SEC Filings

10-K
INTUITIVE SURGICAL INC filed this Form 10-K on 02/02/2018
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was primarily driven by higher lease receivable balances resulting from sales-type lease arrangement transactions entered into during the year ended December 31, 2017.
For the year ended December 31, 2016, cash provided by our operating activities of $1,087.0 million exceeded our net income of $735.9 million primarily due certain to non-cash charges as outlined below:
1.
Our net income included non-cash charges including in the form of share-based compensation of $177.6 million; depreciation and loss of disposal of property, plant, and equipment of $73.9 million; investment related non-cash charges of $35.9 million; deferred income tax of $18.7 million; and amortization of intangible assets of $18.2 million.
2.
The non-cash charges outlined above were partly offset by changes in operating assets and liabilities that resulted in $3.0 million of cash used by operating activities during the year ended December 31, 2016. Operating assets and liabilities are primarily comprised of accounts receivable, inventory, prepaid expenses, deferred revenue, and other accrued liabilities. Inventory, including the transfer of equipment from inventory to property, plant and equipment, increased by $46.7 million. Accounts receivable increased $35.9 million primarily driven by higher revenue and timing of collections. Prepaids and other assets increased $28.7 million primarily driven by higher lease receivable balances resulting from sales-type lease arrangement transactions entered into during year ended December 31, 2016. The unfavorable impact of these items on cash provided by operating activities was partly offset by a $53.8 million increase in other liabilities, primarily due to higher income tax payable, a $19.9 million increase in deferred revenue, an $18.7 million increase in accrued compensation and employee benefits, and a $15.9 million increase in accounts payable. Deferred revenue, which includes deferred service revenue that is being recognized as revenue over the service contract period, increased primarily due to the increase in the number of installed systems for which service contracts existed.
For the year ended December 31, 2015, cash provided by our operating activities of $806.2 million exceeded our net income of $588.8 million for two primary reasons:
1.
Our net income included non-cash charges primarily in the form of share-based compensation of $167.9 million, depreciation and loss of disposal of property, plant, and equipment of $65.1 million, amortization of intangible assets of $24.4 million, and investment related non-cash charges of $26.4 million.
2.
The non-cash charges outlined above were partly offset by changes in operating assets and liabilities that resulted in $92.5 million of cash used by operating activities. Operating assets and liabilities are primarily comprised of accounts receivable, inventory, deferred revenue, other accrued liabilities, and prepaid expenses. Accounts receivable increased $79.2 million in 2015 reflecting higher sales in 2015 and timing of sales and collections. Prepaids and other assets increased $10.5 million primarily driven by higher lease receivable balances resulting from sales-type lease arrangements entered into in 2015. Accrued liabilities decreased by $10.5 million mainly due to settlement payments made related to accrued product liability litigation. Other changes in operating assets and liabilities include an inventory increase of $10.7 million, net of equipment transfers from inventory to property, plant and equipment, and a decrease in accounts payable of $11.3 million also resulted in cash used by operating activities. The unfavorable impact of these items on cash provided by operating activities was partly offset by a $21.5 million increase in accrued compensation and employee benefits and an $8.2 million increase of deferred revenue.
Investing Activities
Net cash provided by investing activities for the year ended December 31, 2017, consisted of proceeds from the sales and maturities of investments (net of purchases of investments) of $569.4 million partly offset by purchases of property, plant, and equipment of $190.7 million.
Net cash used in investing activities for the year ended December 31, 2016, consisted of purchases of investments (net of the proceeds from the sales and maturities of investments) of $1.2 billion and purchases of property, plant, and equipment for $53.9 million.
Net cash used in investing activities for the year ended December 31, 2015, consisted of purchases of investments (net of the proceeds from the sales and maturities of investments) of $768.5 million and purchases of property, plant, and equipment for $81.0 million.
We invest predominantly in high quality, fixed income securities. Our investment portfolio may at any time contain investments in U.S. treasury and U.S. government agency securities, taxable and tax exempt municipal notes, corporate notes and bonds, commercial paper, non-U.S. government agency securities, cash deposits, and money market funds.
Financing Activities
Net cash used in financing activities during 2017 primarily consisted of $2,274.0 million related to an accelerated share buyback program executed and settled during 2017 that is further described in “Note 8. Stockholders' Equity” in the Notes to the Consolidated Financial Statements included in Item 8, and taxes paid on behalf of employees related to net share settlement of

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