Name: Edwards Lifesciences Corp. (NYSE:EW) | 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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Edwards Lifesciences Corp., 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	1,503,100)	823,400)	1,046,900)	722,200)	583,600)
Depreciation and amortization	134,800)	107,200)	89,300)	77,400)	81,900)
Non-cash operating lease cost	28,500)	28,200)	25,300)	—)	—)
Stock-based compensation	109,300)	92,600)	81,300)	71,000)	61,600)
Inventory write off	—)	—)	73,100)	—)	—)
Impairment charges	—)	—)	40,600)	118,800)	31,000)
Change in fair value of contingent consideration liabilities, net	(124,100)	13,600)	(6,100)	(5,700)	(9,900)
Deferred income taxes	(41,400)	(49,400)	12,100)	(27,300)	17,800)
Purchased in-process research and development	—)	—)	24,000)	—)	6,700)
Other	(23,400)	(3,500)	(2,800)	13,000)	(6,200)
Accounts and other receivables, net	(91,100)	41,900)	(88,000)	(28,700)	(3,900)
Inventories	19,000)	(120,600)	(105,400)	(65,700)	(124,000)
Prepaid expenses and other current assets	7,900)	(28,500)	(6,800)	15,700)	(9,900)
Accounts payable and accrued liabilities	195,200)	(84,500)	116,500)	12,500)	85,200)
Litigation settlement accrual	(29,200)	270,500)	(180,000)	180,000)	—)
Income taxes	62,000)	(52,900)	43,200)	(157,800)	278,400)
Other	(18,500)	16,300)	16,200)	1,400)	8,400)
Changes in operating assets and liabilities	145,300)	42,200)	(204,300)	(42,600)	234,200)
Adjustments to reconcile net income to cash provided by operating activities	229,000)	230,900)	132,500)	204,600)	417,100)
Net cash provided by operating activities	1,732,100)	1,054,300)	1,179,400)	926,800)	1,000,700)
Capital expenditures	(325,800)	(407,000)	(254,400)	(238,700)	(168,100)
Deposit of cash in escrow	—)	—)	—)	—)	(25,000)
Purchases of held-to-maturity investments	(250,000)	(162,000)	(130,200)	(210,000)	(804,900)
Proceeds from sales and maturities of held-to-maturity investments	138,000)	212,200)	50,000)	578,100)	654,700)
Purchases of available-for-sale investments	(1,629,300)	(689,700)	(437,900)	(249,300)	(529,800)
Proceeds from sales and maturities of available-for-sale investments	391,200)	564,800)	359,900)	223,200)	448,700)
Acquisitions	—)	—)	(100,200)	—)	(192,900)
Payment for acquisition option	(13,100)	(10,000)	(35,000)	—)	—)
Issuances of notes receivable	(5,100)	(27,000)	(12,900)	(600)	—)
Collections of notes receivable	20,000)	—)	—)	—)	—)
Investments in intangible assets and in-process research and development	(4,000)	(300)	(24,000)	(3,000)	(7,400)
Other	(44,400)	(12,100)	(11,100)	(23,000)	(22,500)
Net cash (used in) provided by investing activities	(1,722,500)	(531,100)	(595,800)	76,700)	(647,200)
Proceeds from issuance of debt	5,200)	16,200)	18,900)	688,000)	994,700)
Payments on debt and finance lease obligations	(7,000)	(17,000)	(28,900)	(1,125,300)	(818,400)
Purchases of treasury stock	(512,800)	(625,400)	(263,300)	(795,500)	(763,300)
Proceeds from stock plans	158,600)	140,500)	160,500)	147,000)	113,800)
Payment of contingent consideration	—)	—)	—)	(15,100)	—)
Other	(300)	(1,200)	(2,800)	(300)	—)
Net cash used in financing activities	(356,300)	(486,900)	(115,600)	(1,101,200)	(473,200)
Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash	13,900)	(20,500)	(3,000)	(6,500)	7,900)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(332,800)	15,800)	465,000)	(104,200)	(111,800)
Cash, cash equivalents, and restricted cash at beginning of year	1,200,200)	1,184,400)	714,100)	818,300)	930,100)
Cash, cash equivalents, and restricted cash at end of year	867,400)	1,200,200)	1,179,100)	714,100)	818,300)

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).

Operating cash flow demonstrates a strong upward trajectory, growing from US$ 1.00 billion in 2017 to US$ 1.73 billion in 2021. This growth is underpinned by a generally increasing net income, which reached its peak in 2021 at US$ 1.50 billion. The consistency of cash provided by operating activities relative to net income suggests high earnings quality and a sustainable operational cash generation model.

Operating Cash Flow Dynamics: Net income experienced a notable surge between 2020 and 2021, coinciding with an increase in non-cash adjustments. Depreciation and amortization showed a steady annual climb, rising from US$ 81.9 million in 2017 to US$ 134.8 million in 2021. Similarly, stock-based compensation expenses trended upward throughout the five-year period, increasing from US$ 61.6 million to US$ 109.3 million, reflecting a growing use of equity-based remuneration.
Investing Activities and Capital Allocation: Capital expenditures exhibited a significant growth trend, increasing from US$ 168.1 million in 2017 to a peak of US$ 407.0 million in 2020, before moderating to US$ 325.8 million in 2021. The investing section is characterized by high volatility in securities management; specifically, 2021 saw a substantial increase in the purchase of available-for-sale investments totaling US$ 1.63 billion, which contributed to a net cash outflow from investing activities of US$ 1.72 billion for that year.
Financing Activities and Capital Structure: A consistent strategy of shareholder returns through treasury stock purchases is evident, with annual outflows ranging from a low of US$ 263.3 million in 2019 to a high of US$ 795.5 million in 2018. The company's reliance on debt issuance transitioned from a period of high activity in 2017 and 2018—with proceeds of US$ 994.7 million and US$ 688.0 million, respectively—to a minimal issuance profile between 2019 and 2021.
Liquidity and Net Cash Position: The ending balance of cash, cash equivalents, and restricted cash fluctuated over the period, peaking at US$ 1.20 billion in 2020 before declining to US$ 867.4 million in 2021. This reduction in year-end liquidity is primarily attributable to the aggressive expansion of the investment portfolio and the continued execution of share buyback programs during the final fiscal year.

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