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.

Albemarle Corp., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income	2,815,131)	199,942)	446,615)	604,357)	739,139)
Depreciation and amortization	300,841)	254,000)	231,984)	213,484)	200,698)
Gain on sale of business/interest in properties, net	8,400)	(295,971)	(7,168)	—)	(210,428)
Gain on sale of property	—)	—)	—)	(14,411)	—)
Stock-based compensation and other	30,474)	20,120)	22,837)	19,680)	15,228)
Equity in net income of unconsolidated investments, net of tax	(772,275)	(95,770)	(127,521)	(129,568)	(89,264)
Dividends received from unconsolidated investments and nonmarketable securities	801,239)	78,391)	88,161)	71,746)	57,415)
Pension and postretirement (benefit) expense	(52,254)	(74,010)	45,658)	31,515)	10,410)
Pension and postretirement contributions	(16,112)	(30,253)	(16,434)	(16,478)	(15,236)
Unrealized gain on investments in marketable securities	3,279)	(3,818)	(4,635)	(2,809)	(527)
Loss on early extinguishment of debt	19,219)	28,955)	—)	4,829)	—)
Deferred income taxes	93,339)	(38,500)	(1,976)	14,394)	49,164)
(Increase) decrease in accounts receivable	(786,121)	(49,295)	100,118)	(18,220)	(97,448)
(Increase) decrease in inventories	(1,609,642)	(127,401)	51,978)	(46,304)	(124,067)
(Increase) decrease in other current assets	(104,655)	17,411)	7,902)	(32,941)	(2,181)
Increase (decrease) in accounts payable	1,287,072)	143,939)	(31,519)	(12,234)	73,730)
Increase (decrease) in accrued expenses and income taxes payable	(201,356)	127,068)	(215,011)	(4,640)	(1,999)
Changes in current assets and liabilities, net of effects of acquisitions and divestitures	(1,414,702)	111,722)	(86,532)	(114,339)	(151,965)
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL	122,682)	135,928)	179,437)	164,496)	—)
Other, net	(31,412)	53,521)	28,488)	(127,522)	(58,469)
Adjustments to reconcile net income to cash flows from operating activities	(907,282)	144,315)	352,299)	115,017)	(192,974)
Net cash provided by operating activities	1,907,849)	344,257)	798,914)	719,374)	546,165)
Acquisitions, net of cash acquired	(162,239)	—)	(22,572)	(820,000)	(11,403)
Capital expenditures	(1,261,646)	(953,667)	(850,477)	(851,796)	(699,991)
Cash proceeds from divestitures, net	—)	289,791)	—)	—)	413,569)
Proceeds from sale of joint venture	—)	—)	11,000)	—)	—)
Proceeds from sale of property and equipment	—)	—)	—)	10,356)	—)
(Investments in) sales of marketable securities, net	1,942)	3,774)	903)	384)	(270)
Investments in equity and other corporate investments	(706)	(6,488)	(2,427)	(2,569)	(5,600)
Net cash used in investing activities	(1,422,649)	(666,590)	(863,573)	(1,663,625)	(303,695)
Proceeds from issuance of common stock	—)	1,453,888)	—)	—)	—)
Proceeds from borrowings of other long-term debt	1,964,216)	—)	452,163)	1,597,807)	—)
Repayments of long-term debt and credit agreements	(705,000)	(1,173,823)	(250,000)	(175,215)	—)
Other borrowings (repayments), net	(391,662)	60,991)	137,635)	(126,364)	(113,567)
Fees related to early extinguishment of debt	(9,767)	(24,877)	—)	(4,419)	—)
Dividends paid to shareholders	(184,429)	(177,853)	(161,818)	(152,204)	(144,596)
Dividends paid to noncontrolling interests	(44,208)	(96,136)	(32,061)	(83,187)	(14,756)
Repurchases of common stock	—)	—)	—)	—)	(500,000)
Proceeds from exercise of stock options	2,783)	18,392)	40,437)	4,814)	3,633)
Withholding taxes paid on stock-based compensation award distributions	(13,338)	(8,140)	(5,143)	(11,031)	(17,240)
Other	(6,708)	(2,230)	(3,952)	(7,514)	—)
Net cash provided by (used in) financing activities	611,887)	50,212)	177,261)	1,042,687)	(786,526)
Net effect of foreign exchange on cash and cash equivalents	(37,217)	(35,331)	21,012)	(40,646)	(37,927)
Increase (decrease) in cash and cash equivalents	1,059,870)	(307,452)	133,614)	57,790)	(581,983)
Cash and cash equivalents at beginning of year	439,272)	746,724)	613,110)	555,320)	1,137,303)
Cash and cash equivalents at end of year	1,499,142)	439,272)	746,724)	613,110)	555,320)

Based on: 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), 10-K (reporting date: 2018-12-31).

Net income: Net income demonstrated a declining trend from 2018 through 2021, falling from approximately $739 million to $200 million. However, in 2022, there was a significant rebound to roughly $2.8 billion, indicating an exceptional increase in profitability during that year.
Depreciation and amortization: Depreciation and amortization expenses steadily increased each year from about $201 million in 2018 to over $300 million in 2022, reflecting ongoing investments in capital assets or acquisitions that are being amortized.
Gain on sale of business/interest in properties: Gains from sales showed volatility with a notable loss in 2018 and 2021 (-$210 million and -$296 million respectively) but a positive gain in 2022 ($8.4 million), which suggests fluctuations in asset disposition activities or restructuring.
Stock-based compensation and other: Stock-based compensation expenses increased moderately over the period, rising from approximately $15 million in 2018 to around $30 million in 2022, which may reflect changes in compensation structures or inflationary effects.
Equity in net income of unconsolidated investments, net of tax: There was a persistent negative equity income from unconsolidated investments throughout the five years, increasing in magnitude notably in 2022 at -$772 million, indicating losses or reduced profitability from these investments.
Dividends received from unconsolidated investments: Dividends received showed an upward trend, with a substantial jump in 2022 to over $801 million, suggesting improved returns or increased holdings in these investments.
Pension and postretirement (benefit) expense: This item shifted from positive expense amounts in 2018-2020 to significant benefit amounts in 2021 and 2022, reflecting changes in pension plans or accounting adjustments improving the company’s expense profile.
Working capital changes: Accounts receivable and inventories experienced large increases (negative cash impact) particularly in 2022, with accounts receivable rising by about $786 million and inventories by $1.6 billion, indicating accumulation of assets or slower turnover. Correspondingly, accounts payable also increased significantly in 2022 by approximately $1.29 billion, which partly offsets the cash impact.
Cash flows from operating activities: Operating cash flow grew substantially from $546 million in 2018 to nearly $1.9 billion in 2022, although it dipped in 2021, reflecting strengthening operational cash generation, possibly driven by higher net income and working capital adjustments.
Investing activities: Net cash used in investing activities was consistently negative, with outflows intensifying over time, peaking at about $1.42 billion in 2022. Capital expenditures increased notably, especially in 2022, indicating sustained investment in fixed assets.
Financing activities: Financing cash flows were variable, showing negative cash flow in 2018 but positive inflows in the following years except for 2021. Significant borrowings and repayments of debt occurred, with large borrowings in 2019 and 2022 and substantial repayments in 2021. Dividends paid increased steadily, along with variability in other financing activities.
Cash and equivalents: Cash and cash equivalents fluctuated, declining in 2018 and 2021 but rising in other years, culminating in a balance of about $1.5 billion at the end of 2022, reflecting improved liquidity after the sizeable net operating cash inflows and financing activities.

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Albemarle Corp. (NYSE:ALB)

Cash Flow Statement