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.

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).

Net Income: Net income exhibited a generally increasing trend over the analyzed period, with a substantial rise from $583.6 million in 2017 to $1.503 billion in 2021. Despite a dip in 2020 to $823.4 million, the overall trajectory indicates strong profitability growth by 2021.
Depreciation and Amortization: Depreciation and amortization expenses increased steadily from $81.9 million in 2017 to $134.8 million in 2021, suggesting ongoing capital investments or asset base expansion.
Non-cash Operating Lease Cost: Reported from 2019 onwards, non-cash operating lease costs showed modest increases, rising from $25.3 million in 2019 to $28.5 million in 2021, reflecting lease obligations likely recognized pursuant to updated accounting standards.
Stock-based Compensation: There was a consistent increase in stock-based compensation expenses, rising from $61.6 million in 2017 to $109.3 million in 2021, possibly reflecting expanded employee incentives or share-based remuneration programs.
Inventory Write-offs and Impairment Charges: Inventory write-offs appeared only in 2019 at $73.1 million. Impairment charges declined after peaking at $118.8 million in 2018 down to zero reported in 2020 and 2021, indicating reduced asset impairments in recent years.
Deferred Income Taxes: Deferred income taxes fluctuated, with negative values in 2018, 2020, and 2021, suggesting timing differences in recognition of tax expenses or benefits over periods.
Change in Fair Value of Contingent Consideration Liabilities: This item showed volatility, shifting between negative and positive values, notably a significant negative change of $124.1 million in 2021, indicating revaluation of contingent liabilities impacting earnings.
Accounts and Other Receivables, Net: The receivables balance trends were variable, with negative adjustments in 2017, 2018, 2019, and 2021, but a positive adjustment in 2020, implying fluctuations in collections or credit terms.
Inventories: Inventory changes were predominantly negative through 2020, peaking at -$124 million in 2017, but turning positive in 2021 to $19 million, possibly due to shifts in inventory management or demand patterns.
Accounts Payable and Accrued Liabilities: This current liability fluctuated considerably, with a sharp negative movement in 2020 (-$84.5 million) contrasted by a strong positive change in 2021 ($195.2 million), suggesting timing in payments or accrual adjustments.
Litigation Settlement Accrual: Substantial volatility was observed; from no accrual in 2017 to a $180 million accrual in 2018, reversal in 2019, a large accrual of $270.5 million in 2020, and reversal again in 2021. This indicates significant legal-related provisions impacting liabilities intermittently.
Income Taxes: Income tax payments fluctuated with notable negative amounts in 2018 and 2020, likely due to tax refunds or deferred tax assets, while positive income tax payments resumed in 2021.
Net Cash Provided by Operating Activities: Operating cash flow remained robust throughout the period, peaking at $1.732 billion in 2021, with slight variations but overall positive cash generation supporting company operations.
Capital Expenditures: Capital expenditures increased significantly in 2020 to $407 million before slightly receding in 2021 to $326 million, reflecting substantial investment activities, possibly in property, plant, or equipment.
Investing Activities: Net cash used in investing activities demonstrated large fluctuations, with significant negative cash flow reaching -$1.722 billion in 2021. This was driven by aggressive purchases of available-for-sale investments and other investing outflows, indicating a strategic focus on long-term asset accumulation despite short-term liquidity impacts.
Financing Activities: Net cash used in financing activities was consistently negative, reflecting payments on debt, purchases of treasury stock, and other outflows. The smallest usage was in 2021 at -$356 million, following a peak of -$1.101 billion in 2018, suggesting active capital structure management including stock repurchases.
Cash and Cash Equivalents: Cash balances decreased significantly in 2021 by $332.8 million, ending at $867.4 million, after peaking in 2020 at $1.200 billion. This reduction aligns with increased investing activities and consistent use of cash in financing activities, but overall cash remains at a substantial level.
Overall Financial Position: The overall financial data show solid profitability growth and strong operating cash flows, supporting considerable investments and active financing strategies. The company’s liquidity experienced fluctuations but remained adequate. Variability in provisions and non-cash adjustments reflects episodic impacts from legal and acquisition-related activities.

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Edwards Lifesciences Corp. (NYSE:EW)

Cash Flow Statement