Name: Hubbell Inc. (NYSE:HUBB) | 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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Hubbell Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income from continuing operations	516,800)	371,100)	356,000)	407,400)	366,100)
Depreciation and amortization	148,500)	149,100)	157,600)	151,000)	148,400)
Deferred income taxes	(27,800)	9,200)	3,300)	6,100)	49,000)
Stock-based compensation	24,500)	17,500)	23,900)	16,400)	24,200)
Provision for bad debt expense	7,400)	1,300)	6,700)	1,700)	—)
(Gain) loss on disposition of business	—)	6,900)	—)	(21,700)	—)
Loss on extinguishment of debt	—)	16,800)	—)	—)	—)
Pension charge	7,000)	—)	7,600)	8,500)	—)
(Gain) loss on sale of assets	3,500)	(4,700)	300)	(400)	(4,000)
(Increase) decrease in accounts receivable	(74,200)	(124,800)	55,500)	44,500)	(75,400)
(Increase) decrease in inventories	(66,500)	(138,900)	50,700)	12,200)	34,200)
Increase (decrease) in accounts payable	(15,300)	195,100)	22,600)	(41,200)	21,500)
Increase (decrease) in current liabilities	108,300)	27,600)	(39,900)	5,000)	(5,900)
Changes in other assets and liabilities, net	13,200)	(14,900)	19,200)	900)	(20,400)
Changes in assets and liabilities, net of acquisitions	(34,500)	(55,900)	108,100)	21,400)	(46,000)
Contributions to qualified defined benefit pension plans	(12,500)	(100)	(23,200)	(10,400)	(27,900)
Other, net	3,300)	2,500)	7,700)	11,600)	7,300)
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities, net of acquisitions	119,400)	142,600)	292,000)	184,200)	151,000)
Net cash provided by operating activities	636,200)	513,700)	648,000)	591,600)	517,100)
Capital expenditures	(129,300)	(90,200)	(88,400)	(93,900)	(96,200)
Acquisitions, net of cash acquired	(177,100)	100)	(239,600)	(70,800)	(1,118,000)
Proceeds from disposal of business, net of cash	332,800)	8,500)	—)	33,400)	—)
Purchases of available-for-sale investments	(33,700)	(11,400)	(35,100)	(14,100)	(16,600)
Proceeds from sales of available-for-sale investments	23,000)	11,500)	28,900)	12,500)	20,500)
Other, net	2,400)	9,400)	5,400)	4,000)	8,900)
Net cash (used in) provided by investing activities	18,100)	(72,100)	(328,800)	(128,900)	(1,201,400)
Issuance of long-term debt	—)	298,700)	225,000)	—)	947,500)
Payment of long-term debt	—)	(300,000)	(331,300)	(225,000)	(168,800)
Issuance of short-term debt	—)	8,100)	125,500)	700)	800)
Payment of short-term debt	(4,800)	(151,600)	(3,600)	(800)	(38,000)
Payment of dividends	(229,600)	(216,900)	(201,400)	(186,600)	(172,300)
Make whole payment for retirement of long-term debt	—)	(16,000)	—)	—)	—)
Debt issuance cost	—)	(4,500)	—)	—)	(7,600)
Acquisition of common shares	(182,000)	(11,200)	(41,300)	(35,000)	(40,000)
Other	(20,700)	(39,600)	(17,100)	(24,300)	(15,100)
Net cash provided by (used in) financing activities	(437,100)	(433,000)	(244,200)	(471,000)	506,500)
Cash provided by (used in) operating activities	(53,000)	30,100)	—)	—)	—)
Cash used in investing activities	(1,700)	(5,700)	—)	—)	—)
Cash provided by (used in) discontinued operations	(54,700)	24,400)	—)	—)	—)
Effect of foreign currency exchange rate changes on cash and cash equivalents	(8,800)	(3,000)	2,600)	1,300)	(8,200)
Increase (decrease) in cash, cash equivalents, and restricted cash	153,700)	30,000)	77,600)	(7,000)	(186,000)
Cash and cash equivalents, beginning of year	286,200)	258,600)	182,000)	189,000)	375,000)
Cash and cash equivalents within assets held for sale, beginning of year	700)	1,000)	—)	—)	—)
Restricted cash, included in other assets, beginning of year	2,700)	—)	—)	—)	—)
Restricted cash, included in Other assets	(2,800)	(2,700)	—)	—)	—)
Cash and cash equivalents within assets held for sale, end of year	—)	(700)	—)	—)	—)
Cash and cash equivalents, end of year	440,500)	286,200)	259,600)	182,000)	189,000)

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).

The analysis of the cash flow trends from 2018 to 2022 reveals a transition from a period of aggressive expansion and debt-funded acquisition toward a phase of operational optimization and increased shareholder returns.

Operating Activities and Earnings Quality: Net income from continuing operations exhibited a general upward trajectory, rising from 366.1 million in 2018 to 516.8 million in 2022, representing a growth of approximately 41%. Net cash provided by operating activities followed a similar positive trend, growing from 517.1 million in 2018 to 636.2 million in 2022. The consistency in depreciation and amortization, remaining stable between 148 million and 157 million throughout the period, indicates a steady base of capital assets. Working capital management showed significant volatility, particularly in 2021, where a substantial increase in accounts payable of 195.1 million helped offset declines in accounts receivable and inventories.
Investment Strategy and Capital Allocation: Investing activities were characterized by a massive capital outlay in 2018, primarily driven by acquisitions totaling 1.118 billion. Following this peak, acquisition spending moderated significantly. Capital expenditures remained relatively flat around 90 million until 2022, when a notable increase to 129.3 million was observed, signaling a ramp-up in infrastructure or capacity investment. A strategic shift toward divestiture is evident in 2022, with proceeds from the disposal of business totaling 332.8 million, which transitioned the net cash from investing activities from a historical deficit to a positive 18.1 million.
Financing and Capital Structure: The company utilized significant debt issuance in 2018, with 947.5 million in long-term debt acquired to fund acquisitions. Between 2019 and 2021, a consistent pattern of debt repayment was observed, with annual payments of long-term debt averaging approximately 252 million. Shareholder returns increased steadily over the five-year period; dividend payments grew annually from 172.3 million in 2018 to 229.6 million in 2022. Furthermore, the acquisition of common shares accelerated sharply in 2022, reaching 182 million compared to previous years where spending typically ranged between 11 million and 41 million.
Liquidity and Cash Position: The overall liquidity position strengthened significantly by the end of the analyzed period. Cash and cash equivalents grew from 189 million at the end of 2018 to 440.5 million by the end of 2022. This increase was primarily driven by the combination of strong operating cash flows and the significant cash influx from business disposals in 2022, which offset the heightened spending on share repurchases and capital expenditures.

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