Name: Stryker Corp. (NYSE:SYK) | 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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Stryker Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net earnings	1,994)	1,599)	2,083)	3,553)	1,020)
Depreciation	371)	340)	314)	306)	271)
Amortization of intangible assets	619)	472)	464)	417)	371)
Asset impairments	264)	215)	16)	14)	—)
Share-based compensation	171)	142)	127)	119)	113)
Recall charges	103)	17)	192)	23)	173)
Sale of inventory stepped up to fair value at acquisition	266)	48)	67)	16)	22)
Deferred income tax expense (benefit)	(237)	48)	126)	(1,582)	36)
Accounts receivable	(377)	354)	(563)	(60)	(162)
Inventories	(189)	27)	(400)	(385)	(320)
Accounts payable	329)	100)	63)	116)	21)
Accrued expenses and other liabilities	315)	(54)	113)	289)	90)
Recall-related payments	(221)	(17)	(177)	(90)	(526)
Income taxes	(98)	(16)	(105)	(156)	704)
Other, net	(47)	2)	(129)	30)	(254)
Changes in operating assets and liabilities	(288)	396)	(1,198)	(256)	(447)
Adjustments to reconcile net earnings to net cash provided by operating activities	1,269)	1,678)	108)	(943)	539)
Net cash provided by operating activities	3,263)	3,277)	2,191)	2,610)	1,559)
Acquisitions, net of cash acquired	(339)	(4,222)	(802)	(2,451)	(831)
Purchases of marketable securities	(49)	(54)	(74)	(226)	(270)
Proceeds from sales of marketable securities	55)	61)	69)	394)	87)
Purchases of property, plant and equipment	(525)	(487)	(649)	(572)	(598)
Other investing, net	(1)	1)	1)	(2)	(1)
Net cash used in investing activities	(859)	(4,701)	(1,455)	(2,857)	(1,613)
Proceeds and payments on short-term borrowings, net	(7)	(6)	(7)	(1)	(200)
Proceeds from issuance of long-term debt	5)	3,292)	2,642)	3,126)	499)
Payments on long-term debt	(1,151)	(2,297)	(1,342)	(669)	—)
Payments of dividends	(950)	(863)	(778)	(703)	(636)
Repurchases of common stock	—)	—)	(307)	(300)	(230)
Cash paid for taxes from withheld shares	(114)	(110)	(136)	(120)	(95)
Payments to purchase noncontrolling interest	—)	—)	—)	(14)	(99)
Other financing, net	(148)	(27)	(69)	10)	(33)
Net cash provided by (used in) financing activities	(2,365)	(11)	3)	1,329)	(794)
Effect of exchange rate changes on cash and cash equivalents	(38)	41)	(18)	(8)	74)
Change in cash and cash equivalents	1)	(1,394)	721)	1,074)	(774)
Cash and cash equivalents at beginning of year	2,943)	4,337)	3,616)	2,542)	3,316)
Cash and cash equivalents at end of year	2,944)	2,943)	4,337)	3,616)	2,542)

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 financial trajectory from 2017 to 2021 is characterized by a significant expansion in operational cash generation used to fund aggressive inorganic growth and consistent shareholder returns. While net earnings exhibited volatility, net cash provided by operating activities demonstrated a general upward trend, nearly doubling from 1.56 billion US$ in 2017 to 3.26 billion US$ by 2021.

Operating Cash Flow Dynamics: Net cash provided by operating activities grew from 1.56 billion US$ in 2017 to a peak of 3.28 billion US$ in 2020. This growth occurred despite fluctuations in net earnings, which peaked in 2018 at 3.55 billion US$ before stabilizing around 2 billion US$. Non-cash adjustments, specifically depreciation and amortization, showed steady annual increases, reflecting a growing asset base. A notable increase in asset impairments is observed in 2020 and 2021, totaling 215 million US$ and 264 million US$, respectively. Working capital requirements were volatile, with a significant cash outflow in 2019 driven by increases in accounts receivable and inventories, which partially reversed in 2020.
Investment and Acquisition Strategy: Investing activities are dominated by a strategic emphasis on acquisitions. Net cash used for acquisitions peaked sharply in 2020 at 4.22 billion US$, following another substantial investment of 2.45 billion US$ in 2018. Capital expenditures for property, plant, and equipment remained relatively consistent, averaging approximately 550 million US$ per year. The intensity of investing activities reached its zenith in 2020, with total net cash used in investing activities amounting to 4.70 billion US$.
Financing and Capital Structure: The company utilized long-term debt as a primary mechanism to fund its acquisition strategy. Significant proceeds from the issuance of long-term debt were recorded in 2018, 2019, and 2020, with 2020 seeing an inflow of 3.29 billion US$. This was offset by increasing payments on long-term debt, which rose from 669 million US$ in 2018 to a peak of 2.30 billion US$ in 2020. Shareholder returns remained a priority, evidenced by a consistent annual increase in dividend payments, rising from 636 million US$ in 2017 to 950 million US$ in 2021. Share repurchases, which were active between 2017 and 2019, ceased in the final two years of the period.

The overall cash position remained resilient throughout the five-year period. Although the change in cash and cash equivalents fluctuated due to the timing of large acquisitions and debt issuances, the ending cash balance remained stable, closing 2021 at 2.94 billion US$. This indicates a balanced approach to liquidity management where operational cash flows and strategic borrowing effectively covered the costs of expansion and dividend obligations.

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