Name: ON Semiconductor Corp. (NASDAQ:ON) | 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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ON Semiconductor Corp., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	2,185,600)	1,903,800)	1,011,200)	236,400)	213,900)
Depreciation and amortization	609,500)	551,800)	596,700)	625,100)	593,100)
(Gain) loss on sale or disposal of fixed assets	11,600)	(32,600)	—)	—)	—)
(Gain) loss on divestiture of businesses	700)	(67,000)	(10,200)	—)	—)
Loss on debt refinancing and prepayment	13,300)	7,100)	29,000)	—)	6,200)
Amortization of debt discount and issuance costs	11,300)	11,000)	10,700)	12,100)	13,000)
Share-based compensation	121,100)	100,800)	101,300)	67,700)	79,400)
Non-cash interest on convertible notes	—)	—)	24,700)	38,200)	37,800)
Non-cash asset impairment charges	19,500)	18,600)	10,800)	18,800)	5,000)
Goodwill and Intangible asset impairment charges	—)	386,800)	—)	—)	—)
Change in deferred tax balances	(127,700)	3,100)	62,400)	(122,600)	11,200)
Other	(4,700)	100)	4,300)	7,300)	1,800)
Receivables	(112,800)	(47,800)	(136,300)	31,400)	4,700)
Inventories	(495,200)	(235,200)	(122,800)	(26,300)	34,600)
Other assets	700)	(110,500)	(22,900)	(60,000)	(34,600)
Accounts payable	(91,700)	38,200)	70,700)	34,200)	(79,900)
Accrued expenses and other current liabilities	(178,600)	96,500)	123,900)	(18,500)	(201,700)
Other long-term liabilities	14,900)	8,400)	28,500)	40,500)	10,200)
Changes in assets and liabilities, exclusive of acquisitions and divestitures	(862,700)	(250,400)	(58,900)	1,300)	(266,700)
Adjustments to reconcile net income to net cash provided by operating activities	(208,100)	729,300)	770,800)	647,900)	480,800)
Net cash provided by operating activities	1,977,500)	2,633,100)	1,782,000)	884,300)	694,700)
Purchase of property, plant and equipment	(1,575,600)	(1,005,000)	(444,600)	(383,600)	(534,600)
Proceeds from sale of property, plant and equipment	4,000)	59,100)	14,000)	6,300)	1,900)
Deposits (made) utilized for purchases of property, plant and equipment	36,500)	(31,000)	(47,400)	2,200)	4,600)
Payments related to acquisition of business, net of cash acquired	(236,300)	(2,400)	(399,400)	(4,500)	(888,000)
Divestiture of business, net of cash transferred and proceeds from escrow	—)	263,100)	7,000)	—)	5,200)
Purchase of available-for-sale securities	—)	(18,000)	(48,900)	—)	—)
Proceeds from sale or maturity of available-for-sale securities	33,500)	28,800)	4,200)	—)	—)
Settlement of purchase price from previous acquisition	—)	—)	—)	26,000)	—)
Purchase of license and deposit made for manufacturing facility	—)	—)	—)	(100,000)	(100,000)
Net cash used in investing activities	(1,737,900)	(705,400)	(915,100)	(453,600)	(1,510,900)
Proceeds for the issuance of common stock under the ESPP	25,800)	22,900)	23,500)	23,600)	26,200)
Proceeds from exercise of stock options	—)	—)	—)	—)	1,700)
Payment of tax withholding for RSUs	(66,800)	(78,100)	(38,900)	(20,000)	(33,500)
Repurchase of common stock	(564,200)	(259,800)	—)	(65,400)	(139,000)
Issuance and borrowings under debt agreements	1,845,000)	500,000)	787,300)	1,858,000)	1,404,800)
Reimbursement of debt issuance and other financing costs	4,500)	—)	2,700)	—)	—)
Payment of debt issuance and other financing costs	(12,400)	—)	(3,800)	(2,400)	(24,000)
Repayment of borrowings under debt agreements	(1,723,400)	(530,000)	(1,270,500)	(2,023,900)	(594,400)
Release of escrow related to prior acquisition	—)	—)	—)	—)	(10,400)
Payment of finance lease obligations	(15,300)	(11,500)	—)	—)	(800)
Payment for purchase of bond hedges	(414,000)	—)	(160,300)	—)	—)
Proceeds from issuance of warrants	242,500)	—)	93,800)	—)	—)
Payments related to prior acquisition	(5,800)	(9,200)	(3,200)	(8,900)	(5,200)
Dividend to non-controlling shareholder	(2,400)	(4,300)	—)	(5,000)	(2,300)
Net cash provided by (used in) financing activities	(686,500)	(370,000)	(569,400)	(244,000)	623,100)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1,100)	(2,400)	(1,300)	600)	200)
Net increase (decrease) in cash, cash equivalents and restricted cash	(448,000)	1,555,300)	296,200)	187,300)	(192,900)
Cash, cash equivalents and restricted cash, beginning of period	2,933,000)	1,377,700)	1,081,500)	894,200)	1,087,100)
Cash, cash equivalents and restricted cash, end of period	2,485,000)	2,933,000)	1,377,700)	1,081,500)	894,200)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

A comprehensive analysis of the cash flow trends from 2019 to 2023 reveals a period of significant growth in profitability coupled with an aggressive capital investment strategy. Net income experienced exponential growth, rising from 213.9 million USD in 2019 to 2.185 billion USD in 2023. This trajectory underscores a substantial increase in the company's earning capacity over the five-year period.

Operating Cash Flow Dynamics: Net cash provided by operating activities followed a general upward trend, peaking at 2.633 billion USD in 2022 before moderating to 1.977 billion USD in 2023. Despite the record net income in 2023, operating cash flow declined, primarily driven by a significant increase in working capital requirements. Specifically, inventory outflows expanded consistently, reaching 495.2 million USD in 2023, suggesting a strategic buildup of stock or supply chain expansion.
Investment and Capital Expenditure Trends: A marked acceleration in capital intensity is observed. Purchases of property, plant, and equipment increased from 534.6 million USD in 2019 to 1.575 billion USD in 2023. This tripling of capital expenditure indicates a heavy investment cycle aimed at expanding production capacity. Net cash used in investing activities reached its highest level in 2023 at 1.737 billion USD, reflecting the company's commitment to long-term infrastructure growth.
Financing and Capital Allocation: The financing strategy shifted from reliance on external capital to shareholder returns and debt management. While early periods saw significant net cash inflows from financing, the company transitioned to net cash outflows from 2020 through 2023. Share repurchases accelerated significantly, increasing from 139 million USD in 2019 to 564.2 million USD in 2023. Debt activity remained volatile, with 2023 showing a high volume of both issuance (1.845 billion USD) and repayment (1.723 billion USD), suggesting active balance sheet optimization.
Liquidity Position: Cash and restricted cash balances grew steadily from 894.2 million USD at the end of 2019 to a peak of 2.933 billion USD at the end of 2022. The balance decreased to 2.485 billion USD by the end of 2023, a result of the simultaneous increase in capital expenditures and share buybacks, despite the strong underlying net income.

Overall, the data indicates a transition from a growth phase funded by debt and acquisitions to a mature phase characterized by internal funding of massive capacity expansions and increased returns to shareholders.

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