Name: NXP Semiconductors N.V. (NASDAQ:NXPI) | 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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NXP Semiconductors N.V., 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	1,906)	80)	272)	2,258)	2,272)
Depreciation and amortization	1,262)	1,988)	2,047)	1,987)	2,173)
Share-based compensation	353)	384)	346)	314)	281)
Amortization of discount (premium) on debt, net	1)	(1)	42)	42)	40)
Amortization of debt issuance costs	7)	9)	11)	10)	12)
Net gain on sale of assets	(1)	(115)	(20)	—)	(1,615)
Loss on extinguishment of debt	22)	60)	11)	26)	41)
Results relating to equity-accounted investees	2)	4)	(1)	(54)	(22)
(Gain) loss on equity securities, net	2)	(21)	—)	—)	—)
Deferred tax benefit	(20)	(349)	(175)	(211)	(797)
(Increase) decrease in receivables and other current assets	(176)	(51)	116)	187)	31)
(Increase) decrease in inventories	(159)	163)	128)	(65)	(120)
Increase (decrease) in accounts payable and accrued liabilities	248)	319)	(460)	(129)	225)
(Increase) decrease in other non-current assets	(350)	7)	43)	(22)	(100)
Changes in operating assets and liabilities	(437)	438)	(173)	(29)	36)
Exchange differences	(5)	16)	15)	14)	30)
Other items	(15)	(11)	(2)	12)	(4)
Adjustments to reconcile net income to net cash provided by operating activities	1,171)	2,402)	2,101)	2,111)	175)
Net cash provided by operating activities	3,077)	2,482)	2,373)	4,369)	2,447)
Purchase of identified intangible assets	(132)	(130)	(102)	(50)	(66)
Capital expenditures on property, plant and equipment	(767)	(392)	(526)	(611)	(552)
Purchase of equipment leased to others	(33)	—)	—)	—)	—)
Insurance recoveries received for equipment damage	10)	—)	—)	—)	—)
Proceeds from disposals of property, plant and equipment	1)	4)	23)	1)	2)
Purchase of interests in businesses, net of cash acquired	(23)	(34)	(1,698)	(18)	—)
Proceeds from sale of interests in businesses, net of cash divested	—)	161)	37)	159)	2,682)
Purchase of investments	(8)	(30)	(19)	(9)	—)
Proceeds from the sale of investments	8)	2)	1)	2)	—)
Proceeds from return of equity investments	10)	1)	—)	4)	—)
Other	—)	—)	—)	—)	6)
Net cash (used for) provided by investing activities	(934)	(418)	(2,284)	(522)	2,072)
Payment of cash convertible note	—)	—)	(1,150)	—)	—)
Proceeds from settlement of cash convertible note hedge	—)	—)	144)	—)	—)
Payment of bond hedge derivatives, convertible option	—)	—)	(145)	—)	—)
Repayment of Bridge Loan	—)	—)	—)	(1,000)	—)
Proceeds from Bridge Loan	—)	—)	—)	1,000)	—)
Repurchase of long-term debt	(1,021)	(1,809)	(600)	(1,273)	(2,728)
Principal payments on long-term debt	—)	—)	—)	(1)	(16)
Proceeds from the issuance of long-term debt	4,000)	2,000)	1,750)	1,997)	—)
Cash paid for debt issuance costs	(47)	(15)	(24)	(23)	—)
Cash paid for terminated acquisition adjustment event	—)	—)	—)	(60)	—)
Dividends paid to non-controlling interests	—)	(35)	—)	(54)	(89)
Dividends paid to common stockholders	(562)	(420)	(319)	(74)	—)
Proceeds from issuance of common stock through stock plans	62)	72)	84)	39)	233)
Purchase of treasury shares and restricted stock unit withholdings	(4,015)	(627)	(1,443)	(5,006)	(286)
Cash paid on behalf of shareholders for tax on repurchased shares	—)	—)	(128)	(142)	—)
Other, net	(2)	(1)	—)	—)	—)
Net cash used for financing activities	(1,585)	(835)	(1,831)	(4,597)	(2,886)
Effect of changes in exchange rates on cash positions	(3)	1)	(2)	(8)	20)
Increase (decrease) in cash and cash equivalents	555)	1,230)	(1,744)	(758)	1,653)
Cash and cash equivalents at beginning of period	2,275)	1,045)	2,789)	3,547)	1,894)
Cash and cash equivalents at end of period	2,830)	2,275)	1,045)	2,789)	3,547)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).

An analysis of the cash flow trends between 2017 and 2021 reveals a company with strong operational cash generation that supports aggressive shareholder returns and strategic capital investments, despite significant volatility in reported net income.

Operating Cash Flow Dynamics: Net cash provided by operating activities remained consistently positive throughout the period, ranging from a low of 2,373 million USD in 2019 to a peak of 4,369 million USD in 2018. A notable divergence is observed between net income and operating cash flow; specifically, in 2019 and 2020, net income dropped sharply to 272 million USD and 80 million USD respectively, yet operating cash flow remained robust, exceeding 2.3 billion USD in both years. This resilience is primarily attributed to substantial non-cash charges, with depreciation and amortization consistently contributing approximately 1.2 billion to 2.0 billion USD annually.
Investing Activities and Capital Allocation: Investment patterns indicate a transition from asset divestiture to strategic acquisition and increased capacity expansion. A significant cash inflow of 2,682 million USD from the sale of business interests occurred in 2017. By 2019, the strategy shifted toward acquisition, evidenced by a 1,698 million USD outlay for business interests. Capital expenditures on property, plant, and equipment showed a general upward trend toward the end of the period, reaching a five-year peak of 767 million USD in 2021, suggesting an increase in investment in production capacity.
Financing and Capital Structure Management: Financing activities are characterized by an aggressive capital return program funded by a combination of operating cash and new debt issuance. Share repurchases were highly active, with massive outflows of 5,006 million USD in 2018 and 4,015 million USD in 2021. Dividends paid to common stockholders also exhibited steady growth, increasing from 74 million USD in 2018 to 562 million USD in 2021. To balance these outflows and retire old obligations, the company frequently utilized the debt markets, notably issuing 4,000 million USD in long-term debt in 2021.
Liquidity and Cash Position: The ending cash and cash equivalents balance fluctuated significantly, hitting a low of 1,045 million USD in 2019 before recovering to 2,830 million USD by 2021. The volatility in the cash balance is directly linked to the timing of large-scale share buybacks and the issuance of long-term debt, rather than operational instability.

Overall, the financial profile is one of high operational efficiency and strong free cash flow generation. The company effectively utilizes its operating surplus and debt markets to optimize its capital structure and maximize shareholder value through dividends and buybacks, while simultaneously increasing its capital investment in the latter part of the period.

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