareholder returns through dividends and stock repurchases. The volatility in deferred taxes and debt-related expenses indicates active financial structuring over the periods. The company’s liquidity position declined, influenced by substantial outflows, suggesting ongoing capital deployment despite solid cash flow from operations.

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Microchip Technology Inc. (NASDAQ:MCHP)

Cash Flow Statement