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.

Boston Scientific Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income (loss)	698)	1,041)	(82)	4,700)	1,671)
(Gain) loss on disposal of businesses and assets	22)	(78)	—)	—)	—)
Depreciation and amortization	1,136)	1,093)	1,123)	1,011)	894)
Deferred and prepaid income taxes	(63)	(124)	(82)	(4,301)	(87)
Stock-based compensation expense	220)	194)	170)	157)	140)
Goodwill and other intangible asset impairment charges	132)	370)	533)	105)	35)
Net (gain) loss on investments and notes receivable	1)	(250)	(398)	30)	(155)
Contingent consideration net expense (benefit)	35)	(136)	(100)	(35)	(21)
Inventory step-up amortization	32)	34)	58)	46)	6)
Debt extinguishment costs	194)	—)	—)	—)	—)
Other, net	124)	77)	244)	419)	(4)
Trade accounts receivable	(220)	(279)	335)	(130)	(110)
Inventories	(321)	(346)	(65)	(290)	(83)
Other assets	(209)	(134)	(200)	45)	(172)
Accounts payable, accrued expenses and other liabilities	(255)	408)	(28)	79)	(1,804)
Increase (decrease) in operating assets and liabilities, excluding purchase accounting	(1,005)	(351)	42)	(296)	(2,169)
Adjustments to reconcile net income (loss) to cash provided by operating activities	828)	829)	1,590)	(2,864)	(1,361)
Cash provided by operating activities	1,526)	1,870)	1,508)	1,836)	310)
Purchases of property, plant and equipment and internal use software	(588)	(554)	(376)	(461)	(316)
Proceeds from sale of property, plant and equipment	12)	14)	12)	7)	14)
Payments for acquisitions of businesses, net of cash acquired	(1,542)	(2,259)	(3)	(4,382)	(1,448)
(Payments for) proceeds from investments and acquisitions of certain technologies	(24)	279)	(146)	(148)	(171)
Proceeds from disposal of certain businesses and assets	5)	826)	15)	90)	—)
Proceeds from royalty rights	70)	82)	87)	52)	—)
(Payments for) proceeds from settlements of hedge contracts	56)	15)	—)	(199)	—)
Cash used for investing activities	(2,011)	(1,597)	(411)	(5,041)	(1,921)
Payment of contingent consideration previously established in purchase accounting	(336)	(15)	(49)	(66)	(19)
Payments for royalty rights	(75)	(85)	(97)	(69)	—)
Proceeds from royalty rights transfer	—)	—)	—)	256)	—)
Payments on short-term borrowings	(250)	—)	(2,950)	(1,000)	—)
Proceeds from short-term borrowings, net of debt issuance costs	—)	—)	2,245)	700)	999)
Net increase (decrease) in commercial paper	(1)	—)	(714)	(575)	21)
Payments on borrowings from credit facilities	—)	—)	(1,919)	—)	(569)
Proceeds from borrowings on credit facilities	—)	—)	1,916)	—)	569)
Payments on long-term borrowings and debt extinguishment costs	(3,184)	—)	(1,260)	(3,560)	(602)
Proceeds from long-term borrowings, net of debt issuance costs	3,270)	—)	1,683)	7,229)	987)
Cash dividends paid on preferred stock	(55)	(55)	(28)	—)	—)
Net proceeds from issuance of preferred stock in connection with public offering	—)	—)	975)	—)	—)
Net proceeds from issuance of common stock in connection with public offering	—)	—)	975)	—)	—)
Payments for repurchase of common stock	—)	—)	(535)	—)	—)
Cash used to net share settle employee equity awards	(53)	(50)	(59)	(65)	(56)
Proceeds from issuances of shares of common stock pursuant to employee stock compensation and purchase plans	136)	110)	110)	123)	102)
Cash provided by (used for) financing activities	(548)	(95)	293)	2,973)	1,432)
Effect of foreign exchange rates on cash	(9)	(5)	(2)	10)	(9)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	(1,042)	173)	1,388)	(222)	(188)
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period	2,168)	1,995)	607)	829)	1,017)
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	1,126)	2,168)	1,995)	607)	829)

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 (Loss): The net income fluctuated significantly over the period, peaking at $4700 million in 2019, declining sharply to a loss of $82 million in 2020, and then recovering partially in the following years to $1041 million in 2021 and $698 million in 2022. This volatility suggests impact from extraordinary items or operational challenges during 2020.
Depreciation and Amortization: Depreciation and amortization exhibited a steady increase from $894 million in 2018 to $1136 million in 2022, indicating continual investment in fixed and intangible assets over time.
Stock-Based Compensation Expense: This expense rose consistently from $140 million in 2018 to $220 million in 2022, reflecting perhaps increased employee compensation or more equity incentives granted.
Goodwill and Intangible Asset Impairment Charges: Impairment charges were notably high in 2020 at $533 million, before decreasing to $132 million in 2022. The spike in 2020 indicates significant write-downs of intangible assets, possibly related to business adjustments or underperformance.
Cash Provided by Operating Activities: Operating cash flow improved strongly from $310 million in 2018 to a peak of $1870 million in 2021, before dipping to $1526 million in 2022 but remaining robust overall. This trend indicates improving operational efficiency and cash generation capabilities despite net income volatility.
Investing Activities: Cash used in investing activities showed significant fluctuations, with major expenditures in acquisitions in 2019 ($4382 million) and 2021 ($2259 million). Capital expenditures steadily increased from $316 million in 2018 to $588 million in 2022, signifying ongoing investment in property, plant, equipment, and software.
Financing Activities: Cash flow from financing activities was positive in the early years (2018-2019), peaking at $2973 million in 2019, but shifted negative from 2021 onwards, reaching -$548 million in 2022. This reflects a transition from raising capital to repaying debt or repurchasing stock.
Debt Activity: Long-term borrowings increased significantly in 2019 ($7229 million), likely linked to the large acquisitions noted. Subsequent years saw repayments or extinguishments, especially notable in 2022 with $3184 million in repayment and new borrowings of $3270 million, indicating active debt management.
Working Capital Components: Variations in working capital accounts such as trade accounts receivable, inventories, and accounts payable were irregular, with negative changes in receivables and inventories in 2021 and 2022 suggesting tighter management or lower inventory levels. The increase in accounts payable and accrued expenses in 2021 points to deferred payments but reversed in 2022.
Cash Position: The cash and equivalents balance experienced a substantial increase in 2020, rising to $1995 million, peaking at $2168 million in 2021, but then decreased notably to $1126 million in 2022. The year-over-year reduction in cash in 2022 indicates higher cash utilization, potentially linked to investing and financing activities.
Other Observations: Deferred and prepaid income taxes fluctuated, notably with a large negative amount in 2019, indicating an adjustment or benefit. Contingent consideration expenses varied, with a significant benefit in 2021 followed by a net expense in 2022, suggesting fluctuations in acquisition-related liabilities. The gain/loss on disposal of businesses affected 2021 and 2022 cash flows, with a large gain in 2021 contributing to cash inflows.

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Boston Scientific Corp. (NYSE:BSX)

Cash Flow Statement