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.

Ecolab Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income (loss) including noncontrolling interest	1,144,000)	(1,185,500)	1,576,200)	1,440,300)	1,522,400)
Net loss from discontinued operations including noncontrolling interest	—)	2,170,300)	—)	—)	—)
Net income from continuing operations including noncontrolling interest	1,144,000)	984,800)	1,576,200)	1,440,300)	1,522,400)
Depreciation	604,400)	594,300)	654,100)	621,300)	585,700)
Amortization	238,700)	218,400)	319,200)	317,000)	307,600)
Deferred income taxes	(1,100)	(45,800)	(37,600)	85,100)	(354,500)
Share-based compensation expense	89,500)	82,100)	91,100)	94,400)	90,500)
Pension and postretirement plan contributions	(60,200)	(70,700)	(186,000)	(60,000)	(144,100)
Pension and postretirement plan expense, net	42,400)	42,000)	28,100)	31,900)	36,900)
Restructuring charges, net of cash paid	(41,700)	7,800)	35,200)	43,500)	5,200)
Debt refinancing	29,400)	77,100)	—)	—)	—)
Gain on sale of businesses	—)	—)	—)	—)	(50,600)
Asset charges and write-downs	—)	—)	—)	—)	15,100)
Other, net	15,900)	61,000)	19,800)	24,000)	37,400)
Accounts receivable	(178,200)	155,600)	(137,200)	(164,100)	(91,800)
Inventories	(73,000)	(179,500)	41,000)	(141,100)	(85,500)
Other assets	(92,900)	42,300)	(81,500)	(80,700)	(48,900)
Accounts payable	200,400)	55,900)	22,300)	113,500)	121,100)
Other liabilities	144,300)	(283,500)	76,000)	(47,400)	144,800)
Changes in operating assets and liabilities, net of effect of acquisitions	600)	(209,200)	(79,400)	(319,800)	39,700)
Adjustments to reconcile net income to cash provided by operating activities	917,900)	757,000)	844,500)	837,400)	568,900)
Cash provided by operating activities	2,061,900)	1,741,800)	2,420,700)	2,277,700)	2,091,300)
Capital expenditures	(643,000)	(489,000)	(800,600)	(847,100)	(868,600)
Property and other assets sold	12,200)	5,300)	10,900)	30,000)	10,700)
Acquisitions and investments in affiliates, net of cash acquired	(3,923,700)	(487,000)	(391,400)	(229,800)	(989,200)
Divestiture of businesses	—)	116,200)	6,800)	9,200)	118,800)
Restricted cash activity	—)	—)	—)	—)	53,800)
Settlement of net investment hedges	—)	—)	—)	14,100)	2,100)
Other, net	(25,200)	(3,200)	(24,800)	(6,400)	(800)
Cash used for investing activities	(4,579,700)	(857,700)	(1,199,100)	(1,030,000)	(1,673,200)
Net issuances (repayments) of commercial paper and notes payable	393,600)	(65,500)	(252,000)	341,800)	(43,700)
Long-term debt borrowings	2,775,000)	1,855,900)	—)	—)	1,309,400)
Long-term debt repayments	(1,017,900)	(1,570,000)	(400,600)	(551,600)	(799,000)
Reacquired shares	(106,600)	(146,200)	(353,700)	(562,400)	(600,300)
Dividends paid	(566,400)	(560,800)	(554,900)	(496,500)	(448,700)
Exercise of employee stock options	143,500)	241,500)	186,800)	114,500)	83,800)
Debt refinancing	(29,400)	(77,100)	—)	—)	—)
Acquisition related liabilities and contingent consideration	—)	—)	(1,500)	(10,100)	(8,500)
Other, net	11,400)	(18,000)	26,300)	(8,400)	(15,700)
Cash provided by (used for) financing activities	1,603,200)	(340,200)	(1,349,600)	(1,172,700)	(522,700)
Cash provided by operating activities, discontinued operations	—)	118,400)	—)	—)	—)
Cash provided by investing activities, discontinued operations	—)	443,200)	—)	—)	—)
Cash used for financing activities, discontinued operations	—)	(1,600)	—)	—)	—)
Cash provided by discontinued operations	—)	560,000)	—)	—)	—)
Effect of exchange rate changes on cash and cash equivalents	14,300)	(30,100)	20,400)	7,600)	(11,400)
Increase (decrease) in cash and cash equivalents	(900,300)	1,073,800)	(107,600)	82,600)	(116,000)
Cash and cash equivalents, beginning of period	1,260,200)	186,400)	294,000)	211,400)	327,400)
Cash and cash equivalents, end of period	359,900)	1,260,200)	186,400)	294,000)	211,400)

Based on: 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), 10-K (reporting date: 2017-12-31).

The cash flow profile indicates a company with consistent operational cash generation that has recently shifted toward a strategy of aggressive inorganic growth. While operating cash flows remained resilient through most of the period, a significant transition occurred in 2021 characterized by a massive increase in investment outlays funded by a corresponding increase in long-term debt.

Operating Cash Flow Trends: Cash provided by operating activities demonstrated stability from 2017 to 2019, peaking at 2.42 billion US dollars in 2019. A contraction occurred in 2020, with cash flow dropping to 1.74 billion US dollars, coinciding with a reported net loss of 1.19 billion US dollars. However, this net loss was heavily influenced by 2.17 billion US dollars from discontinued operations, as net income from continuing operations remained positive at 984.8 million US dollars. By 2021, operating cash flow recovered to 2.06 billion US dollars, supported by strong adjustments for depreciation and amortization, which combined for approximately 843 million US dollars that year.
Investment and Capital Expenditure Patterns: Capital expenditures remained relatively consistent between 2017 and 2019, averaging approximately 839 million US dollars annually, before decreasing to 489 million US dollars in 2020. A pivotal shift occurred in 2021, where cash used for investing activities surged to 4.58 billion US dollars. This spike was driven almost exclusively by acquisitions and investments in affiliates, which totaled 3.92 billion US dollars, signaling a strategic pivot toward significant business expansion.
Financing and Capital Allocation: Financing activities shifted from a net outflow position (2017–2020) to a net inflow of 1.60 billion US dollars in 2021. This transition was primarily fueled by 2.78 billion US dollars in long-term debt borrowings, which served to offset the heavy acquisition spending. Capital return to shareholders remained a priority, with dividends increasing steadily from 448.7 million US dollars in 2017 to 566.4 million US dollars in 2021. Conversely, the scale of share repurchases declined sharply, falling from 600.3 million US dollars in 2017 to 106.6 million US dollars in 2021, suggesting a reallocation of capital from buybacks toward growth investments.
Liquidity and Net Cash Position: The ending cash balance showed significant volatility. A notable increase to 1.26 billion US dollars in 2020 was bolstered by 560 million US dollars provided by discontinued operations. This liquidity cushion was largely utilized in 2021 to fund the aforementioned acquisition strategy, resulting in a year-end cash balance of 359.9 million US dollars.

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Ecolab Inc. (NYSE:ECL)

Cash Flow Statement