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.

Kimberly-Clark Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016
Net income	2,396)	2,197)	1,445)	2,319)	2,219)
Depreciation and amortization	796)	917)	882)	724)	705)
Asset impairments	17)	—)	74)	—)	2)
Stock-based compensation	147)	96)	41)	76)	77)
Deferred income taxes	45)	29)	2)	(69)	(15)
Net (gains) losses on asset dispositions	68)	(193)	52)	21)	6)
Equity companies’ earnings (in excess of) less than dividends paid	(30)	(6)	18)	26)	(4)
Accounts receivable	95)	(116)	33)	(44)	(23)
Inventories	(96)	24)	(127)	(33)	230)
Trade accounts payable	239)	(153)	392)	174)	(61)
Accrued expenses	132)	11)	115)	(102)	26)
Accrued income taxes	42)	(6)	64)	(176)	121)
Derivatives	(9)	1)	30)	(47)	43)
Currency and other	(40)	(49)	(118)	80)	(2)
Operating working capital	363)	(288)	389)	(148)	334)
Postretirement benefits	(28)	13)	(25)	2)	(50)
Other	(45)	(29)	92)	(22)	(42)
Cash provided by operations	3,729)	2,736)	2,970)	2,929)	3,232)
Capital spending	(1,217)	(1,209)	(877)	(785)	(771)
Acquisition, net of cash acquired	(1,083)	(4)	—)	—)	—)
Proceeds from dispositions of property	31)	242)	51)	3)	23)
Investments in time deposits	(753)	(568)	(353)	(214)	(221)
Maturities of time deposits	690)	542)	272)	183)	188)
Other	27)	(45)	5)	(38)	49)
Cash used for investing	(2,305)	(1,042)	(902)	(851)	(732)
Cash dividends paid	(1,451)	(1,408)	(1,386)	(1,359)	(1,311)
Change in short-term debt	(561)	303)	(34)	360)	(908)
Debt proceeds	1,845)	706)	507)	937)	1,293)
Debt repayments	(854)	(707)	(407)	(1,481)	(598)
Proceeds from exercise of stock options	217)	228)	62)	121)	107)
Acquisitions of common stock for the treasury	(700)	(800)	(800)	(911)	(739)
Other	(63)	(114)	(57)	(88)	(29)
Cash used for financing	(1,567)	(1,792)	(2,115)	(2,421)	(2,185)
Effect of exchange rate changes on cash and cash equivalents	4)	1)	(30)	36)	(11)
Change in cash and cash equivalents	(139)	(97)	(77)	(307)	304)
Cash and cash equivalents, beginning of year	442)	539)	616)	923)	619)
Cash and cash equivalents, end of year	303)	442)	539)	616)	923)

Based on: 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), 10-K (reporting date: 2016-12-31).

The financial data exhibits a series of fluctuations in net income for the entity, starting at $2,219 million in 2016, peaking at $2,396 million in 2020, with a notable dip to $1,445 million in 2018 before recovery. Depreciation and amortization expenses generally trended upward from 2016 to 2019, reaching $917 million, then decreased to $796 million in 2020. Asset impairments were mostly low except for 2018, with a prominent $74 million recorded.

Stock-based compensation values oscillated over the years, initially steady in 2016-2017 around $76-$77 million, decreasing substantially in 2018 to $41 million, then rising to $147 million by 2020. Deferred income taxes shifted from a negative position (-$15 million in 2016) to positive by 2020 ($45 million), indicating a change in tax deferral dynamics. Gains or losses on asset dispositions varied widely, showing a significant loss of $193 million in 2019 contrasting with gains in other years.

Equity companies’ earnings relative to dividends paid showed volatility, with positive excess earnings in early years (2017-2018) turning negative in later years, reaching -$30 million in 2020. Components of working capital such as accounts receivable, inventories, trade accounts payable, and accrued expenses showed inconsistent patterns, with some years reflecting increases and others decreases, suggesting fluctuating operational liquidity management.

Operating working capital displayed notable volatility, with changes spanning from a negative $288 million in 2019 to a positive $389 million in 2018, highlighting variability in the company's short-term asset and liability management. Postretirement benefit adjustments were relatively minor but inconsistent, oscillating slightly above and below zero.

Cash provided by operations remained robust throughout the period, ranging from $2,736 million to $3,729 million, with the highest cash generation occurring in 2020. Capital expenditures increased progressively from $771 million in 2016 to $1,217 million in 2020, suggesting growing investment in fixed assets.

Notable in investing activities was the significant acquisition cost of $1,083 million in 2020, contrasting with negligible acquisition expenses in earlier years. Proceeds from property dispositions were unusually high in 2019 ($242 million) compared to other years, and investments in time deposits markedly increased in 2020 to $753 million, accompanied by corresponding maturities indicating active cash management.

Overall cash used for investing surged in 2020 to $2,305 million, substantially higher than prior years, driven by acquisition costs and increased time deposit investments. Cash dividends exhibited steady increases annually, reaching $1,451 million by 2020, reflecting consistent shareholder returns.

Financing activities showed dynamic debt management; debt proceeds peaked in 2020 at $1,845 million, offset partially by repayments of $854 million, indicating increased borrowing. Repurchases of common stock for the treasury ranged from $700 million to $911 million, demonstrating sustained share buyback initiatives.

Cash used for financing decreased from $2,421 million in 2017 to $1,567 million in 2020, signifying reduced net cash outflows in this category over time. The net change in cash and cash equivalents was negative for the last four years, culminating in a reduction to $303 million at the end of 2020 from $923 million at the end of 2016, signifying a drawdown in cash reserves despite strong operational cash flows.

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Kimberly-Clark Corp. (NYSE:KMB)

Cash Flow Statement