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.

Allergan PLC, consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Net income (loss)	(5,265,100)	(5,086,200)	(4,118,900)	14,979,500)	3,919,400)
Depreciation	204,500)	196,300)	171,500)	155,800)	218,300)
Amortization	5,856,600)	6,552,300)	7,197,100)	6,475,200)	5,777,000)
Provision for inventory reserve	160,200)	96,400)	102,200)	181,400)	140,900)
Share-based compensation	214,300)	239,800)	293,300)	334,500)	690,400)
Deferred income tax benefit	(660,900)	(1,255,700)	(7,783,100)	(1,443,900)	(7,380,100)
Pre-tax gain on sale of businesses to Teva	—)	—)	—)	(24,511,100)	—)
Non-cash tax effect of gain on sale of businesses to Teva	—)	—)	—)	5,285,200)	—)
Goodwill impairments	3,552,800)	2,841,100)	—)	—)	—)
In-process research and development impairments	436,000)	804,600)	1,452,300)	743,900)	511,600)
Loss on asset sales and impairments, net	440,200)	2,857,600)	3,927,700)	5,000)	334,400)
Net income impact of other-than-temporary loss on investment in Teva securities	—)	—)	3,273,500)	—)	—)
Charge to settle Teva related matters	—)	—)	387,400)	—)	—)
Loss on forward sale of Teva shares	—)	—)	62,900)	—)	—)
Gain on sale of Teva securities, net	—)	(60,900)	—)	—)	—)
Amortization of inventory step-up	—)	—)	131,700)	42,400)	1,192,900)
Gain on sale of businesses	—)	(182,600)	—)	—)	—)
Non-cash extinguishment of debt	200)	30,000)	(15,700)	—)	—)
Cash discount related to extinguishment of debt	—)	(45,600)	—)	—)	—)
Amortization of deferred financing costs	17,500)	22,600)	27,800)	51,000)	298,300)
Amortization of right of use assets	130,900)	—)	—)	—)	—)
Contingent consideration adjustments, including accretion	54,100)	(106,500)	(133,200)	(66,800)	108,800)
Excess tax benefit from stock-based compensation	—)	—)	—)	(20,400)	(76,100)
Other, net	(5,500)	29,000)	(37,000)	(59,900)	66,400)
(Increase) decrease in accounts receivable, net	(358,800)	(37,000)	(188,300)	(191,000)	(1,034,300)
(Increase) decrease in inventories	(393,400)	(145,700)	(144,800)	(268,400)	(226,200)
(Increase) decrease in prepaid expenses and other current assets	(78,100)	4,300)	27,900)	29,900)	70,900)
Increase (decrease) in accounts payable and accrued expenses	1,434,400)	151,600)	95,900)	313,500)	142,500)
Increase (decrease) in income and other taxes payable	1,697,900)	(1,191,600)	1,114,100)	(326,600)	(87,800)
Increase (decrease) in other assets and liabilities	(199,100)	(73,700)	29,100)	(283,900)	(137,300)
Changes in assets and liabilities, net of effects of acquisitions	2,102,900)	(1,292,100)	933,900)	(726,500)	(1,272,200)
Reconciliation to net cash provided by operating activities	12,503,800)	10,726,300)	9,992,300)	(13,554,200)	610,600)
Net cash provided by operating activities	7,238,700)	5,640,100)	5,873,400)	1,425,300)	4,530,000)
Additions to property, plant and equipment	(375,200)	(253,500)	(349,900)	(331,400)	(454,900)
Additions to product rights and other intangibles	(58,300)	—)	(614,300)	(2,000)	(154,700)
Sale of businesses to Teva	—)	—)	—)	33,804,200)	—)
Additions to investments	(3,938,000)	(2,471,700)	(9,783,800)	(15,743,500)	(24,300)
Proceeds from sale of investments and other assets	1,569,600)	6,259,300)	15,153,300)	7,771,600)	883,000)
Payments to settle Teva related matters	—)	(466,000)	—)	—)	—)
Proceeds from sales of property, plant and equipment	23,700)	30,400)	7,100)	33,300)	140,100)
Acquisitions of businesses, net of cash acquired	(80,600)	—)	(5,290,400)	(1,198,900)	(37,510,100)
Net cash (used in) provided by investing activities	(2,858,800)	3,098,500)	(878,000)	24,333,300)	(37,120,900)
Proceeds from borrowings of long-term indebtedness, including credit facility	11,900)	2,657,000)	3,550,000)	1,050,000)	30,137,700)
Payments on debt, including capital lease obligations and credit facility	(1,044,900)	(8,804,500)	(6,413,600)	(10,848,700)	(5,134,200)
Debt issuance and other financing costs	—)	(10,400)	(20,600)	—)	(310,800)
Proceeds from issuance of preferred shares	—)	—)	—)	—)	4,929,700)
Proceeds from issuance of ordinary shares	—)	—)	—)	—)	4,071,100)
Payments of contingent consideration and other financing	(9,300)	(30,900)	(511,600)	(161,100)	(230,100)
Proceeds from stock plans	91,200)	102,400)	183,400)	172,100)	230,000)
Proceeds from forward sale of Teva securities	—)	465,500)	—)	—)	—)
Payments to settle Teva related matters	—)	(234,000)	—)	—)	—)
Repurchase of ordinary shares	(840,600)	(2,775,400)	(493,000)	(15,076,400)	(118,000)
Dividends paid	(974,400)	(1,049,800)	(1,218,200)	(278,400)	(208,100)
Excess tax benefit from stock-based compensation	—)	—)	—)	20,400)	76,100)
Net cash provided by (used in) financing activities	(2,766,100)	(9,680,100)	(4,923,600)	(25,122,100)	33,443,400)
Effect of currency exchange rate changes on cash and cash equivalents	9,100)	4,700)	21,400)	(8,500)	(6,500)
Net increase (decrease) in cash and cash equivalents	1,622,900)	(936,800)	93,200)	628,000)	846,000)
Cash and cash equivalents at beginning of period	880,400)	1,817,200)	1,724,000)	1,096,000)	250,000)
Cash and cash equivalents at end of period	2,503,300)	880,400)	1,817,200)	1,724,000)	1,096,000)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Net Income (Loss): The company experienced significant volatility in net income over the five-year period. Starting with a positive net income of $3.9 billion in 2015, it surged to $14.98 billion in 2016, primarily due to a substantial pre-tax gain on the sale of businesses to Teva. However, the following years saw consistent net losses, reaching approximately -$5.26 billion by 2019, influenced by impairments and losses on asset sales.
Depreciation and Amortization: Depreciation remained relatively stable, slightly increasing from $218 million in 2015 to $204.5 million in 2019. Amortization showed a declining trend after peaking at $7.2 billion in 2017, falling to $5.9 billion in 2019, possibly reflecting reduced intangible assets or completed amortization schedules.
Impairments and Asset-Related Losses: Goodwill impairments appeared only in 2018 and 2019, increasing from $2.8 billion to $3.55 billion, indicating challenges in maintaining asset values. Losses related to asset sales and impairments were significant, particularly in 2017 and 2018, suggesting ongoing restructuring or disposals. In-process research and development impairments fluctuated, peaking at $1.45 billion in 2017 before declining to $436 million in 2019.
Teva-Related Transactions and Impacts: The sale of businesses to Teva in 2016 generated a large cash inflow of $33.8 billion and a significant pre-tax gain with associated tax benefits. Subsequent years saw various non-cash and cash charges related to Teva securities and settlements, contributing to financial volatility and impacting net income negatively in 2017 and 2018.
Working Capital Changes: Changes in working capital were inconsistent, with significant increases in accounts payable and accrued expenses by $1.43 billion in 2019, a notable recovery from lower increases in prior years. Accounts receivable and inventories generally decreased, reflecting efforts in cash conversion. Income and other taxes payable fluctuated widely, with a large positive change of $1.7 billion in 2019 compared to a negative $1.19 billion in 2018, impacting cash flow dynamics.
Operating Cash Flow: Net cash provided by operating activities was positive throughout the period, peaking at $7.24 billion in 2019. Despite net income losses in some years, cash flows remained robust, indicating strong operational cash generation and effective non-cash adjustment management.
Investing Activities: Investing cash flows showed variability, with a large cash inflow in 2016 due to the sale of businesses to Teva, contrasted by significant outflows in 2015 and 2019 associated with acquisitions and additions to property and intangibles. Capital expenditures were relatively stable but trended downward in later years, possibly reflecting asset base optimization.
Financing Activities: Financing cash flows fluctuated markedly. The company raised significant debt and equity in 2015 but experienced substantial repayments in subsequent years, including a notable $15.1 billion debt payment in 2016. Share repurchases were aggressive in 2016 but reduced drastically by 2019. Dividends remained relatively consistent but modest relative to cash flows.
Liquidity Position: Cash and cash equivalents increased overall, despite a dip in 2018. The ending cash balance rose from $1.1 billion in 2015 to $2.5 billion in 2019, reflecting a generally positive liquidity trend supported by operating cash flows and financing activities.
Other Observations: Share-based compensation expenses decreased steadily from 2015 to 2019, indicating possible cost management in employee incentives. The amortization of deferred financing costs and right of use assets showed declines and new expenses, respectively, aligning with changes in financing and lease structures.

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Allergan PLC (NYSE:AGN)

Cash Flow Statement