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q_an001
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What does Discover’s Provision Coverage Ratio for 2023 indicate about its approach to managing bad debts?
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The PCR for Discover for 2023 of approximately 401.21% indicates that Discover has set aside provisions that are more than four times the amount of its NPAs. A higher PCR suggests strong risk management as it shows that the company is well-prepared to cover potential losses from its bad loans. This level of coverage provides confidence that the company can absorb credit losses, reflecting financial stability and conservative provisioning practices.
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Analysis
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65, 67
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0001393612-24-000010
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 65: The following tables provide changes in our allowance for credit losses (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------|:-------------------------------------|:------|:---------------------|:------|:---------------|:----|:------------|:------------|:----|:--------|:---|:---|:------|
| 1 | | For the Year Ended December 31, 2023 | | | | | | | | | | | | |
| 2 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 3 | Balance at December 31, 2022 | $ | 5,883 | | | $ | 839 | | $ | 595 | $ | 57 | $ | 7,374 |
| 4 | Cumulative effect of ASU No. 2022-02 adoption(1) | (66) | | | - | | | (2) | | - | (68) | | | |
| 5 | Balance at January 1, 2023 | 5,817 | | | 839 | | | 593 | | 57 | 7,306 | | | |
| 6 | Additions | | | | | | | | | | | | | |
| 7 | Provision for credit losses(2) | 5,476 | | | 152 | | | 363 | | 28 | 6,019 | | | |
| 8 | Deductions | | | | | | | | | | | | | |
| 9 | Charge-offs | (4,481) | | | (155) | | | (290) | | (1) | (4,927) | | | |
| 10 | Recoveries | 807 | | | 22 | | | 56 | | - | 885 | | | |
| 11 | Net charge-offs | (3,674) | | | (133) | | | (234) | | (1) | (4,042) | | | |
| 13 | Balance at December 31, 2023 | $ | 7,619 | | | $ | 858 | | $ | 722 | $ | 84 | $ | 9,283 |
| 15 | | For the Year Ended December 31, 2022 | | | | | | | | | | | | |
| 16 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 17 | Balance at December 31, 2021 | $ | 5,273 | | | $ | 843 | | $ | 662 | $ | 44 | $ | 6,822 |
| 18 | Additions | | | | | | | | | | | | | |
| 19 | Provision for credit losses(2) | 2,233 | | | 99 | | | 24 | | 13 | 2,369 | | | |
| 20 | Deductions | | | | | | | | | | | | | |
| 21 | Charge-offs | (2,417) | | | (126) | | | (159) | | - | (2,702) | | | |
| 22 | Recoveries | 794 | | | 23 | | | 68 | | - | 885 | | | |
| 23 | Net charge-offs | (1,623) | | | (103) | | | (91) | | - | (1,817) | | | |
| 25 | Balance at December 31, 2022 | $ | 5,883 | | | $ | 839 | | $ | 595 | $ | 57 | $ | 7,374 |
| 27 | | For the Year Ended December 31, 2021 | | | | | | | | | | | | |
| 28 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 29 | Balance at December 31, 2020 | $ | 6,491 | | | $ | 840 | | $ | 857 | $ | 38 | $ | 8,226 |
| 32 | Additions | | | | | | | | | | | | | |
| 33 | Provision for credit losses(2) | 229 | | | 67 | | | (75) | | 6 | 227 | | | |
| 34 | Deductions | | | | | | | | | | | | | |
| 35 | Charge-offs | (2,255) | | | (89) | | | (190) | | - | (2,534) | | | |
| 36 | Recoveries | 808 | | | 25 | | | 70 | | - | 903 | | | |
| 37 | Net charge-offs | (1,447) | | | (64) | | | (120) | | - | (1,631) | | | |
| 39 | Balance at December 31, 2021 | $ | 5,273 | | | $ | 843 | | $ | 662 | $ | 44 | $ | 6,822 |
(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.
(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
-65-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 67:
Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):| | | | | | | | | | | | |
|---:|:---------------------------------|:-------------|:------|:-----|:-----|:---|:---|:---|:------|:-----|:---|
| 1 | | December 31, | | | | | | | | | |
| 2 | | 2023 | | 2022 | | | | | | | |
| 3 | | $ | | % | $ | | % | | | | |
| 4 | Loans 30 or more days delinquent | | | | | | | | | | |
| 5 | Credit card loans | $ | 3,955 | | 3.87 | % | | $ | 2,278 | 2.53 | % |
| 6 | Private student loans | $ | 271 | | 2.62 | % | | $ | 212 | 2.05 | % |
| 7 | Personal loans | $ | 143 | | 1.45 | % | | $ | 63 | 0.80 | % |
| 9 | Total loan receivables | $ | 4,427 | | 3.45 | % | | $ | 2,578 | 2.30 | % |
| 11 | Loans 90 or more days delinquent | | | | | | | | | | |
| 12 | Credit card loans | $ | 1,917 | | 1.87 | % | | $ | 1,028 | 1.14 | % |
| 13 | Private student loans | $ | 70 | | 0.67 | % | | $ | 45 | 0.43 | % |
| 14 | Personal loans | $ | 39 | | 0.40 | % | | $ | 16 | 0.21 | % |
| 16 | Total loan receivables | $ | 2,045 | | 1.59 | % | | $ | 1,101 | 0.98 | % |
| 18 | Loans not accruing interest | $ | 269 | | 0.21 | % | | $ | 214 | 0.19 | % |
The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:----------------------|:-------------------|:-------|:-----------------------------------|:------|:------------------------------------------|:-------|:------------------------|:------|:-------|:-------|:------|:---|:--------|
| 1 | At December 31, 2023 | Due OneYear orLess | | Due AfterOne YearThroughFive Years | | Due AfterFive Years Through Fifteen Years | | Due After Fifteen Years | Total | | | | | |
| 2 | Credit card loans | $ | 32,250 | | | $ | 54,628 | | $ | 15,032 | $ | 349 | $ | 102,259 |
| 3 | Private student loans | 364 | | | 2,083 | | | 6,296 | | 1,609 | 10,352 | | | |
| 4 | Personal loans | 2,653 | | | 6,653 | | | 546 | | - | 9,852 | | | |
| 5 | Other loans | 161 | | | 724 | | | 2,102 | | 2,959 | 5,946 | | | |
| 6 | Total loan portfolio | $ | 35,428 | | | $ | 64,088 | | $ | 23,976 | $ | 4,917 | $ | 128,409 |
(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
-67-
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The following tables provide changes in our allowance for credit losses (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------|:-------------------------------------|:------|:---------------------|:------|:---------------|:----|:------------|:------------|:----|:--------|:---|:---|:------|
| 1 | | For the Year Ended December 31, 2023 | | | | | | | | | | | | |
| 2 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 3 | Balance at December 31, 2022 | $ | 5,883 | | | $ | 839 | | $ | 595 | $ | 57 | $ | 7,374 |
| 4 | Cumulative effect of ASU No. 2022-02 adoption(1) | (66) | | | - | | | (2) | | - | (68) | | | |
| 5 | Balance at January 1, 2023 | 5,817 | | | 839 | | | 593 | | 57 | 7,306 | | | |
| 6 | Additions | | | | | | | | | | | | | |
| 7 | Provision for credit losses(2) | 5,476 | | | 152 | | | 363 | | 28 | 6,019 | | | |
| 8 | Deductions | | | | | | | | | | | | | |
| 9 | Charge-offs | (4,481) | | | (155) | | | (290) | | (1) | (4,927) | | | |
| 10 | Recoveries | 807 | | | 22 | | | 56 | | - | 885 | | | |
| 11 | Net charge-offs | (3,674) | | | (133) | | | (234) | | (1) | (4,042) | | | |
| 13 | Balance at December 31, 2023 | $ | 7,619 | | | $ | 858 | | $ | 722 | $ | 84 | $ | 9,283 |
| 15 | | For the Year Ended December 31, 2022 | | | | | | | | | | | | |
| 16 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 17 | Balance at December 31, 2021 | $ | 5,273 | | | $ | 843 | | $ | 662 | $ | 44 | $ | 6,822 |
| 18 | Additions | | | | | | | | | | | | | |
| 19 | Provision for credit losses(2) | 2,233 | | | 99 | | | 24 | | 13 | 2,369 | | | |
| 20 | Deductions | | | | | | | | | | | | | |
| 21 | Charge-offs | (2,417) | | | (126) | | | (159) | | - | (2,702) | | | |
| 22 | Recoveries | 794 | | | 23 | | | 68 | | - | 885 | | | |
| 23 | Net charge-offs | (1,623) | | | (103) | | | (91) | | - | (1,817) | | | |
| 25 | Balance at December 31, 2022 | $ | 5,883 | | | $ | 839 | | $ | 595 | $ | 57 | $ | 7,374 |
| 27 | | For the Year Ended December 31, 2021 | | | | | | | | | | | | |
| 28 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 29 | Balance at December 31, 2020 | $ | 6,491 | | | $ | 840 | | $ | 857 | $ | 38 | $ | 8,226 |
| 32 | Additions | | | | | | | | | | | | | |
| 33 | Provision for credit losses(2) | 229 | | | 67 | | | (75) | | 6 | 227 | | | |
| 34 | Deductions | | | | | | | | | | | | | |
| 35 | Charge-offs | (2,255) | | | (89) | | | (190) | | - | (2,534) | | | |
| 36 | Recoveries | 808 | | | 25 | | | 70 | | - | 903 | | | |
| 37 | Net charge-offs | (1,447) | | | (64) | | | (120) | | - | (1,631) | | | |
| 39 | Balance at December 31, 2021 | $ | 5,273 | | | $ | 843 | | $ | 662 | $ | 44 | $ | 6,822 |
(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.
(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
-65-
,
Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):| | | | | | | | | | | | |
|---:|:---------------------------------|:-------------|:------|:-----|:-----|:---|:---|:---|:------|:-----|:---|
| 1 | | December 31, | | | | | | | | | |
| 2 | | 2023 | | 2022 | | | | | | | |
| 3 | | $ | | % | $ | | % | | | | |
| 4 | Loans 30 or more days delinquent | | | | | | | | | | |
| 5 | Credit card loans | $ | 3,955 | | 3.87 | % | | $ | 2,278 | 2.53 | % |
| 6 | Private student loans | $ | 271 | | 2.62 | % | | $ | 212 | 2.05 | % |
| 7 | Personal loans | $ | 143 | | 1.45 | % | | $ | 63 | 0.80 | % |
| 9 | Total loan receivables | $ | 4,427 | | 3.45 | % | | $ | 2,578 | 2.30 | % |
| 11 | Loans 90 or more days delinquent | | | | | | | | | | |
| 12 | Credit card loans | $ | 1,917 | | 1.87 | % | | $ | 1,028 | 1.14 | % |
| 13 | Private student loans | $ | 70 | | 0.67 | % | | $ | 45 | 0.43 | % |
| 14 | Personal loans | $ | 39 | | 0.40 | % | | $ | 16 | 0.21 | % |
| 16 | Total loan receivables | $ | 2,045 | | 1.59 | % | | $ | 1,101 | 0.98 | % |
| 18 | Loans not accruing interest | $ | 269 | | 0.21 | % | | $ | 214 | 0.19 | % |
The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:----------------------|:-------------------|:-------|:-----------------------------------|:------|:------------------------------------------|:-------|:------------------------|:------|:-------|:-------|:------|:---|:--------|
| 1 | At December 31, 2023 | Due OneYear orLess | | Due AfterOne YearThroughFive Years | | Due AfterFive Years Through Fifteen Years | | Due After Fifteen Years | Total | | | | | |
| 2 | Credit card loans | $ | 32,250 | | | $ | 54,628 | | $ | 15,032 | $ | 349 | $ | 102,259 |
| 3 | Private student loans | 364 | | | 2,083 | | | 6,296 | | 1,609 | 10,352 | | | |
| 4 | Personal loans | 2,653 | | | 6,653 | | | 546 | | - | 9,852 | | | |
| 5 | Other loans | 161 | | | 724 | | | 2,102 | | 2,959 | 5,946 | | | |
| 6 | Total loan portfolio | $ | 35,428 | | | $ | 64,088 | | $ | 23,976 | $ | 4,917 | $ | 128,409 |
(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
-67-
|
Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 65: The following tables provide changes in our allowance for credit losses (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2023</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td>$</td><td>5,883 </td><td></td><td colspan="3"></td><td>$</td><td>839 </td><td></td><td colspan="3"></td><td>$</td><td>595 </td><td></td><td colspan="3"></td><td>$</td><td>57 </td><td></td><td colspan="3"></td><td>$</td><td>7,374 </td><td></td></tr><tr><td colspan="3">Cumulative effect of ASU No. 2022-02 adoption(1)</td><td colspan="2">(66)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68)</td><td></td></tr><tr><td colspan="3">Balance at January 1, 2023</td><td colspan="2">5,817 </td><td></td><td colspan="3"></td><td colspan="2">839 </td><td></td><td colspan="3"></td><td colspan="2">593 </td><td></td><td colspan="3"></td><td colspan="2">57 </td><td></td><td colspan="3"></td><td colspan="2">7,306 </td><td></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">5,476 </td><td></td><td colspan="3"></td><td colspan="2">152 </td><td></td><td colspan="3"></td><td colspan="2">363 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td><td colspan="3"></td><td colspan="2">6,019 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(4,481)</td><td></td><td colspan="3"></td><td colspan="2">(155)</td><td></td><td colspan="3"></td><td colspan="2">(290)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">(4,927)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">807 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td><td colspan="3"></td><td colspan="2">56 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">885 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(3,674)</td><td></td><td colspan="3"></td><td colspan="2">(133)</td><td></td><td colspan="3"></td><td colspan="2">(234)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">(4,042)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2023</td><td>$</td><td>7,619 </td><td></td><td colspan="3"></td><td>$</td><td>858 </td><td></td><td colspan="3"></td><td>$</td><td>722 </td><td></td><td colspan="3"></td><td>$</td><td>84 </td><td></td><td colspan="3"></td><td>$</td><td>9,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2022</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td>$</td><td>5,273 </td><td></td><td colspan="3"></td><td>$</td><td>843 </td><td></td><td colspan="3"></td><td>$</td><td>662 </td><td></td><td colspan="3"></td><td>$</td><td>44 </td><td></td><td colspan="3"></td><td>$</td><td>6,822 </td><td></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">2,233 </td><td></td><td colspan="3"></td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td><td colspan="3"></td><td colspan="2">2,369 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(2,417)</td><td></td><td colspan="3"></td><td colspan="2">(126)</td><td></td><td colspan="3"></td><td colspan="2">(159)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,702)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">794 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">885 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(1,623)</td><td></td><td colspan="3"></td><td colspan="2">(103)</td><td></td><td colspan="3"></td><td colspan="2">(91)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,817)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td>$</td><td>5,883 </td><td></td><td colspan="3"></td><td>$</td><td>839 </td><td></td><td colspan="3"></td><td>$</td><td>595 </td><td></td><td colspan="3"></td><td>$</td><td>57 </td><td></td><td colspan="3"></td><td>$</td><td>7,374 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2021</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2020</td><td>$</td><td>6,491 </td><td></td><td colspan="3"></td><td>$</td><td>840 </td><td></td><td colspan="3"></td><td>$</td><td>857 </td><td></td><td colspan="3"></td><td>$</td><td>38 </td><td></td><td colspan="3"></td><td>$</td><td>8,226 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">229 </td><td></td><td colspan="3"></td><td colspan="2">67 </td><td></td><td colspan="3"></td><td colspan="2">(75)</td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(2,255)</td><td></td><td colspan="3"></td><td colspan="2">(89)</td><td></td><td colspan="3"></td><td colspan="2">(190)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,534)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">808 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td></td><td colspan="3"></td><td colspan="2">70 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">903 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(1,447)</td><td></td><td colspan="3"></td><td colspan="2">(64)</td><td></td><td colspan="3"></td><td colspan="2">(120)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,631)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td>$</td><td>5,273 </td><td></td><td colspan="3"></td><td>$</td><td>843 </td><td></td><td colspan="3"></td><td>$</td><td>662 </td><td></td><td colspan="3"></td><td>$</td><td>44 </td><td></td><td colspan="3"></td><td>$</td><td>6,822 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.
(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 67:
Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">December 31,</td></tr><tr><td colspan="3"> </td><td colspan="9">2023</td><td colspan="3"></td><td colspan="9">2022</td></tr><tr><td colspan="3"> </td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td><td colspan="3"></td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td></tr><tr><td colspan="3">Loans 30 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>3,955 </td><td></td><td colspan="3"></td><td colspan="2">3.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,278 </td><td></td><td colspan="3"></td><td colspan="2">2.53 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>271 </td><td></td><td colspan="3"></td><td colspan="2">2.62 </td><td>%</td><td colspan="3"></td><td>$</td><td>212 </td><td></td><td colspan="3"></td><td colspan="2">2.05 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>143 </td><td></td><td colspan="3"></td><td colspan="2">1.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>63 </td><td></td><td colspan="3"></td><td colspan="2">0.80 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>4,427 </td><td></td><td colspan="3"></td><td colspan="2">3.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,578 </td><td></td><td colspan="3"></td><td colspan="2">2.30 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans 90 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>1,917 </td><td></td><td colspan="3"></td><td colspan="2">1.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,028 </td><td></td><td colspan="3"></td><td colspan="2">1.14 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>70 </td><td></td><td colspan="3"></td><td colspan="2">0.67 </td><td>%</td><td colspan="3"></td><td>$</td><td>45 </td><td></td><td colspan="3"></td><td colspan="2">0.43 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>39 </td><td></td><td colspan="3"></td><td colspan="2">0.40 </td><td>%</td><td colspan="3"></td><td>$</td><td>16 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>2,045 </td><td></td><td colspan="3"></td><td colspan="2">1.59 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,101 </td><td></td><td colspan="3"></td><td colspan="2">0.98 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans not accruing interest</td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td><td colspan="3"></td><td>$</td><td>214 </td><td></td><td colspan="3"></td><td colspan="2">0.19 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">At December 31, 2023</td><td colspan="3">Due OneYear orLess</td><td colspan="3"></td><td colspan="3">Due AfterOne YearThroughFive Years</td><td colspan="3"></td><td colspan="3">Due AfterFive Years Through Fifteen Years</td><td colspan="3"></td><td colspan="3">Due After Fifteen Years</td><td colspan="3"></td><td colspan="3">Total</td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>32,250 </td><td></td><td colspan="3"></td><td>$</td><td>54,628 </td><td></td><td colspan="3"></td><td>$</td><td>15,032 </td><td></td><td colspan="3"></td><td>$</td><td>349 </td><td></td><td colspan="3"></td><td>$</td><td>102,259 </td><td></td></tr><tr><td colspan="3">Private student loans</td><td colspan="2">364 </td><td></td><td colspan="3"></td><td colspan="2">2,083 </td><td></td><td colspan="3"></td><td colspan="2">6,296 </td><td></td><td colspan="3"></td><td colspan="2">1,609 </td><td></td><td colspan="3"></td><td colspan="2">10,352 </td><td></td></tr><tr><td colspan="3">Personal loans</td><td colspan="2">2,653 </td><td></td><td colspan="3"></td><td colspan="2">6,653 </td><td></td><td colspan="3"></td><td colspan="2">546 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,852 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">161 </td><td></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">2,102 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">5,946 </td><td></td></tr><tr><td colspan="3">Total loan portfolio</td><td>$</td><td>35,428 </td><td></td><td colspan="3"></td><td>$</td><td>64,088 </td><td></td><td colspan="3"></td><td>$</td><td>23,976 </td><td></td><td colspan="3"></td><td>$</td><td>4,917 </td><td></td><td colspan="3"></td><td>$</td><td>128,409 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
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The following tables provide changes in our allowance for credit losses (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2023</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td>$</td><td>5,883 </td><td></td><td colspan="3"></td><td>$</td><td>839 </td><td></td><td colspan="3"></td><td>$</td><td>595 </td><td></td><td colspan="3"></td><td>$</td><td>57 </td><td></td><td colspan="3"></td><td>$</td><td>7,374 </td><td></td></tr><tr><td colspan="3">Cumulative effect of ASU No. 2022-02 adoption(1)</td><td colspan="2">(66)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68)</td><td></td></tr><tr><td colspan="3">Balance at January 1, 2023</td><td colspan="2">5,817 </td><td></td><td colspan="3"></td><td colspan="2">839 </td><td></td><td colspan="3"></td><td colspan="2">593 </td><td></td><td colspan="3"></td><td colspan="2">57 </td><td></td><td colspan="3"></td><td colspan="2">7,306 </td><td></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">5,476 </td><td></td><td colspan="3"></td><td colspan="2">152 </td><td></td><td colspan="3"></td><td colspan="2">363 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td><td colspan="3"></td><td colspan="2">6,019 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(4,481)</td><td></td><td colspan="3"></td><td colspan="2">(155)</td><td></td><td colspan="3"></td><td colspan="2">(290)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">(4,927)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">807 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td><td colspan="3"></td><td colspan="2">56 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">885 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(3,674)</td><td></td><td colspan="3"></td><td colspan="2">(133)</td><td></td><td colspan="3"></td><td colspan="2">(234)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">(4,042)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2023</td><td>$</td><td>7,619 </td><td></td><td colspan="3"></td><td>$</td><td>858 </td><td></td><td colspan="3"></td><td>$</td><td>722 </td><td></td><td colspan="3"></td><td>$</td><td>84 </td><td></td><td colspan="3"></td><td>$</td><td>9,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2022</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td>$</td><td>5,273 </td><td></td><td colspan="3"></td><td>$</td><td>843 </td><td></td><td colspan="3"></td><td>$</td><td>662 </td><td></td><td colspan="3"></td><td>$</td><td>44 </td><td></td><td colspan="3"></td><td>$</td><td>6,822 </td><td></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">2,233 </td><td></td><td colspan="3"></td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td><td colspan="3"></td><td colspan="2">2,369 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(2,417)</td><td></td><td colspan="3"></td><td colspan="2">(126)</td><td></td><td colspan="3"></td><td colspan="2">(159)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,702)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">794 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">885 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(1,623)</td><td></td><td colspan="3"></td><td colspan="2">(103)</td><td></td><td colspan="3"></td><td colspan="2">(91)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,817)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td>$</td><td>5,883 </td><td></td><td colspan="3"></td><td>$</td><td>839 </td><td></td><td colspan="3"></td><td>$</td><td>595 </td><td></td><td colspan="3"></td><td>$</td><td>57 </td><td></td><td colspan="3"></td><td>$</td><td>7,374 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2021</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2020</td><td>$</td><td>6,491 </td><td></td><td colspan="3"></td><td>$</td><td>840 </td><td></td><td colspan="3"></td><td>$</td><td>857 </td><td></td><td colspan="3"></td><td>$</td><td>38 </td><td></td><td colspan="3"></td><td>$</td><td>8,226 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">229 </td><td></td><td colspan="3"></td><td colspan="2">67 </td><td></td><td colspan="3"></td><td colspan="2">(75)</td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(2,255)</td><td></td><td colspan="3"></td><td colspan="2">(89)</td><td></td><td colspan="3"></td><td colspan="2">(190)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,534)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">808 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td></td><td colspan="3"></td><td colspan="2">70 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">903 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(1,447)</td><td></td><td colspan="3"></td><td colspan="2">(64)</td><td></td><td colspan="3"></td><td colspan="2">(120)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,631)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td>$</td><td>5,273 </td><td></td><td colspan="3"></td><td>$</td><td>843 </td><td></td><td colspan="3"></td><td>$</td><td>662 </td><td></td><td colspan="3"></td><td>$</td><td>44 </td><td></td><td colspan="3"></td><td>$</td><td>6,822 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.
(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
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Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">December 31,</td></tr><tr><td colspan="3"> </td><td colspan="9">2023</td><td colspan="3"></td><td colspan="9">2022</td></tr><tr><td colspan="3"> </td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td><td colspan="3"></td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td></tr><tr><td colspan="3">Loans 30 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>3,955 </td><td></td><td colspan="3"></td><td colspan="2">3.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,278 </td><td></td><td colspan="3"></td><td colspan="2">2.53 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>271 </td><td></td><td colspan="3"></td><td colspan="2">2.62 </td><td>%</td><td colspan="3"></td><td>$</td><td>212 </td><td></td><td colspan="3"></td><td colspan="2">2.05 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>143 </td><td></td><td colspan="3"></td><td colspan="2">1.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>63 </td><td></td><td colspan="3"></td><td colspan="2">0.80 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>4,427 </td><td></td><td colspan="3"></td><td colspan="2">3.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,578 </td><td></td><td colspan="3"></td><td colspan="2">2.30 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans 90 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>1,917 </td><td></td><td colspan="3"></td><td colspan="2">1.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,028 </td><td></td><td colspan="3"></td><td colspan="2">1.14 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>70 </td><td></td><td colspan="3"></td><td colspan="2">0.67 </td><td>%</td><td colspan="3"></td><td>$</td><td>45 </td><td></td><td colspan="3"></td><td colspan="2">0.43 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>39 </td><td></td><td colspan="3"></td><td colspan="2">0.40 </td><td>%</td><td colspan="3"></td><td>$</td><td>16 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>2,045 </td><td></td><td colspan="3"></td><td colspan="2">1.59 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,101 </td><td></td><td colspan="3"></td><td colspan="2">0.98 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans not accruing interest</td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td><td colspan="3"></td><td>$</td><td>214 </td><td></td><td colspan="3"></td><td colspan="2">0.19 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">At December 31, 2023</td><td colspan="3">Due OneYear orLess</td><td colspan="3"></td><td colspan="3">Due AfterOne YearThroughFive Years</td><td colspan="3"></td><td colspan="3">Due AfterFive Years Through Fifteen Years</td><td colspan="3"></td><td colspan="3">Due After Fifteen Years</td><td colspan="3"></td><td colspan="3">Total</td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>32,250 </td><td></td><td colspan="3"></td><td>$</td><td>54,628 </td><td></td><td colspan="3"></td><td>$</td><td>15,032 </td><td></td><td colspan="3"></td><td>$</td><td>349 </td><td></td><td colspan="3"></td><td>$</td><td>102,259 </td><td></td></tr><tr><td colspan="3">Private student loans</td><td colspan="2">364 </td><td></td><td colspan="3"></td><td colspan="2">2,083 </td><td></td><td colspan="3"></td><td colspan="2">6,296 </td><td></td><td colspan="3"></td><td colspan="2">1,609 </td><td></td><td colspan="3"></td><td colspan="2">10,352 </td><td></td></tr><tr><td colspan="3">Personal loans</td><td colspan="2">2,653 </td><td></td><td colspan="3"></td><td colspan="2">6,653 </td><td></td><td colspan="3"></td><td colspan="2">546 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,852 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">161 </td><td></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">2,102 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">5,946 </td><td></td></tr><tr><td colspan="3">Total loan portfolio</td><td>$</td><td>35,428 </td><td></td><td colspan="3"></td><td>$</td><td>64,088 </td><td></td><td colspan="3"></td><td>$</td><td>23,976 </td><td></td><td colspan="3"></td><td>$</td><td>4,917 </td><td></td><td colspan="3"></td><td>$</td><td>128,409 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
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q_an002
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How does DFS Debt-to-Equity Ratio for 2023 reflect on the company's financial stability?
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Increase in Leverage: The ratio increased from 8.2 in 2022 to 9.2 in 2023, indicating higher reliance on debt relative to equity.
Financial Risk: The higher ratio suggests greater financial risk due to increased debt obligations.
Impact on Stability: Greater leverage could affect financial stability, especially in adverse economic conditions or with rising interest rates.
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Analysis
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85
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0001393612-24-000010
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Item 8. Financial Statements and Supplementary Data
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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q_an003
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What does the change in Discover’s ROE for 2023 compared to 2022 reflect about the company?
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ROE Calculation:
2023: ROE (2023)=$2,940 million/$14,586 million = 19.6%
2022: ROE (2022)=$4,374 million/$14,344 million = 29.9%
The decline from 29.9% in 2022 to 19.6% in 2023 reflects a reduction in profitability relative to shareholders' equity. This drop could be attributed to decreased net income despite a relatively stable equity base.
|
Analysis
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85, 86
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0001393612-24-000010
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Item 8. Financial Statements and Supplementary Data
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
-86-
|
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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|
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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q_an004
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How did the earnings per share (EPS) attributable to NEE, assuming dilution, change from 2021 to 2023?
|
The earnings per share (EPS) attributable to NEE, assuming dilution, changed as follows from 2021 to 2023:
- 2021: $1.81
- 2022: $2.10
- 2023: $3.60
The EPS increased from $1.81 in 2021 to $3.60 in 2023, reflecting a significant improvement in the company's profitability on a per-share basis.
|
Analysis
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60
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0000753308-24-000008
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Item 8. Financial Statements and Supplementary Data
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NEXTERA ENERGY INC 10-K form for the fiscal year ended 2023-12-31, page 60:
Table of Contents
NEXTERA ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(millions, except per share amounts)
| | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:-----|:-------------------------|:-------|:-------|:---|:-------|:--------|:---|:-------|
| 1 | | | Years Ended December 31, | | | | | | | |
| 2 | | 2023 | | 2022 | 2021 | | | | | |
| 3 | OPERATING REVENUES | | $ | 28,114 | | $ | 20,956 | | $ | 17,069 |
| 4 | OPERATING EXPENSES | | | | | | | | | |
| 5 | Fuel, purchased power and interchange | | 5,457 | | 6,389 | | | 4,527 | | |
| 6 | Other operations and maintenance | | 4,681 | | 4,428 | | | 3,981 | | |
| 10 | Depreciation and amortization | | 5,879 | | 4,503 | | | 3,924 | | |
| 11 | Taxes other than income taxes and other – net | | 2,265 | | 2,077 | | | 1,801 | | |
| 12 | Total operating expenses – net | | 18,282 | | 17,397 | | | 14,233 | | |
| 13 | GAINS ON DISPOSAL OF BUSINESSES/ASSETS – NET | | 405 | | 522 | | | 77 | | |
| 14 | OPERATING INCOME | | 10,237 | | 4,081 | | | 2,913 | | |
| 15 | OTHER INCOME (DEDUCTIONS) | | | | | | | | | |
| 16 | Interest expense | | (3,324) | | (585) | | | (1,270) | | |
| 18 | Equity in earnings (losses) of equity method investees | | (648) | | 203 | | | 666 | | |
| 19 | Allowance for equity funds used during construction | | 161 | | 112 | | | 142 | | |
| 21 | Gains on disposal of investments and other property – net | | 125 | | 80 | | | 70 | | |
| 22 | Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds – net | | 159 | | (461) | | | 267 | | |
| 23 | Other net periodic benefit income | | 245 | | 202 | | | 257 | | |
| 24 | Other – net | | 333 | | 200 | | | 130 | | |
| 25 | Total other income (deductions) – net | | (2,949) | | (249) | | | 262 | | |
| 26 | INCOME BEFORE INCOME TAXES | | 7,288 | | 3,832 | | | 3,175 | | |
| 27 | INCOME TAXES | | 1,006 | | 586 | | | 348 | | |
| 28 | NET INCOME | | 6,282 | | 3,246 | | | 2,827 | | |
| 29 | NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | 1,028 | | 901 | | | 746 | | |
| 30 | NET INCOME ATTRIBUTABLE TO NEE | | $ | 7,310 | | $ | 4,147 | | $ | 3,573 |
| 31 | Earnings per share attributable to NEE: | | | | | | | | | |
| 32 | Basic | | $ | 3.61 | | $ | 2.10 | | $ | 1.82 |
| 33 | Assuming dilution | | $ | 3.60 | | $ | 2.10 | | $ | 1.81 |
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
60
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Table of Contents
NEXTERA ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(millions, except per share amounts)
| | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:-----|:-------------------------|:-------|:-------|:---|:-------|:--------|:---|:-------|
| 1 | | | Years Ended December 31, | | | | | | | |
| 2 | | 2023 | | 2022 | 2021 | | | | | |
| 3 | OPERATING REVENUES | | $ | 28,114 | | $ | 20,956 | | $ | 17,069 |
| 4 | OPERATING EXPENSES | | | | | | | | | |
| 5 | Fuel, purchased power and interchange | | 5,457 | | 6,389 | | | 4,527 | | |
| 6 | Other operations and maintenance | | 4,681 | | 4,428 | | | 3,981 | | |
| 10 | Depreciation and amortization | | 5,879 | | 4,503 | | | 3,924 | | |
| 11 | Taxes other than income taxes and other – net | | 2,265 | | 2,077 | | | 1,801 | | |
| 12 | Total operating expenses – net | | 18,282 | | 17,397 | | | 14,233 | | |
| 13 | GAINS ON DISPOSAL OF BUSINESSES/ASSETS – NET | | 405 | | 522 | | | 77 | | |
| 14 | OPERATING INCOME | | 10,237 | | 4,081 | | | 2,913 | | |
| 15 | OTHER INCOME (DEDUCTIONS) | | | | | | | | | |
| 16 | Interest expense | | (3,324) | | (585) | | | (1,270) | | |
| 18 | Equity in earnings (losses) of equity method investees | | (648) | | 203 | | | 666 | | |
| 19 | Allowance for equity funds used during construction | | 161 | | 112 | | | 142 | | |
| 21 | Gains on disposal of investments and other property – net | | 125 | | 80 | | | 70 | | |
| 22 | Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds – net | | 159 | | (461) | | | 267 | | |
| 23 | Other net periodic benefit income | | 245 | | 202 | | | 257 | | |
| 24 | Other – net | | 333 | | 200 | | | 130 | | |
| 25 | Total other income (deductions) – net | | (2,949) | | (249) | | | 262 | | |
| 26 | INCOME BEFORE INCOME TAXES | | 7,288 | | 3,832 | | | 3,175 | | |
| 27 | INCOME TAXES | | 1,006 | | 586 | | | 348 | | |
| 28 | NET INCOME | | 6,282 | | 3,246 | | | 2,827 | | |
| 29 | NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | 1,028 | | 901 | | | 746 | | |
| 30 | NET INCOME ATTRIBUTABLE TO NEE | | $ | 7,310 | | $ | 4,147 | | $ | 3,573 |
| 31 | Earnings per share attributable to NEE: | | | | | | | | | |
| 32 | Basic | | $ | 3.61 | | $ | 2.10 | | $ | 1.82 |
| 33 | Assuming dilution | | $ | 3.60 | | $ | 2.10 | | $ | 1.81 |
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
60
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NEXTERA ENERGY INC 10-K form for the fiscal year ended 2023-12-31, page 60:
Table of Contents
NEXTERA ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="3"></td><td colspan="15">Years Ended December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">OPERATING REVENUES</td><td colspan="3"></td><td>$</td><td>28,114 </td><td></td><td colspan="3"></td><td>$</td><td>20,956 </td><td></td><td colspan="3"></td><td>$</td><td>17,069 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES</td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Fuel, purchased power and interchange</td><td colspan="3"></td><td colspan="2">5,457 </td><td></td><td colspan="3"></td><td colspan="2">6,389 </td><td></td><td colspan="3"></td><td colspan="2">4,527 </td><td></td></tr><tr><td colspan="3">Other operations and maintenance</td><td colspan="3"></td><td colspan="2">4,681 </td><td></td><td colspan="3"></td><td colspan="2">4,428 </td><td></td><td colspan="3"></td><td colspan="2">3,981 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="3"></td><td colspan="2">5,879 </td><td></td><td colspan="3"></td><td colspan="2">4,503 </td><td></td><td colspan="3"></td><td colspan="2">3,924 </td><td></td></tr><tr><td colspan="3">Taxes other than income taxes and other – net</td><td colspan="3"></td><td colspan="2">2,265 </td><td></td><td colspan="3"></td><td colspan="2">2,077 </td><td></td><td colspan="3"></td><td colspan="2">1,801 </td><td></td></tr><tr><td colspan="3">Total operating expenses – net</td><td colspan="3"></td><td colspan="2">18,282 </td><td></td><td colspan="3"></td><td colspan="2">17,397 </td><td></td><td colspan="3"></td><td colspan="2">14,233 </td><td></td></tr><tr><td colspan="3">GAINS ON DISPOSAL OF BUSINESSES/ASSETS – NET</td><td colspan="3"></td><td colspan="2">405 </td><td></td><td colspan="3"></td><td colspan="2">522 </td><td></td><td colspan="3"></td><td colspan="2">77 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="3"></td><td colspan="2">10,237 </td><td></td><td colspan="3"></td><td colspan="2">4,081 </td><td></td><td colspan="3"></td><td colspan="2">2,913 </td><td></td></tr><tr><td colspan="3">OTHER INCOME (DEDUCTIONS)</td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="2">(3,324)</td><td></td><td colspan="3"></td><td colspan="2">(585)</td><td></td><td colspan="3"></td><td colspan="2">(1,270)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Equity in earnings (losses) of equity method investees</td><td colspan="3"></td><td colspan="2">(648)</td><td></td><td colspan="3"></td><td colspan="2">203 </td><td></td><td colspan="3"></td><td colspan="2">666 </td><td></td></tr><tr><td colspan="3">Allowance for equity funds used during construction</td><td colspan="3"></td><td colspan="2">161 </td><td></td><td colspan="3"></td><td colspan="2">112 </td><td></td><td colspan="3"></td><td colspan="2">142 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Gains on disposal of investments and other property – net</td><td colspan="3"></td><td colspan="2">125 </td><td></td><td colspan="3"></td><td colspan="2">80 </td><td></td><td colspan="3"></td><td colspan="2">70 </td><td></td></tr><tr><td colspan="3">Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds – net</td><td colspan="3"></td><td colspan="2">159 </td><td></td><td colspan="3"></td><td colspan="2">(461)</td><td></td><td colspan="3"></td><td colspan="2">267 </td><td></td></tr><tr><td colspan="3">Other net periodic benefit income</td><td colspan="3"></td><td colspan="2">245 </td><td></td><td colspan="3"></td><td colspan="2">202 </td><td></td><td colspan="3"></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="3">Other – net</td><td colspan="3"></td><td colspan="2">333 </td><td></td><td colspan="3"></td><td colspan="2">200 </td><td></td><td colspan="3"></td><td colspan="2">130 </td><td></td></tr><tr><td colspan="3">Total other income (deductions) – net</td><td colspan="3"></td><td colspan="2">(2,949)</td><td></td><td colspan="3"></td><td colspan="2">(249)</td><td></td><td colspan="3"></td><td colspan="2">262 </td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES</td><td colspan="3"></td><td colspan="2">7,288 </td><td></td><td colspan="3"></td><td colspan="2">3,832 </td><td></td><td colspan="3"></td><td colspan="2">3,175 </td><td></td></tr><tr><td colspan="3">INCOME TAXES</td><td colspan="3"></td><td colspan="2">1,006 </td><td></td><td colspan="3"></td><td colspan="2">586 </td><td></td><td colspan="3"></td><td colspan="2">348 </td><td></td></tr><tr><td colspan="3">NET INCOME</td><td colspan="3"></td><td colspan="2">6,282 </td><td></td><td colspan="3"></td><td colspan="2">3,246 </td><td></td><td colspan="3"></td><td colspan="2">2,827 </td><td></td></tr><tr><td colspan="3">NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS</td><td colspan="3"></td><td colspan="2">1,028 </td><td></td><td colspan="3"></td><td colspan="2">901 </td><td></td><td colspan="3"></td><td colspan="2">746 </td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO NEE</td><td colspan="3"></td><td>$</td><td>7,310 </td><td></td><td colspan="3"></td><td>$</td><td>4,147 </td><td></td><td colspan="3"></td><td>$</td><td>3,573 </td><td></td></tr><tr><td colspan="3">Earnings per share attributable to NEE:</td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>3.61 </td><td></td><td colspan="3"></td><td>$</td><td>2.10 </td><td></td><td colspan="3"></td><td>$</td><td>1.82 </td><td></td></tr><tr><td colspan="3">Assuming dilution</td><td colspan="3"></td><td>$</td><td>3.60 </td><td></td><td colspan="3"></td><td>$</td><td>2.10 </td><td></td><td colspan="3"></td><td>$</td><td>1.81 </td><td></td></tr></table>
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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Table of Contents
NEXTERA ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="3"></td><td colspan="15">Years Ended December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">OPERATING REVENUES</td><td colspan="3"></td><td>$</td><td>28,114 </td><td></td><td colspan="3"></td><td>$</td><td>20,956 </td><td></td><td colspan="3"></td><td>$</td><td>17,069 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES</td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Fuel, purchased power and interchange</td><td colspan="3"></td><td colspan="2">5,457 </td><td></td><td colspan="3"></td><td colspan="2">6,389 </td><td></td><td colspan="3"></td><td colspan="2">4,527 </td><td></td></tr><tr><td colspan="3">Other operations and maintenance</td><td colspan="3"></td><td colspan="2">4,681 </td><td></td><td colspan="3"></td><td colspan="2">4,428 </td><td></td><td colspan="3"></td><td colspan="2">3,981 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="3"></td><td colspan="2">5,879 </td><td></td><td colspan="3"></td><td colspan="2">4,503 </td><td></td><td colspan="3"></td><td colspan="2">3,924 </td><td></td></tr><tr><td colspan="3">Taxes other than income taxes and other – net</td><td colspan="3"></td><td colspan="2">2,265 </td><td></td><td colspan="3"></td><td colspan="2">2,077 </td><td></td><td colspan="3"></td><td colspan="2">1,801 </td><td></td></tr><tr><td colspan="3">Total operating expenses – net</td><td colspan="3"></td><td colspan="2">18,282 </td><td></td><td colspan="3"></td><td colspan="2">17,397 </td><td></td><td colspan="3"></td><td colspan="2">14,233 </td><td></td></tr><tr><td colspan="3">GAINS ON DISPOSAL OF BUSINESSES/ASSETS – NET</td><td colspan="3"></td><td colspan="2">405 </td><td></td><td colspan="3"></td><td colspan="2">522 </td><td></td><td colspan="3"></td><td colspan="2">77 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="3"></td><td colspan="2">10,237 </td><td></td><td colspan="3"></td><td colspan="2">4,081 </td><td></td><td colspan="3"></td><td colspan="2">2,913 </td><td></td></tr><tr><td colspan="3">OTHER INCOME (DEDUCTIONS)</td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="2">(3,324)</td><td></td><td colspan="3"></td><td colspan="2">(585)</td><td></td><td colspan="3"></td><td colspan="2">(1,270)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Equity in earnings (losses) of equity method investees</td><td colspan="3"></td><td colspan="2">(648)</td><td></td><td colspan="3"></td><td colspan="2">203 </td><td></td><td colspan="3"></td><td colspan="2">666 </td><td></td></tr><tr><td colspan="3">Allowance for equity funds used during construction</td><td colspan="3"></td><td colspan="2">161 </td><td></td><td colspan="3"></td><td colspan="2">112 </td><td></td><td colspan="3"></td><td colspan="2">142 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Gains on disposal of investments and other property – net</td><td colspan="3"></td><td colspan="2">125 </td><td></td><td colspan="3"></td><td colspan="2">80 </td><td></td><td colspan="3"></td><td colspan="2">70 </td><td></td></tr><tr><td colspan="3">Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds – net</td><td colspan="3"></td><td colspan="2">159 </td><td></td><td colspan="3"></td><td colspan="2">(461)</td><td></td><td colspan="3"></td><td colspan="2">267 </td><td></td></tr><tr><td colspan="3">Other net periodic benefit income</td><td colspan="3"></td><td colspan="2">245 </td><td></td><td colspan="3"></td><td colspan="2">202 </td><td></td><td colspan="3"></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="3">Other – net</td><td colspan="3"></td><td colspan="2">333 </td><td></td><td colspan="3"></td><td colspan="2">200 </td><td></td><td colspan="3"></td><td colspan="2">130 </td><td></td></tr><tr><td colspan="3">Total other income (deductions) – net</td><td colspan="3"></td><td colspan="2">(2,949)</td><td></td><td colspan="3"></td><td colspan="2">(249)</td><td></td><td colspan="3"></td><td colspan="2">262 </td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES</td><td colspan="3"></td><td colspan="2">7,288 </td><td></td><td colspan="3"></td><td colspan="2">3,832 </td><td></td><td colspan="3"></td><td colspan="2">3,175 </td><td></td></tr><tr><td colspan="3">INCOME TAXES</td><td colspan="3"></td><td colspan="2">1,006 </td><td></td><td colspan="3"></td><td colspan="2">586 </td><td></td><td colspan="3"></td><td colspan="2">348 </td><td></td></tr><tr><td colspan="3">NET INCOME</td><td colspan="3"></td><td colspan="2">6,282 </td><td></td><td colspan="3"></td><td colspan="2">3,246 </td><td></td><td colspan="3"></td><td colspan="2">2,827 </td><td></td></tr><tr><td colspan="3">NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS</td><td colspan="3"></td><td colspan="2">1,028 </td><td></td><td colspan="3"></td><td colspan="2">901 </td><td></td><td colspan="3"></td><td colspan="2">746 </td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO NEE</td><td colspan="3"></td><td>$</td><td>7,310 </td><td></td><td colspan="3"></td><td>$</td><td>4,147 </td><td></td><td colspan="3"></td><td>$</td><td>3,573 </td><td></td></tr><tr><td colspan="3">Earnings per share attributable to NEE:</td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>3.61 </td><td></td><td colspan="3"></td><td>$</td><td>2.10 </td><td></td><td colspan="3"></td><td>$</td><td>1.82 </td><td></td></tr><tr><td colspan="3">Assuming dilution</td><td colspan="3"></td><td>$</td><td>3.60 </td><td></td><td colspan="3"></td><td>$</td><td>2.10 </td><td></td><td colspan="3"></td><td>$</td><td>1.81 </td><td></td></tr></table>
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
60
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q_an005
|
What are the liquidity metrics for Apple Inc. for the year 2023, and what do they indicate?
|
The liquidity metrics for Apple Inc. for the year 2023 are as follows:
- Current Assets: $143,566 million
- Current Liabilities: $145,308 million
- Cash and Cash Equivalents: $29,965 million
- Marketable Securities (Current): $31,590 million
The current ratio is calculated as Current Assets / Current Liabilities. For 2023, the current ratio is $143,566 million / $145,308 million = 0.99. A current ratio of less than 1 indicates that the company may not have enough current assets to cover its current liabilities. However, the company has significant cash and cash equivalents and marketable securities, which provide liquidity to meet short-term obligations. The quick ratio, which excludes inventories from current assets, is calculated as (Current Assets - Inventories) / Current Liabilities. For 2023, the quick ratio is ($143,566 million - $6,331 million) / $145,308 million = 0.95. This also indicates a slightly lower ability to cover current liabilities with liquid assets. Overall, while the current and quick ratios are slightly below 1, the company's substantial cash and marketable securities provide a strong liquidity position.
|
Analysis
|
28, 30
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0000320193-23-000106
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Item 8. Financial Statements and Supplementary Data
|
Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 28:
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
| | | | | | | | | | | |
|---:|:---------------------------------------------|:------------------|:--------|:------------------|:-----------|:------------------|:--------|:-----------|:---|:--------|
| 1 | | Years ended | | | | | | | | |
| 2 | | September 30,2023 | | September 24,2022 | | September 25,2021 | | | | |
| 3 | Net sales: | | | | | | | | | |
| 4 | Products | $ | 298,085 | | | $ | 316,199 | | $ | 297,392 |
| 5 | Services | 85,200 | | | 78,129 | | | 68,425 | | |
| 6 | Total net sales | 383,285 | | | 394,328 | | | 365,817 | | |
| 8 | Cost of sales: | | | | | | | | | |
| 9 | Products | 189,282 | | | 201,471 | | | 192,266 | | |
| 10 | Services | 24,855 | | | 22,075 | | | 20,715 | | |
| 11 | Total cost of sales | 214,137 | | | 223,546 | | | 212,981 | | |
| 12 | Gross margin | 169,148 | | | 170,782 | | | 152,836 | | |
| 14 | Operating expenses: | | | | | | | | | |
| 15 | Research and development | 29,915 | | | 26,251 | | | 21,914 | | |
| 16 | Selling, general and administrative | 24,932 | | | 25,094 | | | 21,973 | | |
| 17 | Total operating expenses | 54,847 | | | 51,345 | | | 43,887 | | |
| 19 | Operating income | 114,301 | | | 119,437 | | | 108,949 | | |
| 20 | Other income/(expense), net | (565) | | | (334) | | | 258 | | |
| 21 | Income before provision for income taxes | 113,736 | | | 119,103 | | | 109,207 | | |
| 22 | Provision for income taxes | 16,741 | | | 19,300 | | | 14,527 | | |
| 23 | Net income | $ | 96,995 | | | $ | 99,803 | | $ | 94,680 |
| 25 | Earnings per share: | | | | | | | | | |
| 26 | Basic | $ | 6.16 | | | $ | 6.15 | | $ | 5.67 |
| 27 | Diluted | $ | 6.13 | | | $ | 6.11 | | $ | 5.61 |
| 29 | Shares used in computing earnings per share: | | | | | | | | | |
| 30 | Basic | 15,744,231 | | | 16,215,963 | | | 16,701,272 | | |
| 31 | Diluted | 15,812,547 | | | 16,325,819 | | | 16,864,919 | | |
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28
, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 30:
Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:--------|:------------------|:---------|:---|:--------|
| 1 | | September 30,2023 | | September 24,2022 | | | |
| 2 | ASSETS: | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 29,965 | | | $ | 23,646 |
| 5 | Marketable securities | 31,590 | | | 24,658 | | |
| 6 | Accounts receivable, net | 29,508 | | | 28,184 | | |
| 7 | Vendor non-trade receivables | 31,477 | | | 32,748 | | |
| 8 | Inventories | 6,331 | | | 4,946 | | |
| 9 | Other current assets | 14,695 | | | 21,223 | | |
| 10 | Total current assets | 143,566 | | | 135,405 | | |
| 12 | Non-current assets: | | | | | | |
| 13 | Marketable securities | 100,544 | | | 120,805 | | |
| 14 | Property, plant and equipment, net | 43,715 | | | 42,117 | | |
| 15 | Other non-current assets | 64,758 | | | 54,428 | | |
| 16 | Total non-current assets | 209,017 | | | 217,350 | | |
| 17 | Total assets | $ | 352,583 | | | $ | 352,755 |
| 19 | LIABILITIES AND SHAREHOLDERS' EQUITY: | | | | | | |
| 20 | Current liabilities: | | | | | | |
| 21 | Accounts payable | $ | 62,611 | | | $ | 64,115 |
| 22 | Other current liabilities | 58,829 | | | 60,845 | | |
| 23 | Deferred revenue | 8,061 | | | 7,912 | | |
| 24 | Commercial paper | 5,985 | | | 9,982 | | |
| 25 | Term debt | 9,822 | | | 11,128 | | |
| 26 | Total current liabilities | 145,308 | | | 153,982 | | |
| 28 | Non-current liabilities: | | | | | | |
| 29 | Term debt | 95,281 | | | 98,959 | | |
| 30 | Other non-current liabilities | 49,848 | | | 49,142 | | |
| 31 | Total non-current liabilities | 145,129 | | | 148,101 | | |
| 32 | Total liabilities | 290,437 | | | 302,083 | | |
| 34 | Commitments and contingencies | | | | | | |
| 36 | Shareholders' equity: | | | | | | |
| 37 | Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively | 73,812 | | | 64,849 | | |
| 38 | Accumulated deficit | (214) | | | (3,068) | | |
| 39 | Accumulated other comprehensive loss | (11,452) | | | (11,109) | | |
| 40 | Total shareholders' equity | 62,146 | | | 50,672 | | |
| 41 | Total liabilities and shareholders' equity | $ | 352,583 | | | $ | 352,755 |
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30
|
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
| | | | | | | | | | | |
|---:|:---------------------------------------------|:------------------|:--------|:------------------|:-----------|:------------------|:--------|:-----------|:---|:--------|
| 1 | | Years ended | | | | | | | | |
| 2 | | September 30,2023 | | September 24,2022 | | September 25,2021 | | | | |
| 3 | Net sales: | | | | | | | | | |
| 4 | Products | $ | 298,085 | | | $ | 316,199 | | $ | 297,392 |
| 5 | Services | 85,200 | | | 78,129 | | | 68,425 | | |
| 6 | Total net sales | 383,285 | | | 394,328 | | | 365,817 | | |
| 8 | Cost of sales: | | | | | | | | | |
| 9 | Products | 189,282 | | | 201,471 | | | 192,266 | | |
| 10 | Services | 24,855 | | | 22,075 | | | 20,715 | | |
| 11 | Total cost of sales | 214,137 | | | 223,546 | | | 212,981 | | |
| 12 | Gross margin | 169,148 | | | 170,782 | | | 152,836 | | |
| 14 | Operating expenses: | | | | | | | | | |
| 15 | Research and development | 29,915 | | | 26,251 | | | 21,914 | | |
| 16 | Selling, general and administrative | 24,932 | | | 25,094 | | | 21,973 | | |
| 17 | Total operating expenses | 54,847 | | | 51,345 | | | 43,887 | | |
| 19 | Operating income | 114,301 | | | 119,437 | | | 108,949 | | |
| 20 | Other income/(expense), net | (565) | | | (334) | | | 258 | | |
| 21 | Income before provision for income taxes | 113,736 | | | 119,103 | | | 109,207 | | |
| 22 | Provision for income taxes | 16,741 | | | 19,300 | | | 14,527 | | |
| 23 | Net income | $ | 96,995 | | | $ | 99,803 | | $ | 94,680 |
| 25 | Earnings per share: | | | | | | | | | |
| 26 | Basic | $ | 6.16 | | | $ | 6.15 | | $ | 5.67 |
| 27 | Diluted | $ | 6.13 | | | $ | 6.11 | | $ | 5.61 |
| 29 | Shares used in computing earnings per share: | | | | | | | | | |
| 30 | Basic | 15,744,231 | | | 16,215,963 | | | 16,701,272 | | |
| 31 | Diluted | 15,812,547 | | | 16,325,819 | | | 16,864,919 | | |
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28
,
Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:--------|:------------------|:---------|:---|:--------|
| 1 | | September 30,2023 | | September 24,2022 | | | |
| 2 | ASSETS: | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 29,965 | | | $ | 23,646 |
| 5 | Marketable securities | 31,590 | | | 24,658 | | |
| 6 | Accounts receivable, net | 29,508 | | | 28,184 | | |
| 7 | Vendor non-trade receivables | 31,477 | | | 32,748 | | |
| 8 | Inventories | 6,331 | | | 4,946 | | |
| 9 | Other current assets | 14,695 | | | 21,223 | | |
| 10 | Total current assets | 143,566 | | | 135,405 | | |
| 12 | Non-current assets: | | | | | | |
| 13 | Marketable securities | 100,544 | | | 120,805 | | |
| 14 | Property, plant and equipment, net | 43,715 | | | 42,117 | | |
| 15 | Other non-current assets | 64,758 | | | 54,428 | | |
| 16 | Total non-current assets | 209,017 | | | 217,350 | | |
| 17 | Total assets | $ | 352,583 | | | $ | 352,755 |
| 19 | LIABILITIES AND SHAREHOLDERS' EQUITY: | | | | | | |
| 20 | Current liabilities: | | | | | | |
| 21 | Accounts payable | $ | 62,611 | | | $ | 64,115 |
| 22 | Other current liabilities | 58,829 | | | 60,845 | | |
| 23 | Deferred revenue | 8,061 | | | 7,912 | | |
| 24 | Commercial paper | 5,985 | | | 9,982 | | |
| 25 | Term debt | 9,822 | | | 11,128 | | |
| 26 | Total current liabilities | 145,308 | | | 153,982 | | |
| 28 | Non-current liabilities: | | | | | | |
| 29 | Term debt | 95,281 | | | 98,959 | | |
| 30 | Other non-current liabilities | 49,848 | | | 49,142 | | |
| 31 | Total non-current liabilities | 145,129 | | | 148,101 | | |
| 32 | Total liabilities | 290,437 | | | 302,083 | | |
| 34 | Commitments and contingencies | | | | | | |
| 36 | Shareholders' equity: | | | | | | |
| 37 | Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively | 73,812 | | | 64,849 | | |
| 38 | Accumulated deficit | (214) | | | (3,068) | | |
| 39 | Accumulated other comprehensive loss | (11,452) | | | (11,109) | | |
| 40 | Total shareholders' equity | 62,146 | | | 50,672 | | |
| 41 | Total liabilities and shareholders' equity | $ | 352,583 | | | $ | 352,755 |
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30
|
Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 28:
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Years ended</td></tr><tr><td colspan="3"></td><td colspan="3">September 30,2023</td><td colspan="3"></td><td colspan="3">September 24,2022</td><td colspan="3"></td><td colspan="3">September 25,2021</td></tr><tr><td colspan="3">Net sales:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Products</td><td>$</td><td>298,085 </td><td></td><td colspan="3"></td><td>$</td><td>316,199 </td><td></td><td colspan="3"></td><td>$</td><td>297,392 </td><td></td></tr><tr><td colspan="3"> Services</td><td colspan="2">85,200 </td><td></td><td colspan="3"></td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">68,425 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td colspan="2">383,285 </td><td></td><td colspan="3"></td><td colspan="2">394,328 </td><td></td><td colspan="3"></td><td colspan="2">365,817 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cost of sales:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Products</td><td colspan="2">189,282 </td><td></td><td colspan="3"></td><td colspan="2">201,471 </td><td></td><td colspan="3"></td><td colspan="2">192,266 </td><td></td></tr><tr><td colspan="3"> Services</td><td colspan="2">24,855 </td><td></td><td colspan="3"></td><td colspan="2">22,075 </td><td></td><td colspan="3"></td><td colspan="2">20,715 </td><td></td></tr><tr><td colspan="3">Total cost of sales</td><td colspan="2">214,137 </td><td></td><td colspan="3"></td><td colspan="2">223,546 </td><td></td><td colspan="3"></td><td colspan="2">212,981 </td><td></td></tr><tr><td colspan="3">Gross margin</td><td colspan="2">169,148 </td><td></td><td colspan="3"></td><td colspan="2">170,782 </td><td></td><td colspan="3"></td><td colspan="2">152,836 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">29,915 </td><td></td><td colspan="3"></td><td colspan="2">26,251 </td><td></td><td colspan="3"></td><td colspan="2">21,914 </td><td></td></tr><tr><td colspan="3">Selling, general and administrative</td><td colspan="2">24,932 </td><td></td><td colspan="3"></td><td colspan="2">25,094 </td><td></td><td colspan="3"></td><td colspan="2">21,973 </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">54,847 </td><td></td><td colspan="3"></td><td colspan="2">51,345 </td><td></td><td colspan="3"></td><td colspan="2">43,887 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">114,301 </td><td></td><td colspan="3"></td><td colspan="2">119,437 </td><td></td><td colspan="3"></td><td colspan="2">108,949 </td><td></td></tr><tr><td colspan="3">Other income/(expense), net</td><td colspan="2">(565)</td><td></td><td colspan="3"></td><td colspan="2">(334)</td><td></td><td colspan="3"></td><td colspan="2">258 </td><td></td></tr><tr><td colspan="3">Income before provision for income taxes</td><td colspan="2">113,736 </td><td></td><td colspan="3"></td><td colspan="2">119,103 </td><td></td><td colspan="3"></td><td colspan="2">109,207 </td><td></td></tr><tr><td colspan="3">Provision for income taxes</td><td colspan="2">16,741 </td><td></td><td colspan="3"></td><td colspan="2">19,300 </td><td></td><td colspan="3"></td><td colspan="2">14,527 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>96,995 </td><td></td><td colspan="3"></td><td>$</td><td>99,803 </td><td></td><td colspan="3"></td><td>$</td><td>94,680 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Earnings per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>6.16 </td><td></td><td colspan="3"></td><td>$</td><td>6.15 </td><td></td><td colspan="3"></td><td>$</td><td>5.67 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>6.13 </td><td></td><td colspan="3"></td><td>$</td><td>6.11 </td><td></td><td colspan="3"></td><td>$</td><td>5.61 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shares used in computing earnings per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">15,744,231 </td><td></td><td colspan="3"></td><td colspan="2">16,215,963 </td><td></td><td colspan="3"></td><td colspan="2">16,701,272 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">15,812,547 </td><td></td><td colspan="3"></td><td colspan="2">16,325,819 </td><td></td><td colspan="3"></td><td colspan="2">16,864,919 </td><td></td></tr></table>
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28
, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 30:
Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">September 30,2023</td><td colspan="3"></td><td colspan="3">September 24,2022</td></tr><tr><td colspan="12">ASSETS:</td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>29,965 </td><td></td><td colspan="3"></td><td>$</td><td>23,646 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">31,590 </td><td></td><td colspan="3"></td><td colspan="2">24,658 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">29,508 </td><td></td><td colspan="3"></td><td colspan="2">28,184 </td><td></td></tr><tr><td colspan="3">Vendor non-trade receivables</td><td colspan="2">31,477 </td><td></td><td colspan="3"></td><td colspan="2">32,748 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">6,331 </td><td></td><td colspan="3"></td><td colspan="2">4,946 </td><td></td></tr><tr><td colspan="3">Other current assets</td><td colspan="2">14,695 </td><td></td><td colspan="3"></td><td colspan="2">21,223 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">143,566 </td><td></td><td colspan="3"></td><td colspan="2">135,405 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">100,544 </td><td></td><td colspan="3"></td><td colspan="2">120,805 </td><td></td></tr><tr><td colspan="3">Property, plant and equipment, net</td><td colspan="2">43,715 </td><td></td><td colspan="3"></td><td colspan="2">42,117 </td><td></td></tr><tr><td colspan="3">Other non-current assets</td><td colspan="2">64,758 </td><td></td><td colspan="3"></td><td colspan="2">54,428 </td><td></td></tr><tr><td colspan="3">Total non-current assets</td><td colspan="2">209,017 </td><td></td><td colspan="3"></td><td colspan="2">217,350 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>352,583 </td><td></td><td colspan="3"></td><td>$</td><td>352,755 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="12">LIABILITIES AND SHAREHOLDERS' EQUITY:</td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>62,611 </td><td></td><td colspan="3"></td><td>$</td><td>64,115 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">58,829 </td><td></td><td colspan="3"></td><td colspan="2">60,845 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">8,061 </td><td></td><td colspan="3"></td><td colspan="2">7,912 </td><td></td></tr><tr><td colspan="3">Commercial paper</td><td colspan="2">5,985 </td><td></td><td colspan="3"></td><td colspan="2">9,982 </td><td></td></tr><tr><td colspan="3">Term debt</td><td colspan="2">9,822 </td><td></td><td colspan="3"></td><td colspan="2">11,128 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">145,308 </td><td></td><td colspan="3"></td><td colspan="2">153,982 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Term debt</td><td colspan="2">95,281 </td><td></td><td colspan="3"></td><td colspan="2">98,959 </td><td></td></tr><tr><td colspan="3">Other non-current liabilities</td><td colspan="2">49,848 </td><td></td><td colspan="3"></td><td colspan="2">49,142 </td><td></td></tr><tr><td colspan="3">Total non-current liabilities</td><td colspan="2">145,129 </td><td></td><td colspan="3"></td><td colspan="2">148,101 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">290,437 </td><td></td><td colspan="3"></td><td colspan="2">302,083 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Commitments and contingencies</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively</td><td colspan="2">73,812 </td><td></td><td colspan="3"></td><td colspan="2">64,849 </td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">(3,068)</td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(11,452)</td><td></td><td colspan="3"></td><td colspan="2">(11,109)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">62,146 </td><td></td><td colspan="3"></td><td colspan="2">50,672 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>352,583 </td><td></td><td colspan="3"></td><td>$</td><td>352,755 </td><td></td></tr></table>
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30
|
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Years ended</td></tr><tr><td colspan="3"></td><td colspan="3">September 30,2023</td><td colspan="3"></td><td colspan="3">September 24,2022</td><td colspan="3"></td><td colspan="3">September 25,2021</td></tr><tr><td colspan="3">Net sales:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Products</td><td>$</td><td>298,085 </td><td></td><td colspan="3"></td><td>$</td><td>316,199 </td><td></td><td colspan="3"></td><td>$</td><td>297,392 </td><td></td></tr><tr><td colspan="3"> Services</td><td colspan="2">85,200 </td><td></td><td colspan="3"></td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">68,425 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td colspan="2">383,285 </td><td></td><td colspan="3"></td><td colspan="2">394,328 </td><td></td><td colspan="3"></td><td colspan="2">365,817 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cost of sales:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Products</td><td colspan="2">189,282 </td><td></td><td colspan="3"></td><td colspan="2">201,471 </td><td></td><td colspan="3"></td><td colspan="2">192,266 </td><td></td></tr><tr><td colspan="3"> Services</td><td colspan="2">24,855 </td><td></td><td colspan="3"></td><td colspan="2">22,075 </td><td></td><td colspan="3"></td><td colspan="2">20,715 </td><td></td></tr><tr><td colspan="3">Total cost of sales</td><td colspan="2">214,137 </td><td></td><td colspan="3"></td><td colspan="2">223,546 </td><td></td><td colspan="3"></td><td colspan="2">212,981 </td><td></td></tr><tr><td colspan="3">Gross margin</td><td colspan="2">169,148 </td><td></td><td colspan="3"></td><td colspan="2">170,782 </td><td></td><td colspan="3"></td><td colspan="2">152,836 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">29,915 </td><td></td><td colspan="3"></td><td colspan="2">26,251 </td><td></td><td colspan="3"></td><td colspan="2">21,914 </td><td></td></tr><tr><td colspan="3">Selling, general and administrative</td><td colspan="2">24,932 </td><td></td><td colspan="3"></td><td colspan="2">25,094 </td><td></td><td colspan="3"></td><td colspan="2">21,973 </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">54,847 </td><td></td><td colspan="3"></td><td colspan="2">51,345 </td><td></td><td colspan="3"></td><td colspan="2">43,887 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">114,301 </td><td></td><td colspan="3"></td><td colspan="2">119,437 </td><td></td><td colspan="3"></td><td colspan="2">108,949 </td><td></td></tr><tr><td colspan="3">Other income/(expense), net</td><td colspan="2">(565)</td><td></td><td colspan="3"></td><td colspan="2">(334)</td><td></td><td colspan="3"></td><td colspan="2">258 </td><td></td></tr><tr><td colspan="3">Income before provision for income taxes</td><td colspan="2">113,736 </td><td></td><td colspan="3"></td><td colspan="2">119,103 </td><td></td><td colspan="3"></td><td colspan="2">109,207 </td><td></td></tr><tr><td colspan="3">Provision for income taxes</td><td colspan="2">16,741 </td><td></td><td colspan="3"></td><td colspan="2">19,300 </td><td></td><td colspan="3"></td><td colspan="2">14,527 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>96,995 </td><td></td><td colspan="3"></td><td>$</td><td>99,803 </td><td></td><td colspan="3"></td><td>$</td><td>94,680 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Earnings per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>6.16 </td><td></td><td colspan="3"></td><td>$</td><td>6.15 </td><td></td><td colspan="3"></td><td>$</td><td>5.67 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>6.13 </td><td></td><td colspan="3"></td><td>$</td><td>6.11 </td><td></td><td colspan="3"></td><td>$</td><td>5.61 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shares used in computing earnings per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">15,744,231 </td><td></td><td colspan="3"></td><td colspan="2">16,215,963 </td><td></td><td colspan="3"></td><td colspan="2">16,701,272 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">15,812,547 </td><td></td><td colspan="3"></td><td colspan="2">16,325,819 </td><td></td><td colspan="3"></td><td colspan="2">16,864,919 </td><td></td></tr></table>
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28
,
Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">September 30,2023</td><td colspan="3"></td><td colspan="3">September 24,2022</td></tr><tr><td colspan="12">ASSETS:</td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>29,965 </td><td></td><td colspan="3"></td><td>$</td><td>23,646 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">31,590 </td><td></td><td colspan="3"></td><td colspan="2">24,658 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">29,508 </td><td></td><td colspan="3"></td><td colspan="2">28,184 </td><td></td></tr><tr><td colspan="3">Vendor non-trade receivables</td><td colspan="2">31,477 </td><td></td><td colspan="3"></td><td colspan="2">32,748 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">6,331 </td><td></td><td colspan="3"></td><td colspan="2">4,946 </td><td></td></tr><tr><td colspan="3">Other current assets</td><td colspan="2">14,695 </td><td></td><td colspan="3"></td><td colspan="2">21,223 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">143,566 </td><td></td><td colspan="3"></td><td colspan="2">135,405 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">100,544 </td><td></td><td colspan="3"></td><td colspan="2">120,805 </td><td></td></tr><tr><td colspan="3">Property, plant and equipment, net</td><td colspan="2">43,715 </td><td></td><td colspan="3"></td><td colspan="2">42,117 </td><td></td></tr><tr><td colspan="3">Other non-current assets</td><td colspan="2">64,758 </td><td></td><td colspan="3"></td><td colspan="2">54,428 </td><td></td></tr><tr><td colspan="3">Total non-current assets</td><td colspan="2">209,017 </td><td></td><td colspan="3"></td><td colspan="2">217,350 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>352,583 </td><td></td><td colspan="3"></td><td>$</td><td>352,755 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="12">LIABILITIES AND SHAREHOLDERS' EQUITY:</td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>62,611 </td><td></td><td colspan="3"></td><td>$</td><td>64,115 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">58,829 </td><td></td><td colspan="3"></td><td colspan="2">60,845 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">8,061 </td><td></td><td colspan="3"></td><td colspan="2">7,912 </td><td></td></tr><tr><td colspan="3">Commercial paper</td><td colspan="2">5,985 </td><td></td><td colspan="3"></td><td colspan="2">9,982 </td><td></td></tr><tr><td colspan="3">Term debt</td><td colspan="2">9,822 </td><td></td><td colspan="3"></td><td colspan="2">11,128 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">145,308 </td><td></td><td colspan="3"></td><td colspan="2">153,982 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Term debt</td><td colspan="2">95,281 </td><td></td><td colspan="3"></td><td colspan="2">98,959 </td><td></td></tr><tr><td colspan="3">Other non-current liabilities</td><td colspan="2">49,848 </td><td></td><td colspan="3"></td><td colspan="2">49,142 </td><td></td></tr><tr><td colspan="3">Total non-current liabilities</td><td colspan="2">145,129 </td><td></td><td colspan="3"></td><td colspan="2">148,101 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">290,437 </td><td></td><td colspan="3"></td><td colspan="2">302,083 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Commitments and contingencies</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively</td><td colspan="2">73,812 </td><td></td><td colspan="3"></td><td colspan="2">64,849 </td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">(3,068)</td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(11,452)</td><td></td><td colspan="3"></td><td colspan="2">(11,109)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">62,146 </td><td></td><td colspan="3"></td><td colspan="2">50,672 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>352,583 </td><td></td><td colspan="3"></td><td>$</td><td>352,755 </td><td></td></tr></table>
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30
|
q_an006
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What does the Fixed Asset Turnover Ratio for Apple Inc. for the year 2023 indicate?
|
The Fixed Asset Turnover Ratio of Apple for 2023 is 8.93. This ratio indicates that Apple Inc. is generating $8.93 in sales for every dollar invested in fixed assets, reflecting highly efficient utilization of its fixed assets to generate revenue.
|
Analysis
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28, 30
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0000320193-23-000106
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Item 8. Financial Statements and Supplementary Data
|
Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 28:
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
| | | | | | | | | | | |
|---:|:---------------------------------------------|:------------------|:--------|:------------------|:-----------|:------------------|:--------|:-----------|:---|:--------|
| 1 | | Years ended | | | | | | | | |
| 2 | | September 30,2023 | | September 24,2022 | | September 25,2021 | | | | |
| 3 | Net sales: | | | | | | | | | |
| 4 | Products | $ | 298,085 | | | $ | 316,199 | | $ | 297,392 |
| 5 | Services | 85,200 | | | 78,129 | | | 68,425 | | |
| 6 | Total net sales | 383,285 | | | 394,328 | | | 365,817 | | |
| 8 | Cost of sales: | | | | | | | | | |
| 9 | Products | 189,282 | | | 201,471 | | | 192,266 | | |
| 10 | Services | 24,855 | | | 22,075 | | | 20,715 | | |
| 11 | Total cost of sales | 214,137 | | | 223,546 | | | 212,981 | | |
| 12 | Gross margin | 169,148 | | | 170,782 | | | 152,836 | | |
| 14 | Operating expenses: | | | | | | | | | |
| 15 | Research and development | 29,915 | | | 26,251 | | | 21,914 | | |
| 16 | Selling, general and administrative | 24,932 | | | 25,094 | | | 21,973 | | |
| 17 | Total operating expenses | 54,847 | | | 51,345 | | | 43,887 | | |
| 19 | Operating income | 114,301 | | | 119,437 | | | 108,949 | | |
| 20 | Other income/(expense), net | (565) | | | (334) | | | 258 | | |
| 21 | Income before provision for income taxes | 113,736 | | | 119,103 | | | 109,207 | | |
| 22 | Provision for income taxes | 16,741 | | | 19,300 | | | 14,527 | | |
| 23 | Net income | $ | 96,995 | | | $ | 99,803 | | $ | 94,680 |
| 25 | Earnings per share: | | | | | | | | | |
| 26 | Basic | $ | 6.16 | | | $ | 6.15 | | $ | 5.67 |
| 27 | Diluted | $ | 6.13 | | | $ | 6.11 | | $ | 5.61 |
| 29 | Shares used in computing earnings per share: | | | | | | | | | |
| 30 | Basic | 15,744,231 | | | 16,215,963 | | | 16,701,272 | | |
| 31 | Diluted | 15,812,547 | | | 16,325,819 | | | 16,864,919 | | |
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28
, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 30:
Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:--------|:------------------|:---------|:---|:--------|
| 1 | | September 30,2023 | | September 24,2022 | | | |
| 2 | ASSETS: | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 29,965 | | | $ | 23,646 |
| 5 | Marketable securities | 31,590 | | | 24,658 | | |
| 6 | Accounts receivable, net | 29,508 | | | 28,184 | | |
| 7 | Vendor non-trade receivables | 31,477 | | | 32,748 | | |
| 8 | Inventories | 6,331 | | | 4,946 | | |
| 9 | Other current assets | 14,695 | | | 21,223 | | |
| 10 | Total current assets | 143,566 | | | 135,405 | | |
| 12 | Non-current assets: | | | | | | |
| 13 | Marketable securities | 100,544 | | | 120,805 | | |
| 14 | Property, plant and equipment, net | 43,715 | | | 42,117 | | |
| 15 | Other non-current assets | 64,758 | | | 54,428 | | |
| 16 | Total non-current assets | 209,017 | | | 217,350 | | |
| 17 | Total assets | $ | 352,583 | | | $ | 352,755 |
| 19 | LIABILITIES AND SHAREHOLDERS' EQUITY: | | | | | | |
| 20 | Current liabilities: | | | | | | |
| 21 | Accounts payable | $ | 62,611 | | | $ | 64,115 |
| 22 | Other current liabilities | 58,829 | | | 60,845 | | |
| 23 | Deferred revenue | 8,061 | | | 7,912 | | |
| 24 | Commercial paper | 5,985 | | | 9,982 | | |
| 25 | Term debt | 9,822 | | | 11,128 | | |
| 26 | Total current liabilities | 145,308 | | | 153,982 | | |
| 28 | Non-current liabilities: | | | | | | |
| 29 | Term debt | 95,281 | | | 98,959 | | |
| 30 | Other non-current liabilities | 49,848 | | | 49,142 | | |
| 31 | Total non-current liabilities | 145,129 | | | 148,101 | | |
| 32 | Total liabilities | 290,437 | | | 302,083 | | |
| 34 | Commitments and contingencies | | | | | | |
| 36 | Shareholders' equity: | | | | | | |
| 37 | Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively | 73,812 | | | 64,849 | | |
| 38 | Accumulated deficit | (214) | | | (3,068) | | |
| 39 | Accumulated other comprehensive loss | (11,452) | | | (11,109) | | |
| 40 | Total shareholders' equity | 62,146 | | | 50,672 | | |
| 41 | Total liabilities and shareholders' equity | $ | 352,583 | | | $ | 352,755 |
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30
|
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
| | | | | | | | | | | |
|---:|:---------------------------------------------|:------------------|:--------|:------------------|:-----------|:------------------|:--------|:-----------|:---|:--------|
| 1 | | Years ended | | | | | | | | |
| 2 | | September 30,2023 | | September 24,2022 | | September 25,2021 | | | | |
| 3 | Net sales: | | | | | | | | | |
| 4 | Products | $ | 298,085 | | | $ | 316,199 | | $ | 297,392 |
| 5 | Services | 85,200 | | | 78,129 | | | 68,425 | | |
| 6 | Total net sales | 383,285 | | | 394,328 | | | 365,817 | | |
| 8 | Cost of sales: | | | | | | | | | |
| 9 | Products | 189,282 | | | 201,471 | | | 192,266 | | |
| 10 | Services | 24,855 | | | 22,075 | | | 20,715 | | |
| 11 | Total cost of sales | 214,137 | | | 223,546 | | | 212,981 | | |
| 12 | Gross margin | 169,148 | | | 170,782 | | | 152,836 | | |
| 14 | Operating expenses: | | | | | | | | | |
| 15 | Research and development | 29,915 | | | 26,251 | | | 21,914 | | |
| 16 | Selling, general and administrative | 24,932 | | | 25,094 | | | 21,973 | | |
| 17 | Total operating expenses | 54,847 | | | 51,345 | | | 43,887 | | |
| 19 | Operating income | 114,301 | | | 119,437 | | | 108,949 | | |
| 20 | Other income/(expense), net | (565) | | | (334) | | | 258 | | |
| 21 | Income before provision for income taxes | 113,736 | | | 119,103 | | | 109,207 | | |
| 22 | Provision for income taxes | 16,741 | | | 19,300 | | | 14,527 | | |
| 23 | Net income | $ | 96,995 | | | $ | 99,803 | | $ | 94,680 |
| 25 | Earnings per share: | | | | | | | | | |
| 26 | Basic | $ | 6.16 | | | $ | 6.15 | | $ | 5.67 |
| 27 | Diluted | $ | 6.13 | | | $ | 6.11 | | $ | 5.61 |
| 29 | Shares used in computing earnings per share: | | | | | | | | | |
| 30 | Basic | 15,744,231 | | | 16,215,963 | | | 16,701,272 | | |
| 31 | Diluted | 15,812,547 | | | 16,325,819 | | | 16,864,919 | | |
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28
,
Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:--------|:------------------|:---------|:---|:--------|
| 1 | | September 30,2023 | | September 24,2022 | | | |
| 2 | ASSETS: | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 29,965 | | | $ | 23,646 |
| 5 | Marketable securities | 31,590 | | | 24,658 | | |
| 6 | Accounts receivable, net | 29,508 | | | 28,184 | | |
| 7 | Vendor non-trade receivables | 31,477 | | | 32,748 | | |
| 8 | Inventories | 6,331 | | | 4,946 | | |
| 9 | Other current assets | 14,695 | | | 21,223 | | |
| 10 | Total current assets | 143,566 | | | 135,405 | | |
| 12 | Non-current assets: | | | | | | |
| 13 | Marketable securities | 100,544 | | | 120,805 | | |
| 14 | Property, plant and equipment, net | 43,715 | | | 42,117 | | |
| 15 | Other non-current assets | 64,758 | | | 54,428 | | |
| 16 | Total non-current assets | 209,017 | | | 217,350 | | |
| 17 | Total assets | $ | 352,583 | | | $ | 352,755 |
| 19 | LIABILITIES AND SHAREHOLDERS' EQUITY: | | | | | | |
| 20 | Current liabilities: | | | | | | |
| 21 | Accounts payable | $ | 62,611 | | | $ | 64,115 |
| 22 | Other current liabilities | 58,829 | | | 60,845 | | |
| 23 | Deferred revenue | 8,061 | | | 7,912 | | |
| 24 | Commercial paper | 5,985 | | | 9,982 | | |
| 25 | Term debt | 9,822 | | | 11,128 | | |
| 26 | Total current liabilities | 145,308 | | | 153,982 | | |
| 28 | Non-current liabilities: | | | | | | |
| 29 | Term debt | 95,281 | | | 98,959 | | |
| 30 | Other non-current liabilities | 49,848 | | | 49,142 | | |
| 31 | Total non-current liabilities | 145,129 | | | 148,101 | | |
| 32 | Total liabilities | 290,437 | | | 302,083 | | |
| 34 | Commitments and contingencies | | | | | | |
| 36 | Shareholders' equity: | | | | | | |
| 37 | Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively | 73,812 | | | 64,849 | | |
| 38 | Accumulated deficit | (214) | | | (3,068) | | |
| 39 | Accumulated other comprehensive loss | (11,452) | | | (11,109) | | |
| 40 | Total shareholders' equity | 62,146 | | | 50,672 | | |
| 41 | Total liabilities and shareholders' equity | $ | 352,583 | | | $ | 352,755 |
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30
|
Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 28:
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Years ended</td></tr><tr><td colspan="3"></td><td colspan="3">September 30,2023</td><td colspan="3"></td><td colspan="3">September 24,2022</td><td colspan="3"></td><td colspan="3">September 25,2021</td></tr><tr><td colspan="3">Net sales:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Products</td><td>$</td><td>298,085 </td><td></td><td colspan="3"></td><td>$</td><td>316,199 </td><td></td><td colspan="3"></td><td>$</td><td>297,392 </td><td></td></tr><tr><td colspan="3"> Services</td><td colspan="2">85,200 </td><td></td><td colspan="3"></td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">68,425 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td colspan="2">383,285 </td><td></td><td colspan="3"></td><td colspan="2">394,328 </td><td></td><td colspan="3"></td><td colspan="2">365,817 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cost of sales:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Products</td><td colspan="2">189,282 </td><td></td><td colspan="3"></td><td colspan="2">201,471 </td><td></td><td colspan="3"></td><td colspan="2">192,266 </td><td></td></tr><tr><td colspan="3"> Services</td><td colspan="2">24,855 </td><td></td><td colspan="3"></td><td colspan="2">22,075 </td><td></td><td colspan="3"></td><td colspan="2">20,715 </td><td></td></tr><tr><td colspan="3">Total cost of sales</td><td colspan="2">214,137 </td><td></td><td colspan="3"></td><td colspan="2">223,546 </td><td></td><td colspan="3"></td><td colspan="2">212,981 </td><td></td></tr><tr><td colspan="3">Gross margin</td><td colspan="2">169,148 </td><td></td><td colspan="3"></td><td colspan="2">170,782 </td><td></td><td colspan="3"></td><td colspan="2">152,836 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">29,915 </td><td></td><td colspan="3"></td><td colspan="2">26,251 </td><td></td><td colspan="3"></td><td colspan="2">21,914 </td><td></td></tr><tr><td colspan="3">Selling, general and administrative</td><td colspan="2">24,932 </td><td></td><td colspan="3"></td><td colspan="2">25,094 </td><td></td><td colspan="3"></td><td colspan="2">21,973 </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">54,847 </td><td></td><td colspan="3"></td><td colspan="2">51,345 </td><td></td><td colspan="3"></td><td colspan="2">43,887 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">114,301 </td><td></td><td colspan="3"></td><td colspan="2">119,437 </td><td></td><td colspan="3"></td><td colspan="2">108,949 </td><td></td></tr><tr><td colspan="3">Other income/(expense), net</td><td colspan="2">(565)</td><td></td><td colspan="3"></td><td colspan="2">(334)</td><td></td><td colspan="3"></td><td colspan="2">258 </td><td></td></tr><tr><td colspan="3">Income before provision for income taxes</td><td colspan="2">113,736 </td><td></td><td colspan="3"></td><td colspan="2">119,103 </td><td></td><td colspan="3"></td><td colspan="2">109,207 </td><td></td></tr><tr><td colspan="3">Provision for income taxes</td><td colspan="2">16,741 </td><td></td><td colspan="3"></td><td colspan="2">19,300 </td><td></td><td colspan="3"></td><td colspan="2">14,527 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>96,995 </td><td></td><td colspan="3"></td><td>$</td><td>99,803 </td><td></td><td colspan="3"></td><td>$</td><td>94,680 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Earnings per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>6.16 </td><td></td><td colspan="3"></td><td>$</td><td>6.15 </td><td></td><td colspan="3"></td><td>$</td><td>5.67 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>6.13 </td><td></td><td colspan="3"></td><td>$</td><td>6.11 </td><td></td><td colspan="3"></td><td>$</td><td>5.61 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shares used in computing earnings per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">15,744,231 </td><td></td><td colspan="3"></td><td colspan="2">16,215,963 </td><td></td><td colspan="3"></td><td colspan="2">16,701,272 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">15,812,547 </td><td></td><td colspan="3"></td><td colspan="2">16,325,819 </td><td></td><td colspan="3"></td><td colspan="2">16,864,919 </td><td></td></tr></table>
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28
, Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 30:
Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">September 30,2023</td><td colspan="3"></td><td colspan="3">September 24,2022</td></tr><tr><td colspan="12">ASSETS:</td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>29,965 </td><td></td><td colspan="3"></td><td>$</td><td>23,646 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">31,590 </td><td></td><td colspan="3"></td><td colspan="2">24,658 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">29,508 </td><td></td><td colspan="3"></td><td colspan="2">28,184 </td><td></td></tr><tr><td colspan="3">Vendor non-trade receivables</td><td colspan="2">31,477 </td><td></td><td colspan="3"></td><td colspan="2">32,748 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">6,331 </td><td></td><td colspan="3"></td><td colspan="2">4,946 </td><td></td></tr><tr><td colspan="3">Other current assets</td><td colspan="2">14,695 </td><td></td><td colspan="3"></td><td colspan="2">21,223 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">143,566 </td><td></td><td colspan="3"></td><td colspan="2">135,405 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">100,544 </td><td></td><td colspan="3"></td><td colspan="2">120,805 </td><td></td></tr><tr><td colspan="3">Property, plant and equipment, net</td><td colspan="2">43,715 </td><td></td><td colspan="3"></td><td colspan="2">42,117 </td><td></td></tr><tr><td colspan="3">Other non-current assets</td><td colspan="2">64,758 </td><td></td><td colspan="3"></td><td colspan="2">54,428 </td><td></td></tr><tr><td colspan="3">Total non-current assets</td><td colspan="2">209,017 </td><td></td><td colspan="3"></td><td colspan="2">217,350 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>352,583 </td><td></td><td colspan="3"></td><td>$</td><td>352,755 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="12">LIABILITIES AND SHAREHOLDERS' EQUITY:</td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>62,611 </td><td></td><td colspan="3"></td><td>$</td><td>64,115 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">58,829 </td><td></td><td colspan="3"></td><td colspan="2">60,845 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">8,061 </td><td></td><td colspan="3"></td><td colspan="2">7,912 </td><td></td></tr><tr><td colspan="3">Commercial paper</td><td colspan="2">5,985 </td><td></td><td colspan="3"></td><td colspan="2">9,982 </td><td></td></tr><tr><td colspan="3">Term debt</td><td colspan="2">9,822 </td><td></td><td colspan="3"></td><td colspan="2">11,128 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">145,308 </td><td></td><td colspan="3"></td><td colspan="2">153,982 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Term debt</td><td colspan="2">95,281 </td><td></td><td colspan="3"></td><td colspan="2">98,959 </td><td></td></tr><tr><td colspan="3">Other non-current liabilities</td><td colspan="2">49,848 </td><td></td><td colspan="3"></td><td colspan="2">49,142 </td><td></td></tr><tr><td colspan="3">Total non-current liabilities</td><td colspan="2">145,129 </td><td></td><td colspan="3"></td><td colspan="2">148,101 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">290,437 </td><td></td><td colspan="3"></td><td colspan="2">302,083 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Commitments and contingencies</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively</td><td colspan="2">73,812 </td><td></td><td colspan="3"></td><td colspan="2">64,849 </td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">(3,068)</td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(11,452)</td><td></td><td colspan="3"></td><td colspan="2">(11,109)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">62,146 </td><td></td><td colspan="3"></td><td colspan="2">50,672 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>352,583 </td><td></td><td colspan="3"></td><td>$</td><td>352,755 </td><td></td></tr></table>
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30
|
Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares, which are reflected in thousands, and per-share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Years ended</td></tr><tr><td colspan="3"></td><td colspan="3">September 30,2023</td><td colspan="3"></td><td colspan="3">September 24,2022</td><td colspan="3"></td><td colspan="3">September 25,2021</td></tr><tr><td colspan="3">Net sales:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Products</td><td>$</td><td>298,085 </td><td></td><td colspan="3"></td><td>$</td><td>316,199 </td><td></td><td colspan="3"></td><td>$</td><td>297,392 </td><td></td></tr><tr><td colspan="3"> Services</td><td colspan="2">85,200 </td><td></td><td colspan="3"></td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">68,425 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td colspan="2">383,285 </td><td></td><td colspan="3"></td><td colspan="2">394,328 </td><td></td><td colspan="3"></td><td colspan="2">365,817 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cost of sales:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Products</td><td colspan="2">189,282 </td><td></td><td colspan="3"></td><td colspan="2">201,471 </td><td></td><td colspan="3"></td><td colspan="2">192,266 </td><td></td></tr><tr><td colspan="3"> Services</td><td colspan="2">24,855 </td><td></td><td colspan="3"></td><td colspan="2">22,075 </td><td></td><td colspan="3"></td><td colspan="2">20,715 </td><td></td></tr><tr><td colspan="3">Total cost of sales</td><td colspan="2">214,137 </td><td></td><td colspan="3"></td><td colspan="2">223,546 </td><td></td><td colspan="3"></td><td colspan="2">212,981 </td><td></td></tr><tr><td colspan="3">Gross margin</td><td colspan="2">169,148 </td><td></td><td colspan="3"></td><td colspan="2">170,782 </td><td></td><td colspan="3"></td><td colspan="2">152,836 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">29,915 </td><td></td><td colspan="3"></td><td colspan="2">26,251 </td><td></td><td colspan="3"></td><td colspan="2">21,914 </td><td></td></tr><tr><td colspan="3">Selling, general and administrative</td><td colspan="2">24,932 </td><td></td><td colspan="3"></td><td colspan="2">25,094 </td><td></td><td colspan="3"></td><td colspan="2">21,973 </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">54,847 </td><td></td><td colspan="3"></td><td colspan="2">51,345 </td><td></td><td colspan="3"></td><td colspan="2">43,887 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">114,301 </td><td></td><td colspan="3"></td><td colspan="2">119,437 </td><td></td><td colspan="3"></td><td colspan="2">108,949 </td><td></td></tr><tr><td colspan="3">Other income/(expense), net</td><td colspan="2">(565)</td><td></td><td colspan="3"></td><td colspan="2">(334)</td><td></td><td colspan="3"></td><td colspan="2">258 </td><td></td></tr><tr><td colspan="3">Income before provision for income taxes</td><td colspan="2">113,736 </td><td></td><td colspan="3"></td><td colspan="2">119,103 </td><td></td><td colspan="3"></td><td colspan="2">109,207 </td><td></td></tr><tr><td colspan="3">Provision for income taxes</td><td colspan="2">16,741 </td><td></td><td colspan="3"></td><td colspan="2">19,300 </td><td></td><td colspan="3"></td><td colspan="2">14,527 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>96,995 </td><td></td><td colspan="3"></td><td>$</td><td>99,803 </td><td></td><td colspan="3"></td><td>$</td><td>94,680 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Earnings per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>6.16 </td><td></td><td colspan="3"></td><td>$</td><td>6.15 </td><td></td><td colspan="3"></td><td>$</td><td>5.67 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>6.13 </td><td></td><td colspan="3"></td><td>$</td><td>6.11 </td><td></td><td colspan="3"></td><td>$</td><td>5.61 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shares used in computing earnings per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">15,744,231 </td><td></td><td colspan="3"></td><td colspan="2">16,215,963 </td><td></td><td colspan="3"></td><td colspan="2">16,701,272 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">15,812,547 </td><td></td><td colspan="3"></td><td colspan="2">16,325,819 </td><td></td><td colspan="3"></td><td colspan="2">16,864,919 </td><td></td></tr></table>
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 28
,
Apple Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in thousands, and par value)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">September 30,2023</td><td colspan="3"></td><td colspan="3">September 24,2022</td></tr><tr><td colspan="12">ASSETS:</td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>29,965 </td><td></td><td colspan="3"></td><td>$</td><td>23,646 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">31,590 </td><td></td><td colspan="3"></td><td colspan="2">24,658 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">29,508 </td><td></td><td colspan="3"></td><td colspan="2">28,184 </td><td></td></tr><tr><td colspan="3">Vendor non-trade receivables</td><td colspan="2">31,477 </td><td></td><td colspan="3"></td><td colspan="2">32,748 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">6,331 </td><td></td><td colspan="3"></td><td colspan="2">4,946 </td><td></td></tr><tr><td colspan="3">Other current assets</td><td colspan="2">14,695 </td><td></td><td colspan="3"></td><td colspan="2">21,223 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">143,566 </td><td></td><td colspan="3"></td><td colspan="2">135,405 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">100,544 </td><td></td><td colspan="3"></td><td colspan="2">120,805 </td><td></td></tr><tr><td colspan="3">Property, plant and equipment, net</td><td colspan="2">43,715 </td><td></td><td colspan="3"></td><td colspan="2">42,117 </td><td></td></tr><tr><td colspan="3">Other non-current assets</td><td colspan="2">64,758 </td><td></td><td colspan="3"></td><td colspan="2">54,428 </td><td></td></tr><tr><td colspan="3">Total non-current assets</td><td colspan="2">209,017 </td><td></td><td colspan="3"></td><td colspan="2">217,350 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>352,583 </td><td></td><td colspan="3"></td><td>$</td><td>352,755 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="12">LIABILITIES AND SHAREHOLDERS' EQUITY:</td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>62,611 </td><td></td><td colspan="3"></td><td>$</td><td>64,115 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">58,829 </td><td></td><td colspan="3"></td><td colspan="2">60,845 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">8,061 </td><td></td><td colspan="3"></td><td colspan="2">7,912 </td><td></td></tr><tr><td colspan="3">Commercial paper</td><td colspan="2">5,985 </td><td></td><td colspan="3"></td><td colspan="2">9,982 </td><td></td></tr><tr><td colspan="3">Term debt</td><td colspan="2">9,822 </td><td></td><td colspan="3"></td><td colspan="2">11,128 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">145,308 </td><td></td><td colspan="3"></td><td colspan="2">153,982 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Term debt</td><td colspan="2">95,281 </td><td></td><td colspan="3"></td><td colspan="2">98,959 </td><td></td></tr><tr><td colspan="3">Other non-current liabilities</td><td colspan="2">49,848 </td><td></td><td colspan="3"></td><td colspan="2">49,142 </td><td></td></tr><tr><td colspan="3">Total non-current liabilities</td><td colspan="2">145,129 </td><td></td><td colspan="3"></td><td colspan="2">148,101 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">290,437 </td><td></td><td colspan="3"></td><td colspan="2">302,083 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Commitments and contingencies</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 15,550,061 and 15,943,425 shares issued and outstanding, respectively</td><td colspan="2">73,812 </td><td></td><td colspan="3"></td><td colspan="2">64,849 </td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">(3,068)</td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(11,452)</td><td></td><td colspan="3"></td><td colspan="2">(11,109)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">62,146 </td><td></td><td colspan="3"></td><td colspan="2">50,672 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>352,583 </td><td></td><td colspan="3"></td><td>$</td><td>352,755 </td><td></td></tr></table>
See accompanying Notes to Consolidated Financial Statements.
Apple Inc. | 2023 Form 10-K | 30
|
q_an007
|
What does the change in dividend payout ratio between 2022 and 2023 indicate about Discover's dividend policy?
|
The increase in dividend payout ratio from 14.9% in FY 2022 to 23.9% in FY 2023 indicates that Discover has been returning a larger portion of its earnings to shareholders. The rise in the payout ratio suggests a shift towards a more generous dividend policy, which may reflect a strategic decision to enhance shareholder value or confidence in the company’s financial stability. This change highlights Discover’s growing commitment to rewarding investors through dividends.
|
Analysis
|
77;86
|
0001393612-24-000010;0001393612-24-000010
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations;Item 8. Financial Statements and Supplementary Data
|
Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 77: Our Board of Directors declared the following common stock dividends during 2023, 2022 and 2021:
| | | | | | | |
|---:|:-----------------------------|:------------------|:-----|:-------------------|:-------------------|:-----|
| 1 | Declaration Date | Record Date | | Payment Date | Dividend per Share | |
| 2 | 2023 | | | | | |
| 3 | October 16, 2023 | November 22, 2023 | | December 07, 2023 | $ | 0.70 |
| 4 | July 17, 2023 | August 24, 2023 | | September 07, 2023 | 0.70 | |
| 5 | April 17, 2023 | May 25, 2023 | | June 08, 2023 | 0.70 | |
| 6 | January 17, 2023 | February 23, 2023 | | March 09, 2023 | 0.60 | |
| 7 | Total common stock dividends | $ | 2.70 | | | |
| 9 | 2022 | | | | | |
| 10 | October 18, 2022 | November 23, 2022 | | December 08, 2022 | $ | 0.60 |
| 11 | July 20, 2022 | August 25, 2022 | | September 08, 2022 | 0.60 | |
| 12 | April 27, 2022 | May 26, 2022 | | June 09, 2022 | 0.60 | |
| 13 | January 18, 2022 | February 17, 2022 | | March 03, 2022 | 0.50 | |
| 14 | Total common stock dividends | $ | 2.30 | | | |
| 16 | 2021 | | | | | |
| 17 | October 19, 2021 | November 24, 2021 | | December 09, 2021 | $ | 0.50 |
| 18 | July 20, 2021 | August 19, 2021 | | September 02, 2021 | 0.50 | |
| 19 | April 20, 2021 | May 20, 2021 | | June 03, 2021 | 0.44 | |
| 20 | January 19, 2021 | February 18, 2021 | | March 04, 2021 | 0.44 | |
| 21 | Total common stock dividends | $ | 1.88 | | | |
On January 16, 2024, we declared a quarterly cash dividend on our common stock of $0.70 per share, payable on March 7, 2024 to holders of record on February 22, 2024, which is consistent with the quarterly amount paid in 2023.
Our Board of Directors declared the following Series C preferred stock dividends during 2023, 2022 and 2021:
| | | | | | | |
|---:|:-----------------------------------------|:-----------------|:------|:------------------|:------------------------------|:------|
| 1 | Declaration Date | Record Date | | Payment Date | Dividend per Depositary Share | |
| 2 | 2023 | | | | | |
| 3 | July 17, 2023 | October 13, 2023 | | October 30, 2023 | $ | 27.50 |
| 4 | January 17, 2023 | April 14, 2023 | | May 01, 2023 | 27.50 | |
| 5 | Total Series C preferred stock dividends | $ | 55.00 | | | |
| 7 | 2022 | | | | | |
| 8 | July 20, 2022 | October 14, 2022 | | October 31, 2022 | $ | 27.50 |
| 9 | January 18, 2022 | April 15, 2022 | | May 02, 2022 | 27.50 | |
| 10 | Total Series C preferred stock dividends | $ | 55.00 | | | |
| 12 | 2021 | | | | | |
| 13 | July 20, 2021 | October 15, 2021 | | November 01, 2021 | $ | 27.50 |
| 14 | January 19, 2021 | April 15, 2021 | | April 30, 2021 | 27.50 | |
| 15 | Total Series C preferred stock dividends | $ | 55.00 | | | |
-77-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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|
Our Board of Directors declared the following common stock dividends during 2023, 2022 and 2021:
| | | | | | | |
|---:|:-----------------------------|:------------------|:-----|:-------------------|:-------------------|:-----|
| 1 | Declaration Date | Record Date | | Payment Date | Dividend per Share | |
| 2 | 2023 | | | | | |
| 3 | October 16, 2023 | November 22, 2023 | | December 07, 2023 | $ | 0.70 |
| 4 | July 17, 2023 | August 24, 2023 | | September 07, 2023 | 0.70 | |
| 5 | April 17, 2023 | May 25, 2023 | | June 08, 2023 | 0.70 | |
| 6 | January 17, 2023 | February 23, 2023 | | March 09, 2023 | 0.60 | |
| 7 | Total common stock dividends | $ | 2.70 | | | |
| 9 | 2022 | | | | | |
| 10 | October 18, 2022 | November 23, 2022 | | December 08, 2022 | $ | 0.60 |
| 11 | July 20, 2022 | August 25, 2022 | | September 08, 2022 | 0.60 | |
| 12 | April 27, 2022 | May 26, 2022 | | June 09, 2022 | 0.60 | |
| 13 | January 18, 2022 | February 17, 2022 | | March 03, 2022 | 0.50 | |
| 14 | Total common stock dividends | $ | 2.30 | | | |
| 16 | 2021 | | | | | |
| 17 | October 19, 2021 | November 24, 2021 | | December 09, 2021 | $ | 0.50 |
| 18 | July 20, 2021 | August 19, 2021 | | September 02, 2021 | 0.50 | |
| 19 | April 20, 2021 | May 20, 2021 | | June 03, 2021 | 0.44 | |
| 20 | January 19, 2021 | February 18, 2021 | | March 04, 2021 | 0.44 | |
| 21 | Total common stock dividends | $ | 1.88 | | | |
On January 16, 2024, we declared a quarterly cash dividend on our common stock of $0.70 per share, payable on March 7, 2024 to holders of record on February 22, 2024, which is consistent with the quarterly amount paid in 2023.
Our Board of Directors declared the following Series C preferred stock dividends during 2023, 2022 and 2021:
| | | | | | | |
|---:|:-----------------------------------------|:-----------------|:------|:------------------|:------------------------------|:------|
| 1 | Declaration Date | Record Date | | Payment Date | Dividend per Depositary Share | |
| 2 | 2023 | | | | | |
| 3 | July 17, 2023 | October 13, 2023 | | October 30, 2023 | $ | 27.50 |
| 4 | January 17, 2023 | April 14, 2023 | | May 01, 2023 | 27.50 | |
| 5 | Total Series C preferred stock dividends | $ | 55.00 | | | |
| 7 | 2022 | | | | | |
| 8 | July 20, 2022 | October 14, 2022 | | October 31, 2022 | $ | 27.50 |
| 9 | January 18, 2022 | April 15, 2022 | | May 02, 2022 | 27.50 | |
| 10 | Total Series C preferred stock dividends | $ | 55.00 | | | |
| 12 | 2021 | | | | | |
| 13 | July 20, 2021 | October 15, 2021 | | November 01, 2021 | $ | 27.50 |
| 14 | January 19, 2021 | April 15, 2021 | | April 30, 2021 | 27.50 | |
| 15 | Total Series C preferred stock dividends | $ | 55.00 | | | |
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,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 77: Our Board of Directors declared the following common stock dividends during 2023, 2022 and 2021:<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Declaration Date</td><td colspan="3"></td><td colspan="3">Record Date</td><td colspan="3"></td><td colspan="3">Payment Date</td><td colspan="3"></td><td colspan="3">Dividend per Share</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">October 16, 2023</td><td colspan="3"></td><td colspan="3">November 22, 2023</td><td colspan="3"></td><td colspan="3">December 07, 2023</td><td colspan="3"></td><td>$</td><td>0.70 </td><td></td></tr><tr><td colspan="3">July 17, 2023</td><td colspan="3"></td><td colspan="3">August 24, 2023</td><td colspan="3"></td><td colspan="3">September 07, 2023</td><td colspan="3"></td><td colspan="2">0.70 </td><td></td></tr><tr><td colspan="3">April 17, 2023</td><td colspan="3"></td><td colspan="3">May 25, 2023</td><td colspan="3"></td><td colspan="3">June 08, 2023</td><td colspan="3"></td><td colspan="2">0.70 </td><td></td></tr><tr><td colspan="3">January 17, 2023</td><td colspan="3"></td><td colspan="3">February 23, 2023</td><td colspan="3"></td><td colspan="3">March 09, 2023</td><td colspan="3"></td><td colspan="2">0.60 </td><td></td></tr><tr><td colspan="15">Total common stock dividends</td><td colspan="3"></td><td>$</td><td>2.70 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">October 18, 2022</td><td colspan="3"></td><td colspan="3">November 23, 2022</td><td colspan="3"></td><td colspan="3">December 08, 2022</td><td colspan="3"></td><td>$</td><td>0.60 </td><td></td></tr><tr><td colspan="3">July 20, 2022</td><td colspan="3"></td><td colspan="3">August 25, 2022</td><td colspan="3"></td><td colspan="3">September 08, 2022</td><td colspan="3"></td><td colspan="2">0.60 </td><td></td></tr><tr><td colspan="3">April 27, 2022</td><td colspan="3"></td><td colspan="3">May 26, 2022</td><td colspan="3"></td><td colspan="3">June 09, 2022</td><td colspan="3"></td><td colspan="2">0.60 </td><td></td></tr><tr><td colspan="3">January 18, 2022</td><td colspan="3"></td><td colspan="3">February 17, 2022</td><td colspan="3"></td><td colspan="3">March 03, 2022</td><td colspan="3"></td><td colspan="2">0.50 </td><td></td></tr><tr><td colspan="15">Total common stock dividends</td><td colspan="3"></td><td>$</td><td>2.30 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">October 19, 2021</td><td colspan="3"></td><td colspan="3">November 24, 2021</td><td colspan="3"></td><td colspan="3">December 09, 2021</td><td colspan="3"></td><td>$</td><td>0.50 </td><td></td></tr><tr><td colspan="3">July 20, 2021</td><td colspan="3"></td><td colspan="3">August 19, 2021</td><td colspan="3"></td><td colspan="3">September 02, 2021</td><td colspan="3"></td><td colspan="2">0.50 </td><td></td></tr><tr><td colspan="3">April 20, 2021</td><td colspan="3"></td><td colspan="3">May 20, 2021</td><td colspan="3"></td><td colspan="3">June 03, 2021</td><td colspan="3"></td><td colspan="2">0.44 </td><td></td></tr><tr><td colspan="3">January 19, 2021</td><td colspan="3"></td><td colspan="3">February 18, 2021</td><td colspan="3"></td><td colspan="3">March 04, 2021</td><td colspan="3"></td><td colspan="2">0.44 </td><td></td></tr><tr><td colspan="15">Total common stock dividends</td><td colspan="3"></td><td>$</td><td>1.88 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>On January 16, 2024, we declared a quarterly cash dividend on our common stock of $0.70 per share, payable on March 7, 2024 to holders of record on February 22, 2024, which is consistent with the quarterly amount paid in 2023.
Our Board of Directors declared the following Series C preferred stock dividends during 2023, 2022 and 2021:<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Declaration Date</td><td colspan="3"></td><td colspan="3">Record Date</td><td colspan="3"></td><td colspan="3">Payment Date</td><td colspan="3"></td><td colspan="3">Dividend per Depositary Share</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">July 17, 2023</td><td colspan="3"></td><td colspan="3">October 13, 2023</td><td colspan="3"></td><td colspan="3">October 30, 2023</td><td colspan="3"></td><td>$</td><td>27.50 </td><td></td></tr><tr><td colspan="3">January 17, 2023</td><td colspan="3"></td><td colspan="3">April 14, 2023</td><td colspan="3"></td><td colspan="3">May 01, 2023</td><td colspan="3"></td><td colspan="2">27.50 </td><td></td></tr><tr><td colspan="15">Total Series C preferred stock dividends</td><td colspan="3"></td><td>$</td><td>55.00 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">July 20, 2022</td><td colspan="3"></td><td colspan="3">October 14, 2022</td><td colspan="3"></td><td colspan="3">October 31, 2022</td><td colspan="3"></td><td>$</td><td>27.50 </td><td></td></tr><tr><td colspan="3">January 18, 2022</td><td colspan="3"></td><td colspan="3">April 15, 2022</td><td colspan="3"></td><td colspan="3">May 02, 2022</td><td colspan="3"></td><td colspan="2">27.50 </td><td></td></tr><tr><td colspan="15">Total Series C preferred stock dividends</td><td colspan="3"></td><td>$</td><td>55.00 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">July 20, 2021</td><td colspan="3"></td><td colspan="3">October 15, 2021</td><td colspan="3"></td><td colspan="3">November 01, 2021</td><td colspan="3"></td><td>$</td><td>27.50 </td><td></td></tr><tr><td colspan="3">January 19, 2021</td><td colspan="3"></td><td colspan="3">April 15, 2021</td><td colspan="3"></td><td colspan="3">April 30, 2021</td><td colspan="3"></td><td colspan="2">27.50 </td><td></td></tr><tr><td colspan="15">Total Series C preferred stock dividends</td><td colspan="3"></td><td>$</td><td>55.00 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>-77-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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Our Board of Directors declared the following common stock dividends during 2023, 2022 and 2021:<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Declaration Date</td><td colspan="3"></td><td colspan="3">Record Date</td><td colspan="3"></td><td colspan="3">Payment Date</td><td colspan="3"></td><td colspan="3">Dividend per Share</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">October 16, 2023</td><td colspan="3"></td><td colspan="3">November 22, 2023</td><td colspan="3"></td><td colspan="3">December 07, 2023</td><td colspan="3"></td><td>$</td><td>0.70 </td><td></td></tr><tr><td colspan="3">July 17, 2023</td><td colspan="3"></td><td colspan="3">August 24, 2023</td><td colspan="3"></td><td colspan="3">September 07, 2023</td><td colspan="3"></td><td colspan="2">0.70 </td><td></td></tr><tr><td colspan="3">April 17, 2023</td><td colspan="3"></td><td colspan="3">May 25, 2023</td><td colspan="3"></td><td colspan="3">June 08, 2023</td><td colspan="3"></td><td colspan="2">0.70 </td><td></td></tr><tr><td colspan="3">January 17, 2023</td><td colspan="3"></td><td colspan="3">February 23, 2023</td><td colspan="3"></td><td colspan="3">March 09, 2023</td><td colspan="3"></td><td colspan="2">0.60 </td><td></td></tr><tr><td colspan="15">Total common stock dividends</td><td colspan="3"></td><td>$</td><td>2.70 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">October 18, 2022</td><td colspan="3"></td><td colspan="3">November 23, 2022</td><td colspan="3"></td><td colspan="3">December 08, 2022</td><td colspan="3"></td><td>$</td><td>0.60 </td><td></td></tr><tr><td colspan="3">July 20, 2022</td><td colspan="3"></td><td colspan="3">August 25, 2022</td><td colspan="3"></td><td colspan="3">September 08, 2022</td><td colspan="3"></td><td colspan="2">0.60 </td><td></td></tr><tr><td colspan="3">April 27, 2022</td><td colspan="3"></td><td colspan="3">May 26, 2022</td><td colspan="3"></td><td colspan="3">June 09, 2022</td><td colspan="3"></td><td colspan="2">0.60 </td><td></td></tr><tr><td colspan="3">January 18, 2022</td><td colspan="3"></td><td colspan="3">February 17, 2022</td><td colspan="3"></td><td colspan="3">March 03, 2022</td><td colspan="3"></td><td colspan="2">0.50 </td><td></td></tr><tr><td colspan="15">Total common stock dividends</td><td colspan="3"></td><td>$</td><td>2.30 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">October 19, 2021</td><td colspan="3"></td><td colspan="3">November 24, 2021</td><td colspan="3"></td><td colspan="3">December 09, 2021</td><td colspan="3"></td><td>$</td><td>0.50 </td><td></td></tr><tr><td colspan="3">July 20, 2021</td><td colspan="3"></td><td colspan="3">August 19, 2021</td><td colspan="3"></td><td colspan="3">September 02, 2021</td><td colspan="3"></td><td colspan="2">0.50 </td><td></td></tr><tr><td colspan="3">April 20, 2021</td><td colspan="3"></td><td colspan="3">May 20, 2021</td><td colspan="3"></td><td colspan="3">June 03, 2021</td><td colspan="3"></td><td colspan="2">0.44 </td><td></td></tr><tr><td colspan="3">January 19, 2021</td><td colspan="3"></td><td colspan="3">February 18, 2021</td><td colspan="3"></td><td colspan="3">March 04, 2021</td><td colspan="3"></td><td colspan="2">0.44 </td><td></td></tr><tr><td colspan="15">Total common stock dividends</td><td colspan="3"></td><td>$</td><td>1.88 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>On January 16, 2024, we declared a quarterly cash dividend on our common stock of $0.70 per share, payable on March 7, 2024 to holders of record on February 22, 2024, which is consistent with the quarterly amount paid in 2023.
Our Board of Directors declared the following Series C preferred stock dividends during 2023, 2022 and 2021:<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Declaration Date</td><td colspan="3"></td><td colspan="3">Record Date</td><td colspan="3"></td><td colspan="3">Payment Date</td><td colspan="3"></td><td colspan="3">Dividend per Depositary Share</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">July 17, 2023</td><td colspan="3"></td><td colspan="3">October 13, 2023</td><td colspan="3"></td><td colspan="3">October 30, 2023</td><td colspan="3"></td><td>$</td><td>27.50 </td><td></td></tr><tr><td colspan="3">January 17, 2023</td><td colspan="3"></td><td colspan="3">April 14, 2023</td><td colspan="3"></td><td colspan="3">May 01, 2023</td><td colspan="3"></td><td colspan="2">27.50 </td><td></td></tr><tr><td colspan="15">Total Series C preferred stock dividends</td><td colspan="3"></td><td>$</td><td>55.00 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">July 20, 2022</td><td colspan="3"></td><td colspan="3">October 14, 2022</td><td colspan="3"></td><td colspan="3">October 31, 2022</td><td colspan="3"></td><td>$</td><td>27.50 </td><td></td></tr><tr><td colspan="3">January 18, 2022</td><td colspan="3"></td><td colspan="3">April 15, 2022</td><td colspan="3"></td><td colspan="3">May 02, 2022</td><td colspan="3"></td><td colspan="2">27.50 </td><td></td></tr><tr><td colspan="15">Total Series C preferred stock dividends</td><td colspan="3"></td><td>$</td><td>55.00 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">July 20, 2021</td><td colspan="3"></td><td colspan="3">October 15, 2021</td><td colspan="3"></td><td colspan="3">November 01, 2021</td><td colspan="3"></td><td>$</td><td>27.50 </td><td></td></tr><tr><td colspan="3">January 19, 2021</td><td colspan="3"></td><td colspan="3">April 15, 2021</td><td colspan="3"></td><td colspan="3">April 30, 2021</td><td colspan="3"></td><td colspan="2">27.50 </td><td></td></tr><tr><td colspan="15">Total Series C preferred stock dividends</td><td colspan="3"></td><td>$</td><td>55.00 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>-77-
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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q_an008
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How Discover’s Return on Assets for 2023 reflect the company’s efficiency in utilizing its assets to generate profit?
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Discover’s ROA for 2023 was approximately 2.08%, which indicates how efficiently the company used its assets to generate profits. A higher ROA suggests that Discover was effective in converting its asset base into earnings.
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Analysis
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85, 86
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0001393612-24-000010
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Item 8. Financial Statements and Supplementary Data
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
-85-
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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|
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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q_an009
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How does NVIDIA's improvement in its Quick Ratio from 2023 to 2024 reflect the company's enhanced liquidity management and financial health?
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There are 2 ways to calculate Quick ratio:
Method 1: Calculating quick assets as Current assets - Inventories:
For 2024: Quick Ratio = ($44,345 - $5,282) / $10,631 = 3.67
For 2023: Quick Ratio = ($23,073 - $5,159) / $6,563 = 2.73
Method 2: Calculating quick assets as sum of Cash and cash equivalent, Short term investments and accounts receivables:
Quick Ratio Calculation
For January 29, 2023
Cash and Cash Equivalents: $3,389 million
Marketable Securities: $9,907 million
Accounts Receivable: $3,827 million
Current Liabilities: $6,563 million
Quick Ratio (2023)=3,389+9,907+3,827/6,563 =17,123/6,563 ≈2.61
For 2024
Cash and Cash Equivalents: $7,280 million
Marketable Securities: $18,704 million
Accounts Receivable: $9,999 million
Current Liabilities: $10,631 million
Quick Ratio (2024)=
7,280+18,704+9,999/10,631 =
35,983/10,631 ≈3.38
Analysis:
NVIDIA's Quick Ratio increased from 2023 to 2024 (2.73 to 3.67 by method 1, 2.61 to 3.38 by method 2). This improvement indicates that the company has enhanced its ability to meet its short-term obligations without relying on the sale of inventory. The higher ratio suggests a stronger liquidity position, reflecting positively on the company's financial health and liquidity management.
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Analysis
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52
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0001045810-24-000029
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Item 15. Exhibit and Financial Statement Schedules
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
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NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
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q_an010
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How does the increase in NVIDIA's Cash Ratio from 2023 to 2024 highlight improvements in its ability to cover liabilities with liquid assets?
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Cash Ratio is calculated using the formula: Cash Ratio = Cash & Cash Equivalents / Current Liabilities.
For 2024: Cash Ratio = $7,280 / $10,631 = 0.68
For 2023: Cash Ratio = $3,389 / $6,563 = 0.52
Analysis:
NVIDIA's Cash Ratio increased from 0.52 in 2023 to 0.68 in 2024. This improvement indicates that the company has enhanced its ability to cover its current liabilities with its most liquid assets, i.e., cash and cash equivalents. The higher ratio suggests a stronger liquidity position, reflecting positively on the company's financial health and liquidity management.
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Analysis
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0001045810-24-000029
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Item 15. Exhibit and Financial Statement Schedules
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
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NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
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q_an011
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What does the significant increase in NVIDIA's Working Capital from 2023 to 2024 reveal about its ability to manage short-term obligations and overall financial health?
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NVIDIA's Working Capital increased from $16,510 million in 2023 to $33,714 million in 2024. This significant improvement indicates that the company has enhanced its ability to cover its short-term obligations with its current assets. The higher working capital suggests a stronger liquidity position, reflecting positively on the company's financial health and liquidity management.
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Analysis
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52
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0001045810-24-000029
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Item 15. Exhibit and Financial Statement Schedules
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
52
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NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
52
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q_an012
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What does the increase in NVIDIA's Days Sales Outstanding (DSO) from 2023 to 2024 indicate about its accounts receivable management and its potential impact on cash flow?
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NVIDIA's Days Sales Outstanding (DSO) increased from 51.8 days in 2023 to 59.9 days in 2024. This increase indicates that the company is taking longer to collect payments from its customers. The higher DSO suggests a potential issue with accounts receivable management, which could impact the company's cash flow and liquidity.
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Analysis
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50, 52
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0001045810-24-000029
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Item 15. Exhibit and Financial Statement Schedules
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 50:
NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)| | | | | | | | | | | |
|---:|:-------------------------------------------------------|:-------------|:-------|:-------------|:-------|:-------------|:-------|:-------|:---|:-------|
| 1 | | Year Ended | | | | | | | | |
| 2 | | Jan 28, 2024 | | Jan 29, 2023 | | Jan 30, 2022 | | | | |
| 3 | Revenue | $ | 60,922 | | | $ | 26,974 | | $ | 26,914 |
| 4 | Cost of revenue | 16,621 | | | 11,618 | | | 9,439 | | |
| 5 | Gross profit | 44,301 | | | 15,356 | | | 17,475 | | |
| 6 | Operating expenses | | | | | | | | | |
| 7 | Research and development | 8,675 | | | 7,339 | | | 5,268 | | |
| 8 | Sales, general and administrative | 2,654 | | | 2,440 | | | 2,166 | | |
| 9 | Acquisition termination cost | - | | | 1,353 | | | - | | |
| 10 | Total operating expenses | 11,329 | | | 11,132 | | | 7,434 | | |
| 11 | Operating income | 32,972 | | | 4,224 | | | 10,041 | | |
| 12 | Interest income | 866 | | | 267 | | | 29 | | |
| 13 | Interest expense | (257) | | | (262) | | | (236) | | |
| 14 | Other, net | 237 | | | (48) | | | 107 | | |
| 15 | Other income (expense), net | 846 | | | (43) | | | (100) | | |
| 16 | Income before income tax | 33,818 | | | 4,181 | | | 9,941 | | |
| 17 | Income tax expense (benefit) | 4,058 | | | (187) | | | 189 | | |
| 18 | Net income | $ | 29,760 | | | $ | 4,368 | | $ | 9,752 |
| 20 | Net income per share: | | | | | | | | | |
| 21 | Basic | $ | 12.05 | | | $ | 1.76 | | $ | 3.91 |
| 22 | Diluted | $ | 11.93 | | | $ | 1.74 | | $ | 3.85 |
| 24 | Weighted average shares used in per share computation: | | | | | | | | | |
| 25 | Basic | 2,469 | | | 2,487 | | | 2,496 | | |
| 26 | Diluted | 2,494 | | | 2,507 | | | 2,535 | | |
See accompanying notes to the consolidated financial statements.
50
, NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)| | | | | | | | | | | |
|---:|:-------------------------------------------------------|:-------------|:-------|:-------------|:-------|:-------------|:-------|:-------|:---|:-------|
| 1 | | Year Ended | | | | | | | | |
| 2 | | Jan 28, 2024 | | Jan 29, 2023 | | Jan 30, 2022 | | | | |
| 3 | Revenue | $ | 60,922 | | | $ | 26,974 | | $ | 26,914 |
| 4 | Cost of revenue | 16,621 | | | 11,618 | | | 9,439 | | |
| 5 | Gross profit | 44,301 | | | 15,356 | | | 17,475 | | |
| 6 | Operating expenses | | | | | | | | | |
| 7 | Research and development | 8,675 | | | 7,339 | | | 5,268 | | |
| 8 | Sales, general and administrative | 2,654 | | | 2,440 | | | 2,166 | | |
| 9 | Acquisition termination cost | - | | | 1,353 | | | - | | |
| 10 | Total operating expenses | 11,329 | | | 11,132 | | | 7,434 | | |
| 11 | Operating income | 32,972 | | | 4,224 | | | 10,041 | | |
| 12 | Interest income | 866 | | | 267 | | | 29 | | |
| 13 | Interest expense | (257) | | | (262) | | | (236) | | |
| 14 | Other, net | 237 | | | (48) | | | 107 | | |
| 15 | Other income (expense), net | 846 | | | (43) | | | (100) | | |
| 16 | Income before income tax | 33,818 | | | 4,181 | | | 9,941 | | |
| 17 | Income tax expense (benefit) | 4,058 | | | (187) | | | 189 | | |
| 18 | Net income | $ | 29,760 | | | $ | 4,368 | | $ | 9,752 |
| 20 | Net income per share: | | | | | | | | | |
| 21 | Basic | $ | 12.05 | | | $ | 1.76 | | $ | 3.91 |
| 22 | Diluted | $ | 11.93 | | | $ | 1.74 | | $ | 3.85 |
| 24 | Weighted average shares used in per share computation: | | | | | | | | | |
| 25 | Basic | 2,469 | | | 2,487 | | | 2,496 | | |
| 26 | Diluted | 2,494 | | | 2,507 | | | 2,535 | | |
See accompanying notes to the consolidated financial statements.
50
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NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 50:
NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Year Ended</td></tr><tr><td colspan="3"></td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td><td colspan="3"></td><td colspan="3">Jan 30, 2022</td></tr><tr><td colspan="3">Revenue</td><td>$</td><td>60,922 </td><td></td><td colspan="3"></td><td>$</td><td>26,974 </td><td></td><td colspan="3"></td><td>$</td><td>26,914 </td><td></td></tr><tr><td colspan="3">Cost of revenue</td><td colspan="2">16,621 </td><td></td><td colspan="3"></td><td colspan="2">11,618 </td><td></td><td colspan="3"></td><td colspan="2">9,439 </td><td></td></tr><tr><td colspan="3">Gross profit</td><td colspan="2">44,301 </td><td></td><td colspan="3"></td><td colspan="2">15,356 </td><td></td><td colspan="3"></td><td colspan="2">17,475 </td><td></td></tr><tr><td colspan="3">Operating expenses</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Research and development</td><td colspan="2">8,675 </td><td></td><td colspan="3"></td><td colspan="2">7,339 </td><td></td><td colspan="3"></td><td colspan="2">5,268 </td><td></td></tr><tr><td colspan="3">Sales, general and administrative</td><td colspan="2">2,654 </td><td></td><td colspan="3"></td><td colspan="2">2,440 </td><td></td><td colspan="3"></td><td colspan="2">2,166 </td><td></td></tr><tr><td colspan="3">Acquisition termination cost</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,353 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">11,329 </td><td></td><td colspan="3"></td><td colspan="2">11,132 </td><td></td><td colspan="3"></td><td colspan="2">7,434 </td><td></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">32,972 </td><td></td><td colspan="3"></td><td colspan="2">4,224 </td><td></td><td colspan="3"></td><td colspan="2">10,041 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="2">866 </td><td></td><td colspan="3"></td><td colspan="2">267 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="2">(257)</td><td></td><td colspan="3"></td><td colspan="2">(262)</td><td></td><td colspan="3"></td><td colspan="2">(236)</td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">237 </td><td></td><td colspan="3"></td><td colspan="2">(48)</td><td></td><td colspan="3"></td><td colspan="2">107 </td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="2">846 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td><td colspan="3"></td><td colspan="2">(100)</td><td></td></tr><tr><td colspan="3">Income before income tax</td><td colspan="2">33,818 </td><td></td><td colspan="3"></td><td colspan="2">4,181 </td><td></td><td colspan="3"></td><td colspan="2">9,941 </td><td></td></tr><tr><td colspan="3">Income tax expense (benefit)</td><td colspan="2">4,058 </td><td></td><td colspan="3"></td><td colspan="2">(187)</td><td></td><td colspan="3"></td><td colspan="2">189 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>29,760 </td><td></td><td colspan="3"></td><td>$</td><td>4,368 </td><td></td><td colspan="3"></td><td>$</td><td>9,752 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>12.05 </td><td></td><td colspan="3"></td><td>$</td><td>1.76 </td><td></td><td colspan="3"></td><td>$</td><td>3.91 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>11.93 </td><td></td><td colspan="3"></td><td>$</td><td>1.74 </td><td></td><td colspan="3"></td><td>$</td><td>3.85 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Weighted average shares used in per share computation:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">2,469 </td><td></td><td colspan="3"></td><td colspan="2">2,487 </td><td></td><td colspan="3"></td><td colspan="2">2,496 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">2,494 </td><td></td><td colspan="3"></td><td colspan="2">2,507 </td><td></td><td colspan="3"></td><td colspan="2">2,535 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
50
, NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
52
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NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Year Ended</td></tr><tr><td colspan="3"></td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td><td colspan="3"></td><td colspan="3">Jan 30, 2022</td></tr><tr><td colspan="3">Revenue</td><td>$</td><td>60,922 </td><td></td><td colspan="3"></td><td>$</td><td>26,974 </td><td></td><td colspan="3"></td><td>$</td><td>26,914 </td><td></td></tr><tr><td colspan="3">Cost of revenue</td><td colspan="2">16,621 </td><td></td><td colspan="3"></td><td colspan="2">11,618 </td><td></td><td colspan="3"></td><td colspan="2">9,439 </td><td></td></tr><tr><td colspan="3">Gross profit</td><td colspan="2">44,301 </td><td></td><td colspan="3"></td><td colspan="2">15,356 </td><td></td><td colspan="3"></td><td colspan="2">17,475 </td><td></td></tr><tr><td colspan="3">Operating expenses</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Research and development</td><td colspan="2">8,675 </td><td></td><td colspan="3"></td><td colspan="2">7,339 </td><td></td><td colspan="3"></td><td colspan="2">5,268 </td><td></td></tr><tr><td colspan="3">Sales, general and administrative</td><td colspan="2">2,654 </td><td></td><td colspan="3"></td><td colspan="2">2,440 </td><td></td><td colspan="3"></td><td colspan="2">2,166 </td><td></td></tr><tr><td colspan="3">Acquisition termination cost</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,353 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">11,329 </td><td></td><td colspan="3"></td><td colspan="2">11,132 </td><td></td><td colspan="3"></td><td colspan="2">7,434 </td><td></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">32,972 </td><td></td><td colspan="3"></td><td colspan="2">4,224 </td><td></td><td colspan="3"></td><td colspan="2">10,041 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="2">866 </td><td></td><td colspan="3"></td><td colspan="2">267 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="2">(257)</td><td></td><td colspan="3"></td><td colspan="2">(262)</td><td></td><td colspan="3"></td><td colspan="2">(236)</td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">237 </td><td></td><td colspan="3"></td><td colspan="2">(48)</td><td></td><td colspan="3"></td><td colspan="2">107 </td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="2">846 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td><td colspan="3"></td><td colspan="2">(100)</td><td></td></tr><tr><td colspan="3">Income before income tax</td><td colspan="2">33,818 </td><td></td><td colspan="3"></td><td colspan="2">4,181 </td><td></td><td colspan="3"></td><td colspan="2">9,941 </td><td></td></tr><tr><td colspan="3">Income tax expense (benefit)</td><td colspan="2">4,058 </td><td></td><td colspan="3"></td><td colspan="2">(187)</td><td></td><td colspan="3"></td><td colspan="2">189 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>29,760 </td><td></td><td colspan="3"></td><td>$</td><td>4,368 </td><td></td><td colspan="3"></td><td>$</td><td>9,752 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>12.05 </td><td></td><td colspan="3"></td><td>$</td><td>1.76 </td><td></td><td colspan="3"></td><td>$</td><td>3.91 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>11.93 </td><td></td><td colspan="3"></td><td>$</td><td>1.74 </td><td></td><td colspan="3"></td><td>$</td><td>3.85 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Weighted average shares used in per share computation:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">2,469 </td><td></td><td colspan="3"></td><td colspan="2">2,487 </td><td></td><td colspan="3"></td><td colspan="2">2,496 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">2,494 </td><td></td><td colspan="3"></td><td colspan="2">2,507 </td><td></td><td colspan="3"></td><td colspan="2">2,535 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
50
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NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
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q_an013
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What are the key findings from the solvency analysis of NVIDIA for 2024 and 2023?
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The key findings from the solvency analysis of NVIDIA for 2024 and 2023 are as follows:
1. Total Liabilities: NVIDIA's total liabilities increased from $19,081 million in 2023 to $22,750 million in 2024, indicating a rise in the company's obligations.
2. Long-term Debt: Long-term debt decreased from $9,703 million in 2023 to $8,459 million in 2024, reflecting the company's efforts to reduce its long-term financial obligations.
3. Debt-to-Equity Ratio: The debt-to-equity ratio is calculated using the formula:
Debt-to-Equity Ratio = Total Liabilities / Total Shareholders' Equity
For 2024:
Debt-to-Equity Ratio (2024) = $22,750 million / $42,978 million = 0.53
For 2023:
Debt-to-Equity Ratio (2023) = $19,081 million / $22,101 million = 0.86
The debt-to-equity ratio decreased from 0.86 in 2023 to 0.53 in 2024, indicating an improvement in the company's solvency position and a lower reliance on debt financing.
4. Interest Coverage Ratio: The interest coverage ratio is calculated using the formula:
Interest Coverage Ratio = Operating Income / Interest Expense
For 2024:
Interest Coverage Ratio (2024) = $32,972 million / $257 million = 128.3
For 2023:
Interest Coverage Ratio (2023) = $4,224 million / $262 million = 16.1
The interest coverage ratio increased significantly from 16.1 in 2023 to 128.3 in 2024, indicating that NVIDIA is in a much stronger position to cover its interest expenses with its operating income.
5. Equity Growth: Total shareholders' equity increased from $22,101 million in 2023 to $42,978 million in 2024, reflecting a substantial growth in the company's equity base.
Overall, NVIDIA's solvency position improved significantly in 2024 compared to 2023. The reduction in long-term debt, lower debt-to-equity ratio, and higher interest coverage ratio indicate a stronger financial position and lower financial risk. The substantial growth in shareholders' equity further enhances the company's solvency and financial stability.
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Analysis
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50,52
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0001045810-24-000029
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Item 15. Exhibit and Financial Statement Schedules
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 50:
NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)| | | | | | | | | | | |
|---:|:-------------------------------------------------------|:-------------|:-------|:-------------|:-------|:-------------|:-------|:-------|:---|:-------|
| 1 | | Year Ended | | | | | | | | |
| 2 | | Jan 28, 2024 | | Jan 29, 2023 | | Jan 30, 2022 | | | | |
| 3 | Revenue | $ | 60,922 | | | $ | 26,974 | | $ | 26,914 |
| 4 | Cost of revenue | 16,621 | | | 11,618 | | | 9,439 | | |
| 5 | Gross profit | 44,301 | | | 15,356 | | | 17,475 | | |
| 6 | Operating expenses | | | | | | | | | |
| 7 | Research and development | 8,675 | | | 7,339 | | | 5,268 | | |
| 8 | Sales, general and administrative | 2,654 | | | 2,440 | | | 2,166 | | |
| 9 | Acquisition termination cost | - | | | 1,353 | | | - | | |
| 10 | Total operating expenses | 11,329 | | | 11,132 | | | 7,434 | | |
| 11 | Operating income | 32,972 | | | 4,224 | | | 10,041 | | |
| 12 | Interest income | 866 | | | 267 | | | 29 | | |
| 13 | Interest expense | (257) | | | (262) | | | (236) | | |
| 14 | Other, net | 237 | | | (48) | | | 107 | | |
| 15 | Other income (expense), net | 846 | | | (43) | | | (100) | | |
| 16 | Income before income tax | 33,818 | | | 4,181 | | | 9,941 | | |
| 17 | Income tax expense (benefit) | 4,058 | | | (187) | | | 189 | | |
| 18 | Net income | $ | 29,760 | | | $ | 4,368 | | $ | 9,752 |
| 20 | Net income per share: | | | | | | | | | |
| 21 | Basic | $ | 12.05 | | | $ | 1.76 | | $ | 3.91 |
| 22 | Diluted | $ | 11.93 | | | $ | 1.74 | | $ | 3.85 |
| 24 | Weighted average shares used in per share computation: | | | | | | | | | |
| 25 | Basic | 2,469 | | | 2,487 | | | 2,496 | | |
| 26 | Diluted | 2,494 | | | 2,507 | | | 2,535 | | |
See accompanying notes to the consolidated financial statements.
50
, NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)| | | | | | | | | | | |
|---:|:-------------------------------------------------------|:-------------|:-------|:-------------|:-------|:-------------|:-------|:-------|:---|:-------|
| 1 | | Year Ended | | | | | | | | |
| 2 | | Jan 28, 2024 | | Jan 29, 2023 | | Jan 30, 2022 | | | | |
| 3 | Revenue | $ | 60,922 | | | $ | 26,974 | | $ | 26,914 |
| 4 | Cost of revenue | 16,621 | | | 11,618 | | | 9,439 | | |
| 5 | Gross profit | 44,301 | | | 15,356 | | | 17,475 | | |
| 6 | Operating expenses | | | | | | | | | |
| 7 | Research and development | 8,675 | | | 7,339 | | | 5,268 | | |
| 8 | Sales, general and administrative | 2,654 | | | 2,440 | | | 2,166 | | |
| 9 | Acquisition termination cost | - | | | 1,353 | | | - | | |
| 10 | Total operating expenses | 11,329 | | | 11,132 | | | 7,434 | | |
| 11 | Operating income | 32,972 | | | 4,224 | | | 10,041 | | |
| 12 | Interest income | 866 | | | 267 | | | 29 | | |
| 13 | Interest expense | (257) | | | (262) | | | (236) | | |
| 14 | Other, net | 237 | | | (48) | | | 107 | | |
| 15 | Other income (expense), net | 846 | | | (43) | | | (100) | | |
| 16 | Income before income tax | 33,818 | | | 4,181 | | | 9,941 | | |
| 17 | Income tax expense (benefit) | 4,058 | | | (187) | | | 189 | | |
| 18 | Net income | $ | 29,760 | | | $ | 4,368 | | $ | 9,752 |
| 20 | Net income per share: | | | | | | | | | |
| 21 | Basic | $ | 12.05 | | | $ | 1.76 | | $ | 3.91 |
| 22 | Diluted | $ | 11.93 | | | $ | 1.74 | | $ | 3.85 |
| 24 | Weighted average shares used in per share computation: | | | | | | | | | |
| 25 | Basic | 2,469 | | | 2,487 | | | 2,496 | | |
| 26 | Diluted | 2,494 | | | 2,507 | | | 2,535 | | |
See accompanying notes to the consolidated financial statements.
50
,
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
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NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 50:
NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Year Ended</td></tr><tr><td colspan="3"></td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td><td colspan="3"></td><td colspan="3">Jan 30, 2022</td></tr><tr><td colspan="3">Revenue</td><td>$</td><td>60,922 </td><td></td><td colspan="3"></td><td>$</td><td>26,974 </td><td></td><td colspan="3"></td><td>$</td><td>26,914 </td><td></td></tr><tr><td colspan="3">Cost of revenue</td><td colspan="2">16,621 </td><td></td><td colspan="3"></td><td colspan="2">11,618 </td><td></td><td colspan="3"></td><td colspan="2">9,439 </td><td></td></tr><tr><td colspan="3">Gross profit</td><td colspan="2">44,301 </td><td></td><td colspan="3"></td><td colspan="2">15,356 </td><td></td><td colspan="3"></td><td colspan="2">17,475 </td><td></td></tr><tr><td colspan="3">Operating expenses</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Research and development</td><td colspan="2">8,675 </td><td></td><td colspan="3"></td><td colspan="2">7,339 </td><td></td><td colspan="3"></td><td colspan="2">5,268 </td><td></td></tr><tr><td colspan="3">Sales, general and administrative</td><td colspan="2">2,654 </td><td></td><td colspan="3"></td><td colspan="2">2,440 </td><td></td><td colspan="3"></td><td colspan="2">2,166 </td><td></td></tr><tr><td colspan="3">Acquisition termination cost</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,353 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">11,329 </td><td></td><td colspan="3"></td><td colspan="2">11,132 </td><td></td><td colspan="3"></td><td colspan="2">7,434 </td><td></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">32,972 </td><td></td><td colspan="3"></td><td colspan="2">4,224 </td><td></td><td colspan="3"></td><td colspan="2">10,041 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="2">866 </td><td></td><td colspan="3"></td><td colspan="2">267 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="2">(257)</td><td></td><td colspan="3"></td><td colspan="2">(262)</td><td></td><td colspan="3"></td><td colspan="2">(236)</td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">237 </td><td></td><td colspan="3"></td><td colspan="2">(48)</td><td></td><td colspan="3"></td><td colspan="2">107 </td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="2">846 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td><td colspan="3"></td><td colspan="2">(100)</td><td></td></tr><tr><td colspan="3">Income before income tax</td><td colspan="2">33,818 </td><td></td><td colspan="3"></td><td colspan="2">4,181 </td><td></td><td colspan="3"></td><td colspan="2">9,941 </td><td></td></tr><tr><td colspan="3">Income tax expense (benefit)</td><td colspan="2">4,058 </td><td></td><td colspan="3"></td><td colspan="2">(187)</td><td></td><td colspan="3"></td><td colspan="2">189 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>29,760 </td><td></td><td colspan="3"></td><td>$</td><td>4,368 </td><td></td><td colspan="3"></td><td>$</td><td>9,752 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>12.05 </td><td></td><td colspan="3"></td><td>$</td><td>1.76 </td><td></td><td colspan="3"></td><td>$</td><td>3.91 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>11.93 </td><td></td><td colspan="3"></td><td>$</td><td>1.74 </td><td></td><td colspan="3"></td><td>$</td><td>3.85 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Weighted average shares used in per share computation:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">2,469 </td><td></td><td colspan="3"></td><td colspan="2">2,487 </td><td></td><td colspan="3"></td><td colspan="2">2,496 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">2,494 </td><td></td><td colspan="3"></td><td colspan="2">2,507 </td><td></td><td colspan="3"></td><td colspan="2">2,535 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
50
, NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
52
|
NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Year Ended</td></tr><tr><td colspan="3"></td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td><td colspan="3"></td><td colspan="3">Jan 30, 2022</td></tr><tr><td colspan="3">Revenue</td><td>$</td><td>60,922 </td><td></td><td colspan="3"></td><td>$</td><td>26,974 </td><td></td><td colspan="3"></td><td>$</td><td>26,914 </td><td></td></tr><tr><td colspan="3">Cost of revenue</td><td colspan="2">16,621 </td><td></td><td colspan="3"></td><td colspan="2">11,618 </td><td></td><td colspan="3"></td><td colspan="2">9,439 </td><td></td></tr><tr><td colspan="3">Gross profit</td><td colspan="2">44,301 </td><td></td><td colspan="3"></td><td colspan="2">15,356 </td><td></td><td colspan="3"></td><td colspan="2">17,475 </td><td></td></tr><tr><td colspan="3">Operating expenses</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Research and development</td><td colspan="2">8,675 </td><td></td><td colspan="3"></td><td colspan="2">7,339 </td><td></td><td colspan="3"></td><td colspan="2">5,268 </td><td></td></tr><tr><td colspan="3">Sales, general and administrative</td><td colspan="2">2,654 </td><td></td><td colspan="3"></td><td colspan="2">2,440 </td><td></td><td colspan="3"></td><td colspan="2">2,166 </td><td></td></tr><tr><td colspan="3">Acquisition termination cost</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,353 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">11,329 </td><td></td><td colspan="3"></td><td colspan="2">11,132 </td><td></td><td colspan="3"></td><td colspan="2">7,434 </td><td></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">32,972 </td><td></td><td colspan="3"></td><td colspan="2">4,224 </td><td></td><td colspan="3"></td><td colspan="2">10,041 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="2">866 </td><td></td><td colspan="3"></td><td colspan="2">267 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="2">(257)</td><td></td><td colspan="3"></td><td colspan="2">(262)</td><td></td><td colspan="3"></td><td colspan="2">(236)</td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">237 </td><td></td><td colspan="3"></td><td colspan="2">(48)</td><td></td><td colspan="3"></td><td colspan="2">107 </td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="2">846 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td><td colspan="3"></td><td colspan="2">(100)</td><td></td></tr><tr><td colspan="3">Income before income tax</td><td colspan="2">33,818 </td><td></td><td colspan="3"></td><td colspan="2">4,181 </td><td></td><td colspan="3"></td><td colspan="2">9,941 </td><td></td></tr><tr><td colspan="3">Income tax expense (benefit)</td><td colspan="2">4,058 </td><td></td><td colspan="3"></td><td colspan="2">(187)</td><td></td><td colspan="3"></td><td colspan="2">189 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>29,760 </td><td></td><td colspan="3"></td><td>$</td><td>4,368 </td><td></td><td colspan="3"></td><td>$</td><td>9,752 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>12.05 </td><td></td><td colspan="3"></td><td>$</td><td>1.76 </td><td></td><td colspan="3"></td><td>$</td><td>3.91 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>11.93 </td><td></td><td colspan="3"></td><td>$</td><td>1.74 </td><td></td><td colspan="3"></td><td>$</td><td>3.85 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Weighted average shares used in per share computation:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">2,469 </td><td></td><td colspan="3"></td><td colspan="2">2,487 </td><td></td><td colspan="3"></td><td colspan="2">2,496 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">2,494 </td><td></td><td colspan="3"></td><td colspan="2">2,507 </td><td></td><td colspan="3"></td><td colspan="2">2,535 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
50
,
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
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q_an014
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What does the Operating Profit Margin reveal about Halliburton's financial health?
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The Operating Profit Margin is a vital measure of a company's operational efficiency and profitability, reflecting the percentage of revenue remaining after covering all operating expenses (excluding interest and taxes). For Halliburton, the Operating Profit Margin rose from 13.34% in 2022 to 17.74% in 2023, indicating improved operational efficiency. This increase suggests that Halliburton has effectively managed its operating costs, such as the cost of services, cost of sales, and general and administrative expenses. A higher Operating Profit Margin not only signifies better cost control but also enhances profitability and financial health. This metric is crucial for investors and analysts, as it reveals the company's capacity to generate profit from core operations, essential for long-term sustainability and growth. A consistent or improving margin over time can highlight strong management practices and a competitive advantage in the industry.
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Analysis
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43
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0000045012-24-000007
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Item 8. Financial Statements and Supplementary Data.
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HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
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| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
|
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
|
q_an015
|
What is the significance of the Gross Profit Margin in assessing Halliburton's profitability?
|
The Gross Profit Margin is a key indicator of a company's financial health and operational efficiency. It measures the percentage of revenue that exceeds the cost of goods sold (COGS), reflecting the core profitability of the company's primary business activities. For Halliburton, the Gross Profit Margin provides insights into how effectively the company is managing its production costs relative to its revenue. A higher Gross Profit Margin indicates that the company retains more revenue after covering the direct costs associated with producing its goods and services, which can be used to cover other operating expenses, invest in growth, and generate profits. In 2023, Halliburton's Gross Profit Margin was 18.94%, up from 16.32% in 2022. This improvement suggests that Halliburton has become more efficient in managing its production costs, leading to higher profitability. The Gross Profit Margin is crucial for investors and analysts as it helps assess the company's ability to generate profit from its core operations before accounting for other expenses such as administrative costs, interest, and taxes. A consistent or improving Gross Profit Margin over time can indicate a strong competitive position and effective cost management strategies.
|
Analysis
|
43
|
0000045012-24-000007
|
Item 8. Financial Statements and Supplementary Data.
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
|
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
|
q_an016
|
How does the Interest Coverage Ratio for Halliburton in 2023 reflect its ability to meet interest obligations?
|
The Interest Coverage Ratio is calculated by dividing EBIT (Earnings Before Interest and Taxes) by Interest Expenses. For Halliburton in 2023, the EBIT is $4,083 million, and the Interest Expense is $395 million.
Interest Coverage Ratio = EBIT / Interest Expenses = $4,083 million / $395 million ≈ 10.34
An Interest Coverage Ratio of 10.34 indicates that Halliburton earns over ten times its interest obligations. This high ratio suggests that the company is in a strong position to meet its interest payments comfortably. It reflects a low risk of default on interest payments, indicating good financial health and stability. A higher interest coverage ratio is generally favorable as it shows that the company generates sufficient earnings to cover its interest expenses multiple times over, reducing the risk for creditors and investors.
|
Analysis
|
43
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0000045012-24-000007
|
Item 8. Financial Statements and Supplementary Data.
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
|
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
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q_an017
|
What does the Financial Leverage Ratio for Halliburton in 2023 indicate about its use of debt relative to equity?
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The Financial Leverage Ratio is calculated by dividing Total Assets by Shareholders' Equity. For Halliburton in 2023, the Total Assets are $24,683 million, and the Shareholders' Equity is $9,433 million.
Financial Leverage Ratio = Total Assets / Shareholders' Equity = $24,683 million / $9,433 million ≈ 2.62
A Financial Leverage Ratio of 2.62 indicates that Halliburton uses $2.62 in assets for every $1 of equity. This ratio suggests that the company is leveraging its equity to acquire more assets, which can potentially enhance returns on equity. However, it also implies a higher level of debt, which can increase financial risk. A higher financial leverage ratio can be beneficial if the company generates sufficient returns on its assets to cover the cost of debt. Conversely, it can be risky if the returns on assets are insufficient, leading to potential financial distress.
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Analysis
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45
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0000045012-24-000007
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Item 8. Financial Statements and Supplementary Data.
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HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
|
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
|
q_an018
|
Analyze the Cash Flow to Debt Ratio for 2023 and its implications for the company's debt management.
|
The Cash Flow to Debt Ratio is calculated by dividing operating cash flow by total debt. For 2023, the operating cash flow is $3,458 million, and total debt (sum of long-term debt and current portion of operating lease liabilities) is $8,547 million. This gives a Cash Flow to Debt Ratio of approximately 0.40. This ratio indicates that the company generates 40% of its total debt in cash from its operations. A higher ratio suggests better debt management and a stronger ability to service debt using cash generated from core business activities.
|
Analysis
|
45, 46
|
0000045012-24-000007
|
Item 8. Financial Statements and Supplementary Data.
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 46:
| | | | | | | | | |
|---:|:-----------------------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:--------|:---|:------|:---|:------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Cash Flows | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars | 2023 | 2022 | 2021 | | | | |
| 4 | Cash flows from operating activities: | | | | | | | |
| 5 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 6 | Adjustments to reconcile net income to cash flows from operating activities: | | | | | | | |
| 7 | Depreciation, depletion, and amortization | 998 | | 940 | | 904 | | |
| 8 | Deferred income tax provision (benefit) | 196 | | 70 | | (486) | | |
| 9 | Impairments and other charges | - | | 366 | | 12 | | |
| 11 | Changes in assets and liabilities: | | | | | | | |
| 12 | Inventories | (303) | | (642) | | (10) | | |
| 13 | Receivables | (257) | | (1,151) | | (500) | | |
| 14 | Accounts payable | 49 | | 852 | | 795 | | |
| 15 | Other operating activities | 113 | | 212 | | (272) | | |
| 16 | Total cash flows provided by operating activities | 3,458 | | 2,242 | | 1,911 | | |
| 17 | Cash flows from investing activities: | | | | | | | |
| 18 | Capital expenditures | (1,379) | | (1,011) | | (799) | | |
| 19 | Purchases of investment securities | (492) | | (75) | | (5) | | |
| 20 | Proceeds from sales of property, plant, and equipment | 195 | | 200 | | 257 | | |
| 21 | Sales of investment securities | 131 | | - | | - | | |
| 22 | Proceeds from a structured real estate transaction | - | | - | | 87 | | |
| 24 | Other investing activities | (114) | | (81) | | (74) | | |
| 25 | Total cash flows used in investing activities | (1,659) | | (967) | | (534) | | |
| 26 | Cash flows from financing activities: | | | | | | | |
| 27 | Stock repurchase program | (800) | | (250) | | - | | |
| 28 | Dividends to shareholders | (576) | | (435) | | (161) | | |
| 29 | Payments on long-term borrowings | (305) | | (1,242) | | (700) | | |
| 30 | Proceeds from issuance of common stock | 136 | | 229 | | 79 | | |
| 32 | Other financing activities | (126) | | (100) | | (56) | | |
| 33 | Total cash flows used in financing activities | (1,671) | | (1,798) | | (838) | | |
| 34 | Effect of exchange rate changes on cash | (210) | | (175) | | (58) | | |
| 35 | Increase / (decrease) in cash and equivalents | (82) | | (698) | | 481 | | |
| 36 | Cash and equivalents at beginning of year | 2,346 | | 3,044 | | 2,563 | | |
| 37 | Cash and equivalents at end of year | $ | 2,264 | | $ | 2,346 | $ | 3,044 |
| 38 | Supplemental disclosure of cash flow information: | | | | | | | |
| 39 | Cash payments during the period for: | | | | | | | |
| 40 | Interest | $ | 460 | | $ | 487 | $ | 517 |
| 41 | Income taxes | $ | 616 | | $ | 354 | $ | 214 |
| 42 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 46
|
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
,
| | | | | | | | | |
|---:|:-----------------------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:--------|:---|:------|:---|:------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Cash Flows | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars | 2023 | 2022 | 2021 | | | | |
| 4 | Cash flows from operating activities: | | | | | | | |
| 5 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 6 | Adjustments to reconcile net income to cash flows from operating activities: | | | | | | | |
| 7 | Depreciation, depletion, and amortization | 998 | | 940 | | 904 | | |
| 8 | Deferred income tax provision (benefit) | 196 | | 70 | | (486) | | |
| 9 | Impairments and other charges | - | | 366 | | 12 | | |
| 11 | Changes in assets and liabilities: | | | | | | | |
| 12 | Inventories | (303) | | (642) | | (10) | | |
| 13 | Receivables | (257) | | (1,151) | | (500) | | |
| 14 | Accounts payable | 49 | | 852 | | 795 | | |
| 15 | Other operating activities | 113 | | 212 | | (272) | | |
| 16 | Total cash flows provided by operating activities | 3,458 | | 2,242 | | 1,911 | | |
| 17 | Cash flows from investing activities: | | | | | | | |
| 18 | Capital expenditures | (1,379) | | (1,011) | | (799) | | |
| 19 | Purchases of investment securities | (492) | | (75) | | (5) | | |
| 20 | Proceeds from sales of property, plant, and equipment | 195 | | 200 | | 257 | | |
| 21 | Sales of investment securities | 131 | | - | | - | | |
| 22 | Proceeds from a structured real estate transaction | - | | - | | 87 | | |
| 24 | Other investing activities | (114) | | (81) | | (74) | | |
| 25 | Total cash flows used in investing activities | (1,659) | | (967) | | (534) | | |
| 26 | Cash flows from financing activities: | | | | | | | |
| 27 | Stock repurchase program | (800) | | (250) | | - | | |
| 28 | Dividends to shareholders | (576) | | (435) | | (161) | | |
| 29 | Payments on long-term borrowings | (305) | | (1,242) | | (700) | | |
| 30 | Proceeds from issuance of common stock | 136 | | 229 | | 79 | | |
| 32 | Other financing activities | (126) | | (100) | | (56) | | |
| 33 | Total cash flows used in financing activities | (1,671) | | (1,798) | | (838) | | |
| 34 | Effect of exchange rate changes on cash | (210) | | (175) | | (58) | | |
| 35 | Increase / (decrease) in cash and equivalents | (82) | | (698) | | 481 | | |
| 36 | Cash and equivalents at beginning of year | 2,346 | | 3,044 | | 2,563 | | |
| 37 | Cash and equivalents at end of year | $ | 2,264 | | $ | 2,346 | $ | 3,044 |
| 38 | Supplemental disclosure of cash flow information: | | | | | | | |
| 39 | Cash payments during the period for: | | | | | | | |
| 40 | Interest | $ | 460 | | $ | 487 | $ | 517 |
| 41 | Income taxes | $ | 616 | | $ | 354 | $ | 214 |
| 42 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 46
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 46:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Cash Flows</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Adjustments to reconcile net income to cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Depreciation, depletion, and amortization</td><td colspan="2">998 </td><td></td><td colspan="2">940 </td><td></td><td colspan="2">904 </td><td></td></tr><tr><td colspan="6">Deferred income tax provision (benefit)</td><td colspan="2">196 </td><td></td><td colspan="2">70 </td><td></td><td colspan="2">(486)</td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">(303)</td><td></td><td colspan="2">(642)</td><td></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="6">Receivables</td><td colspan="2">(257)</td><td></td><td colspan="2">(1,151)</td><td></td><td colspan="2">(500)</td><td></td></tr><tr><td colspan="6">Accounts payable</td><td colspan="2">49 </td><td></td><td colspan="2">852 </td><td></td><td colspan="2">795 </td><td></td></tr><tr><td colspan="6">Other operating activities</td><td colspan="2">113 </td><td></td><td colspan="2">212 </td><td></td><td colspan="2">(272)</td><td></td></tr><tr><td colspan="6">Total cash flows provided by operating activities</td><td colspan="2">3,458 </td><td></td><td colspan="2">2,242 </td><td></td><td colspan="2">1,911 </td><td></td></tr><tr><td colspan="6">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Capital expenditures</td><td colspan="2">(1,379)</td><td></td><td colspan="2">(1,011)</td><td></td><td colspan="2">(799)</td><td></td></tr><tr><td colspan="6">Purchases of investment securities</td><td colspan="2">(492)</td><td></td><td colspan="2">(75)</td><td></td><td colspan="2">(5)</td><td></td></tr><tr><td colspan="6">Proceeds from sales of property, plant, and equipment</td><td colspan="2">195 </td><td></td><td colspan="2">200 </td><td></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="6">Sales of investment securities</td><td colspan="2">131 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Proceeds from a structured real estate transaction</td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td><td colspan="2">87 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other investing activities</td><td colspan="2">(114)</td><td></td><td colspan="2">(81)</td><td></td><td colspan="2">(74)</td><td></td></tr><tr><td colspan="6">Total cash flows used in investing activities</td><td colspan="2">(1,659)</td><td></td><td colspan="2">(967)</td><td></td><td colspan="2">(534)</td><td></td></tr><tr><td colspan="6">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Stock repurchase program</td><td colspan="2">(800)</td><td></td><td colspan="2">(250)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Dividends to shareholders</td><td colspan="2">(576)</td><td></td><td colspan="2">(435)</td><td></td><td colspan="2">(161)</td><td></td></tr><tr><td colspan="6">Payments on long-term borrowings</td><td colspan="2">(305)</td><td></td><td colspan="2">(1,242)</td><td></td><td colspan="2">(700)</td><td></td></tr><tr><td colspan="6">Proceeds from issuance of common stock</td><td colspan="2">136 </td><td></td><td colspan="2">229 </td><td></td><td colspan="2">79 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other financing activities</td><td colspan="2">(126)</td><td></td><td colspan="2">(100)</td><td></td><td colspan="2">(56)</td><td></td></tr><tr><td colspan="6">Total cash flows used in financing activities</td><td colspan="2">(1,671)</td><td></td><td colspan="2">(1,798)</td><td></td><td colspan="2">(838)</td><td></td></tr><tr><td colspan="6">Effect of exchange rate changes on cash</td><td colspan="2">(210)</td><td></td><td colspan="2">(175)</td><td></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="6">Increase / (decrease) in cash and equivalents</td><td colspan="2">(82)</td><td></td><td colspan="2">(698)</td><td></td><td colspan="2">481 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at beginning of year</td><td colspan="2">2,346 </td><td></td><td colspan="2">3,044 </td><td></td><td colspan="2">2,563 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at end of year</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td>$</td><td>3,044 </td><td></td></tr><tr><td colspan="6">Supplemental disclosure of cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash payments during the period for:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Interest</td><td>$</td><td>460 </td><td></td><td>$</td><td>487 </td><td></td><td>$</td><td>517 </td><td></td></tr><tr><td colspan="6">Income taxes</td><td>$</td><td>616 </td><td></td><td>$</td><td>354 </td><td></td><td>$</td><td>214 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 46
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
,
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Cash Flows</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Adjustments to reconcile net income to cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Depreciation, depletion, and amortization</td><td colspan="2">998 </td><td></td><td colspan="2">940 </td><td></td><td colspan="2">904 </td><td></td></tr><tr><td colspan="6">Deferred income tax provision (benefit)</td><td colspan="2">196 </td><td></td><td colspan="2">70 </td><td></td><td colspan="2">(486)</td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">(303)</td><td></td><td colspan="2">(642)</td><td></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="6">Receivables</td><td colspan="2">(257)</td><td></td><td colspan="2">(1,151)</td><td></td><td colspan="2">(500)</td><td></td></tr><tr><td colspan="6">Accounts payable</td><td colspan="2">49 </td><td></td><td colspan="2">852 </td><td></td><td colspan="2">795 </td><td></td></tr><tr><td colspan="6">Other operating activities</td><td colspan="2">113 </td><td></td><td colspan="2">212 </td><td></td><td colspan="2">(272)</td><td></td></tr><tr><td colspan="6">Total cash flows provided by operating activities</td><td colspan="2">3,458 </td><td></td><td colspan="2">2,242 </td><td></td><td colspan="2">1,911 </td><td></td></tr><tr><td colspan="6">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Capital expenditures</td><td colspan="2">(1,379)</td><td></td><td colspan="2">(1,011)</td><td></td><td colspan="2">(799)</td><td></td></tr><tr><td colspan="6">Purchases of investment securities</td><td colspan="2">(492)</td><td></td><td colspan="2">(75)</td><td></td><td colspan="2">(5)</td><td></td></tr><tr><td colspan="6">Proceeds from sales of property, plant, and equipment</td><td colspan="2">195 </td><td></td><td colspan="2">200 </td><td></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="6">Sales of investment securities</td><td colspan="2">131 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Proceeds from a structured real estate transaction</td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td><td colspan="2">87 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other investing activities</td><td colspan="2">(114)</td><td></td><td colspan="2">(81)</td><td></td><td colspan="2">(74)</td><td></td></tr><tr><td colspan="6">Total cash flows used in investing activities</td><td colspan="2">(1,659)</td><td></td><td colspan="2">(967)</td><td></td><td colspan="2">(534)</td><td></td></tr><tr><td colspan="6">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Stock repurchase program</td><td colspan="2">(800)</td><td></td><td colspan="2">(250)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Dividends to shareholders</td><td colspan="2">(576)</td><td></td><td colspan="2">(435)</td><td></td><td colspan="2">(161)</td><td></td></tr><tr><td colspan="6">Payments on long-term borrowings</td><td colspan="2">(305)</td><td></td><td colspan="2">(1,242)</td><td></td><td colspan="2">(700)</td><td></td></tr><tr><td colspan="6">Proceeds from issuance of common stock</td><td colspan="2">136 </td><td></td><td colspan="2">229 </td><td></td><td colspan="2">79 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other financing activities</td><td colspan="2">(126)</td><td></td><td colspan="2">(100)</td><td></td><td colspan="2">(56)</td><td></td></tr><tr><td colspan="6">Total cash flows used in financing activities</td><td colspan="2">(1,671)</td><td></td><td colspan="2">(1,798)</td><td></td><td colspan="2">(838)</td><td></td></tr><tr><td colspan="6">Effect of exchange rate changes on cash</td><td colspan="2">(210)</td><td></td><td colspan="2">(175)</td><td></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="6">Increase / (decrease) in cash and equivalents</td><td colspan="2">(82)</td><td></td><td colspan="2">(698)</td><td></td><td colspan="2">481 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at beginning of year</td><td colspan="2">2,346 </td><td></td><td colspan="2">3,044 </td><td></td><td colspan="2">2,563 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at end of year</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td>$</td><td>3,044 </td><td></td></tr><tr><td colspan="6">Supplemental disclosure of cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash payments during the period for:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Interest</td><td>$</td><td>460 </td><td></td><td>$</td><td>487 </td><td></td><td>$</td><td>517 </td><td></td></tr><tr><td colspan="6">Income taxes</td><td>$</td><td>616 </td><td></td><td>$</td><td>354 </td><td></td><td>$</td><td>214 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 46
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q_an019
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How does the Free Cash Flow for 2023 reflect the company's financial flexibility?
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Free Cash Flow is calculated by subtracting capital expenditures from operating cash flow. For 2023, the operating cash flow is $3,458 million, and capital expenditures are $1,379 million. This gives a Free Cash Flow of $2,079 million. Positive Free Cash Flow indicates that the company has sufficient cash generated from operations to cover its capital expenditures and still have cash left over for other purposes, such as paying down debt, paying dividends, or investing in growth opportunities. This reflects strong financial flexibility and the ability to pursue strategic initiatives.
|
Analysis
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46
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0000045012-24-000007
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Item 8. Financial Statements and Supplementary Data.
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HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 46:
| | | | | | | | | |
|---:|:-----------------------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:--------|:---|:------|:---|:------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Cash Flows | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars | 2023 | 2022 | 2021 | | | | |
| 4 | Cash flows from operating activities: | | | | | | | |
| 5 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 6 | Adjustments to reconcile net income to cash flows from operating activities: | | | | | | | |
| 7 | Depreciation, depletion, and amortization | 998 | | 940 | | 904 | | |
| 8 | Deferred income tax provision (benefit) | 196 | | 70 | | (486) | | |
| 9 | Impairments and other charges | - | | 366 | | 12 | | |
| 11 | Changes in assets and liabilities: | | | | | | | |
| 12 | Inventories | (303) | | (642) | | (10) | | |
| 13 | Receivables | (257) | | (1,151) | | (500) | | |
| 14 | Accounts payable | 49 | | 852 | | 795 | | |
| 15 | Other operating activities | 113 | | 212 | | (272) | | |
| 16 | Total cash flows provided by operating activities | 3,458 | | 2,242 | | 1,911 | | |
| 17 | Cash flows from investing activities: | | | | | | | |
| 18 | Capital expenditures | (1,379) | | (1,011) | | (799) | | |
| 19 | Purchases of investment securities | (492) | | (75) | | (5) | | |
| 20 | Proceeds from sales of property, plant, and equipment | 195 | | 200 | | 257 | | |
| 21 | Sales of investment securities | 131 | | - | | - | | |
| 22 | Proceeds from a structured real estate transaction | - | | - | | 87 | | |
| 24 | Other investing activities | (114) | | (81) | | (74) | | |
| 25 | Total cash flows used in investing activities | (1,659) | | (967) | | (534) | | |
| 26 | Cash flows from financing activities: | | | | | | | |
| 27 | Stock repurchase program | (800) | | (250) | | - | | |
| 28 | Dividends to shareholders | (576) | | (435) | | (161) | | |
| 29 | Payments on long-term borrowings | (305) | | (1,242) | | (700) | | |
| 30 | Proceeds from issuance of common stock | 136 | | 229 | | 79 | | |
| 32 | Other financing activities | (126) | | (100) | | (56) | | |
| 33 | Total cash flows used in financing activities | (1,671) | | (1,798) | | (838) | | |
| 34 | Effect of exchange rate changes on cash | (210) | | (175) | | (58) | | |
| 35 | Increase / (decrease) in cash and equivalents | (82) | | (698) | | 481 | | |
| 36 | Cash and equivalents at beginning of year | 2,346 | | 3,044 | | 2,563 | | |
| 37 | Cash and equivalents at end of year | $ | 2,264 | | $ | 2,346 | $ | 3,044 |
| 38 | Supplemental disclosure of cash flow information: | | | | | | | |
| 39 | Cash payments during the period for: | | | | | | | |
| 40 | Interest | $ | 460 | | $ | 487 | $ | 517 |
| 41 | Income taxes | $ | 616 | | $ | 354 | $ | 214 |
| 42 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 46
|
| | | | | | | | | |
|---:|:-----------------------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:--------|:---|:------|:---|:------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Cash Flows | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars | 2023 | 2022 | 2021 | | | | |
| 4 | Cash flows from operating activities: | | | | | | | |
| 5 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 6 | Adjustments to reconcile net income to cash flows from operating activities: | | | | | | | |
| 7 | Depreciation, depletion, and amortization | 998 | | 940 | | 904 | | |
| 8 | Deferred income tax provision (benefit) | 196 | | 70 | | (486) | | |
| 9 | Impairments and other charges | - | | 366 | | 12 | | |
| 11 | Changes in assets and liabilities: | | | | | | | |
| 12 | Inventories | (303) | | (642) | | (10) | | |
| 13 | Receivables | (257) | | (1,151) | | (500) | | |
| 14 | Accounts payable | 49 | | 852 | | 795 | | |
| 15 | Other operating activities | 113 | | 212 | | (272) | | |
| 16 | Total cash flows provided by operating activities | 3,458 | | 2,242 | | 1,911 | | |
| 17 | Cash flows from investing activities: | | | | | | | |
| 18 | Capital expenditures | (1,379) | | (1,011) | | (799) | | |
| 19 | Purchases of investment securities | (492) | | (75) | | (5) | | |
| 20 | Proceeds from sales of property, plant, and equipment | 195 | | 200 | | 257 | | |
| 21 | Sales of investment securities | 131 | | - | | - | | |
| 22 | Proceeds from a structured real estate transaction | - | | - | | 87 | | |
| 24 | Other investing activities | (114) | | (81) | | (74) | | |
| 25 | Total cash flows used in investing activities | (1,659) | | (967) | | (534) | | |
| 26 | Cash flows from financing activities: | | | | | | | |
| 27 | Stock repurchase program | (800) | | (250) | | - | | |
| 28 | Dividends to shareholders | (576) | | (435) | | (161) | | |
| 29 | Payments on long-term borrowings | (305) | | (1,242) | | (700) | | |
| 30 | Proceeds from issuance of common stock | 136 | | 229 | | 79 | | |
| 32 | Other financing activities | (126) | | (100) | | (56) | | |
| 33 | Total cash flows used in financing activities | (1,671) | | (1,798) | | (838) | | |
| 34 | Effect of exchange rate changes on cash | (210) | | (175) | | (58) | | |
| 35 | Increase / (decrease) in cash and equivalents | (82) | | (698) | | 481 | | |
| 36 | Cash and equivalents at beginning of year | 2,346 | | 3,044 | | 2,563 | | |
| 37 | Cash and equivalents at end of year | $ | 2,264 | | $ | 2,346 | $ | 3,044 |
| 38 | Supplemental disclosure of cash flow information: | | | | | | | |
| 39 | Cash payments during the period for: | | | | | | | |
| 40 | Interest | $ | 460 | | $ | 487 | $ | 517 |
| 41 | Income taxes | $ | 616 | | $ | 354 | $ | 214 |
| 42 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 46
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 46:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Cash Flows</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Adjustments to reconcile net income to cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Depreciation, depletion, and amortization</td><td colspan="2">998 </td><td></td><td colspan="2">940 </td><td></td><td colspan="2">904 </td><td></td></tr><tr><td colspan="6">Deferred income tax provision (benefit)</td><td colspan="2">196 </td><td></td><td colspan="2">70 </td><td></td><td colspan="2">(486)</td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">(303)</td><td></td><td colspan="2">(642)</td><td></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="6">Receivables</td><td colspan="2">(257)</td><td></td><td colspan="2">(1,151)</td><td></td><td colspan="2">(500)</td><td></td></tr><tr><td colspan="6">Accounts payable</td><td colspan="2">49 </td><td></td><td colspan="2">852 </td><td></td><td colspan="2">795 </td><td></td></tr><tr><td colspan="6">Other operating activities</td><td colspan="2">113 </td><td></td><td colspan="2">212 </td><td></td><td colspan="2">(272)</td><td></td></tr><tr><td colspan="6">Total cash flows provided by operating activities</td><td colspan="2">3,458 </td><td></td><td colspan="2">2,242 </td><td></td><td colspan="2">1,911 </td><td></td></tr><tr><td colspan="6">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Capital expenditures</td><td colspan="2">(1,379)</td><td></td><td colspan="2">(1,011)</td><td></td><td colspan="2">(799)</td><td></td></tr><tr><td colspan="6">Purchases of investment securities</td><td colspan="2">(492)</td><td></td><td colspan="2">(75)</td><td></td><td colspan="2">(5)</td><td></td></tr><tr><td colspan="6">Proceeds from sales of property, plant, and equipment</td><td colspan="2">195 </td><td></td><td colspan="2">200 </td><td></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="6">Sales of investment securities</td><td colspan="2">131 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Proceeds from a structured real estate transaction</td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td><td colspan="2">87 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other investing activities</td><td colspan="2">(114)</td><td></td><td colspan="2">(81)</td><td></td><td colspan="2">(74)</td><td></td></tr><tr><td colspan="6">Total cash flows used in investing activities</td><td colspan="2">(1,659)</td><td></td><td colspan="2">(967)</td><td></td><td colspan="2">(534)</td><td></td></tr><tr><td colspan="6">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Stock repurchase program</td><td colspan="2">(800)</td><td></td><td colspan="2">(250)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Dividends to shareholders</td><td colspan="2">(576)</td><td></td><td colspan="2">(435)</td><td></td><td colspan="2">(161)</td><td></td></tr><tr><td colspan="6">Payments on long-term borrowings</td><td colspan="2">(305)</td><td></td><td colspan="2">(1,242)</td><td></td><td colspan="2">(700)</td><td></td></tr><tr><td colspan="6">Proceeds from issuance of common stock</td><td colspan="2">136 </td><td></td><td colspan="2">229 </td><td></td><td colspan="2">79 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other financing activities</td><td colspan="2">(126)</td><td></td><td colspan="2">(100)</td><td></td><td colspan="2">(56)</td><td></td></tr><tr><td colspan="6">Total cash flows used in financing activities</td><td colspan="2">(1,671)</td><td></td><td colspan="2">(1,798)</td><td></td><td colspan="2">(838)</td><td></td></tr><tr><td colspan="6">Effect of exchange rate changes on cash</td><td colspan="2">(210)</td><td></td><td colspan="2">(175)</td><td></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="6">Increase / (decrease) in cash and equivalents</td><td colspan="2">(82)</td><td></td><td colspan="2">(698)</td><td></td><td colspan="2">481 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at beginning of year</td><td colspan="2">2,346 </td><td></td><td colspan="2">3,044 </td><td></td><td colspan="2">2,563 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at end of year</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td>$</td><td>3,044 </td><td></td></tr><tr><td colspan="6">Supplemental disclosure of cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash payments during the period for:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Interest</td><td>$</td><td>460 </td><td></td><td>$</td><td>487 </td><td></td><td>$</td><td>517 </td><td></td></tr><tr><td colspan="6">Income taxes</td><td>$</td><td>616 </td><td></td><td>$</td><td>354 </td><td></td><td>$</td><td>214 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 46
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Cash Flows</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Adjustments to reconcile net income to cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Depreciation, depletion, and amortization</td><td colspan="2">998 </td><td></td><td colspan="2">940 </td><td></td><td colspan="2">904 </td><td></td></tr><tr><td colspan="6">Deferred income tax provision (benefit)</td><td colspan="2">196 </td><td></td><td colspan="2">70 </td><td></td><td colspan="2">(486)</td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">(303)</td><td></td><td colspan="2">(642)</td><td></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="6">Receivables</td><td colspan="2">(257)</td><td></td><td colspan="2">(1,151)</td><td></td><td colspan="2">(500)</td><td></td></tr><tr><td colspan="6">Accounts payable</td><td colspan="2">49 </td><td></td><td colspan="2">852 </td><td></td><td colspan="2">795 </td><td></td></tr><tr><td colspan="6">Other operating activities</td><td colspan="2">113 </td><td></td><td colspan="2">212 </td><td></td><td colspan="2">(272)</td><td></td></tr><tr><td colspan="6">Total cash flows provided by operating activities</td><td colspan="2">3,458 </td><td></td><td colspan="2">2,242 </td><td></td><td colspan="2">1,911 </td><td></td></tr><tr><td colspan="6">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Capital expenditures</td><td colspan="2">(1,379)</td><td></td><td colspan="2">(1,011)</td><td></td><td colspan="2">(799)</td><td></td></tr><tr><td colspan="6">Purchases of investment securities</td><td colspan="2">(492)</td><td></td><td colspan="2">(75)</td><td></td><td colspan="2">(5)</td><td></td></tr><tr><td colspan="6">Proceeds from sales of property, plant, and equipment</td><td colspan="2">195 </td><td></td><td colspan="2">200 </td><td></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="6">Sales of investment securities</td><td colspan="2">131 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Proceeds from a structured real estate transaction</td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td><td colspan="2">87 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other investing activities</td><td colspan="2">(114)</td><td></td><td colspan="2">(81)</td><td></td><td colspan="2">(74)</td><td></td></tr><tr><td colspan="6">Total cash flows used in investing activities</td><td colspan="2">(1,659)</td><td></td><td colspan="2">(967)</td><td></td><td colspan="2">(534)</td><td></td></tr><tr><td colspan="6">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Stock repurchase program</td><td colspan="2">(800)</td><td></td><td colspan="2">(250)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Dividends to shareholders</td><td colspan="2">(576)</td><td></td><td colspan="2">(435)</td><td></td><td colspan="2">(161)</td><td></td></tr><tr><td colspan="6">Payments on long-term borrowings</td><td colspan="2">(305)</td><td></td><td colspan="2">(1,242)</td><td></td><td colspan="2">(700)</td><td></td></tr><tr><td colspan="6">Proceeds from issuance of common stock</td><td colspan="2">136 </td><td></td><td colspan="2">229 </td><td></td><td colspan="2">79 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other financing activities</td><td colspan="2">(126)</td><td></td><td colspan="2">(100)</td><td></td><td colspan="2">(56)</td><td></td></tr><tr><td colspan="6">Total cash flows used in financing activities</td><td colspan="2">(1,671)</td><td></td><td colspan="2">(1,798)</td><td></td><td colspan="2">(838)</td><td></td></tr><tr><td colspan="6">Effect of exchange rate changes on cash</td><td colspan="2">(210)</td><td></td><td colspan="2">(175)</td><td></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="6">Increase / (decrease) in cash and equivalents</td><td colspan="2">(82)</td><td></td><td colspan="2">(698)</td><td></td><td colspan="2">481 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at beginning of year</td><td colspan="2">2,346 </td><td></td><td colspan="2">3,044 </td><td></td><td colspan="2">2,563 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at end of year</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td>$</td><td>3,044 </td><td></td></tr><tr><td colspan="6">Supplemental disclosure of cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash payments during the period for:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Interest</td><td>$</td><td>460 </td><td></td><td>$</td><td>487 </td><td></td><td>$</td><td>517 </td><td></td></tr><tr><td colspan="6">Income taxes</td><td>$</td><td>616 </td><td></td><td>$</td><td>354 </td><td></td><td>$</td><td>214 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 46
|
q_an020
|
How does the cash ratio for 2023 reflect the company's ability to cover its short-term liabilities with its most liquid assets?
|
The cash ratio is calculated by dividing cash and cash equivalents by current liabilities. For 2023, cash and cash equivalents are $2,264 million, and current liabilities are $5,608 million. This gives a cash ratio of approximately 0.40. This ratio indicates that the company has 40% of its current liabilities covered by its most liquid assets. While a cash ratio below 1 suggests that the company may not have enough cash on hand to cover all its short-term liabilities, it is not necessarily a cause for concern if the company has other liquid assets or strong cash flow from operations.
|
Analysis
|
45,46
|
0000045012-24-000007
|
Item 8. Financial Statements and Supplementary Data.
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 46:
| | | | | | | | | |
|---:|:-----------------------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:--------|:---|:------|:---|:------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Cash Flows | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars | 2023 | 2022 | 2021 | | | | |
| 4 | Cash flows from operating activities: | | | | | | | |
| 5 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 6 | Adjustments to reconcile net income to cash flows from operating activities: | | | | | | | |
| 7 | Depreciation, depletion, and amortization | 998 | | 940 | | 904 | | |
| 8 | Deferred income tax provision (benefit) | 196 | | 70 | | (486) | | |
| 9 | Impairments and other charges | - | | 366 | | 12 | | |
| 11 | Changes in assets and liabilities: | | | | | | | |
| 12 | Inventories | (303) | | (642) | | (10) | | |
| 13 | Receivables | (257) | | (1,151) | | (500) | | |
| 14 | Accounts payable | 49 | | 852 | | 795 | | |
| 15 | Other operating activities | 113 | | 212 | | (272) | | |
| 16 | Total cash flows provided by operating activities | 3,458 | | 2,242 | | 1,911 | | |
| 17 | Cash flows from investing activities: | | | | | | | |
| 18 | Capital expenditures | (1,379) | | (1,011) | | (799) | | |
| 19 | Purchases of investment securities | (492) | | (75) | | (5) | | |
| 20 | Proceeds from sales of property, plant, and equipment | 195 | | 200 | | 257 | | |
| 21 | Sales of investment securities | 131 | | - | | - | | |
| 22 | Proceeds from a structured real estate transaction | - | | - | | 87 | | |
| 24 | Other investing activities | (114) | | (81) | | (74) | | |
| 25 | Total cash flows used in investing activities | (1,659) | | (967) | | (534) | | |
| 26 | Cash flows from financing activities: | | | | | | | |
| 27 | Stock repurchase program | (800) | | (250) | | - | | |
| 28 | Dividends to shareholders | (576) | | (435) | | (161) | | |
| 29 | Payments on long-term borrowings | (305) | | (1,242) | | (700) | | |
| 30 | Proceeds from issuance of common stock | 136 | | 229 | | 79 | | |
| 32 | Other financing activities | (126) | | (100) | | (56) | | |
| 33 | Total cash flows used in financing activities | (1,671) | | (1,798) | | (838) | | |
| 34 | Effect of exchange rate changes on cash | (210) | | (175) | | (58) | | |
| 35 | Increase / (decrease) in cash and equivalents | (82) | | (698) | | 481 | | |
| 36 | Cash and equivalents at beginning of year | 2,346 | | 3,044 | | 2,563 | | |
| 37 | Cash and equivalents at end of year | $ | 2,264 | | $ | 2,346 | $ | 3,044 |
| 38 | Supplemental disclosure of cash flow information: | | | | | | | |
| 39 | Cash payments during the period for: | | | | | | | |
| 40 | Interest | $ | 460 | | $ | 487 | $ | 517 |
| 41 | Income taxes | $ | 616 | | $ | 354 | $ | 214 |
| 42 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 46
|
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
,
| | | | | | | | | |
|---:|:-----------------------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:--------|:---|:------|:---|:------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Cash Flows | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars | 2023 | 2022 | 2021 | | | | |
| 4 | Cash flows from operating activities: | | | | | | | |
| 5 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 6 | Adjustments to reconcile net income to cash flows from operating activities: | | | | | | | |
| 7 | Depreciation, depletion, and amortization | 998 | | 940 | | 904 | | |
| 8 | Deferred income tax provision (benefit) | 196 | | 70 | | (486) | | |
| 9 | Impairments and other charges | - | | 366 | | 12 | | |
| 11 | Changes in assets and liabilities: | | | | | | | |
| 12 | Inventories | (303) | | (642) | | (10) | | |
| 13 | Receivables | (257) | | (1,151) | | (500) | | |
| 14 | Accounts payable | 49 | | 852 | | 795 | | |
| 15 | Other operating activities | 113 | | 212 | | (272) | | |
| 16 | Total cash flows provided by operating activities | 3,458 | | 2,242 | | 1,911 | | |
| 17 | Cash flows from investing activities: | | | | | | | |
| 18 | Capital expenditures | (1,379) | | (1,011) | | (799) | | |
| 19 | Purchases of investment securities | (492) | | (75) | | (5) | | |
| 20 | Proceeds from sales of property, plant, and equipment | 195 | | 200 | | 257 | | |
| 21 | Sales of investment securities | 131 | | - | | - | | |
| 22 | Proceeds from a structured real estate transaction | - | | - | | 87 | | |
| 24 | Other investing activities | (114) | | (81) | | (74) | | |
| 25 | Total cash flows used in investing activities | (1,659) | | (967) | | (534) | | |
| 26 | Cash flows from financing activities: | | | | | | | |
| 27 | Stock repurchase program | (800) | | (250) | | - | | |
| 28 | Dividends to shareholders | (576) | | (435) | | (161) | | |
| 29 | Payments on long-term borrowings | (305) | | (1,242) | | (700) | | |
| 30 | Proceeds from issuance of common stock | 136 | | 229 | | 79 | | |
| 32 | Other financing activities | (126) | | (100) | | (56) | | |
| 33 | Total cash flows used in financing activities | (1,671) | | (1,798) | | (838) | | |
| 34 | Effect of exchange rate changes on cash | (210) | | (175) | | (58) | | |
| 35 | Increase / (decrease) in cash and equivalents | (82) | | (698) | | 481 | | |
| 36 | Cash and equivalents at beginning of year | 2,346 | | 3,044 | | 2,563 | | |
| 37 | Cash and equivalents at end of year | $ | 2,264 | | $ | 2,346 | $ | 3,044 |
| 38 | Supplemental disclosure of cash flow information: | | | | | | | |
| 39 | Cash payments during the period for: | | | | | | | |
| 40 | Interest | $ | 460 | | $ | 487 | $ | 517 |
| 41 | Income taxes | $ | 616 | | $ | 354 | $ | 214 |
| 42 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 46
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 46:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Cash Flows</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Adjustments to reconcile net income to cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Depreciation, depletion, and amortization</td><td colspan="2">998 </td><td></td><td colspan="2">940 </td><td></td><td colspan="2">904 </td><td></td></tr><tr><td colspan="6">Deferred income tax provision (benefit)</td><td colspan="2">196 </td><td></td><td colspan="2">70 </td><td></td><td colspan="2">(486)</td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">(303)</td><td></td><td colspan="2">(642)</td><td></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="6">Receivables</td><td colspan="2">(257)</td><td></td><td colspan="2">(1,151)</td><td></td><td colspan="2">(500)</td><td></td></tr><tr><td colspan="6">Accounts payable</td><td colspan="2">49 </td><td></td><td colspan="2">852 </td><td></td><td colspan="2">795 </td><td></td></tr><tr><td colspan="6">Other operating activities</td><td colspan="2">113 </td><td></td><td colspan="2">212 </td><td></td><td colspan="2">(272)</td><td></td></tr><tr><td colspan="6">Total cash flows provided by operating activities</td><td colspan="2">3,458 </td><td></td><td colspan="2">2,242 </td><td></td><td colspan="2">1,911 </td><td></td></tr><tr><td colspan="6">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Capital expenditures</td><td colspan="2">(1,379)</td><td></td><td colspan="2">(1,011)</td><td></td><td colspan="2">(799)</td><td></td></tr><tr><td colspan="6">Purchases of investment securities</td><td colspan="2">(492)</td><td></td><td colspan="2">(75)</td><td></td><td colspan="2">(5)</td><td></td></tr><tr><td colspan="6">Proceeds from sales of property, plant, and equipment</td><td colspan="2">195 </td><td></td><td colspan="2">200 </td><td></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="6">Sales of investment securities</td><td colspan="2">131 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Proceeds from a structured real estate transaction</td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td><td colspan="2">87 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other investing activities</td><td colspan="2">(114)</td><td></td><td colspan="2">(81)</td><td></td><td colspan="2">(74)</td><td></td></tr><tr><td colspan="6">Total cash flows used in investing activities</td><td colspan="2">(1,659)</td><td></td><td colspan="2">(967)</td><td></td><td colspan="2">(534)</td><td></td></tr><tr><td colspan="6">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Stock repurchase program</td><td colspan="2">(800)</td><td></td><td colspan="2">(250)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Dividends to shareholders</td><td colspan="2">(576)</td><td></td><td colspan="2">(435)</td><td></td><td colspan="2">(161)</td><td></td></tr><tr><td colspan="6">Payments on long-term borrowings</td><td colspan="2">(305)</td><td></td><td colspan="2">(1,242)</td><td></td><td colspan="2">(700)</td><td></td></tr><tr><td colspan="6">Proceeds from issuance of common stock</td><td colspan="2">136 </td><td></td><td colspan="2">229 </td><td></td><td colspan="2">79 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other financing activities</td><td colspan="2">(126)</td><td></td><td colspan="2">(100)</td><td></td><td colspan="2">(56)</td><td></td></tr><tr><td colspan="6">Total cash flows used in financing activities</td><td colspan="2">(1,671)</td><td></td><td colspan="2">(1,798)</td><td></td><td colspan="2">(838)</td><td></td></tr><tr><td colspan="6">Effect of exchange rate changes on cash</td><td colspan="2">(210)</td><td></td><td colspan="2">(175)</td><td></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="6">Increase / (decrease) in cash and equivalents</td><td colspan="2">(82)</td><td></td><td colspan="2">(698)</td><td></td><td colspan="2">481 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at beginning of year</td><td colspan="2">2,346 </td><td></td><td colspan="2">3,044 </td><td></td><td colspan="2">2,563 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at end of year</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td>$</td><td>3,044 </td><td></td></tr><tr><td colspan="6">Supplemental disclosure of cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash payments during the period for:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Interest</td><td>$</td><td>460 </td><td></td><td>$</td><td>487 </td><td></td><td>$</td><td>517 </td><td></td></tr><tr><td colspan="6">Income taxes</td><td>$</td><td>616 </td><td></td><td>$</td><td>354 </td><td></td><td>$</td><td>214 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 46
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
,
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Cash Flows</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Adjustments to reconcile net income to cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Depreciation, depletion, and amortization</td><td colspan="2">998 </td><td></td><td colspan="2">940 </td><td></td><td colspan="2">904 </td><td></td></tr><tr><td colspan="6">Deferred income tax provision (benefit)</td><td colspan="2">196 </td><td></td><td colspan="2">70 </td><td></td><td colspan="2">(486)</td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">(303)</td><td></td><td colspan="2">(642)</td><td></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="6">Receivables</td><td colspan="2">(257)</td><td></td><td colspan="2">(1,151)</td><td></td><td colspan="2">(500)</td><td></td></tr><tr><td colspan="6">Accounts payable</td><td colspan="2">49 </td><td></td><td colspan="2">852 </td><td></td><td colspan="2">795 </td><td></td></tr><tr><td colspan="6">Other operating activities</td><td colspan="2">113 </td><td></td><td colspan="2">212 </td><td></td><td colspan="2">(272)</td><td></td></tr><tr><td colspan="6">Total cash flows provided by operating activities</td><td colspan="2">3,458 </td><td></td><td colspan="2">2,242 </td><td></td><td colspan="2">1,911 </td><td></td></tr><tr><td colspan="6">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Capital expenditures</td><td colspan="2">(1,379)</td><td></td><td colspan="2">(1,011)</td><td></td><td colspan="2">(799)</td><td></td></tr><tr><td colspan="6">Purchases of investment securities</td><td colspan="2">(492)</td><td></td><td colspan="2">(75)</td><td></td><td colspan="2">(5)</td><td></td></tr><tr><td colspan="6">Proceeds from sales of property, plant, and equipment</td><td colspan="2">195 </td><td></td><td colspan="2">200 </td><td></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="6">Sales of investment securities</td><td colspan="2">131 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Proceeds from a structured real estate transaction</td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td><td colspan="2">87 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other investing activities</td><td colspan="2">(114)</td><td></td><td colspan="2">(81)</td><td></td><td colspan="2">(74)</td><td></td></tr><tr><td colspan="6">Total cash flows used in investing activities</td><td colspan="2">(1,659)</td><td></td><td colspan="2">(967)</td><td></td><td colspan="2">(534)</td><td></td></tr><tr><td colspan="6">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Stock repurchase program</td><td colspan="2">(800)</td><td></td><td colspan="2">(250)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Dividends to shareholders</td><td colspan="2">(576)</td><td></td><td colspan="2">(435)</td><td></td><td colspan="2">(161)</td><td></td></tr><tr><td colspan="6">Payments on long-term borrowings</td><td colspan="2">(305)</td><td></td><td colspan="2">(1,242)</td><td></td><td colspan="2">(700)</td><td></td></tr><tr><td colspan="6">Proceeds from issuance of common stock</td><td colspan="2">136 </td><td></td><td colspan="2">229 </td><td></td><td colspan="2">79 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other financing activities</td><td colspan="2">(126)</td><td></td><td colspan="2">(100)</td><td></td><td colspan="2">(56)</td><td></td></tr><tr><td colspan="6">Total cash flows used in financing activities</td><td colspan="2">(1,671)</td><td></td><td colspan="2">(1,798)</td><td></td><td colspan="2">(838)</td><td></td></tr><tr><td colspan="6">Effect of exchange rate changes on cash</td><td colspan="2">(210)</td><td></td><td colspan="2">(175)</td><td></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="6">Increase / (decrease) in cash and equivalents</td><td colspan="2">(82)</td><td></td><td colspan="2">(698)</td><td></td><td colspan="2">481 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at beginning of year</td><td colspan="2">2,346 </td><td></td><td colspan="2">3,044 </td><td></td><td colspan="2">2,563 </td><td></td></tr><tr><td colspan="6">Cash and equivalents at end of year</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td>$</td><td>3,044 </td><td></td></tr><tr><td colspan="6">Supplemental disclosure of cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash payments during the period for:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Interest</td><td>$</td><td>460 </td><td></td><td>$</td><td>487 </td><td></td><td>$</td><td>517 </td><td></td></tr><tr><td colspan="6">Income taxes</td><td>$</td><td>616 </td><td></td><td>$</td><td>354 </td><td></td><td>$</td><td>214 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 46
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q_an021
|
Evaluate Halliburton's receivables turnover ratio from 2021 to 2023 and discuss its implications on the company's credit policies and collection efficiency.
|
The increasing receivables turnover ratio from 3.31 in 2021 to 4.85 in 2023 indicates that Halliburton has improved its efficiency in collecting receivables. A higher receivables turnover ratio suggests that the company is collecting its receivables more quickly, which can be a sign of effective credit policies and efficient collection processes. This improvement can positively impact the company's cash flow and reduce the risk of bad debts.
|
Analysis
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43, 45
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0000045012-24-000007
|
Item 8. Financial Statements and Supplementary Data.
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
|
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
,
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
,
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
|
q_an022
|
What does the Days Payable Outstanding (DPO) metric reveal about Halliburton's payment practices over the period from 2021 to 2023?
|
The DPO has decreased from 85.8 days in 2021 to 61.5 days in 2023. This reduction in DPO indicates that Halliburton has been paying its suppliers more quickly over the years. A lower DPO is generally favorable as it suggests that the company is able to settle its payables in a timely manner, which can strengthen supplier relationships and potentially lead to better credit terms. However, it is also important to consider the company's cash flow and liquidity position, as paying suppliers too quickly may impact the company's cash reserves. Overall, the improvement in DPO reflects positively on Halliburton's payment practices and its ability to manage its supplier relationships effectively.
|
Analysis
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43, 45
|
0000045012-24-000007
|
Item 8. Financial Statements and Supplementary Data.
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
|
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
,
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
,
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
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q_an023
|
Analyze the asset turnover ratio for Halliburton from 2021 to 2023 and discuss its implications on the company's utilization of its assets to generate revenue.
|
The asset turnover ratio is calculated using the formula: Asset Turnover Ratio = Net Sales / Average Total Assets. For Halliburton, net sales are equivalent to total revenue.
Total revenue for Halliburton over the years is as follows:
- 2023: $23,018 million
- 2022: $20,297 million
- 2021: $15,295 million
The average total assets for each year can be calculated as the average of the beginning and ending total assets for that year. However, the beginning total assets for 2021 is not provided, so we will use the ending total assets of the previous year as the beginning total assets for the current year.
- Average Total Assets 2023: ($23,255 million + $24,683 million) / 2 = $23,969 million
- Average Total Assets 2022: ($23,255 million + $23,255 million) / 2 = $23,255 million
- Average Total Assets 2021: ($23,255 million + $23,255 million) / 2 = $23,255 million
Using these values, the asset turnover ratios are:
- 2023: $23,018 million / $23,969 million = 0.96
- 2022: $20,297 million / $23,255 million = 0.87
- 2021: $15,295 million / $23,255 million = 0.66
|
Analysis
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43, 45
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0000045012-24-000007
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Item 8. Financial Statements and Supplementary Data.
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
|
| | | | | | | | | |
|---:|:-------------------------------------------------------------|:----------------------------------------------------------|:-----------------------|:-------|:---|:-------|:---|:-------|
| 1 | | HALLIBURTON COMPANY Consolidated Statements of Operations | | | | | | |
| 2 | | | Year Ended December 31 | | | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | 2021 | | | | |
| 4 | Revenue: | | | | | | | |
| 5 | Services | $ | 16,483 | | $ | 14,749 | $ | 10,989 |
| 6 | Product sales | 6,535 | | 5,548 | | 4,306 | | |
| 7 | Total revenue | 23,018 | | 20,297 | | 15,295 | | |
| 8 | Operating costs and expenses: | | | | | | | |
| 9 | Cost of services | 13,402 | | 12,381 | | 9,745 | | |
| 10 | Cost of sales | 5,256 | | 4,603 | | 3,534 | | |
| 12 | General and administrative | 226 | | 240 | | 204 | | |
| 13 | SAP S4 upgrade expense | 51 | | - | | - | | |
| 14 | Impairments and other charges | - | | 366 | | 12 | | |
| 16 | Total operating costs and expenses | 18,935 | | 17,590 | | 13,495 | | |
| 17 | Operating income | 4,083 | | 2,707 | | 1,800 | | |
| 18 | Interest expense, net of interest income of $81, $29, and $9 | (395) | | (463) | | (520) | | |
| 19 | Loss on Blue Chip Swap transactions | (110) | | - | | - | | |
| 20 | Argentina currency impact | (131) | | (30) | | 6 | | |
| 21 | Loss on early extinguishment of debt | - | | (42) | | - | | |
| 22 | Other, net | (84) | | (62) | | (34) | | |
| 23 | Income before income taxes | 3,363 | | 2,110 | | 1,252 | | |
| 24 | Income tax benefit (provision) | (701) | | (515) | | 216 | | |
| 27 | Net income | $ | 2,662 | | $ | 1,595 | $ | 1,468 |
| 28 | Net income attributable to noncontrolling interest | (24) | | (23) | | (11) | | |
| 29 | Net income attributable to company | $ | 2,638 | | $ | 1,572 | $ | 1,457 |
| 40 | Basic net income per share | $ | 2.93 | | $ | 1.74 | $ | 1.63 |
| 41 | Diluted net income per share | $ | 2.92 | | $ | 1.73 | $ | 1.63 |
| 46 | Basic weighted average common shares outstanding | 899 | | 904 | | 892 | | |
| 47 | Diluted weighted average common shares outstanding | 902 | | 908 | | 892 | | |
| 48 | | See notes to consolidated financial statements. | | | | | | |
HAL 2023 FORM 10-K | 43
,
| | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------|:------------------------------------------------|:------------|:--------|:---|:-------|
| 1 | HALLIBURTON COMPANY Consolidated Balance Sheets | | | | | |
| 2 | | | December 31 | | | |
| 3 | Millions of dollars and shares except per share data | 2023 | 2022 | | | |
| 4 | Assets | | | | | |
| 5 | Current assets: | | | | | |
| 6 | Cash and equivalents | $ | 2,264 | | $ | 2,346 |
| 7 | Receivables (net of allowances for credit losses of $742 and $731) | 4,860 | | 4,627 | | |
| 8 | Inventories | 3,226 | | 2,923 | | |
| 11 | Other current assets | 1,193 | | 1,056 | | |
| 12 | Total current assets | 11,543 | | 10,952 | | |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660) | 4,900 | | 4,348 | | |
| 14 | Goodwill | 2,850 | | 2,829 | | |
| 15 | Deferred income taxes | 2,505 | | 2,636 | | |
| 16 | Operating lease right-of-use assets | 1,088 | | 913 | | |
| 17 | Other assets | 1,797 | | 1,577 | | |
| 18 | Total assets | $ | 24,683 | | $ | 23,255 |
| 19 | Liabilities and Shareholders' Equity | | | | | |
| 20 | Current liabilities: | | | | | |
| 21 | Accounts payable | $ | 3,147 | | $ | 3,121 |
| 22 | Accrued employee compensation and benefits | 689 | | 634 | | |
| 23 | Income taxes payable | 390 | | 294 | | |
| 24 | Taxes other than income | 370 | | 349 | | |
| 25 | Current portion of operating lease liabilities | 262 | | 224 | | |
| 28 | Other current liabilities | 750 | | 723 | | |
| 29 | Total current liabilities | 5,608 | | 5,345 | | |
| 30 | Long-term debt | 7,636 | | 7,928 | | |
| 31 | Operating lease liabilities | 911 | | 791 | | |
| 32 | Employee compensation and benefits | 408 | | 408 | | |
| 33 | Other liabilities | 687 | | 806 | | |
| 34 | Total liabilities | 15,250 | | 15,278 | | |
| 35 | Shareholders' equity: | | | | | |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663 | | 2,664 | | |
| 37 | Paid-in capital in excess of par value | 63 | | 50 | | |
| 38 | Accumulated other comprehensive loss | (331) | | (230) | | |
| 39 | Retained earnings | 12,536 | | 10,572 | | |
| 40 | Treasury stock, at cost (176 and 164 shares) | (5,540) | | (5,108) | | |
| 41 | Company shareholders' equity | 9,391 | | 7,948 | | |
| 42 | Noncontrolling interest in consolidated subsidiaries | 42 | | 29 | | |
| 43 | Total shareholders' equity | 9,433 | | 7,977 | | |
| 44 | Total liabilities and shareholders' equity | $ | 24,683 | | $ | 23,255 |
| 45 | | See notes to consolidated financial statements. | | | | |
HAL 2023 FORM 10-K | 45
|
HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 43:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
, HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
|
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="12">HALLIBURTON COMPANY Consolidated Statements of Operations</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="9">Year Ended December 31</td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3">2021</td></tr><tr><td colspan="6">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Services</td><td>$</td><td>16,483 </td><td></td><td>$</td><td>14,749 </td><td></td><td>$</td><td>10,989 </td><td></td></tr><tr><td colspan="6">Product sales</td><td colspan="2">6,535 </td><td></td><td colspan="2">5,548 </td><td></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="6">Total revenue</td><td colspan="2">23,018 </td><td></td><td colspan="2">20,297 </td><td></td><td colspan="2">15,295 </td><td></td></tr><tr><td colspan="6">Operating costs and expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cost of services</td><td colspan="2">13,402 </td><td></td><td colspan="2">12,381 </td><td></td><td colspan="2">9,745 </td><td></td></tr><tr><td colspan="6">Cost of sales</td><td colspan="2">5,256 </td><td></td><td colspan="2">4,603 </td><td></td><td colspan="2">3,534 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">General and administrative</td><td colspan="2">226 </td><td></td><td colspan="2">240 </td><td></td><td colspan="2">204 </td><td></td></tr><tr><td colspan="6">SAP S4 upgrade expense</td><td colspan="2">51 </td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Impairments and other charges</td><td colspan="2">- </td><td></td><td colspan="2">366 </td><td></td><td colspan="2">12 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Total operating costs and expenses</td><td colspan="2">18,935 </td><td></td><td colspan="2">17,590 </td><td></td><td colspan="2">13,495 </td><td></td></tr><tr><td colspan="6">Operating income</td><td colspan="2">4,083 </td><td></td><td colspan="2">2,707 </td><td></td><td colspan="2">1,800 </td><td></td></tr><tr><td colspan="6">Interest expense, net of interest income of $81, $29, and $9</td><td colspan="2">(395)</td><td></td><td colspan="2">(463)</td><td></td><td colspan="2">(520)</td><td></td></tr><tr><td colspan="6">Loss on Blue Chip Swap transactions</td><td colspan="2">(110)</td><td></td><td colspan="2">- </td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Argentina currency impact</td><td colspan="2">(131)</td><td></td><td colspan="2">(30)</td><td></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="6">Loss on early extinguishment of debt</td><td colspan="2">- </td><td></td><td colspan="2">(42)</td><td></td><td colspan="2">- </td><td></td></tr><tr><td colspan="6">Other, net</td><td colspan="2">(84)</td><td></td><td colspan="2">(62)</td><td></td><td colspan="2">(34)</td><td></td></tr><tr><td colspan="6">Income before income taxes</td><td colspan="2">3,363 </td><td></td><td colspan="2">2,110 </td><td></td><td colspan="2">1,252 </td><td></td></tr><tr><td colspan="6">Income tax benefit (provision)</td><td colspan="2">(701)</td><td></td><td colspan="2">(515)</td><td></td><td colspan="2">216 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Net income</td><td>$</td><td>2,662 </td><td></td><td>$</td><td>1,595 </td><td></td><td>$</td><td>1,468 </td><td></td></tr><tr><td colspan="6">Net income attributable to noncontrolling interest </td><td colspan="2">(24)</td><td></td><td colspan="2">(23)</td><td></td><td colspan="2">(11)</td><td></td></tr><tr><td colspan="6">Net income attributable to company</td><td>$</td><td>2,638 </td><td></td><td>$</td><td>1,572 </td><td></td><td>$</td><td>1,457 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic net income per share</td><td>$</td><td>2.93 </td><td></td><td>$</td><td>1.74 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="6">Diluted net income per share</td><td>$</td><td>2.92 </td><td></td><td>$</td><td>1.73 </td><td></td><td>$</td><td>1.63 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Basic weighted average common shares outstanding</td><td colspan="2">899 </td><td></td><td colspan="2">904 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="6">Diluted weighted average common shares outstanding</td><td colspan="2">902 </td><td></td><td colspan="2">908 </td><td></td><td colspan="2">892 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 43
,
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="12">HALLIBURTON COMPANY Consolidated Balance Sheets</td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="6">December 31</td><td colspan="3"></td></tr><tr><td colspan="6">Millions of dollars and shares except per share data</td><td colspan="3">2023</td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="12">Assets</td><td colspan="3"></td></tr><tr><td colspan="6">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Cash and equivalents</td><td>$</td><td>2,264 </td><td></td><td>$</td><td>2,346 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Receivables (net of allowances for credit losses of $742 and $731)</td><td colspan="2">4,860 </td><td></td><td colspan="2">4,627 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Inventories</td><td colspan="2">3,226 </td><td></td><td colspan="2">2,923 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current assets</td><td colspan="2">1,193 </td><td></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current assets</td><td colspan="2">11,543 </td><td></td><td colspan="2">10,952 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)</td><td colspan="2">4,900 </td><td></td><td colspan="2">4,348 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Goodwill</td><td colspan="2">2,850 </td><td></td><td colspan="2">2,829 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Deferred income taxes</td><td colspan="2">2,505 </td><td></td><td colspan="2">2,636 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease right-of-use assets</td><td colspan="2">1,088 </td><td></td><td colspan="2">913 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other assets</td><td colspan="2">1,797 </td><td></td><td colspan="2">1,577 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total assets</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="12">Liabilities and Shareholders' Equity</td><td colspan="3"></td></tr><tr><td colspan="6">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Accounts payable</td><td>$</td><td>3,147 </td><td></td><td>$</td><td>3,121 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accrued employee compensation and benefits</td><td colspan="2">689 </td><td></td><td colspan="2">634 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Income taxes payable</td><td colspan="2">390 </td><td></td><td colspan="2">294 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Taxes other than income</td><td colspan="2">370 </td><td></td><td colspan="2">349 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Current portion of operating lease liabilities </td><td colspan="2">262 </td><td></td><td colspan="2">224 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Other current liabilities</td><td colspan="2">750 </td><td></td><td colspan="2">723 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total current liabilities</td><td colspan="2">5,608 </td><td></td><td colspan="2">5,345 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Long-term debt</td><td colspan="2">7,636 </td><td></td><td colspan="2">7,928 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Operating lease liabilities</td><td colspan="2">911 </td><td></td><td colspan="2">791 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Employee compensation and benefits</td><td colspan="2">408 </td><td></td><td colspan="2">408 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Other liabilities</td><td colspan="2">687 </td><td></td><td colspan="2">806 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities</td><td colspan="2">15,250 </td><td></td><td colspan="2">15,278 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Shareholders' equity:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="6">Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares)</td><td colspan="2">2,663 </td><td></td><td colspan="2">2,664 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Paid-in capital in excess of par value</td><td colspan="2">63 </td><td></td><td colspan="2">50 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Accumulated other comprehensive loss</td><td colspan="2">(331)</td><td></td><td colspan="2">(230)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Retained earnings</td><td colspan="2">12,536 </td><td></td><td colspan="2">10,572 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Treasury stock, at cost (176 and 164 shares)</td><td colspan="2">(5,540)</td><td></td><td colspan="2">(5,108)</td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Company shareholders' equity</td><td colspan="2">9,391 </td><td></td><td colspan="2">7,948 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Noncontrolling interest in consolidated subsidiaries</td><td colspan="2">42 </td><td></td><td colspan="2">29 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total shareholders' equity</td><td colspan="2">9,433 </td><td></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td></tr><tr><td colspan="6">Total liabilities and shareholders' equity</td><td>$</td><td>24,683 </td><td></td><td>$</td><td>23,255 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">See notes to consolidated financial statements.</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
HAL 2023 FORM 10-K | 45
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q_an024
|
How does the receivables turnover ratio for General Mills in the fiscal year 2024 assess the company's efficiency in collecting receivables
|
The receivables turnover ratio is an efficiency metric that measures how effectively a company collects its receivables. It is calculated by dividing net sales by the average receivables. For General Mills in the fiscal year 2024, the net sales were $19,857.2 million, and the average receivables were approximately $1,689.7 million (calculated as the average of the beginning and ending receivables for the year). This results in a receivables turnover ratio of approximately 11.75. A higher receivables turnover ratio indicates that the company is efficiently collecting its receivables and converting them into cash. For General Mills, a receivables turnover ratio of 11.75 suggests that the company is collecting its receivables nearly 12 times a year. Efficient receivables management is crucial for maintaining healthy cash flow and reducing the risk of bad debts. The company must continue to focus on timely collection of receivables to ensure strong cash flow management and financial stability.
|
Analysis
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42, 44
|
0001193125-24-168943
|
ITEM 7A - QUANTITATIVE
|
GENERAL MILLS INC 10-K form, page 42:
42
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Net sales
$
19,857.2
$
20,094.2
$
18,992.8
Cost of sales
12,925.1
13,548.4
12,590.6
Selling, general, and administrative expenses
3,259.0
3,500.4
3,147.0
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
241.4
56.2
(26.5)
Operating profit
3,431.7
3,433.8
3,475.8
Benefit plan non-service income
(75.8)
(88.8)
(113.4)
Interest, net
479.2
382.1
379.6
Earnings before income taxes and after-tax earnings
from joint ventures
3,028.3
3,140.5
3,209.6
Income taxes
594.5
612.2
586.3
After-tax earnings from joint ventures
84.8
81.3
111.7
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
2,518.6
2,609.6
2,735.0
Net earnings attributable to redeemable and noncontrolling interests
22.0
15.7
27.7
Net earnings attributable to General Mills
$
2,496.6
$
2,593.9
$
2,707.3
Earnings per share - basic
$
4.34
$
4.36
$
4.46
Earnings per share - diluted
$
4.31
$
4.31
$
4.42
Dividends per share
$
2.36
$
2.16
$
2.04
See accompanying notes to consolidated financial statements.
, GENERAL MILLS INC 10-K form, page 44:
44
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
May 26, 2024
May 28, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
418.0
$
585.5
Receivables
1,696.2
1,683.2
Inventories
1,898.2
2,172.0
Prepaid expenses and other current assets
568.5
735.7
Total current
assets
4,580.9
5,176.4
Land, buildings, and equipment
3,863.9
3,636.2
Goodwill
14,750.7
14,511.2
Other intangible assets
6,979.9
6,967.6
Other assets
1,294.5
1,160.3
Total assets
$
31,469.9
$
31,451.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,987.8
$
4,194.2
Current portion of long-term debt
1,614.1
1,709.1
Notes payable
11.8
31.7
Other current liabilities
1,419.4
1,600.7
Total current
liabilities
7,033.1
7,535.7
Long-term debt
11,304.2
9,965.1
Deferred income taxes
2,200.6
2,110.9
Other liabilities
1,283.5
1,140.0
Total liabilities
21,821.4
20,751.7
Stockholders' equity:
Common stock,
754.6
shares issued, $
0.10
par value
75.5
75.5
Additional paid-in capital
1,227.0
1,222.4
Retained earnings
20,971.8
19,838.6
Common stock in treasury,
at cost, shares of
195.5
and
168.0
(10,357.9)
(8,410.0)
Accumulated other comprehensive loss
(2,519.7)
(2,276.9)
Total stockholders'
equity
9,396.7
10,449.6
Noncontrolling interests
251.8
250.4
Total equity
9,648.5
10,700.0
Total liabilities and equity
$
31,469.9
$
31,451.7
See accompanying notes to consolidated financial statements.
|
42
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Net sales
$
19,857.2
$
20,094.2
$
18,992.8
Cost of sales
12,925.1
13,548.4
12,590.6
Selling, general, and administrative expenses
3,259.0
3,500.4
3,147.0
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
241.4
56.2
(26.5)
Operating profit
3,431.7
3,433.8
3,475.8
Benefit plan non-service income
(75.8)
(88.8)
(113.4)
Interest, net
479.2
382.1
379.6
Earnings before income taxes and after-tax earnings
from joint ventures
3,028.3
3,140.5
3,209.6
Income taxes
594.5
612.2
586.3
After-tax earnings from joint ventures
84.8
81.3
111.7
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
2,518.6
2,609.6
2,735.0
Net earnings attributable to redeemable and noncontrolling interests
22.0
15.7
27.7
Net earnings attributable to General Mills
$
2,496.6
$
2,593.9
$
2,707.3
Earnings per share - basic
$
4.34
$
4.36
$
4.46
Earnings per share - diluted
$
4.31
$
4.31
$
4.42
Dividends per share
$
2.36
$
2.16
$
2.04
See accompanying notes to consolidated financial statements.
,
44
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
May 26, 2024
May 28, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
418.0
$
585.5
Receivables
1,696.2
1,683.2
Inventories
1,898.2
2,172.0
Prepaid expenses and other current assets
568.5
735.7
Total current
assets
4,580.9
5,176.4
Land, buildings, and equipment
3,863.9
3,636.2
Goodwill
14,750.7
14,511.2
Other intangible assets
6,979.9
6,967.6
Other assets
1,294.5
1,160.3
Total assets
$
31,469.9
$
31,451.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,987.8
$
4,194.2
Current portion of long-term debt
1,614.1
1,709.1
Notes payable
11.8
31.7
Other current liabilities
1,419.4
1,600.7
Total current
liabilities
7,033.1
7,535.7
Long-term debt
11,304.2
9,965.1
Deferred income taxes
2,200.6
2,110.9
Other liabilities
1,283.5
1,140.0
Total liabilities
21,821.4
20,751.7
Stockholders' equity:
Common stock,
754.6
shares issued, $
0.10
par value
75.5
75.5
Additional paid-in capital
1,227.0
1,222.4
Retained earnings
20,971.8
19,838.6
Common stock in treasury,
at cost, shares of
195.5
and
168.0
(10,357.9)
(8,410.0)
Accumulated other comprehensive loss
(2,519.7)
(2,276.9)
Total stockholders'
equity
9,396.7
10,449.6
Noncontrolling interests
251.8
250.4
Total equity
9,648.5
10,700.0
Total liabilities and equity
$
31,469.9
$
31,451.7
See accompanying notes to consolidated financial statements.
|
GENERAL MILLS INC 10-K form, page 42:
42
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Net sales
$
19,857.2
$
20,094.2
$
18,992.8
Cost of sales
12,925.1
13,548.4
12,590.6
Selling, general, and administrative expenses
3,259.0
3,500.4
3,147.0
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
241.4
56.2
(26.5)
Operating profit
3,431.7
3,433.8
3,475.8
Benefit plan non-service income
(75.8)
(88.8)
(113.4)
Interest, net
479.2
382.1
379.6
Earnings before income taxes and after-tax earnings
from joint ventures
3,028.3
3,140.5
3,209.6
Income taxes
594.5
612.2
586.3
After-tax earnings from joint ventures
84.8
81.3
111.7
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
2,518.6
2,609.6
2,735.0
Net earnings attributable to redeemable and noncontrolling interests
22.0
15.7
27.7
Net earnings attributable to General Mills
$
2,496.6
$
2,593.9
$
2,707.3
Earnings per share - basic
$
4.34
$
4.36
$
4.46
Earnings per share - diluted
$
4.31
$
4.31
$
4.42
Dividends per share
$
2.36
$
2.16
$
2.04
See accompanying notes to consolidated financial statements.
, GENERAL MILLS INC 10-K form, page 44:
44
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
May 26, 2024
May 28, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
418.0
$
585.5
Receivables
1,696.2
1,683.2
Inventories
1,898.2
2,172.0
Prepaid expenses and other current assets
568.5
735.7
Total current
assets
4,580.9
5,176.4
Land, buildings, and equipment
3,863.9
3,636.2
Goodwill
14,750.7
14,511.2
Other intangible assets
6,979.9
6,967.6
Other assets
1,294.5
1,160.3
Total assets
$
31,469.9
$
31,451.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,987.8
$
4,194.2
Current portion of long-term debt
1,614.1
1,709.1
Notes payable
11.8
31.7
Other current liabilities
1,419.4
1,600.7
Total current
liabilities
7,033.1
7,535.7
Long-term debt
11,304.2
9,965.1
Deferred income taxes
2,200.6
2,110.9
Other liabilities
1,283.5
1,140.0
Total liabilities
21,821.4
20,751.7
Stockholders' equity:
Common stock,
754.6
shares issued, $
0.10
par value
75.5
75.5
Additional paid-in capital
1,227.0
1,222.4
Retained earnings
20,971.8
19,838.6
Common stock in treasury,
at cost, shares of
195.5
and
168.0
(10,357.9)
(8,410.0)
Accumulated other comprehensive loss
(2,519.7)
(2,276.9)
Total stockholders'
equity
9,396.7
10,449.6
Noncontrolling interests
251.8
250.4
Total equity
9,648.5
10,700.0
Total liabilities and equity
$
31,469.9
$
31,451.7
See accompanying notes to consolidated financial statements.
|
42
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Net sales
$
19,857.2
$
20,094.2
$
18,992.8
Cost of sales
12,925.1
13,548.4
12,590.6
Selling, general, and administrative expenses
3,259.0
3,500.4
3,147.0
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
241.4
56.2
(26.5)
Operating profit
3,431.7
3,433.8
3,475.8
Benefit plan non-service income
(75.8)
(88.8)
(113.4)
Interest, net
479.2
382.1
379.6
Earnings before income taxes and after-tax earnings
from joint ventures
3,028.3
3,140.5
3,209.6
Income taxes
594.5
612.2
586.3
After-tax earnings from joint ventures
84.8
81.3
111.7
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
2,518.6
2,609.6
2,735.0
Net earnings attributable to redeemable and noncontrolling interests
22.0
15.7
27.7
Net earnings attributable to General Mills
$
2,496.6
$
2,593.9
$
2,707.3
Earnings per share - basic
$
4.34
$
4.36
$
4.46
Earnings per share - diluted
$
4.31
$
4.31
$
4.42
Dividends per share
$
2.36
$
2.16
$
2.04
See accompanying notes to consolidated financial statements.
,
44
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
May 26, 2024
May 28, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
418.0
$
585.5
Receivables
1,696.2
1,683.2
Inventories
1,898.2
2,172.0
Prepaid expenses and other current assets
568.5
735.7
Total current
assets
4,580.9
5,176.4
Land, buildings, and equipment
3,863.9
3,636.2
Goodwill
14,750.7
14,511.2
Other intangible assets
6,979.9
6,967.6
Other assets
1,294.5
1,160.3
Total assets
$
31,469.9
$
31,451.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,987.8
$
4,194.2
Current portion of long-term debt
1,614.1
1,709.1
Notes payable
11.8
31.7
Other current liabilities
1,419.4
1,600.7
Total current
liabilities
7,033.1
7,535.7
Long-term debt
11,304.2
9,965.1
Deferred income taxes
2,200.6
2,110.9
Other liabilities
1,283.5
1,140.0
Total liabilities
21,821.4
20,751.7
Stockholders' equity:
Common stock,
754.6
shares issued, $
0.10
par value
75.5
75.5
Additional paid-in capital
1,227.0
1,222.4
Retained earnings
20,971.8
19,838.6
Common stock in treasury,
at cost, shares of
195.5
and
168.0
(10,357.9)
(8,410.0)
Accumulated other comprehensive loss
(2,519.7)
(2,276.9)
Total stockholders'
equity
9,396.7
10,449.6
Noncontrolling interests
251.8
250.4
Total equity
9,648.5
10,700.0
Total liabilities and equity
$
31,469.9
$
31,451.7
See accompanying notes to consolidated financial statements.
|
q_an025
|
What does the cash flow analysis for General Mills in the fiscal year 2024 indicate about the company's liquidity and ability to generate cash from operations?
|
Cash flow analysis is a critical aspect of assessing a company's liquidity and its ability to generate cash from operations. For General Mills in the fiscal year 2024, the net cash provided by operating activities was $3,302.6 million. This figure indicates that the company generated substantial cash from its core operations, which is essential for meeting short-term obligations, investing in growth opportunities, and returning value to shareholders. A strong cash flow from operations suggests that the company has a healthy liquidity position and can cover its short-term liabilities without relying on external financing. Additionally, positive cash flow from operations provides the company with the flexibility to invest in capital expenditures, acquisitions, and other strategic initiatives. For General Mills, maintaining strong cash flow from operations is crucial for sustaining financial stability and supporting long-term growth. The company must continue to focus on efficient cash management and operational performance to ensure it can generate consistent cash flows and maintain liquidity.
|
Analysis
|
46
|
0001193125-24-168943
|
ITEM 7A - QUANTITATIVE
|
GENERAL MILLS INC 10-K form, page 46:
46
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions)
Fiscal Year
2024
2023
2022
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling interests
$
2,518.6
$
2,609.6
$
2,735.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
552.7
546.6
570.3
After-tax earnings from joint ventures
(84.8)
(81.3)
(111.7)
Distributions of earnings from joint ventures
50.4
69.9
107.5
Stock-based compensation
95.3
111.7
98.7
Deferred income taxes
(48.5)
(22.2)
62.2
Pension and other postretirement benefit plan contributions
(30.1)
(30.1)
(31.3)
Pension and other postretirement benefit plan costs
(27.0)
(27.6)
(30.1)
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
223.5
24.4
(117.1)
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures
10.6
(48.9)
277.4
Other, net
41.9
71.1
(50.7)
Net cash provided by operating activities
3,302.6
2,778.6
3,316.1
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(774.1)
(689.5)
(568.7)
Acquisitions, net of cash acquired
(451.9)
(251.5)
(1,201.3)
Investments in affiliates, net
(2.7)
(32.2)
15.4
Proceeds from disposal of land, buildings, and equipment
0.8
1.3
3.3
Proceeds from divestitures, net of cash divested
-
633.1
74.1
Other, net
30.5
(7.6)
(13.5)
Net cash used by investing activities
(1,197.4)
(346.4)
(1,690.7)
Cash Flows - Financing Activities
Change in notes payable
(20.5)
(769.3)
551.4
Issuance of long-term debt
2,065.2
2,324.4
2,203.7
Payment of long-term debt
(901.5)
(1,421.7)
(3,140.9)
Proceeds from common stock issued on exercised options
25.5
232.3
161.7
Purchases of common stock for treasury
(2,002.4)
(1,403.6)
(876.8)
Dividends paid
(1,363.4)
(1,287.9)
(1,244.5)
Distributions to redeemable and noncontrolling interest holders
(21.3)
(15.7)
(129.8)
Other, net
(53.9)
(62.6)
(28.0)
Net cash used by financing activities
(2,272.3)
(2,404.1)
(2,503.2)
Effect of exchange rate changes on cash and cash equivalents
(0.4)
(12.0)
(58.0)
(Decrease) increase in cash and cash equivalents
(167.5)
16.1
(935.8)
Cash and cash equivalents - beginning of year
585.5
569.4
1,505.2
Cash and cash equivalents - end of year
$
418.0
$
585.5
$
569.4
Cash flow from changes in current assets and liabilities, excluding the effects of acquisitions and
divestitures:
Receivables
$
(1.8)
$
(41.2)
$
(166.3)
Inventories
287.6
(319.0)
(85.8)
Prepaid expenses and other current assets
167.0
61.6
(35.3)
Accounts payable
(251.2)
199.8
456.7
Other current liabilities
(191.0)
49.9
108.1
Changes in current assets and liabilities
$
10.6
$
(48.9)
$
277.4
See accompanying notes to consolidated financial statements.
|
46
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions)
Fiscal Year
2024
2023
2022
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling interests
$
2,518.6
$
2,609.6
$
2,735.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
552.7
546.6
570.3
After-tax earnings from joint ventures
(84.8)
(81.3)
(111.7)
Distributions of earnings from joint ventures
50.4
69.9
107.5
Stock-based compensation
95.3
111.7
98.7
Deferred income taxes
(48.5)
(22.2)
62.2
Pension and other postretirement benefit plan contributions
(30.1)
(30.1)
(31.3)
Pension and other postretirement benefit plan costs
(27.0)
(27.6)
(30.1)
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
223.5
24.4
(117.1)
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures
10.6
(48.9)
277.4
Other, net
41.9
71.1
(50.7)
Net cash provided by operating activities
3,302.6
2,778.6
3,316.1
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(774.1)
(689.5)
(568.7)
Acquisitions, net of cash acquired
(451.9)
(251.5)
(1,201.3)
Investments in affiliates, net
(2.7)
(32.2)
15.4
Proceeds from disposal of land, buildings, and equipment
0.8
1.3
3.3
Proceeds from divestitures, net of cash divested
-
633.1
74.1
Other, net
30.5
(7.6)
(13.5)
Net cash used by investing activities
(1,197.4)
(346.4)
(1,690.7)
Cash Flows - Financing Activities
Change in notes payable
(20.5)
(769.3)
551.4
Issuance of long-term debt
2,065.2
2,324.4
2,203.7
Payment of long-term debt
(901.5)
(1,421.7)
(3,140.9)
Proceeds from common stock issued on exercised options
25.5
232.3
161.7
Purchases of common stock for treasury
(2,002.4)
(1,403.6)
(876.8)
Dividends paid
(1,363.4)
(1,287.9)
(1,244.5)
Distributions to redeemable and noncontrolling interest holders
(21.3)
(15.7)
(129.8)
Other, net
(53.9)
(62.6)
(28.0)
Net cash used by financing activities
(2,272.3)
(2,404.1)
(2,503.2)
Effect of exchange rate changes on cash and cash equivalents
(0.4)
(12.0)
(58.0)
(Decrease) increase in cash and cash equivalents
(167.5)
16.1
(935.8)
Cash and cash equivalents - beginning of year
585.5
569.4
1,505.2
Cash and cash equivalents - end of year
$
418.0
$
585.5
$
569.4
Cash flow from changes in current assets and liabilities, excluding the effects of acquisitions and
divestitures:
Receivables
$
(1.8)
$
(41.2)
$
(166.3)
Inventories
287.6
(319.0)
(85.8)
Prepaid expenses and other current assets
167.0
61.6
(35.3)
Accounts payable
(251.2)
199.8
456.7
Other current liabilities
(191.0)
49.9
108.1
Changes in current assets and liabilities
$
10.6
$
(48.9)
$
277.4
See accompanying notes to consolidated financial statements.
|
GENERAL MILLS INC 10-K form, page 46:
46
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions)
Fiscal Year
2024
2023
2022
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling interests
$
2,518.6
$
2,609.6
$
2,735.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
552.7
546.6
570.3
After-tax earnings from joint ventures
(84.8)
(81.3)
(111.7)
Distributions of earnings from joint ventures
50.4
69.9
107.5
Stock-based compensation
95.3
111.7
98.7
Deferred income taxes
(48.5)
(22.2)
62.2
Pension and other postretirement benefit plan contributions
(30.1)
(30.1)
(31.3)
Pension and other postretirement benefit plan costs
(27.0)
(27.6)
(30.1)
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
223.5
24.4
(117.1)
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures
10.6
(48.9)
277.4
Other, net
41.9
71.1
(50.7)
Net cash provided by operating activities
3,302.6
2,778.6
3,316.1
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(774.1)
(689.5)
(568.7)
Acquisitions, net of cash acquired
(451.9)
(251.5)
(1,201.3)
Investments in affiliates, net
(2.7)
(32.2)
15.4
Proceeds from disposal of land, buildings, and equipment
0.8
1.3
3.3
Proceeds from divestitures, net of cash divested
-
633.1
74.1
Other, net
30.5
(7.6)
(13.5)
Net cash used by investing activities
(1,197.4)
(346.4)
(1,690.7)
Cash Flows - Financing Activities
Change in notes payable
(20.5)
(769.3)
551.4
Issuance of long-term debt
2,065.2
2,324.4
2,203.7
Payment of long-term debt
(901.5)
(1,421.7)
(3,140.9)
Proceeds from common stock issued on exercised options
25.5
232.3
161.7
Purchases of common stock for treasury
(2,002.4)
(1,403.6)
(876.8)
Dividends paid
(1,363.4)
(1,287.9)
(1,244.5)
Distributions to redeemable and noncontrolling interest holders
(21.3)
(15.7)
(129.8)
Other, net
(53.9)
(62.6)
(28.0)
Net cash used by financing activities
(2,272.3)
(2,404.1)
(2,503.2)
Effect of exchange rate changes on cash and cash equivalents
(0.4)
(12.0)
(58.0)
(Decrease) increase in cash and cash equivalents
(167.5)
16.1
(935.8)
Cash and cash equivalents - beginning of year
585.5
569.4
1,505.2
Cash and cash equivalents - end of year
$
418.0
$
585.5
$
569.4
Cash flow from changes in current assets and liabilities, excluding the effects of acquisitions and
divestitures:
Receivables
$
(1.8)
$
(41.2)
$
(166.3)
Inventories
287.6
(319.0)
(85.8)
Prepaid expenses and other current assets
167.0
61.6
(35.3)
Accounts payable
(251.2)
199.8
456.7
Other current liabilities
(191.0)
49.9
108.1
Changes in current assets and liabilities
$
10.6
$
(48.9)
$
277.4
See accompanying notes to consolidated financial statements.
|
46
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions)
Fiscal Year
2024
2023
2022
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling interests
$
2,518.6
$
2,609.6
$
2,735.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
552.7
546.6
570.3
After-tax earnings from joint ventures
(84.8)
(81.3)
(111.7)
Distributions of earnings from joint ventures
50.4
69.9
107.5
Stock-based compensation
95.3
111.7
98.7
Deferred income taxes
(48.5)
(22.2)
62.2
Pension and other postretirement benefit plan contributions
(30.1)
(30.1)
(31.3)
Pension and other postretirement benefit plan costs
(27.0)
(27.6)
(30.1)
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
223.5
24.4
(117.1)
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures
10.6
(48.9)
277.4
Other, net
41.9
71.1
(50.7)
Net cash provided by operating activities
3,302.6
2,778.6
3,316.1
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(774.1)
(689.5)
(568.7)
Acquisitions, net of cash acquired
(451.9)
(251.5)
(1,201.3)
Investments in affiliates, net
(2.7)
(32.2)
15.4
Proceeds from disposal of land, buildings, and equipment
0.8
1.3
3.3
Proceeds from divestitures, net of cash divested
-
633.1
74.1
Other, net
30.5
(7.6)
(13.5)
Net cash used by investing activities
(1,197.4)
(346.4)
(1,690.7)
Cash Flows - Financing Activities
Change in notes payable
(20.5)
(769.3)
551.4
Issuance of long-term debt
2,065.2
2,324.4
2,203.7
Payment of long-term debt
(901.5)
(1,421.7)
(3,140.9)
Proceeds from common stock issued on exercised options
25.5
232.3
161.7
Purchases of common stock for treasury
(2,002.4)
(1,403.6)
(876.8)
Dividends paid
(1,363.4)
(1,287.9)
(1,244.5)
Distributions to redeemable and noncontrolling interest holders
(21.3)
(15.7)
(129.8)
Other, net
(53.9)
(62.6)
(28.0)
Net cash used by financing activities
(2,272.3)
(2,404.1)
(2,503.2)
Effect of exchange rate changes on cash and cash equivalents
(0.4)
(12.0)
(58.0)
(Decrease) increase in cash and cash equivalents
(167.5)
16.1
(935.8)
Cash and cash equivalents - beginning of year
585.5
569.4
1,505.2
Cash and cash equivalents - end of year
$
418.0
$
585.5
$
569.4
Cash flow from changes in current assets and liabilities, excluding the effects of acquisitions and
divestitures:
Receivables
$
(1.8)
$
(41.2)
$
(166.3)
Inventories
287.6
(319.0)
(85.8)
Prepaid expenses and other current assets
167.0
61.6
(35.3)
Accounts payable
(251.2)
199.8
456.7
Other current liabilities
(191.0)
49.9
108.1
Changes in current assets and liabilities
$
10.6
$
(48.9)
$
277.4
See accompanying notes to consolidated financial statements.
|
q_an026
|
What is the significance of the net income metric for General Mills in the fiscal year 2024, and how does it impact the company's overall profitability?
|
Net income is a crucial profitability metric that indicates the company's total earnings after all expenses, taxes, and costs have been deducted from total revenue. For General Mills, the net income for the fiscal year 2024 was $2,496.6 million. This figure is slightly lower than the net income of $2,593.9 million in 2023 and $2,707.3 million in 2022. The net income metric is significant because it provides a clear picture of the company's profitability and financial health. A decline in net income, as seen in 2024, could signal potential issues such as increased costs, reduced sales, or other financial challenges. This decrease in net income can impact the company's ability to reinvest in its operations, pay dividends, and meet its financial obligations. Additionally, a lower net income might affect investor confidence and the company's stock price. It is essential for General Mills to analyze the factors contributing to this decline and address any underlying issues to ensure sustained profitability and financial stability.
|
Analysis
|
42
|
0001193125-24-168943
|
ITEM 7A - QUANTITATIVE
|
GENERAL MILLS INC 10-K form, page 42:
42
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Net sales
$
19,857.2
$
20,094.2
$
18,992.8
Cost of sales
12,925.1
13,548.4
12,590.6
Selling, general, and administrative expenses
3,259.0
3,500.4
3,147.0
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
241.4
56.2
(26.5)
Operating profit
3,431.7
3,433.8
3,475.8
Benefit plan non-service income
(75.8)
(88.8)
(113.4)
Interest, net
479.2
382.1
379.6
Earnings before income taxes and after-tax earnings
from joint ventures
3,028.3
3,140.5
3,209.6
Income taxes
594.5
612.2
586.3
After-tax earnings from joint ventures
84.8
81.3
111.7
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
2,518.6
2,609.6
2,735.0
Net earnings attributable to redeemable and noncontrolling interests
22.0
15.7
27.7
Net earnings attributable to General Mills
$
2,496.6
$
2,593.9
$
2,707.3
Earnings per share - basic
$
4.34
$
4.36
$
4.46
Earnings per share - diluted
$
4.31
$
4.31
$
4.42
Dividends per share
$
2.36
$
2.16
$
2.04
See accompanying notes to consolidated financial statements.
|
42
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Net sales
$
19,857.2
$
20,094.2
$
18,992.8
Cost of sales
12,925.1
13,548.4
12,590.6
Selling, general, and administrative expenses
3,259.0
3,500.4
3,147.0
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
241.4
56.2
(26.5)
Operating profit
3,431.7
3,433.8
3,475.8
Benefit plan non-service income
(75.8)
(88.8)
(113.4)
Interest, net
479.2
382.1
379.6
Earnings before income taxes and after-tax earnings
from joint ventures
3,028.3
3,140.5
3,209.6
Income taxes
594.5
612.2
586.3
After-tax earnings from joint ventures
84.8
81.3
111.7
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
2,518.6
2,609.6
2,735.0
Net earnings attributable to redeemable and noncontrolling interests
22.0
15.7
27.7
Net earnings attributable to General Mills
$
2,496.6
$
2,593.9
$
2,707.3
Earnings per share - basic
$
4.34
$
4.36
$
4.46
Earnings per share - diluted
$
4.31
$
4.31
$
4.42
Dividends per share
$
2.36
$
2.16
$
2.04
See accompanying notes to consolidated financial statements.
|
GENERAL MILLS INC 10-K form, page 42:
42
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Net sales
$
19,857.2
$
20,094.2
$
18,992.8
Cost of sales
12,925.1
13,548.4
12,590.6
Selling, general, and administrative expenses
3,259.0
3,500.4
3,147.0
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
241.4
56.2
(26.5)
Operating profit
3,431.7
3,433.8
3,475.8
Benefit plan non-service income
(75.8)
(88.8)
(113.4)
Interest, net
479.2
382.1
379.6
Earnings before income taxes and after-tax earnings
from joint ventures
3,028.3
3,140.5
3,209.6
Income taxes
594.5
612.2
586.3
After-tax earnings from joint ventures
84.8
81.3
111.7
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
2,518.6
2,609.6
2,735.0
Net earnings attributable to redeemable and noncontrolling interests
22.0
15.7
27.7
Net earnings attributable to General Mills
$
2,496.6
$
2,593.9
$
2,707.3
Earnings per share - basic
$
4.34
$
4.36
$
4.46
Earnings per share - diluted
$
4.31
$
4.31
$
4.42
Dividends per share
$
2.36
$
2.16
$
2.04
See accompanying notes to consolidated financial statements.
|
42
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Net sales
$
19,857.2
$
20,094.2
$
18,992.8
Cost of sales
12,925.1
13,548.4
12,590.6
Selling, general, and administrative expenses
3,259.0
3,500.4
3,147.0
Divestitures gain, net
-
(444.6)
(194.1)
Restructuring, impairment, and other exit costs (recoveries)
241.4
56.2
(26.5)
Operating profit
3,431.7
3,433.8
3,475.8
Benefit plan non-service income
(75.8)
(88.8)
(113.4)
Interest, net
479.2
382.1
379.6
Earnings before income taxes and after-tax earnings
from joint ventures
3,028.3
3,140.5
3,209.6
Income taxes
594.5
612.2
586.3
After-tax earnings from joint ventures
84.8
81.3
111.7
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
2,518.6
2,609.6
2,735.0
Net earnings attributable to redeemable and noncontrolling interests
22.0
15.7
27.7
Net earnings attributable to General Mills
$
2,496.6
$
2,593.9
$
2,707.3
Earnings per share - basic
$
4.34
$
4.36
$
4.46
Earnings per share - diluted
$
4.31
$
4.31
$
4.42
Dividends per share
$
2.36
$
2.16
$
2.04
See accompanying notes to consolidated financial statements.
|
q_an027
|
What was Discover’s Delinquency Ratio for 2023, and what does this suggest about the risk in its loan portfolio?
|
Discover’s Delinquency Ratio for 2023 can be calculated as follows:
30 Days Delinquent
Total Delinquent Loans: $4,427 million
Total Loans: $128,409 million
30-Day Delinquency Ratio =3.45%
90 or More Days Delinquent
Total Delinquent Loans: $2,314 million
Total Loans: $128,409 million
90-Day Delinquency Ratio=1.59%
Implications:
Increased Delinquency Rates: The 30-day delinquency ratio of 3.45% in 2023, up from 2.30% in 2022, and the 90-day delinquency ratio of 1.59%, up from 0.98% in 2022, indicate a deterioration in credit quality.
Risk in Loan Portfolio: Higher delinquency rates signal increased credit risk within the loan portfolio.
|
Analysis
|
67;85
|
0001393612-24-000010;0001393612-24-000010
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations;Item 8. Financial Statements and Supplementary Data
|
Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 67:
Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):| | | | | | | | | | | | |
|---:|:---------------------------------|:-------------|:------|:-----|:-----|:---|:---|:---|:------|:-----|:---|
| 1 | | December 31, | | | | | | | | | |
| 2 | | 2023 | | 2022 | | | | | | | |
| 3 | | $ | | % | $ | | % | | | | |
| 4 | Loans 30 or more days delinquent | | | | | | | | | | |
| 5 | Credit card loans | $ | 3,955 | | 3.87 | % | | $ | 2,278 | 2.53 | % |
| 6 | Private student loans | $ | 271 | | 2.62 | % | | $ | 212 | 2.05 | % |
| 7 | Personal loans | $ | 143 | | 1.45 | % | | $ | 63 | 0.80 | % |
| 9 | Total loan receivables | $ | 4,427 | | 3.45 | % | | $ | 2,578 | 2.30 | % |
| 11 | Loans 90 or more days delinquent | | | | | | | | | | |
| 12 | Credit card loans | $ | 1,917 | | 1.87 | % | | $ | 1,028 | 1.14 | % |
| 13 | Private student loans | $ | 70 | | 0.67 | % | | $ | 45 | 0.43 | % |
| 14 | Personal loans | $ | 39 | | 0.40 | % | | $ | 16 | 0.21 | % |
| 16 | Total loan receivables | $ | 2,045 | | 1.59 | % | | $ | 1,101 | 0.98 | % |
| 18 | Loans not accruing interest | $ | 269 | | 0.21 | % | | $ | 214 | 0.19 | % |
The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:----------------------|:-------------------|:-------|:-----------------------------------|:------|:------------------------------------------|:-------|:------------------------|:------|:-------|:-------|:------|:---|:--------|
| 1 | At December 31, 2023 | Due OneYear orLess | | Due AfterOne YearThroughFive Years | | Due AfterFive Years Through Fifteen Years | | Due After Fifteen Years | Total | | | | | |
| 2 | Credit card loans | $ | 32,250 | | | $ | 54,628 | | $ | 15,032 | $ | 349 | $ | 102,259 |
| 3 | Private student loans | 364 | | | 2,083 | | | 6,296 | | 1,609 | 10,352 | | | |
| 4 | Personal loans | 2,653 | | | 6,653 | | | 546 | | - | 9,852 | | | |
| 5 | Other loans | 161 | | | 724 | | | 2,102 | | 2,959 | 5,946 | | | |
| 6 | Total loan portfolio | $ | 35,428 | | | $ | 64,088 | | $ | 23,976 | $ | 4,917 | $ | 128,409 |
(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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|
Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):| | | | | | | | | | | | |
|---:|:---------------------------------|:-------------|:------|:-----|:-----|:---|:---|:---|:------|:-----|:---|
| 1 | | December 31, | | | | | | | | | |
| 2 | | 2023 | | 2022 | | | | | | | |
| 3 | | $ | | % | $ | | % | | | | |
| 4 | Loans 30 or more days delinquent | | | | | | | | | | |
| 5 | Credit card loans | $ | 3,955 | | 3.87 | % | | $ | 2,278 | 2.53 | % |
| 6 | Private student loans | $ | 271 | | 2.62 | % | | $ | 212 | 2.05 | % |
| 7 | Personal loans | $ | 143 | | 1.45 | % | | $ | 63 | 0.80 | % |
| 9 | Total loan receivables | $ | 4,427 | | 3.45 | % | | $ | 2,578 | 2.30 | % |
| 11 | Loans 90 or more days delinquent | | | | | | | | | | |
| 12 | Credit card loans | $ | 1,917 | | 1.87 | % | | $ | 1,028 | 1.14 | % |
| 13 | Private student loans | $ | 70 | | 0.67 | % | | $ | 45 | 0.43 | % |
| 14 | Personal loans | $ | 39 | | 0.40 | % | | $ | 16 | 0.21 | % |
| 16 | Total loan receivables | $ | 2,045 | | 1.59 | % | | $ | 1,101 | 0.98 | % |
| 18 | Loans not accruing interest | $ | 269 | | 0.21 | % | | $ | 214 | 0.19 | % |
The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:----------------------|:-------------------|:-------|:-----------------------------------|:------|:------------------------------------------|:-------|:------------------------|:------|:-------|:-------|:------|:---|:--------|
| 1 | At December 31, 2023 | Due OneYear orLess | | Due AfterOne YearThroughFive Years | | Due AfterFive Years Through Fifteen Years | | Due After Fifteen Years | Total | | | | | |
| 2 | Credit card loans | $ | 32,250 | | | $ | 54,628 | | $ | 15,032 | $ | 349 | $ | 102,259 |
| 3 | Private student loans | 364 | | | 2,083 | | | 6,296 | | 1,609 | 10,352 | | | |
| 4 | Personal loans | 2,653 | | | 6,653 | | | 546 | | - | 9,852 | | | |
| 5 | Other loans | 161 | | | 724 | | | 2,102 | | 2,959 | 5,946 | | | |
| 6 | Total loan portfolio | $ | 35,428 | | | $ | 64,088 | | $ | 23,976 | $ | 4,917 | $ | 128,409 |
(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
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,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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|
Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 67:
Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">December 31,</td></tr><tr><td colspan="3"> </td><td colspan="9">2023</td><td colspan="3"></td><td colspan="9">2022</td></tr><tr><td colspan="3"> </td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td><td colspan="3"></td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td></tr><tr><td colspan="3">Loans 30 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>3,955 </td><td></td><td colspan="3"></td><td colspan="2">3.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,278 </td><td></td><td colspan="3"></td><td colspan="2">2.53 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>271 </td><td></td><td colspan="3"></td><td colspan="2">2.62 </td><td>%</td><td colspan="3"></td><td>$</td><td>212 </td><td></td><td colspan="3"></td><td colspan="2">2.05 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>143 </td><td></td><td colspan="3"></td><td colspan="2">1.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>63 </td><td></td><td colspan="3"></td><td colspan="2">0.80 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>4,427 </td><td></td><td colspan="3"></td><td colspan="2">3.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,578 </td><td></td><td colspan="3"></td><td colspan="2">2.30 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans 90 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>1,917 </td><td></td><td colspan="3"></td><td colspan="2">1.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,028 </td><td></td><td colspan="3"></td><td colspan="2">1.14 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>70 </td><td></td><td colspan="3"></td><td colspan="2">0.67 </td><td>%</td><td colspan="3"></td><td>$</td><td>45 </td><td></td><td colspan="3"></td><td colspan="2">0.43 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>39 </td><td></td><td colspan="3"></td><td colspan="2">0.40 </td><td>%</td><td colspan="3"></td><td>$</td><td>16 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>2,045 </td><td></td><td colspan="3"></td><td colspan="2">1.59 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,101 </td><td></td><td colspan="3"></td><td colspan="2">0.98 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans not accruing interest</td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td><td colspan="3"></td><td>$</td><td>214 </td><td></td><td colspan="3"></td><td colspan="2">0.19 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">At December 31, 2023</td><td colspan="3">Due OneYear orLess</td><td colspan="3"></td><td colspan="3">Due AfterOne YearThroughFive Years</td><td colspan="3"></td><td colspan="3">Due AfterFive Years Through Fifteen Years</td><td colspan="3"></td><td colspan="3">Due After Fifteen Years</td><td colspan="3"></td><td colspan="3">Total</td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>32,250 </td><td></td><td colspan="3"></td><td>$</td><td>54,628 </td><td></td><td colspan="3"></td><td>$</td><td>15,032 </td><td></td><td colspan="3"></td><td>$</td><td>349 </td><td></td><td colspan="3"></td><td>$</td><td>102,259 </td><td></td></tr><tr><td colspan="3">Private student loans</td><td colspan="2">364 </td><td></td><td colspan="3"></td><td colspan="2">2,083 </td><td></td><td colspan="3"></td><td colspan="2">6,296 </td><td></td><td colspan="3"></td><td colspan="2">1,609 </td><td></td><td colspan="3"></td><td colspan="2">10,352 </td><td></td></tr><tr><td colspan="3">Personal loans</td><td colspan="2">2,653 </td><td></td><td colspan="3"></td><td colspan="2">6,653 </td><td></td><td colspan="3"></td><td colspan="2">546 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,852 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">161 </td><td></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">2,102 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">5,946 </td><td></td></tr><tr><td colspan="3">Total loan portfolio</td><td>$</td><td>35,428 </td><td></td><td colspan="3"></td><td>$</td><td>64,088 </td><td></td><td colspan="3"></td><td>$</td><td>23,976 </td><td></td><td colspan="3"></td><td>$</td><td>4,917 </td><td></td><td colspan="3"></td><td>$</td><td>128,409 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">December 31,</td></tr><tr><td colspan="3"> </td><td colspan="9">2023</td><td colspan="3"></td><td colspan="9">2022</td></tr><tr><td colspan="3"> </td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td><td colspan="3"></td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td></tr><tr><td colspan="3">Loans 30 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>3,955 </td><td></td><td colspan="3"></td><td colspan="2">3.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,278 </td><td></td><td colspan="3"></td><td colspan="2">2.53 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>271 </td><td></td><td colspan="3"></td><td colspan="2">2.62 </td><td>%</td><td colspan="3"></td><td>$</td><td>212 </td><td></td><td colspan="3"></td><td colspan="2">2.05 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>143 </td><td></td><td colspan="3"></td><td colspan="2">1.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>63 </td><td></td><td colspan="3"></td><td colspan="2">0.80 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>4,427 </td><td></td><td colspan="3"></td><td colspan="2">3.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,578 </td><td></td><td colspan="3"></td><td colspan="2">2.30 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans 90 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>1,917 </td><td></td><td colspan="3"></td><td colspan="2">1.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,028 </td><td></td><td colspan="3"></td><td colspan="2">1.14 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>70 </td><td></td><td colspan="3"></td><td colspan="2">0.67 </td><td>%</td><td colspan="3"></td><td>$</td><td>45 </td><td></td><td colspan="3"></td><td colspan="2">0.43 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>39 </td><td></td><td colspan="3"></td><td colspan="2">0.40 </td><td>%</td><td colspan="3"></td><td>$</td><td>16 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>2,045 </td><td></td><td colspan="3"></td><td colspan="2">1.59 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,101 </td><td></td><td colspan="3"></td><td colspan="2">0.98 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans not accruing interest</td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td><td colspan="3"></td><td>$</td><td>214 </td><td></td><td colspan="3"></td><td colspan="2">0.19 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">At December 31, 2023</td><td colspan="3">Due OneYear orLess</td><td colspan="3"></td><td colspan="3">Due AfterOne YearThroughFive Years</td><td colspan="3"></td><td colspan="3">Due AfterFive Years Through Fifteen Years</td><td colspan="3"></td><td colspan="3">Due After Fifteen Years</td><td colspan="3"></td><td colspan="3">Total</td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>32,250 </td><td></td><td colspan="3"></td><td>$</td><td>54,628 </td><td></td><td colspan="3"></td><td>$</td><td>15,032 </td><td></td><td colspan="3"></td><td>$</td><td>349 </td><td></td><td colspan="3"></td><td>$</td><td>102,259 </td><td></td></tr><tr><td colspan="3">Private student loans</td><td colspan="2">364 </td><td></td><td colspan="3"></td><td colspan="2">2,083 </td><td></td><td colspan="3"></td><td colspan="2">6,296 </td><td></td><td colspan="3"></td><td colspan="2">1,609 </td><td></td><td colspan="3"></td><td colspan="2">10,352 </td><td></td></tr><tr><td colspan="3">Personal loans</td><td colspan="2">2,653 </td><td></td><td colspan="3"></td><td colspan="2">6,653 </td><td></td><td colspan="3"></td><td colspan="2">546 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,852 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">161 </td><td></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">2,102 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">5,946 </td><td></td></tr><tr><td colspan="3">Total loan portfolio</td><td>$</td><td>35,428 </td><td></td><td colspan="3"></td><td>$</td><td>64,088 </td><td></td><td colspan="3"></td><td>$</td><td>23,976 </td><td></td><td colspan="3"></td><td>$</td><td>4,917 </td><td></td><td colspan="3"></td><td>$</td><td>128,409 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-85-
|
q_an028
|
How did Tesla's short-term debt and lease obligations evolve between 2019 and 2020, and what implications does this have for its financial health?
|
In 2020, the current portion of debt and finance leases rose to $2,132 million from $1,785 million in 2019, indicating an increase in short-term financial obligations. This could impact Tesla’s ability to manage its liquidity and cash flow in the coming year.
|
Analysis
|
49
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
q_an029
|
In what way did Tesla's Days Sales Outstanding (DSO) change from 2019 to 2020, and how does this affect its receivables management strategy?
|
The company’s Days Sales Outstanding (DSO) increased to approximately 21.8 days in 2020, up from 19.6 days in 2019. This rise suggests that Tesla is taking longer to collect payments from customers, signaling a potential need for improved receivables management to optimize cash flow.
|
Analysis
|
49, 50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an030
|
How did Tesla's EBITDA margin fluctuate from 2019 to 2020, and what insights does this shift provide regarding its operational efficiency?
|
From 2019 to 2020, Tesla's EBITDA margin improved significantly from 6.92% to 13.83%, pointing to stronger operational performance and a better ability to generate earnings before interest, taxes, depreciation, and amortization.
|
Analysis
|
50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an031
|
What impact did the change in Tesla's interest coverage ratio from 2019 to 2020 have on its ability to service debt costs?
|
The interest coverage ratio showed a marked improvement, rising from -0.10 in 2019 to 2.67 in 2020. This indicates that Tesla has enhanced its capacity to cover interest payments with operating income, improving its financial stability and reducing default risk.
|
Analysis
|
50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an032
|
How did Tesla's inventory turnover ratio shift from 2019 to 2020, and what does this change reveal about its inventory handling practices?
|
Tesla's inventory turnover ratio showed a slight increase from 5.77 in 2019 to 6.07 in 2020. This change reflects better inventory management, indicating more efficient handling and selling of goods.
|
Analysis
|
49, 50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an033
|
How did Tesla's net profit margin vary from 2019 to 2020, and what does this variation suggest about its overall profitability?
|
A notable turnaround in profitability occurred as Tesla's net profit margin shifted from a loss of -3.15% in 2019 to a positive 2.73% in 2020. This suggests significant improvements in financial health and profitability.
|
Analysis
|
50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an034
|
What does the shift in Tesla's quick ratio from 2019 to 2020 indicate about its capacity to cover short-term liabilities?
|
With a substantial rise in the quick ratio from 0.74 in 2019 to 1.61 in 2020, Tesla's ability to meet short-term obligations with its most liquid assets has improved, signaling stronger short-term financial stability.
|
Analysis
|
49
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
q_an035
|
What insights can be drawn from the change in Tesla's accrued liabilities from 2019 to 2020 regarding its short-term financial commitments?
|
Increases were also seen in accrued liabilities and other short-term liabilities, which grew by 19.7%, from $3,222 million in 2019 to $3,855 million in 2020. This rise in obligations could also have an impact on liquidity.
|
Analysis
|
49
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
q_an036
|
How does the variation in Tesla's Days Payable Outstanding (DPO) from 2019 to 2020 provide insight into its payment practices to suppliers?
|
Tesla's Days Payable Outstanding (DPO) rose significantly from 66.9 days in 2019 to 89.2 days in 2020. While this increase could improve short-term liquidity by delaying supplier payments, it may also strain relationships with suppliers.
|
Analysis
|
49, 50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an037
|
What does the change in Tesla's deferred revenue from 2019 to 2020 suggest about its future revenue recognition strategies?
|
Deferred revenue saw a 25.3% increase from $1,163 million in 2019 to $1,458 million in 2020, indicating more advance payments from customers. These funds will be recognized as revenue in the future.
|
Analysis
|
49
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
q_an038
|
How did Tesla's fixed asset turnover ratio evolve from 2019 to 2020, and what does this shift indicate about the utilization of its physical assets?
|
The fixed asset turnover ratio showed a slight improvement, from 2.36 in 2019 to 2.47 in 2020, suggesting that Tesla is becoming more efficient in utilizing its fixed assets to generate revenue.
|
Analysis
|
49, 50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an039
|
What can be inferred from the change in Tesla's accounts payable from 2019 to 2020 regarding its short-term financial responsibilities?
|
Accounts payable grew by 60.4%, from $3,771 million in 2019 to $6,051 million in 2020, which means Tesla now has greater short-term financial obligations to suppliers, potentially affecting its liquidity.
|
Analysis
|
49
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
q_an040
|
What does the change in Tesla's accounts receivable turnover ratio from 2019 to 2020 indicate about its approach to credit and collections?
|
The accounts receivable turnover ratio decreased from 18.56 in 2019 to 16.73 in 2020, signaling reduced efficiency in collecting payments from customers. This suggests the need for improvements in credit and collection practices.
|
Analysis
|
49, 50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an041
|
How did Tesla's cash and cash equivalents change from 2019 to 2020, and what does this shift suggest about its liquidity management?
|
A significant improvement in cash reserves occurred, with cash and cash equivalents soaring by 209%, from $6,268 million in 2019 to $19,384 million in 2020. This surge strengthens Tesla's liquidity, providing more flexibility to meet short-term obligations and invest in growth.
|
Analysis
|
49
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
q_an042
|
What is indicated by the change in Tesla's cost of revenues from 2019 to 2020 in terms of its financial structure?
|
Despite the 21.4% rise in the cost of revenues, from $20,509 million in 2019 to $24,906 million in 2020, Tesla managed to improve its gross profit margin, indicating effective cost control and revenue growth.
|
Analysis
|
50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an043
|
What does the shift in Tesla's Days Inventory Outstanding (DIO) from 2019 to 2020 reveal about its inventory management efficiency?
|
Days Inventory Outstanding (DIO) decreased from 63.3 days in 2019 to 60.1 days in 2020, reflecting improved efficiency in managing and selling inventory.
|
Analysis
|
49, 50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an044
|
What does the change in Tesla's long-term debt between 2019 and 2020 indicate about its financing strategy?
|
Tesla reduced its long-term debt from $11,634 million in 2019 to $9,556 million in 2020, focusing on lowering its debt burden to reduce interest expenses and improve financial flexibility.
|
Analysis
|
49
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
q_an045
|
How did the alteration in Tesla's other long-term liabilities from 2019 to 2020 reflect its financial obligations?
|
Other long-term liabilities grew by 23.8%, from $2,691 million in 2019 to $3,330 million in 2020, indicating that Tesla has assumed additional long-term financial commitments, possibly for future expansion or operational needs.
|
Analysis
|
49
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
q_an046
|
How did the change in Tesla's Return on Assets (ROA) from 2019 to 2020 impact its ability to generate profits from its assets?
|
The Return on Assets (ROA) improved from -2.26% in 2019 to 1.65% in 2020, signaling more efficient use of assets to generate profit, which reflects improved operational performance.
|
Analysis
|
49, 50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an047
|
What does Tesla's asset turnover ratio for 2019 and 2020 reveal about the company's efficiency in utilizing its assets to generate revenue?
|
The asset turnover ratio decreased from 0.72 in 2019 to 0.60 in 2020, indicating that Tesla has become less efficient in using its assets to generate revenue, suggesting the need for better asset management.
|
Analysis
|
49, 50
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------|:------------------------|:-------|:---|:-----|:---|:-------|:-----|:---|:-------|:---|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | 2021 | | | 2020 | | | 2019 | | | |
| 3 | Revenues | | | | | | | | | | |
| 4 | Automotive sales | $ | 44,125 | | | $ | 24,604 | | $ | 19,358 | |
| 5 | Automotive regulatory credits | | 1,465 | | | | 1,580 | | | 594 | |
| 6 | Automotive leasing | | 1,642 | | | | 1,052 | | | 869 | |
| 7 | Total automotive revenues | | 47,232 | | | | 27,236 | | | 20,821 | |
| 8 | Energy generation and storage | | 2,789 | | | | 1,994 | | | 1,531 | |
| 9 | Services and other | | 3,802 | | | | 2,306 | | | 2,226 | |
| 10 | Total revenues | | 53,823 | | | | 31,536 | | | 24,578 | |
| 11 | Cost of revenues | | | | | | | | | | |
| 12 | Automotive sales | | 32,415 | | | | 19,696 | | | 15,939 | |
| 13 | Automotive leasing | | 978 | | | | 563 | | | 459 | |
| 14 | Total automotive cost of revenues | | 33,393 | | | | 20,259 | | | 16,398 | |
| 15 | Energy generation and storage | | 2,918 | | | | 1,976 | | | 1,341 | |
| 16 | Services and other | | 3,906 | | | | 2,671 | | | 2,770 | |
| 17 | Total cost of revenues | | 40,217 | | | | 24,906 | | | 20,509 | |
| 18 | Gross profit | | 13,606 | | | | 6,630 | | | 4,069 | |
| 19 | Operating expenses | | | | | | | | | | |
| 20 | Research and development | | 2,593 | | | | 1,491 | | | 1,343 | |
| 21 | Selling, general and administrative | | 4,517 | | | | 3,145 | | | 2,646 | |
| 22 | Restructuring and other | | (27 | ) | | | - | | | 149 | |
| 23 | Total operating expenses | | 7,083 | | | | 4,636 | | | 4,138 | |
| 24 | Income (loss) from operations | | 6,523 | | | | 1,994 | | | (69 | ) |
| 25 | Interest income | | 56 | | | | 30 | | | 44 | |
| 26 | Interest expense | | (371 | ) | | | (748 | ) | | (685 | ) |
| 27 | Other income (expense), net | | 135 | | | | (122 | ) | | 45 | |
| 28 | Income (loss) before income taxes | | 6,343 | | | | 1,154 | | | (665 | ) |
| 29 | Provision for income taxes | | 699 | | | | 292 | | | 110 | |
| 30 | Net income (loss) | | 5,644 | | | | 862 | | | (775 | ) |
| 31 | Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | | 125 | | | | 141 | | | 87 | |
| 32 | Net income (loss) attributable to common stockholders | $ | 5,519 | | | $ | 721 | | $ | (862 | ) |
| 34 | Net income (loss) per share of common stock attributable to common stockholders | | | | | | | | | | |
| 35 | Basic | $ | 5.60 | | | $ | 0.74 | | $ | (0.98 | ) |
| 36 | Diluted | $ | 4.90 | | | $ | 0.64 | | $ | (0.98 | ) |
| 37 | Weighted average shares used in computing net income (loss) per share of common stock | | | | | | | | | | |
| 38 | Basic | | 986 | | | | 933 | | | 887 | |
| 39 | Diluted | | 1,129 | | | | 1,083 | | | 887 | |
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 50: Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
, Tesla, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="10">Year Ended December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
<td> </td>
<td colspan="2">2019</td>
<td> </td>
</tr>
<tr>
<td>Revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td>$</td>
<td>44,125</td>
<td> </td>
<td> </td>
<td>$</td>
<td>24,604</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,358</td>
<td> </td>
</tr>
<tr>
<td>Automotive regulatory credits</td>
<td> </td>
<td> </td>
<td>1,465</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,580</td>
<td> </td>
<td> </td>
<td> </td>
<td>594</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>1,642</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>869</td>
<td> </td>
</tr>
<tr>
<td>Total automotive revenues</td>
<td> </td>
<td> </td>
<td>47,232</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,236</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,821</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,789</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,531</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,802</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,306</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,226</td>
<td> </td>
</tr>
<tr>
<td>Total revenues</td>
<td> </td>
<td> </td>
<td>53,823</td>
<td> </td>
<td> </td>
<td> </td>
<td>31,536</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,578</td>
<td> </td>
</tr>
<tr>
<td>Cost of revenues</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Automotive sales</td>
<td> </td>
<td> </td>
<td>32,415</td>
<td> </td>
<td> </td>
<td> </td>
<td>19,696</td>
<td> </td>
<td> </td>
<td> </td>
<td>15,939</td>
<td> </td>
</tr>
<tr>
<td>Automotive leasing</td>
<td> </td>
<td> </td>
<td>978</td>
<td> </td>
<td> </td>
<td> </td>
<td>563</td>
<td> </td>
<td> </td>
<td> </td>
<td>459</td>
<td> </td>
</tr>
<tr>
<td>Total automotive cost of revenues</td>
<td> </td>
<td> </td>
<td>33,393</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,259</td>
<td> </td>
<td> </td>
<td> </td>
<td>16,398</td>
<td> </td>
</tr>
<tr>
<td>Energy generation and storage</td>
<td> </td>
<td> </td>
<td>2,918</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,976</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,341</td>
<td> </td>
</tr>
<tr>
<td>Services and other</td>
<td> </td>
<td> </td>
<td>3,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,671</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,770</td>
<td> </td>
</tr>
<tr>
<td>Total cost of revenues</td>
<td> </td>
<td> </td>
<td>40,217</td>
<td> </td>
<td> </td>
<td> </td>
<td>24,906</td>
<td> </td>
<td> </td>
<td> </td>
<td>20,509</td>
<td> </td>
</tr>
<tr>
<td>Gross profit</td>
<td> </td>
<td> </td>
<td>13,606</td>
<td> </td>
<td> </td>
<td> </td>
<td>6,630</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,069</td>
<td> </td>
</tr>
<tr>
<td>Operating expenses</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Research and development</td>
<td> </td>
<td> </td>
<td>2,593</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,491</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,343</td>
<td> </td>
</tr>
<tr>
<td>Selling, general and administrative</td>
<td> </td>
<td> </td>
<td>4,517</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,145</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,646</td>
<td> </td>
</tr>
<tr>
<td>Restructuring and other</td>
<td> </td>
<td> </td>
<td>(27</td>
<td>)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>149</td>
<td> </td>
</tr>
<tr>
<td>Total operating expenses</td>
<td> </td>
<td> </td>
<td>7,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,636</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,138</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) from operations</td>
<td> </td>
<td> </td>
<td>6,523</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,994</td>
<td> </td>
<td> </td>
<td> </td>
<td>(69</td>
<td>)</td>
</tr>
<tr>
<td>Interest income</td>
<td> </td>
<td> </td>
<td>56</td>
<td> </td>
<td> </td>
<td> </td>
<td>30</td>
<td> </td>
<td> </td>
<td> </td>
<td>44</td>
<td> </td>
</tr>
<tr>
<td>Interest expense</td>
<td> </td>
<td> </td>
<td>(371</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(748</td>
<td>)</td>
<td> </td>
<td> </td>
<td>(685</td>
<td>)</td>
</tr>
<tr>
<td>Other income (expense), net</td>
<td> </td>
<td> </td>
<td>135</td>
<td> </td>
<td> </td>
<td> </td>
<td>(122</td>
<td>)</td>
<td> </td>
<td> </td>
<td>45</td>
<td> </td>
</tr>
<tr>
<td>Income (loss) before income taxes</td>
<td> </td>
<td> </td>
<td>6,343</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,154</td>
<td> </td>
<td> </td>
<td> </td>
<td>(665</td>
<td>)</td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td> </td>
<td> </td>
<td>699</td>
<td> </td>
<td> </td>
<td> </td>
<td>292</td>
<td> </td>
<td> </td>
<td> </td>
<td>110</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss)</td>
<td> </td>
<td> </td>
<td>5,644</td>
<td> </td>
<td> </td>
<td> </td>
<td>862</td>
<td> </td>
<td> </td>
<td> </td>
<td>(775</td>
<td>)</td>
</tr>
<tr>
<td>Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>125</td>
<td> </td>
<td> </td>
<td> </td>
<td>141</td>
<td> </td>
<td> </td>
<td> </td>
<td>87</td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) attributable to common stockholders</td>
<td> </td>
<td>$</td>
<td>5,519</td>
<td> </td>
<td> </td>
<td>$</td>
<td>721</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(862</td>
<td>)</td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Net income (loss) per share of common stock attributable to common stockholders</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td>$</td>
<td>5.60</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.74</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td>$</td>
<td>4.90</td>
<td> </td>
<td> </td>
<td>$</td>
<td>0.64</td>
<td> </td>
<td> </td>
<td>$</td>
<td>(0.98</td>
<td>)</td>
</tr>
<tr>
<td>Weighted average shares used in computing net income (loss) per share of common stock</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Basic</td>
<td> </td>
<td> </td>
<td>986</td>
<td> </td>
<td> </td>
<td> </td>
<td>933</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
<tr>
<td>Diluted</td>
<td> </td>
<td> </td>
<td>1,129</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,083</td>
<td> </td>
<td> </td>
<td> </td>
<td>887</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
50
|
q_an048
|
What does Tesla's current ratio for 2020 and 2019 suggest about its ability to meet short-term obligations?
|
Tesla’s current ratio improved from 1.13 in 2019 to 1.88 in 2020, showing that the company has strengthened its ability to cover short-term liabilities with its current assets, signaling better overall financial health.
|
Analysis
|
49
|
0000950170-22-000796
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:---|:-------|:---|
| 1 | | December 31, | | December 31, | | | |
| 2 | | 2021 | | 2020 | | | |
| 3 | Assets | | | | | | |
| 4 | Current assets | | | | | | |
| 5 | Cash and cash equivalents | $ | 17,576 | | $ | 19,384 | |
| 6 | Short-term marketable securities | | 131 | | | - | |
| 7 | Accounts receivable, net | | 1,913 | | | 1,886 | |
| 8 | Inventory | | 5,757 | | | 4,101 | |
| 9 | Prepaid expenses and other current assets | | 1,723 | | | 1,346 | |
| 10 | Total current assets | | 27,100 | | | 26,717 | |
| 11 | Operating lease vehicles, net | | 4,511 | | | 3,091 | |
| 12 | Solar energy systems, net | | 5,765 | | | 5,979 | |
| 13 | Property, plant and equipment, net | | 18,884 | | | 12,747 | |
| 14 | Operating lease right-of-use assets | | 2,016 | | | 1,558 | |
| 15 | Digital assets, net | | 1,260 | | | - | |
| 16 | Intangible assets, net | | 257 | | | 313 | |
| 17 | Goodwill | | 200 | | | 207 | |
| 18 | Other non-current assets | | 2,138 | | | 1,536 | |
| 19 | Total assets | $ | 62,131 | | $ | 52,148 | |
| 20 | Liabilities | | | | | | |
| 21 | Current liabilities | | | | | | |
| 22 | Accounts payable | $ | 10,025 | | $ | 6,051 | |
| 23 | Accrued liabilities and other | | 5,719 | | | 3,855 | |
| 24 | Deferred revenue | | 1,447 | | | 1,458 | |
| 25 | Customer deposits | | 925 | | | 752 | |
| 26 | Current portion of debt and finance leases | | 1,589 | | | 2,132 | |
| 27 | Total current liabilities | | 19,705 | | | 14,248 | |
| 28 | Debt and finance leases, net of current portion | | 5,245 | | | 9,556 | |
| 29 | Deferred revenue, net of current portion | | 2,052 | | | 1,284 | |
| 30 | Other long-term liabilities | | 3,546 | | | 3,330 | |
| 31 | Total liabilities | | 30,548 | | | 28,418 | |
| 32 | Commitments and contingencies (Note 15) | | | | | | |
| 33 | Redeemable noncontrolling interests in subsidiaries | | 568 | | | 604 | |
| 34 | Convertible senior notes (Note 11) | | - | | | 51 | |
| 35 | Equity | | | | | | |
| 36 | Stockholders' equity | | | | | | |
| 37 | Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding | | - | | | - | |
| 38 | Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | | 1 | | | 1 | |
| 39 | Additional paid-in capital | | 29,803 | | | 27,260 | |
| 40 | Accumulated other comprehensive income | | 54 | | | 363 | |
| 41 | Retained earnings (accumulated deficit) | | 331 | | | (5,399 | ) |
| 42 | Total stockholders' equity | | 30,189 | | | 22,225 | |
| 43 | Noncontrolling interests in subsidiaries | | 826 | | | 850 | |
| 44 | Total liabilities and equity | $ | 62,131 | | $ | 52,148 | |
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc. 10-K form for the fiscal year ended 2021-12-31, page 49: Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
<table>
<tr>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td colspan="2">December 31,</td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
<td colspan="2">2021</td>
<td> </td>
<td> </td>
<td colspan="2">2020</td>
<td> </td>
</tr>
<tr>
<td>Assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current assets</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Cash and cash equivalents</td>
<td> </td>
<td>$</td>
<td>17,576</td>
<td> </td>
<td> </td>
<td>$</td>
<td>19,384</td>
<td> </td>
</tr>
<tr>
<td>Short-term marketable securities</td>
<td> </td>
<td> </td>
<td>131</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Accounts receivable, net</td>
<td> </td>
<td> </td>
<td>1,913</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,886</td>
<td> </td>
</tr>
<tr>
<td>Inventory</td>
<td> </td>
<td> </td>
<td>5,757</td>
<td> </td>
<td> </td>
<td> </td>
<td>4,101</td>
<td> </td>
</tr>
<tr>
<td>Prepaid expenses and other current assets</td>
<td> </td>
<td> </td>
<td>1,723</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,346</td>
<td> </td>
</tr>
<tr>
<td>Total current assets</td>
<td> </td>
<td> </td>
<td>27,100</td>
<td> </td>
<td> </td>
<td> </td>
<td>26,717</td>
<td> </td>
</tr>
<tr>
<td>Operating lease vehicles, net</td>
<td> </td>
<td> </td>
<td>4,511</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,091</td>
<td> </td>
</tr>
<tr>
<td>Solar energy systems, net</td>
<td> </td>
<td> </td>
<td>5,765</td>
<td> </td>
<td> </td>
<td> </td>
<td>5,979</td>
<td> </td>
</tr>
<tr>
<td>Property, plant and equipment, net</td>
<td> </td>
<td> </td>
<td>18,884</td>
<td> </td>
<td> </td>
<td> </td>
<td>12,747</td>
<td> </td>
</tr>
<tr>
<td>Operating lease right-of-use assets</td>
<td> </td>
<td> </td>
<td>2,016</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,558</td>
<td> </td>
</tr>
<tr>
<td>Digital assets, net</td>
<td> </td>
<td> </td>
<td>1,260</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Intangible assets, net</td>
<td> </td>
<td> </td>
<td>257</td>
<td> </td>
<td> </td>
<td> </td>
<td>313</td>
<td> </td>
</tr>
<tr>
<td>Goodwill</td>
<td> </td>
<td> </td>
<td>200</td>
<td> </td>
<td> </td>
<td> </td>
<td>207</td>
<td> </td>
</tr>
<tr>
<td>Other non-current assets</td>
<td> </td>
<td> </td>
<td>2,138</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,536</td>
<td> </td>
</tr>
<tr>
<td>Total assets</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
<tr>
<td>Liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Current liabilities</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Accounts payable</td>
<td> </td>
<td>$</td>
<td>10,025</td>
<td> </td>
<td> </td>
<td>$</td>
<td>6,051</td>
<td> </td>
</tr>
<tr>
<td>Accrued liabilities and other</td>
<td> </td>
<td> </td>
<td>5,719</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,855</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue</td>
<td> </td>
<td> </td>
<td>1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,458</td>
<td> </td>
</tr>
<tr>
<td>Customer deposits</td>
<td> </td>
<td> </td>
<td>925</td>
<td> </td>
<td> </td>
<td> </td>
<td>752</td>
<td> </td>
</tr>
<tr>
<td>Current portion of debt and finance leases</td>
<td> </td>
<td> </td>
<td>1,589</td>
<td> </td>
<td> </td>
<td> </td>
<td>2,132</td>
<td> </td>
</tr>
<tr>
<td>Total current liabilities</td>
<td> </td>
<td> </td>
<td>19,705</td>
<td> </td>
<td> </td>
<td> </td>
<td>14,248</td>
<td> </td>
</tr>
<tr>
<td>Debt and finance leases, net of current portion</td>
<td> </td>
<td> </td>
<td>5,245</td>
<td> </td>
<td> </td>
<td> </td>
<td>9,556</td>
<td> </td>
</tr>
<tr>
<td>Deferred revenue, net of current portion</td>
<td> </td>
<td> </td>
<td>2,052</td>
<td> </td>
<td> </td>
<td> </td>
<td>1,284</td>
<td> </td>
</tr>
<tr>
<td>Other long-term liabilities</td>
<td> </td>
<td> </td>
<td>3,546</td>
<td> </td>
<td> </td>
<td> </td>
<td>3,330</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities</td>
<td> </td>
<td> </td>
<td>30,548</td>
<td> </td>
<td> </td>
<td> </td>
<td>28,418</td>
<td> </td>
</tr>
<tr>
<td>Commitments and contingencies (Note 15)</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Redeemable noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>568</td>
<td> </td>
<td> </td>
<td> </td>
<td>604</td>
<td> </td>
</tr>
<tr>
<td>Convertible senior notes (Note 11)</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>51</td>
<td> </td>
</tr>
<tr>
<td>Equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Stockholders' equity</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr>
<td>Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding</td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
<td> </td>
<td> </td>
<td>-</td>
<td> </td>
</tr>
<tr>
<td>Common stock; $0.001 par value; 2,000 shares authorized; 1,033 and 960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively</td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
<td> </td>
<td> </td>
<td>1</td>
<td> </td>
</tr>
<tr>
<td>Additional paid-in capital</td>
<td> </td>
<td> </td>
<td>29,803</td>
<td> </td>
<td> </td>
<td> </td>
<td>27,260</td>
<td> </td>
</tr>
<tr>
<td>Accumulated other comprehensive income</td>
<td> </td>
<td> </td>
<td>54</td>
<td> </td>
<td> </td>
<td> </td>
<td>363</td>
<td> </td>
</tr>
<tr>
<td>Retained earnings (accumulated deficit)</td>
<td> </td>
<td> </td>
<td>331</td>
<td> </td>
<td> </td>
<td> </td>
<td>(5,399</td>
<td>)</td>
</tr>
<tr>
<td>Total stockholders' equity</td>
<td> </td>
<td> </td>
<td>30,189</td>
<td> </td>
<td> </td>
<td> </td>
<td>22,225</td>
<td> </td>
</tr>
<tr>
<td>Noncontrolling interests in subsidiaries</td>
<td> </td>
<td> </td>
<td>826</td>
<td> </td>
<td> </td>
<td> </td>
<td>850</td>
<td> </td>
</tr>
<tr>
<td>Total liabilities and equity</td>
<td> </td>
<td>$</td>
<td>62,131</td>
<td> </td>
<td> </td>
<td>$</td>
<td>52,148</td>
<td> </td>
</tr>
</table>
The accompanying notes are an integral part of these consolidated financial statements.
49
|
q_an049
|
What does the Gross Profit Margin for JM Smucker in 2022 indicate about its efficiency in managing production and procurement costs relative to revenue generation?
|
The Gross Profit Margin for JM Smucker in 2022 was 33.8%, compared to 39.2% in 2021. This decline was primarily due to higher costs driven by inflationary pressures across commodities, packaging, transportation, and manufacturing. The unfavorable impact of unsaleable inventory and estimated customer returns related to the Jif peanut butter recall also contributed significantly to the gross profit reduction. Additionally, increased operating inefficiencies amidst supply chain challenges exacerbated the situation
|
Analysis
|
28
|
0000091419-22-000049
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 28:
Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
| | | | | | | | | | |
|---:|:------------------------------------------------|:---------------------|:--------|:-----|:-----|:---------------------|:--------|:-----|:---|
| 1 | | Year Ended April 30, | | | | | | | |
| 2 | | 2022 | | 2021 | | % Increase(Decrease) | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | - | % |
| 4 | Gross profit | $ | 2,700.7 | | | $ | 3,138.7 | (14) | |
| 5 | % of net sales | 33.8 | % | | 39.2 | % | | | |
| 6 | Operating income | $ | 1,023.8 | | | $ | 1,386.8 | (26) | |
| 7 | % of net sales | 12.8 | % | | 17.3 | % | | | |
| 8 | Net income: | | | | | | | | |
| 9 | Net income | $ | 631.7 | | | $ | 876.3 | (28) | |
| 10 | Net income per common share – assuming dilution | $ | 5.83 | | | $ | 7.79 | (25) | |
| 11 | Adjusted gross profit (A) | $ | 2,744.6 | | | $ | 3,048.5 | (10) | |
| 12 | % of net sales | 34.3 | % | | 38.1 | % | | | |
| 13 | Adjusted operating income (A) | $ | 1,440.1 | | | $ | 1,528.8 | (6) | |
| 14 | % of net sales | 18.0 | % | | 19.1 | % | | | |
| 15 | Adjusted income: (A) | | | | | | | | |
| 16 | Income | $ | 962.2 | | | $ | 1,025.0 | (6) | |
| 17 | Earnings per share – assuming dilution | $ | 8.88 | | | $ | 9.12 | (3) | |
(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
| | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------|:---------------------|:--------|:-----|:--------|:--------------------|:--------|:-------|:---|:------|:---|:---|
| 1 | | Year Ended April 30, | | | | | | | | | | |
| 2 | | 2022 | | 2021 | | Increase (Decrease) | | % | | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | | $ | (3.8) | - | % |
| 4 | Crisco divestiture | - | | | (198.9) | | | 198.9 | | 2 | | |
| 5 | Natural Balance divestiture | - | | | (156.7) | | | 156.7 | | 2 | | |
| 6 | Private label dry pet food divestiture | - | | | (40.7) | | | 40.7 | | 1 | | |
| 7 | Natural beverage and grains divestiture | - | | | (35.5) | | | 35.5 | | - | | |
| 8 | Foreign currency exchange | (17.1) | | | - | | | (17.1) | | - | | |
| 9 | Net sales excluding divestitures and foreign currency exchange (A) | $ | 7,981.8 | | | $ | 7,570.9 | | $ | 410.9 | 5 | % |
Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
28
|
Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
| | | | | | | | | | |
|---:|:------------------------------------------------|:---------------------|:--------|:-----|:-----|:---------------------|:--------|:-----|:---|
| 1 | | Year Ended April 30, | | | | | | | |
| 2 | | 2022 | | 2021 | | % Increase(Decrease) | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | - | % |
| 4 | Gross profit | $ | 2,700.7 | | | $ | 3,138.7 | (14) | |
| 5 | % of net sales | 33.8 | % | | 39.2 | % | | | |
| 6 | Operating income | $ | 1,023.8 | | | $ | 1,386.8 | (26) | |
| 7 | % of net sales | 12.8 | % | | 17.3 | % | | | |
| 8 | Net income: | | | | | | | | |
| 9 | Net income | $ | 631.7 | | | $ | 876.3 | (28) | |
| 10 | Net income per common share – assuming dilution | $ | 5.83 | | | $ | 7.79 | (25) | |
| 11 | Adjusted gross profit (A) | $ | 2,744.6 | | | $ | 3,048.5 | (10) | |
| 12 | % of net sales | 34.3 | % | | 38.1 | % | | | |
| 13 | Adjusted operating income (A) | $ | 1,440.1 | | | $ | 1,528.8 | (6) | |
| 14 | % of net sales | 18.0 | % | | 19.1 | % | | | |
| 15 | Adjusted income: (A) | | | | | | | | |
| 16 | Income | $ | 962.2 | | | $ | 1,025.0 | (6) | |
| 17 | Earnings per share – assuming dilution | $ | 8.88 | | | $ | 9.12 | (3) | |
(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
| | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------|:---------------------|:--------|:-----|:--------|:--------------------|:--------|:-------|:---|:------|:---|:---|
| 1 | | Year Ended April 30, | | | | | | | | | | |
| 2 | | 2022 | | 2021 | | Increase (Decrease) | | % | | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | | $ | (3.8) | - | % |
| 4 | Crisco divestiture | - | | | (198.9) | | | 198.9 | | 2 | | |
| 5 | Natural Balance divestiture | - | | | (156.7) | | | 156.7 | | 2 | | |
| 6 | Private label dry pet food divestiture | - | | | (40.7) | | | 40.7 | | 1 | | |
| 7 | Natural beverage and grains divestiture | - | | | (35.5) | | | 35.5 | | - | | |
| 8 | Foreign currency exchange | (17.1) | | | - | | | (17.1) | | - | | |
| 9 | Net sales excluding divestitures and foreign currency exchange (A) | $ | 7,981.8 | | | $ | 7,570.9 | | $ | 410.9 | 5 | % |
Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 28:
Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">% Increase(Decrease)</td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Gross profit</td><td>$</td><td>2,700.7 </td><td></td><td colspan="3"></td><td>$</td><td>3,138.7 </td><td></td><td colspan="3"></td><td colspan="2">(14)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td>$</td><td>1,023.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,386.8 </td><td></td><td colspan="3"></td><td colspan="2">(26)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>631.7 </td><td></td><td colspan="3"></td><td>$</td><td>876.3 </td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net income per common share – assuming dilution</td><td>$</td><td>5.83 </td><td></td><td colspan="3"></td><td>$</td><td>7.79 </td><td></td><td colspan="3"></td><td colspan="2">(25)</td><td></td></tr><tr><td colspan="3">Adjusted gross profit (A)</td><td>$</td><td>2,744.6 </td><td></td><td colspan="3"></td><td>$</td><td>3,048.5 </td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">34.3 </td><td>%</td><td colspan="3"></td><td colspan="2">38.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted operating income (A)</td><td>$</td><td>1,440.1 </td><td></td><td colspan="3"></td><td>$</td><td>1,528.8 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">18.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted income: (A)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income</td><td>$</td><td>962.2 </td><td></td><td colspan="3"></td><td>$</td><td>1,025.0 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">Earnings per share – assuming dilution</td><td>$</td><td>8.88 </td><td></td><td colspan="3"></td><td>$</td><td>9.12 </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr></table>(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Increase (Decrease)</td><td colspan="3"></td><td colspan="3"> % </td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td>$</td><td>(3.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Crisco divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(198.9)</td><td></td><td colspan="3"></td><td colspan="2">198.9 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Natural Balance divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(156.7)</td><td></td><td colspan="3"></td><td colspan="2">156.7 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Private label dry pet food divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(40.7)</td><td></td><td colspan="3"></td><td colspan="2">40.7 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Natural beverage and grains divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(35.5)</td><td></td><td colspan="3"></td><td colspan="2">35.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Foreign currency exchange</td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Net sales excluding divestitures and foreign currency exchange (A)</td><td>$</td><td>7,981.8 </td><td></td><td colspan="3"></td><td>$</td><td>7,570.9 </td><td></td><td colspan="3"></td><td>$</td><td>410.9 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td>%</td></tr></table>Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">% Increase(Decrease)</td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Gross profit</td><td>$</td><td>2,700.7 </td><td></td><td colspan="3"></td><td>$</td><td>3,138.7 </td><td></td><td colspan="3"></td><td colspan="2">(14)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td>$</td><td>1,023.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,386.8 </td><td></td><td colspan="3"></td><td colspan="2">(26)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>631.7 </td><td></td><td colspan="3"></td><td>$</td><td>876.3 </td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net income per common share – assuming dilution</td><td>$</td><td>5.83 </td><td></td><td colspan="3"></td><td>$</td><td>7.79 </td><td></td><td colspan="3"></td><td colspan="2">(25)</td><td></td></tr><tr><td colspan="3">Adjusted gross profit (A)</td><td>$</td><td>2,744.6 </td><td></td><td colspan="3"></td><td>$</td><td>3,048.5 </td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">34.3 </td><td>%</td><td colspan="3"></td><td colspan="2">38.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted operating income (A)</td><td>$</td><td>1,440.1 </td><td></td><td colspan="3"></td><td>$</td><td>1,528.8 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">18.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted income: (A)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income</td><td>$</td><td>962.2 </td><td></td><td colspan="3"></td><td>$</td><td>1,025.0 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">Earnings per share – assuming dilution</td><td>$</td><td>8.88 </td><td></td><td colspan="3"></td><td>$</td><td>9.12 </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr></table>(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Increase (Decrease)</td><td colspan="3"></td><td colspan="3"> % </td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td>$</td><td>(3.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Crisco divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(198.9)</td><td></td><td colspan="3"></td><td colspan="2">198.9 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Natural Balance divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(156.7)</td><td></td><td colspan="3"></td><td colspan="2">156.7 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Private label dry pet food divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(40.7)</td><td></td><td colspan="3"></td><td colspan="2">40.7 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Natural beverage and grains divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(35.5)</td><td></td><td colspan="3"></td><td colspan="2">35.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Foreign currency exchange</td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Net sales excluding divestitures and foreign currency exchange (A)</td><td>$</td><td>7,981.8 </td><td></td><td colspan="3"></td><td>$</td><td>7,570.9 </td><td></td><td colspan="3"></td><td>$</td><td>410.9 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td>%</td></tr></table>Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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q_an050
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How does the Net Profit Margin for 2022 reflect JM Smucker’s ability to convert revenue into actual profit, considering the impact of divestitures and recalls?
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The Net Profit Margin for JM Smucker in 2022 was 7.9%, a decrease from 10.9% in 2021. This reduction reflects the compounded effects of increased costs, including commodity inflation and higher operating expenses. Additionally, the Jif peanut butter recall resulted in financial losses, including unsaleable inventory and customer refunds. The company's divestitures, which reduced revenue, and increased impairment charges on intangible assets, further strained profitability. Despite these challenges, JM Smucker leveraged pricing adjustments and partial insurance recoveries to mitigate some losses, although they were insufficient to maintain previous levels of profitability.
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Analysis
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0000091419-22-000049
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 28:
Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
| | | | | | | | | | |
|---:|:------------------------------------------------|:---------------------|:--------|:-----|:-----|:---------------------|:--------|:-----|:---|
| 1 | | Year Ended April 30, | | | | | | | |
| 2 | | 2022 | | 2021 | | % Increase(Decrease) | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | - | % |
| 4 | Gross profit | $ | 2,700.7 | | | $ | 3,138.7 | (14) | |
| 5 | % of net sales | 33.8 | % | | 39.2 | % | | | |
| 6 | Operating income | $ | 1,023.8 | | | $ | 1,386.8 | (26) | |
| 7 | % of net sales | 12.8 | % | | 17.3 | % | | | |
| 8 | Net income: | | | | | | | | |
| 9 | Net income | $ | 631.7 | | | $ | 876.3 | (28) | |
| 10 | Net income per common share – assuming dilution | $ | 5.83 | | | $ | 7.79 | (25) | |
| 11 | Adjusted gross profit (A) | $ | 2,744.6 | | | $ | 3,048.5 | (10) | |
| 12 | % of net sales | 34.3 | % | | 38.1 | % | | | |
| 13 | Adjusted operating income (A) | $ | 1,440.1 | | | $ | 1,528.8 | (6) | |
| 14 | % of net sales | 18.0 | % | | 19.1 | % | | | |
| 15 | Adjusted income: (A) | | | | | | | | |
| 16 | Income | $ | 962.2 | | | $ | 1,025.0 | (6) | |
| 17 | Earnings per share – assuming dilution | $ | 8.88 | | | $ | 9.12 | (3) | |
(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
| | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------|:---------------------|:--------|:-----|:--------|:--------------------|:--------|:-------|:---|:------|:---|:---|
| 1 | | Year Ended April 30, | | | | | | | | | | |
| 2 | | 2022 | | 2021 | | Increase (Decrease) | | % | | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | | $ | (3.8) | - | % |
| 4 | Crisco divestiture | - | | | (198.9) | | | 198.9 | | 2 | | |
| 5 | Natural Balance divestiture | - | | | (156.7) | | | 156.7 | | 2 | | |
| 6 | Private label dry pet food divestiture | - | | | (40.7) | | | 40.7 | | 1 | | |
| 7 | Natural beverage and grains divestiture | - | | | (35.5) | | | 35.5 | | - | | |
| 8 | Foreign currency exchange | (17.1) | | | - | | | (17.1) | | - | | |
| 9 | Net sales excluding divestitures and foreign currency exchange (A) | $ | 7,981.8 | | | $ | 7,570.9 | | $ | 410.9 | 5 | % |
Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
28
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Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
| | | | | | | | | | |
|---:|:------------------------------------------------|:---------------------|:--------|:-----|:-----|:---------------------|:--------|:-----|:---|
| 1 | | Year Ended April 30, | | | | | | | |
| 2 | | 2022 | | 2021 | | % Increase(Decrease) | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | - | % |
| 4 | Gross profit | $ | 2,700.7 | | | $ | 3,138.7 | (14) | |
| 5 | % of net sales | 33.8 | % | | 39.2 | % | | | |
| 6 | Operating income | $ | 1,023.8 | | | $ | 1,386.8 | (26) | |
| 7 | % of net sales | 12.8 | % | | 17.3 | % | | | |
| 8 | Net income: | | | | | | | | |
| 9 | Net income | $ | 631.7 | | | $ | 876.3 | (28) | |
| 10 | Net income per common share – assuming dilution | $ | 5.83 | | | $ | 7.79 | (25) | |
| 11 | Adjusted gross profit (A) | $ | 2,744.6 | | | $ | 3,048.5 | (10) | |
| 12 | % of net sales | 34.3 | % | | 38.1 | % | | | |
| 13 | Adjusted operating income (A) | $ | 1,440.1 | | | $ | 1,528.8 | (6) | |
| 14 | % of net sales | 18.0 | % | | 19.1 | % | | | |
| 15 | Adjusted income: (A) | | | | | | | | |
| 16 | Income | $ | 962.2 | | | $ | 1,025.0 | (6) | |
| 17 | Earnings per share – assuming dilution | $ | 8.88 | | | $ | 9.12 | (3) | |
(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
| | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------|:---------------------|:--------|:-----|:--------|:--------------------|:--------|:-------|:---|:------|:---|:---|
| 1 | | Year Ended April 30, | | | | | | | | | | |
| 2 | | 2022 | | 2021 | | Increase (Decrease) | | % | | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | | $ | (3.8) | - | % |
| 4 | Crisco divestiture | - | | | (198.9) | | | 198.9 | | 2 | | |
| 5 | Natural Balance divestiture | - | | | (156.7) | | | 156.7 | | 2 | | |
| 6 | Private label dry pet food divestiture | - | | | (40.7) | | | 40.7 | | 1 | | |
| 7 | Natural beverage and grains divestiture | - | | | (35.5) | | | 35.5 | | - | | |
| 8 | Foreign currency exchange | (17.1) | | | - | | | (17.1) | | - | | |
| 9 | Net sales excluding divestitures and foreign currency exchange (A) | $ | 7,981.8 | | | $ | 7,570.9 | | $ | 410.9 | 5 | % |
Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
28
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J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 28:
Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">% Increase(Decrease)</td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Gross profit</td><td>$</td><td>2,700.7 </td><td></td><td colspan="3"></td><td>$</td><td>3,138.7 </td><td></td><td colspan="3"></td><td colspan="2">(14)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td>$</td><td>1,023.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,386.8 </td><td></td><td colspan="3"></td><td colspan="2">(26)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>631.7 </td><td></td><td colspan="3"></td><td>$</td><td>876.3 </td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net income per common share – assuming dilution</td><td>$</td><td>5.83 </td><td></td><td colspan="3"></td><td>$</td><td>7.79 </td><td></td><td colspan="3"></td><td colspan="2">(25)</td><td></td></tr><tr><td colspan="3">Adjusted gross profit (A)</td><td>$</td><td>2,744.6 </td><td></td><td colspan="3"></td><td>$</td><td>3,048.5 </td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">34.3 </td><td>%</td><td colspan="3"></td><td colspan="2">38.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted operating income (A)</td><td>$</td><td>1,440.1 </td><td></td><td colspan="3"></td><td>$</td><td>1,528.8 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">18.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted income: (A)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income</td><td>$</td><td>962.2 </td><td></td><td colspan="3"></td><td>$</td><td>1,025.0 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">Earnings per share – assuming dilution</td><td>$</td><td>8.88 </td><td></td><td colspan="3"></td><td>$</td><td>9.12 </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr></table>(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Increase (Decrease)</td><td colspan="3"></td><td colspan="3"> % </td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td>$</td><td>(3.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Crisco divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(198.9)</td><td></td><td colspan="3"></td><td colspan="2">198.9 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Natural Balance divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(156.7)</td><td></td><td colspan="3"></td><td colspan="2">156.7 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Private label dry pet food divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(40.7)</td><td></td><td colspan="3"></td><td colspan="2">40.7 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Natural beverage and grains divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(35.5)</td><td></td><td colspan="3"></td><td colspan="2">35.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Foreign currency exchange</td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Net sales excluding divestitures and foreign currency exchange (A)</td><td>$</td><td>7,981.8 </td><td></td><td colspan="3"></td><td>$</td><td>7,570.9 </td><td></td><td colspan="3"></td><td>$</td><td>410.9 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td>%</td></tr></table>Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">% Increase(Decrease)</td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Gross profit</td><td>$</td><td>2,700.7 </td><td></td><td colspan="3"></td><td>$</td><td>3,138.7 </td><td></td><td colspan="3"></td><td colspan="2">(14)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td>$</td><td>1,023.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,386.8 </td><td></td><td colspan="3"></td><td colspan="2">(26)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>631.7 </td><td></td><td colspan="3"></td><td>$</td><td>876.3 </td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net income per common share – assuming dilution</td><td>$</td><td>5.83 </td><td></td><td colspan="3"></td><td>$</td><td>7.79 </td><td></td><td colspan="3"></td><td colspan="2">(25)</td><td></td></tr><tr><td colspan="3">Adjusted gross profit (A)</td><td>$</td><td>2,744.6 </td><td></td><td colspan="3"></td><td>$</td><td>3,048.5 </td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">34.3 </td><td>%</td><td colspan="3"></td><td colspan="2">38.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted operating income (A)</td><td>$</td><td>1,440.1 </td><td></td><td colspan="3"></td><td>$</td><td>1,528.8 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">18.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted income: (A)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income</td><td>$</td><td>962.2 </td><td></td><td colspan="3"></td><td>$</td><td>1,025.0 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">Earnings per share – assuming dilution</td><td>$</td><td>8.88 </td><td></td><td colspan="3"></td><td>$</td><td>9.12 </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr></table>(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Increase (Decrease)</td><td colspan="3"></td><td colspan="3"> % </td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td>$</td><td>(3.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Crisco divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(198.9)</td><td></td><td colspan="3"></td><td colspan="2">198.9 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Natural Balance divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(156.7)</td><td></td><td colspan="3"></td><td colspan="2">156.7 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Private label dry pet food divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(40.7)</td><td></td><td colspan="3"></td><td colspan="2">40.7 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Natural beverage and grains divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(35.5)</td><td></td><td colspan="3"></td><td colspan="2">35.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Foreign currency exchange</td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Net sales excluding divestitures and foreign currency exchange (A)</td><td>$</td><td>7,981.8 </td><td></td><td colspan="3"></td><td>$</td><td>7,570.9 </td><td></td><td colspan="3"></td><td>$</td><td>410.9 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td>%</td></tr></table>Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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q_an051
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What insights does the trend in Operating Profit Margin over the last three fiscal years provide about JM Smucker’s operational efficiency and cost control?
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The Operating Profit Margin declined from 17.3% in 2021 to 12.8% in 2022, continuing a downward trend over the past three years. This decline is primarily attributed to rising input and logistic costs, which were further exacerbated by supply chain disruptions. The impairment of the Rachael Ray Nutrish brand added to operating costs, reducing overall margin. The company's efforts to adjust pricing and manage costs were unable to fully counteract these pressures, signaling challenges in operational efficiency and cost control during a turbulent year.
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Analysis
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0000091419-22-000049
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 28:
Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
| | | | | | | | | | |
|---:|:------------------------------------------------|:---------------------|:--------|:-----|:-----|:---------------------|:--------|:-----|:---|
| 1 | | Year Ended April 30, | | | | | | | |
| 2 | | 2022 | | 2021 | | % Increase(Decrease) | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | - | % |
| 4 | Gross profit | $ | 2,700.7 | | | $ | 3,138.7 | (14) | |
| 5 | % of net sales | 33.8 | % | | 39.2 | % | | | |
| 6 | Operating income | $ | 1,023.8 | | | $ | 1,386.8 | (26) | |
| 7 | % of net sales | 12.8 | % | | 17.3 | % | | | |
| 8 | Net income: | | | | | | | | |
| 9 | Net income | $ | 631.7 | | | $ | 876.3 | (28) | |
| 10 | Net income per common share – assuming dilution | $ | 5.83 | | | $ | 7.79 | (25) | |
| 11 | Adjusted gross profit (A) | $ | 2,744.6 | | | $ | 3,048.5 | (10) | |
| 12 | % of net sales | 34.3 | % | | 38.1 | % | | | |
| 13 | Adjusted operating income (A) | $ | 1,440.1 | | | $ | 1,528.8 | (6) | |
| 14 | % of net sales | 18.0 | % | | 19.1 | % | | | |
| 15 | Adjusted income: (A) | | | | | | | | |
| 16 | Income | $ | 962.2 | | | $ | 1,025.0 | (6) | |
| 17 | Earnings per share – assuming dilution | $ | 8.88 | | | $ | 9.12 | (3) | |
(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
| | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------|:---------------------|:--------|:-----|:--------|:--------------------|:--------|:-------|:---|:------|:---|:---|
| 1 | | Year Ended April 30, | | | | | | | | | | |
| 2 | | 2022 | | 2021 | | Increase (Decrease) | | % | | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | | $ | (3.8) | - | % |
| 4 | Crisco divestiture | - | | | (198.9) | | | 198.9 | | 2 | | |
| 5 | Natural Balance divestiture | - | | | (156.7) | | | 156.7 | | 2 | | |
| 6 | Private label dry pet food divestiture | - | | | (40.7) | | | 40.7 | | 1 | | |
| 7 | Natural beverage and grains divestiture | - | | | (35.5) | | | 35.5 | | - | | |
| 8 | Foreign currency exchange | (17.1) | | | - | | | (17.1) | | - | | |
| 9 | Net sales excluding divestitures and foreign currency exchange (A) | $ | 7,981.8 | | | $ | 7,570.9 | | $ | 410.9 | 5 | % |
Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
| | | | | | | | | | |
|---:|:------------------------------------------------|:---------------------|:--------|:-----|:-----|:---------------------|:--------|:-----|:---|
| 1 | | Year Ended April 30, | | | | | | | |
| 2 | | 2022 | | 2021 | | % Increase(Decrease) | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | - | % |
| 4 | Gross profit | $ | 2,700.7 | | | $ | 3,138.7 | (14) | |
| 5 | % of net sales | 33.8 | % | | 39.2 | % | | | |
| 6 | Operating income | $ | 1,023.8 | | | $ | 1,386.8 | (26) | |
| 7 | % of net sales | 12.8 | % | | 17.3 | % | | | |
| 8 | Net income: | | | | | | | | |
| 9 | Net income | $ | 631.7 | | | $ | 876.3 | (28) | |
| 10 | Net income per common share – assuming dilution | $ | 5.83 | | | $ | 7.79 | (25) | |
| 11 | Adjusted gross profit (A) | $ | 2,744.6 | | | $ | 3,048.5 | (10) | |
| 12 | % of net sales | 34.3 | % | | 38.1 | % | | | |
| 13 | Adjusted operating income (A) | $ | 1,440.1 | | | $ | 1,528.8 | (6) | |
| 14 | % of net sales | 18.0 | % | | 19.1 | % | | | |
| 15 | Adjusted income: (A) | | | | | | | | |
| 16 | Income | $ | 962.2 | | | $ | 1,025.0 | (6) | |
| 17 | Earnings per share – assuming dilution | $ | 8.88 | | | $ | 9.12 | (3) | |
(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
| | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------|:---------------------|:--------|:-----|:--------|:--------------------|:--------|:-------|:---|:------|:---|:---|
| 1 | | Year Ended April 30, | | | | | | | | | | |
| 2 | | 2022 | | 2021 | | Increase (Decrease) | | % | | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | | $ | (3.8) | - | % |
| 4 | Crisco divestiture | - | | | (198.9) | | | 198.9 | | 2 | | |
| 5 | Natural Balance divestiture | - | | | (156.7) | | | 156.7 | | 2 | | |
| 6 | Private label dry pet food divestiture | - | | | (40.7) | | | 40.7 | | 1 | | |
| 7 | Natural beverage and grains divestiture | - | | | (35.5) | | | 35.5 | | - | | |
| 8 | Foreign currency exchange | (17.1) | | | - | | | (17.1) | | - | | |
| 9 | Net sales excluding divestitures and foreign currency exchange (A) | $ | 7,981.8 | | | $ | 7,570.9 | | $ | 410.9 | 5 | % |
Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 28:
Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">% Increase(Decrease)</td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Gross profit</td><td>$</td><td>2,700.7 </td><td></td><td colspan="3"></td><td>$</td><td>3,138.7 </td><td></td><td colspan="3"></td><td colspan="2">(14)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td>$</td><td>1,023.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,386.8 </td><td></td><td colspan="3"></td><td colspan="2">(26)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>631.7 </td><td></td><td colspan="3"></td><td>$</td><td>876.3 </td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net income per common share – assuming dilution</td><td>$</td><td>5.83 </td><td></td><td colspan="3"></td><td>$</td><td>7.79 </td><td></td><td colspan="3"></td><td colspan="2">(25)</td><td></td></tr><tr><td colspan="3">Adjusted gross profit (A)</td><td>$</td><td>2,744.6 </td><td></td><td colspan="3"></td><td>$</td><td>3,048.5 </td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">34.3 </td><td>%</td><td colspan="3"></td><td colspan="2">38.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted operating income (A)</td><td>$</td><td>1,440.1 </td><td></td><td colspan="3"></td><td>$</td><td>1,528.8 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">18.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted income: (A)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income</td><td>$</td><td>962.2 </td><td></td><td colspan="3"></td><td>$</td><td>1,025.0 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">Earnings per share – assuming dilution</td><td>$</td><td>8.88 </td><td></td><td colspan="3"></td><td>$</td><td>9.12 </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr></table>(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Increase (Decrease)</td><td colspan="3"></td><td colspan="3"> % </td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td>$</td><td>(3.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Crisco divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(198.9)</td><td></td><td colspan="3"></td><td colspan="2">198.9 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Natural Balance divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(156.7)</td><td></td><td colspan="3"></td><td colspan="2">156.7 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Private label dry pet food divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(40.7)</td><td></td><td colspan="3"></td><td colspan="2">40.7 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Natural beverage and grains divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(35.5)</td><td></td><td colspan="3"></td><td colspan="2">35.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Foreign currency exchange</td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Net sales excluding divestitures and foreign currency exchange (A)</td><td>$</td><td>7,981.8 </td><td></td><td colspan="3"></td><td>$</td><td>7,570.9 </td><td></td><td colspan="3"></td><td>$</td><td>410.9 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td>%</td></tr></table>Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">% Increase(Decrease)</td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Gross profit</td><td>$</td><td>2,700.7 </td><td></td><td colspan="3"></td><td>$</td><td>3,138.7 </td><td></td><td colspan="3"></td><td colspan="2">(14)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td>$</td><td>1,023.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,386.8 </td><td></td><td colspan="3"></td><td colspan="2">(26)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>631.7 </td><td></td><td colspan="3"></td><td>$</td><td>876.3 </td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net income per common share – assuming dilution</td><td>$</td><td>5.83 </td><td></td><td colspan="3"></td><td>$</td><td>7.79 </td><td></td><td colspan="3"></td><td colspan="2">(25)</td><td></td></tr><tr><td colspan="3">Adjusted gross profit (A)</td><td>$</td><td>2,744.6 </td><td></td><td colspan="3"></td><td>$</td><td>3,048.5 </td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">34.3 </td><td>%</td><td colspan="3"></td><td colspan="2">38.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted operating income (A)</td><td>$</td><td>1,440.1 </td><td></td><td colspan="3"></td><td>$</td><td>1,528.8 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">18.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted income: (A)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income</td><td>$</td><td>962.2 </td><td></td><td colspan="3"></td><td>$</td><td>1,025.0 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">Earnings per share – assuming dilution</td><td>$</td><td>8.88 </td><td></td><td colspan="3"></td><td>$</td><td>9.12 </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr></table>(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Increase (Decrease)</td><td colspan="3"></td><td colspan="3"> % </td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td>$</td><td>(3.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Crisco divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(198.9)</td><td></td><td colspan="3"></td><td colspan="2">198.9 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Natural Balance divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(156.7)</td><td></td><td colspan="3"></td><td colspan="2">156.7 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Private label dry pet food divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(40.7)</td><td></td><td colspan="3"></td><td colspan="2">40.7 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Natural beverage and grains divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(35.5)</td><td></td><td colspan="3"></td><td colspan="2">35.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Foreign currency exchange</td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Net sales excluding divestitures and foreign currency exchange (A)</td><td>$</td><td>7,981.8 </td><td></td><td colspan="3"></td><td>$</td><td>7,570.9 </td><td></td><td colspan="3"></td><td>$</td><td>410.9 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td>%</td></tr></table>Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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q_an052
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What does the variation in Return on Assets (ROA) from 2021 to 2022 reveal about JM Smucker's effectiveness in utilizing its asset base to generate income?
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The ROA for JM Smucker showed a decline in 2022, driven by a sharp reduction in net income while asset levels remained relatively constant. This decline reflects the company’s reduced efficiency in leveraging its assets to generate returns. The strain caused by higher costs, operational inefficiencies, and the financial implications of the Jif recall significantly impacted the company's ability to optimize its asset utilization.
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Analysis
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28
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0000091419-22-000049
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 28:
Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
| | | | | | | | | | |
|---:|:------------------------------------------------|:---------------------|:--------|:-----|:-----|:---------------------|:--------|:-----|:---|
| 1 | | Year Ended April 30, | | | | | | | |
| 2 | | 2022 | | 2021 | | % Increase(Decrease) | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | - | % |
| 4 | Gross profit | $ | 2,700.7 | | | $ | 3,138.7 | (14) | |
| 5 | % of net sales | 33.8 | % | | 39.2 | % | | | |
| 6 | Operating income | $ | 1,023.8 | | | $ | 1,386.8 | (26) | |
| 7 | % of net sales | 12.8 | % | | 17.3 | % | | | |
| 8 | Net income: | | | | | | | | |
| 9 | Net income | $ | 631.7 | | | $ | 876.3 | (28) | |
| 10 | Net income per common share – assuming dilution | $ | 5.83 | | | $ | 7.79 | (25) | |
| 11 | Adjusted gross profit (A) | $ | 2,744.6 | | | $ | 3,048.5 | (10) | |
| 12 | % of net sales | 34.3 | % | | 38.1 | % | | | |
| 13 | Adjusted operating income (A) | $ | 1,440.1 | | | $ | 1,528.8 | (6) | |
| 14 | % of net sales | 18.0 | % | | 19.1 | % | | | |
| 15 | Adjusted income: (A) | | | | | | | | |
| 16 | Income | $ | 962.2 | | | $ | 1,025.0 | (6) | |
| 17 | Earnings per share – assuming dilution | $ | 8.88 | | | $ | 9.12 | (3) | |
(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
| | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------|:---------------------|:--------|:-----|:--------|:--------------------|:--------|:-------|:---|:------|:---|:---|
| 1 | | Year Ended April 30, | | | | | | | | | | |
| 2 | | 2022 | | 2021 | | Increase (Decrease) | | % | | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | | $ | (3.8) | - | % |
| 4 | Crisco divestiture | - | | | (198.9) | | | 198.9 | | 2 | | |
| 5 | Natural Balance divestiture | - | | | (156.7) | | | 156.7 | | 2 | | |
| 6 | Private label dry pet food divestiture | - | | | (40.7) | | | 40.7 | | 1 | | |
| 7 | Natural beverage and grains divestiture | - | | | (35.5) | | | 35.5 | | - | | |
| 8 | Foreign currency exchange | (17.1) | | | - | | | (17.1) | | - | | |
| 9 | Net sales excluding divestitures and foreign currency exchange (A) | $ | 7,981.8 | | | $ | 7,570.9 | | $ | 410.9 | 5 | % |
Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
| | | | | | | | | | |
|---:|:------------------------------------------------|:---------------------|:--------|:-----|:-----|:---------------------|:--------|:-----|:---|
| 1 | | Year Ended April 30, | | | | | | | |
| 2 | | 2022 | | 2021 | | % Increase(Decrease) | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | - | % |
| 4 | Gross profit | $ | 2,700.7 | | | $ | 3,138.7 | (14) | |
| 5 | % of net sales | 33.8 | % | | 39.2 | % | | | |
| 6 | Operating income | $ | 1,023.8 | | | $ | 1,386.8 | (26) | |
| 7 | % of net sales | 12.8 | % | | 17.3 | % | | | |
| 8 | Net income: | | | | | | | | |
| 9 | Net income | $ | 631.7 | | | $ | 876.3 | (28) | |
| 10 | Net income per common share – assuming dilution | $ | 5.83 | | | $ | 7.79 | (25) | |
| 11 | Adjusted gross profit (A) | $ | 2,744.6 | | | $ | 3,048.5 | (10) | |
| 12 | % of net sales | 34.3 | % | | 38.1 | % | | | |
| 13 | Adjusted operating income (A) | $ | 1,440.1 | | | $ | 1,528.8 | (6) | |
| 14 | % of net sales | 18.0 | % | | 19.1 | % | | | |
| 15 | Adjusted income: (A) | | | | | | | | |
| 16 | Income | $ | 962.2 | | | $ | 1,025.0 | (6) | |
| 17 | Earnings per share – assuming dilution | $ | 8.88 | | | $ | 9.12 | (3) | |
(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
| | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------|:---------------------|:--------|:-----|:--------|:--------------------|:--------|:-------|:---|:------|:---|:---|
| 1 | | Year Ended April 30, | | | | | | | | | | |
| 2 | | 2022 | | 2021 | | Increase (Decrease) | | % | | | | |
| 3 | Net sales | $ | 7,998.9 | | | $ | 8,002.7 | | $ | (3.8) | - | % |
| 4 | Crisco divestiture | - | | | (198.9) | | | 198.9 | | 2 | | |
| 5 | Natural Balance divestiture | - | | | (156.7) | | | 156.7 | | 2 | | |
| 6 | Private label dry pet food divestiture | - | | | (40.7) | | | 40.7 | | 1 | | |
| 7 | Natural beverage and grains divestiture | - | | | (35.5) | | | 35.5 | | - | | |
| 8 | Foreign currency exchange | (17.1) | | | - | | | (17.1) | | - | | |
| 9 | Net sales excluding divestitures and foreign currency exchange (A) | $ | 7,981.8 | | | $ | 7,570.9 | | $ | 410.9 | 5 | % |
Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
28
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J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 28:
Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">% Increase(Decrease)</td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Gross profit</td><td>$</td><td>2,700.7 </td><td></td><td colspan="3"></td><td>$</td><td>3,138.7 </td><td></td><td colspan="3"></td><td colspan="2">(14)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td>$</td><td>1,023.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,386.8 </td><td></td><td colspan="3"></td><td colspan="2">(26)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>631.7 </td><td></td><td colspan="3"></td><td>$</td><td>876.3 </td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net income per common share – assuming dilution</td><td>$</td><td>5.83 </td><td></td><td colspan="3"></td><td>$</td><td>7.79 </td><td></td><td colspan="3"></td><td colspan="2">(25)</td><td></td></tr><tr><td colspan="3">Adjusted gross profit (A)</td><td>$</td><td>2,744.6 </td><td></td><td colspan="3"></td><td>$</td><td>3,048.5 </td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">34.3 </td><td>%</td><td colspan="3"></td><td colspan="2">38.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted operating income (A)</td><td>$</td><td>1,440.1 </td><td></td><td colspan="3"></td><td>$</td><td>1,528.8 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">18.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted income: (A)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income</td><td>$</td><td>962.2 </td><td></td><td colspan="3"></td><td>$</td><td>1,025.0 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">Earnings per share – assuming dilution</td><td>$</td><td>8.88 </td><td></td><td colspan="3"></td><td>$</td><td>9.12 </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr></table>(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Increase (Decrease)</td><td colspan="3"></td><td colspan="3"> % </td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td>$</td><td>(3.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Crisco divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(198.9)</td><td></td><td colspan="3"></td><td colspan="2">198.9 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Natural Balance divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(156.7)</td><td></td><td colspan="3"></td><td colspan="2">156.7 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Private label dry pet food divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(40.7)</td><td></td><td colspan="3"></td><td colspan="2">40.7 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Natural beverage and grains divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(35.5)</td><td></td><td colspan="3"></td><td colspan="2">35.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Foreign currency exchange</td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Net sales excluding divestitures and foreign currency exchange (A)</td><td>$</td><td>7,981.8 </td><td></td><td colspan="3"></td><td>$</td><td>7,570.9 </td><td></td><td colspan="3"></td><td>$</td><td>410.9 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td>%</td></tr></table>Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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Results of Operations
This discussion and analysis deals with comparisons of material changes in the consolidated financial statements for the years ended April 30, 2022 and 2021. For the comparisons of the years ended April 30, 2021 and 2020, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2021 Annual Report on Form 10-K.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">% Increase(Decrease)</td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Gross profit</td><td>$</td><td>2,700.7 </td><td></td><td colspan="3"></td><td>$</td><td>3,138.7 </td><td></td><td colspan="3"></td><td colspan="2">(14)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating income</td><td>$</td><td>1,023.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,386.8 </td><td></td><td colspan="3"></td><td colspan="2">(26)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>631.7 </td><td></td><td colspan="3"></td><td>$</td><td>876.3 </td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net income per common share – assuming dilution</td><td>$</td><td>5.83 </td><td></td><td colspan="3"></td><td>$</td><td>7.79 </td><td></td><td colspan="3"></td><td colspan="2">(25)</td><td></td></tr><tr><td colspan="3">Adjusted gross profit (A)</td><td>$</td><td>2,744.6 </td><td></td><td colspan="3"></td><td>$</td><td>3,048.5 </td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">34.3 </td><td>%</td><td colspan="3"></td><td colspan="2">38.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted operating income (A)</td><td>$</td><td>1,440.1 </td><td></td><td colspan="3"></td><td>$</td><td>1,528.8 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">% of net sales</td><td colspan="2">18.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted income: (A)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income</td><td>$</td><td>962.2 </td><td></td><td colspan="3"></td><td>$</td><td>1,025.0 </td><td></td><td colspan="3"></td><td colspan="2">(6)</td><td></td></tr><tr><td colspan="3">Earnings per share – assuming dilution</td><td>$</td><td>8.88 </td><td></td><td colspan="3"></td><td>$</td><td>9.12 </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr></table>(A)We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a reconciliation to the comparable generally accepted accounting principles ("GAAP") financial measure.
Net Sales
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Increase (Decrease)</td><td colspan="3"></td><td colspan="3"> % </td></tr><tr><td colspan="3">Net sales</td><td>$</td><td>7,998.9 </td><td></td><td colspan="3"></td><td>$</td><td>8,002.7 </td><td></td><td colspan="3"></td><td>$</td><td>(3.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr><tr><td colspan="3">Crisco divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(198.9)</td><td></td><td colspan="3"></td><td colspan="2">198.9 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Natural Balance divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(156.7)</td><td></td><td colspan="3"></td><td colspan="2">156.7 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Private label dry pet food divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(40.7)</td><td></td><td colspan="3"></td><td colspan="2">40.7 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Natural beverage and grains divestiture</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(35.5)</td><td></td><td colspan="3"></td><td colspan="2">35.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Foreign currency exchange</td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Net sales excluding divestitures and foreign currency exchange (A)</td><td>$</td><td>7,981.8 </td><td></td><td colspan="3"></td><td>$</td><td>7,570.9 </td><td></td><td colspan="3"></td><td>$</td><td>410.9 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td>%</td></tr></table>Amounts may not add due to rounding.
(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in 2022 was comparable to the prior year, which includes $431.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $410.9, or 5 percent, which was primarily due to higher net price realization across each of our U.S. Retail segments and for International and Away From Home, reflecting list price increases during 2022.
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q_an053
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How does the change in Gross Profit Margin in 2022 reflect the impact of inflation and fluctuating commodity prices on JM Smucker's profitability?
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The decline in Gross Profit Margin from 39.2% to 33.8% in 2022 illustrates the significant impact of inflation on the company's cost structure. Rising costs for green coffee, oils, protein meals, and packaging materials, combined with elevated logistics expenses, eroded profitability. Pricing adjustments helped mitigate these effects but were insufficient to fully counteract the cost pressures. The impact of the Jif recall further compounded the challenges, highlighting the difficulty of maintaining margins during periods of high volatility.
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Analysis
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0000091419-22-000049
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 29:
Operating Income
The following table presents the components of operating income as a percentage of net sales. | | | | | | | |
|---:|:---------------------------------------------------------|:---------------------|:---|:-----|:------|:---|
| 1 | | Year Ended April 30, | | | | |
| 2 | | 2022 | | 2021 | | |
| 3 | Gross profit | 33.8 | % | | 39.2 | % |
| 4 | Selling, distribution, and administrative expenses: | | | | | |
| 5 | Marketing | 3.5 | % | | 3.9 | % |
| 6 | Advertising | 2.2 | | | 2.8 | |
| 7 | Selling | 2.8 | | | 3.0 | |
| 8 | Distribution | 3.6 | | | 3.4 | |
| 9 | General and administrative | 5.0 | | | 5.9 | |
| 10 | Total selling, distribution, and administrative expenses | 17.0 | % | | 19.0 | % |
| 11 | Amortization | 2.8 | | | 2.9 | |
| 13 | Other intangible assets impairment charges | 1.9 | | | - | |
| 14 | Other special project costs | 0.1 | | | 0.3 | |
| 15 | Other operating expense (income) – net | (0.8) | | | (0.4) | |
| 16 | Operating income | 12.8 | % | | 17.3 | % |
Amounts may not add due to rounding.
Gross profit decreased $438.0, or 14 percent, in 2022, reflecting higher costs, primarily driven by increased commodity and ingredient, transportation, packaging, and manufacturing costs, the noncomparable impact related to divestitures, the unfavorable impact of unsaleable inventory and estimated customer returns related to the Jif peanut butter recall, and unfavorable volume/mix, partially offset by higher net pricing.
Operating income decreased $363.0, or 26 percent, primarily reflecting the decrease in gross profit and a $150.4 intangible asset impairment charge in 2022 related to the Rachael Ray Nutrish brand, partially offset by a $162.8 decrease in selling, distribution, and administrative ("SD&A") expenses, primarily driven by lower marketing spend and incentive compensation expense. Further offsetting the decrease in operating income is a $36.7 increase in net other operating income, primarily reflecting an anticipated insurance recovery of $49.8, net of the deductible, related to the Jif peanut butter recall that mostly offsets the unfavorable impact of unsaleable inventory, estimated customer returns, and consumer refunds, as discussed in Note 15: Contingencies.
Our non-GAAP adjustments include amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other one-time items that do not directly reflect ongoing operating results. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for additional information. Gross profit excluding non-GAAP adjustments ("adjusted gross profit") decreased $303.9, or 10 percent, in 2022, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs, as compared to GAAP gross profit. Adjusted operating income decreased $88.7, or 6 percent, as compared to the prior year, further reflecting the exclusion of the impairment charge and net pre-tax gain on divestitures.
Interest Expense
Net interest expense decreased $16.2, or 9 percent, in 2022, primarily as a result of reduced debt outstanding as compared to the prior year. For additional information, see "Capital Resources" in this discussion and analysis.
Income Taxes
Income taxes decreased $83.5, or 28 percent, in 2022, as compared to the prior year. The effective income tax rate of 25.1 percent for 2022 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes, including an unfavorable one-time deferred tax impact of an internal legal entity simplification in the third quarter of 2022 to support multiple work locations for office-based employees and our continued strategic activities. The effective income tax rate of 25.2 percent for 2021 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to the impact of state income taxes, as well as additional net income tax expense related to the divestitures of the Crisco and Natural Balance businesses. We anticipate a full-year effective income tax rate for 2023 to be approximately 24.2 percent. For additional information, refer to Note 13: Income Taxes.
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Operating Income
The following table presents the components of operating income as a percentage of net sales. | | | | | | | |
|---:|:---------------------------------------------------------|:---------------------|:---|:-----|:------|:---|
| 1 | | Year Ended April 30, | | | | |
| 2 | | 2022 | | 2021 | | |
| 3 | Gross profit | 33.8 | % | | 39.2 | % |
| 4 | Selling, distribution, and administrative expenses: | | | | | |
| 5 | Marketing | 3.5 | % | | 3.9 | % |
| 6 | Advertising | 2.2 | | | 2.8 | |
| 7 | Selling | 2.8 | | | 3.0 | |
| 8 | Distribution | 3.6 | | | 3.4 | |
| 9 | General and administrative | 5.0 | | | 5.9 | |
| 10 | Total selling, distribution, and administrative expenses | 17.0 | % | | 19.0 | % |
| 11 | Amortization | 2.8 | | | 2.9 | |
| 13 | Other intangible assets impairment charges | 1.9 | | | - | |
| 14 | Other special project costs | 0.1 | | | 0.3 | |
| 15 | Other operating expense (income) – net | (0.8) | | | (0.4) | |
| 16 | Operating income | 12.8 | % | | 17.3 | % |
Amounts may not add due to rounding.
Gross profit decreased $438.0, or 14 percent, in 2022, reflecting higher costs, primarily driven by increased commodity and ingredient, transportation, packaging, and manufacturing costs, the noncomparable impact related to divestitures, the unfavorable impact of unsaleable inventory and estimated customer returns related to the Jif peanut butter recall, and unfavorable volume/mix, partially offset by higher net pricing.
Operating income decreased $363.0, or 26 percent, primarily reflecting the decrease in gross profit and a $150.4 intangible asset impairment charge in 2022 related to the Rachael Ray Nutrish brand, partially offset by a $162.8 decrease in selling, distribution, and administrative ("SD&A") expenses, primarily driven by lower marketing spend and incentive compensation expense. Further offsetting the decrease in operating income is a $36.7 increase in net other operating income, primarily reflecting an anticipated insurance recovery of $49.8, net of the deductible, related to the Jif peanut butter recall that mostly offsets the unfavorable impact of unsaleable inventory, estimated customer returns, and consumer refunds, as discussed in Note 15: Contingencies.
Our non-GAAP adjustments include amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other one-time items that do not directly reflect ongoing operating results. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for additional information. Gross profit excluding non-GAAP adjustments ("adjusted gross profit") decreased $303.9, or 10 percent, in 2022, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs, as compared to GAAP gross profit. Adjusted operating income decreased $88.7, or 6 percent, as compared to the prior year, further reflecting the exclusion of the impairment charge and net pre-tax gain on divestitures.
Interest Expense
Net interest expense decreased $16.2, or 9 percent, in 2022, primarily as a result of reduced debt outstanding as compared to the prior year. For additional information, see "Capital Resources" in this discussion and analysis.
Income Taxes
Income taxes decreased $83.5, or 28 percent, in 2022, as compared to the prior year. The effective income tax rate of 25.1 percent for 2022 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes, including an unfavorable one-time deferred tax impact of an internal legal entity simplification in the third quarter of 2022 to support multiple work locations for office-based employees and our continued strategic activities. The effective income tax rate of 25.2 percent for 2021 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to the impact of state income taxes, as well as additional net income tax expense related to the divestitures of the Crisco and Natural Balance businesses. We anticipate a full-year effective income tax rate for 2023 to be approximately 24.2 percent. For additional information, refer to Note 13: Income Taxes.
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J M SMUCKER Co 10-K form for the fiscal year ended 2022-04-30, page 29:
Operating Income
The following table presents the components of operating income as a percentage of net sales. <table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Gross profit</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td></tr><tr><td colspan="3">Selling, distribution, and administrative expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Marketing</td><td colspan="2">3.5 </td><td>%</td><td colspan="3"></td><td colspan="2">3.9 </td><td>%</td></tr><tr><td colspan="3">Advertising</td><td colspan="2">2.2 </td><td></td><td colspan="3"></td><td colspan="2">2.8 </td><td></td></tr><tr><td colspan="3">Selling</td><td colspan="2">2.8 </td><td></td><td colspan="3"></td><td colspan="2">3.0 </td><td></td></tr><tr><td colspan="3">Distribution</td><td colspan="2">3.6 </td><td></td><td colspan="3"></td><td colspan="2">3.4 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">5.0 </td><td></td><td colspan="3"></td><td colspan="2">5.9 </td><td></td></tr><tr><td colspan="3">Total selling, distribution, and administrative expenses</td><td colspan="2">17.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.0 </td><td>%</td></tr><tr><td colspan="3">Amortization</td><td colspan="2">2.8 </td><td></td><td colspan="3"></td><td colspan="2">2.9 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other intangible assets impairment charges</td><td colspan="2">1.9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other special project costs</td><td colspan="2">0.1 </td><td></td><td colspan="3"></td><td colspan="2">0.3 </td><td></td></tr><tr><td colspan="3">Other operating expense (income) – net</td><td colspan="2">(0.8)</td><td></td><td colspan="3"></td><td colspan="2">(0.4)</td><td></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td></tr></table>Amounts may not add due to rounding.
Gross profit decreased $438.0, or 14 percent, in 2022, reflecting higher costs, primarily driven by increased commodity and ingredient, transportation, packaging, and manufacturing costs, the noncomparable impact related to divestitures, the unfavorable impact of unsaleable inventory and estimated customer returns related to the Jif peanut butter recall, and unfavorable volume/mix, partially offset by higher net pricing.
Operating income decreased $363.0, or 26 percent, primarily reflecting the decrease in gross profit and a $150.4 intangible asset impairment charge in 2022 related to the Rachael Ray Nutrish brand, partially offset by a $162.8 decrease in selling, distribution, and administrative ("SD&A") expenses, primarily driven by lower marketing spend and incentive compensation expense. Further offsetting the decrease in operating income is a $36.7 increase in net other operating income, primarily reflecting an anticipated insurance recovery of $49.8, net of the deductible, related to the Jif peanut butter recall that mostly offsets the unfavorable impact of unsaleable inventory, estimated customer returns, and consumer refunds, as discussed in Note 15: Contingencies.
Our non-GAAP adjustments include amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other one-time items that do not directly reflect ongoing operating results. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for additional information. Gross profit excluding non-GAAP adjustments ("adjusted gross profit") decreased $303.9, or 10 percent, in 2022, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs, as compared to GAAP gross profit. Adjusted operating income decreased $88.7, or 6 percent, as compared to the prior year, further reflecting the exclusion of the impairment charge and net pre-tax gain on divestitures.
Interest Expense
Net interest expense decreased $16.2, or 9 percent, in 2022, primarily as a result of reduced debt outstanding as compared to the prior year. For additional information, see "Capital Resources" in this discussion and analysis.
Income Taxes
Income taxes decreased $83.5, or 28 percent, in 2022, as compared to the prior year. The effective income tax rate of 25.1 percent for 2022 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes, including an unfavorable one-time deferred tax impact of an internal legal entity simplification in the third quarter of 2022 to support multiple work locations for office-based employees and our continued strategic activities. The effective income tax rate of 25.2 percent for 2021 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to the impact of state income taxes, as well as additional net income tax expense related to the divestitures of the Crisco and Natural Balance businesses. We anticipate a full-year effective income tax rate for 2023 to be approximately 24.2 percent. For additional information, refer to Note 13: Income Taxes.
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Operating Income
The following table presents the components of operating income as a percentage of net sales. <table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9">Year Ended April 30,</td></tr><tr><td colspan="3"> </td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Gross profit</td><td colspan="2">33.8 </td><td>%</td><td colspan="3"></td><td colspan="2">39.2 </td><td>%</td></tr><tr><td colspan="3">Selling, distribution, and administrative expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Marketing</td><td colspan="2">3.5 </td><td>%</td><td colspan="3"></td><td colspan="2">3.9 </td><td>%</td></tr><tr><td colspan="3">Advertising</td><td colspan="2">2.2 </td><td></td><td colspan="3"></td><td colspan="2">2.8 </td><td></td></tr><tr><td colspan="3">Selling</td><td colspan="2">2.8 </td><td></td><td colspan="3"></td><td colspan="2">3.0 </td><td></td></tr><tr><td colspan="3">Distribution</td><td colspan="2">3.6 </td><td></td><td colspan="3"></td><td colspan="2">3.4 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">5.0 </td><td></td><td colspan="3"></td><td colspan="2">5.9 </td><td></td></tr><tr><td colspan="3">Total selling, distribution, and administrative expenses</td><td colspan="2">17.0 </td><td>%</td><td colspan="3"></td><td colspan="2">19.0 </td><td>%</td></tr><tr><td colspan="3">Amortization</td><td colspan="2">2.8 </td><td></td><td colspan="3"></td><td colspan="2">2.9 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other intangible assets impairment charges</td><td colspan="2">1.9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other special project costs</td><td colspan="2">0.1 </td><td></td><td colspan="3"></td><td colspan="2">0.3 </td><td></td></tr><tr><td colspan="3">Other operating expense (income) – net</td><td colspan="2">(0.8)</td><td></td><td colspan="3"></td><td colspan="2">(0.4)</td><td></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">12.8 </td><td>%</td><td colspan="3"></td><td colspan="2">17.3 </td><td>%</td></tr></table>Amounts may not add due to rounding.
Gross profit decreased $438.0, or 14 percent, in 2022, reflecting higher costs, primarily driven by increased commodity and ingredient, transportation, packaging, and manufacturing costs, the noncomparable impact related to divestitures, the unfavorable impact of unsaleable inventory and estimated customer returns related to the Jif peanut butter recall, and unfavorable volume/mix, partially offset by higher net pricing.
Operating income decreased $363.0, or 26 percent, primarily reflecting the decrease in gross profit and a $150.4 intangible asset impairment charge in 2022 related to the Rachael Ray Nutrish brand, partially offset by a $162.8 decrease in selling, distribution, and administrative ("SD&A") expenses, primarily driven by lower marketing spend and incentive compensation expense. Further offsetting the decrease in operating income is a $36.7 increase in net other operating income, primarily reflecting an anticipated insurance recovery of $49.8, net of the deductible, related to the Jif peanut butter recall that mostly offsets the unfavorable impact of unsaleable inventory, estimated customer returns, and consumer refunds, as discussed in Note 15: Contingencies.
Our non-GAAP adjustments include amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other one-time items that do not directly reflect ongoing operating results. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for additional information. Gross profit excluding non-GAAP adjustments ("adjusted gross profit") decreased $303.9, or 10 percent, in 2022, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs, as compared to GAAP gross profit. Adjusted operating income decreased $88.7, or 6 percent, as compared to the prior year, further reflecting the exclusion of the impairment charge and net pre-tax gain on divestitures.
Interest Expense
Net interest expense decreased $16.2, or 9 percent, in 2022, primarily as a result of reduced debt outstanding as compared to the prior year. For additional information, see "Capital Resources" in this discussion and analysis.
Income Taxes
Income taxes decreased $83.5, or 28 percent, in 2022, as compared to the prior year. The effective income tax rate of 25.1 percent for 2022 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes, including an unfavorable one-time deferred tax impact of an internal legal entity simplification in the third quarter of 2022 to support multiple work locations for office-based employees and our continued strategic activities. The effective income tax rate of 25.2 percent for 2021 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to the impact of state income taxes, as well as additional net income tax expense related to the divestitures of the Crisco and Natural Balance businesses. We anticipate a full-year effective income tax rate for 2023 to be approximately 24.2 percent. For additional information, refer to Note 13: Income Taxes.
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q_an054
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What does the change in gross profit margin for 2023 compared to previous year indicate about the company's profitability?
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Analysis of Gross Profit and Gross Profit Margin: 2022 vs. 2023
Gross profit is defined here as the sum of net interest income (after provision for credit losses) and total other income. This measure represents the company's revenue after covering direct costs, such as interest expenses and credit loss provisions, but before accounting for operating expenses.
Gross Profit Calculations
For 2023:
Net Interest Income (after provision for credit losses): $7,081 million
Total Other Income: $2,761 million
Gross Profit: $7,081 million + $2,761 million = $9,842 million
For 2022:
Net Interest Income (after provision for credit losses): $8,640 million
Total Other Income: $2,294 million
Gross Profit: $8,640 million + $2,294 million = $10,934 million
Total Revenue Calculations
For 2023:
Total Interest Income: $17,845 million
Total Other Income: $2,761 million
Total Revenue: $17,845 million + $2,761 million = $20,606 million
For 2022:
Total Interest Income: $12,864 million
Total Other Income: $2,294 million
Total Revenue: $12,864 million + $2,294 million = $15,158 million
Gross Profit Margin
The gross profit margin is calculated as:
Gross Profit Margin=( Gross Profit/Total Revenue )×100
For 2023:
Gross Profit Margin=(9,842/20,606 )×100≈47.8%
For 2022:
Gross Profit Margin=(10,934/15,158 )×100≈72.1%
Analysis and Interpretation
The gross profit margin experienced a significant decline from 72.1% in 2022 to 47.8% in 2023, indicating a notable reduction in profitability. This drop suggests the company faced challenges in maintaining its cost-efficiency or revenue growth. Possible factors contributing to this decline include:
-Higher interest expenses
-Increased provisions for credit losses
-Operational inefficiencies
The substantial margin decrease raises concerns about the company's financial stability and efficiency. Further investigation into these trends is recommended to identify specific drivers and determine strategies to address declining profitability.
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Analysis
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0001393612-24-000010
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Item 8. Financial Statements and Supplementary Data
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-86-
|
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-86-
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q_an055
|
How efficiently is NVIDIA utilizing its assets and managing its inventory and receivables in 2024 compared to 2023?
|
In 2024, NVIDIA demonstrated improved efficiency in utilizing its assets and managing its inventory and receivables compared to 2023. The key efficiency metrics indicate the following trends:
1. Inventory Turnover Ratio: Increased from 2.23 in 2023 to 3.18 in 2024, showing that NVIDIA is turning over its inventory more frequently, which is a positive sign of inventory management efficiency.
2. Days Sales of Inventory (DSI): Decreased from 164.0 days in 2023 to 114.6 days in 2024, indicating that the company is selling its inventory faster.
3. Receivables Turnover Ratio: Increased from 3.90 in 2023 to 8.81 in 2024, suggesting that NVIDIA is collecting its receivables more efficiently.
4. Days Sales Outstanding (DSO): Increased from 51.8 days in 2023 to 59.9 days in 2024, indicating a slight delay in collecting receivables, which may need attention.
5. Payables Turnover Ratio: Increased from 5.97 in 2023 to 8.54 in 2024, showing that the company is paying its suppliers more quickly.
6. Days Payable Outstanding (DPO): Increased from 37.5 days in 2023 to 59.2 days in 2024, indicating that NVIDIA is taking longer to pay its suppliers, which can be a strategic move to manage cash flow.
7. Asset Turnover Ratio: Increased from 0.50 in 2023 to 1.14 in 2024, reflecting better utilization of total assets to generate sales.
8. Fixed Asset Turnover Ratio: Increased from 6.99 in 2023 to 15.78 in 2024, indicating more efficient use of fixed assets to generate revenue.
9. Net Working Capital Turnover Ratio: Increased from 1.63 in 2023 to 1.81 in 2024, showing improved efficiency in using working capital to generate sales.
Overall, NVIDIA has shown significant improvements in most efficiency metrics, indicating better management of its resources and enhanced operational efficiency in 2024 compared to 2023. However, the increase in DSO suggests that the company may need to focus on improving its receivables collection process.
|
Analysis
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50, 52
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0001045810-24-000029
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Item 15. Exhibit and Financial Statement Schedules
|
NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 50:
NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)| | | | | | | | | | | |
|---:|:-------------------------------------------------------|:-------------|:-------|:-------------|:-------|:-------------|:-------|:-------|:---|:-------|
| 1 | | Year Ended | | | | | | | | |
| 2 | | Jan 28, 2024 | | Jan 29, 2023 | | Jan 30, 2022 | | | | |
| 3 | Revenue | $ | 60,922 | | | $ | 26,974 | | $ | 26,914 |
| 4 | Cost of revenue | 16,621 | | | 11,618 | | | 9,439 | | |
| 5 | Gross profit | 44,301 | | | 15,356 | | | 17,475 | | |
| 6 | Operating expenses | | | | | | | | | |
| 7 | Research and development | 8,675 | | | 7,339 | | | 5,268 | | |
| 8 | Sales, general and administrative | 2,654 | | | 2,440 | | | 2,166 | | |
| 9 | Acquisition termination cost | - | | | 1,353 | | | - | | |
| 10 | Total operating expenses | 11,329 | | | 11,132 | | | 7,434 | | |
| 11 | Operating income | 32,972 | | | 4,224 | | | 10,041 | | |
| 12 | Interest income | 866 | | | 267 | | | 29 | | |
| 13 | Interest expense | (257) | | | (262) | | | (236) | | |
| 14 | Other, net | 237 | | | (48) | | | 107 | | |
| 15 | Other income (expense), net | 846 | | | (43) | | | (100) | | |
| 16 | Income before income tax | 33,818 | | | 4,181 | | | 9,941 | | |
| 17 | Income tax expense (benefit) | 4,058 | | | (187) | | | 189 | | |
| 18 | Net income | $ | 29,760 | | | $ | 4,368 | | $ | 9,752 |
| 20 | Net income per share: | | | | | | | | | |
| 21 | Basic | $ | 12.05 | | | $ | 1.76 | | $ | 3.91 |
| 22 | Diluted | $ | 11.93 | | | $ | 1.74 | | $ | 3.85 |
| 24 | Weighted average shares used in per share computation: | | | | | | | | | |
| 25 | Basic | 2,469 | | | 2,487 | | | 2,496 | | |
| 26 | Diluted | 2,494 | | | 2,507 | | | 2,535 | | |
See accompanying notes to the consolidated financial statements.
50
, NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
|
NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)| | | | | | | | | | | |
|---:|:-------------------------------------------------------|:-------------|:-------|:-------------|:-------|:-------------|:-------|:-------|:---|:-------|
| 1 | | Year Ended | | | | | | | | |
| 2 | | Jan 28, 2024 | | Jan 29, 2023 | | Jan 30, 2022 | | | | |
| 3 | Revenue | $ | 60,922 | | | $ | 26,974 | | $ | 26,914 |
| 4 | Cost of revenue | 16,621 | | | 11,618 | | | 9,439 | | |
| 5 | Gross profit | 44,301 | | | 15,356 | | | 17,475 | | |
| 6 | Operating expenses | | | | | | | | | |
| 7 | Research and development | 8,675 | | | 7,339 | | | 5,268 | | |
| 8 | Sales, general and administrative | 2,654 | | | 2,440 | | | 2,166 | | |
| 9 | Acquisition termination cost | - | | | 1,353 | | | - | | |
| 10 | Total operating expenses | 11,329 | | | 11,132 | | | 7,434 | | |
| 11 | Operating income | 32,972 | | | 4,224 | | | 10,041 | | |
| 12 | Interest income | 866 | | | 267 | | | 29 | | |
| 13 | Interest expense | (257) | | | (262) | | | (236) | | |
| 14 | Other, net | 237 | | | (48) | | | 107 | | |
| 15 | Other income (expense), net | 846 | | | (43) | | | (100) | | |
| 16 | Income before income tax | 33,818 | | | 4,181 | | | 9,941 | | |
| 17 | Income tax expense (benefit) | 4,058 | | | (187) | | | 189 | | |
| 18 | Net income | $ | 29,760 | | | $ | 4,368 | | $ | 9,752 |
| 20 | Net income per share: | | | | | | | | | |
| 21 | Basic | $ | 12.05 | | | $ | 1.76 | | $ | 3.91 |
| 22 | Diluted | $ | 11.93 | | | $ | 1.74 | | $ | 3.85 |
| 24 | Weighted average shares used in per share computation: | | | | | | | | | |
| 25 | Basic | 2,469 | | | 2,487 | | | 2,496 | | |
| 26 | Diluted | 2,494 | | | 2,507 | | | 2,535 | | |
See accompanying notes to the consolidated financial statements.
50
,
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)| | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:-------|:-------------|:-------|:---|:-------|
| 1 | | Jan 28, 2024 | | Jan 29, 2023 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 7,280 | | | $ | 3,389 |
| 5 | Marketable securities | 18,704 | | | 9,907 | | |
| 6 | Accounts receivable, net | 9,999 | | | 3,827 | | |
| 7 | Inventories | 5,282 | | | 5,159 | | |
| 8 | Prepaid expenses and other current assets | 3,080 | | | 791 | | |
| 9 | Total current assets | 44,345 | | | 23,073 | | |
| 10 | Property and equipment, net | 3,914 | | | 3,807 | | |
| 11 | Operating lease assets | 1,346 | | | 1,038 | | |
| 12 | Goodwill | 4,430 | | | 4,372 | | |
| 13 | Intangible assets, net | 1,112 | | | 1,676 | | |
| 14 | Deferred income tax assets | 6,081 | | | 3,396 | | |
| 15 | Other assets | 4,500 | | | 3,820 | | |
| 16 | Total assets | $ | 65,728 | | | $ | 41,182 |
| 18 | Liabilities and Shareholders' Equity | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 2,699 | | | $ | 1,193 |
| 21 | Accrued and other current liabilities | 6,682 | | | 4,120 | | |
| 22 | Short-term debt | 1,250 | | | 1,250 | | |
| 23 | Total current liabilities | 10,631 | | | 6,563 | | |
| 24 | Long-term debt | 8,459 | | | 9,703 | | |
| 25 | Long-term operating lease liabilities | 1,119 | | | 902 | | |
| 26 | Other long-term liabilities | 2,541 | | | 1,913 | | |
| 27 | Total liabilities | 22,750 | | | 19,081 | | |
| 28 | Commitments and contingencies - see Note 13 | | | | | | |
| 30 | Shareholders' equity: | | | | | | |
| 31 | Preferred stock, $0.001 par value; 2 shares authorized; none issued | - | | | - | | |
| 32 | Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023 | 2 | | | 2 | | |
| 33 | Additional paid-in capital | 13,132 | | | 11,971 | | |
| 35 | Accumulated other comprehensive income (loss) | 27 | | | (43) | | |
| 36 | Retained earnings | 29,817 | | | 10,171 | | |
| 37 | Total shareholders' equity | 42,978 | | | 22,101 | | |
| 38 | Total liabilities and shareholders' equity | $ | 65,728 | | | $ | 41,182 |
See accompanying notes to the consolidated financial statements.
52
|
NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 50:
NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Year Ended</td></tr><tr><td colspan="3"></td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td><td colspan="3"></td><td colspan="3">Jan 30, 2022</td></tr><tr><td colspan="3">Revenue</td><td>$</td><td>60,922 </td><td></td><td colspan="3"></td><td>$</td><td>26,974 </td><td></td><td colspan="3"></td><td>$</td><td>26,914 </td><td></td></tr><tr><td colspan="3">Cost of revenue</td><td colspan="2">16,621 </td><td></td><td colspan="3"></td><td colspan="2">11,618 </td><td></td><td colspan="3"></td><td colspan="2">9,439 </td><td></td></tr><tr><td colspan="3">Gross profit</td><td colspan="2">44,301 </td><td></td><td colspan="3"></td><td colspan="2">15,356 </td><td></td><td colspan="3"></td><td colspan="2">17,475 </td><td></td></tr><tr><td colspan="3">Operating expenses</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Research and development</td><td colspan="2">8,675 </td><td></td><td colspan="3"></td><td colspan="2">7,339 </td><td></td><td colspan="3"></td><td colspan="2">5,268 </td><td></td></tr><tr><td colspan="3">Sales, general and administrative</td><td colspan="2">2,654 </td><td></td><td colspan="3"></td><td colspan="2">2,440 </td><td></td><td colspan="3"></td><td colspan="2">2,166 </td><td></td></tr><tr><td colspan="3">Acquisition termination cost</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,353 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">11,329 </td><td></td><td colspan="3"></td><td colspan="2">11,132 </td><td></td><td colspan="3"></td><td colspan="2">7,434 </td><td></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">32,972 </td><td></td><td colspan="3"></td><td colspan="2">4,224 </td><td></td><td colspan="3"></td><td colspan="2">10,041 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="2">866 </td><td></td><td colspan="3"></td><td colspan="2">267 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="2">(257)</td><td></td><td colspan="3"></td><td colspan="2">(262)</td><td></td><td colspan="3"></td><td colspan="2">(236)</td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">237 </td><td></td><td colspan="3"></td><td colspan="2">(48)</td><td></td><td colspan="3"></td><td colspan="2">107 </td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="2">846 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td><td colspan="3"></td><td colspan="2">(100)</td><td></td></tr><tr><td colspan="3">Income before income tax</td><td colspan="2">33,818 </td><td></td><td colspan="3"></td><td colspan="2">4,181 </td><td></td><td colspan="3"></td><td colspan="2">9,941 </td><td></td></tr><tr><td colspan="3">Income tax expense (benefit)</td><td colspan="2">4,058 </td><td></td><td colspan="3"></td><td colspan="2">(187)</td><td></td><td colspan="3"></td><td colspan="2">189 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>29,760 </td><td></td><td colspan="3"></td><td>$</td><td>4,368 </td><td></td><td colspan="3"></td><td>$</td><td>9,752 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>12.05 </td><td></td><td colspan="3"></td><td>$</td><td>1.76 </td><td></td><td colspan="3"></td><td>$</td><td>3.91 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>11.93 </td><td></td><td colspan="3"></td><td>$</td><td>1.74 </td><td></td><td colspan="3"></td><td>$</td><td>3.85 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Weighted average shares used in per share computation:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">2,469 </td><td></td><td colspan="3"></td><td colspan="2">2,487 </td><td></td><td colspan="3"></td><td colspan="2">2,496 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">2,494 </td><td></td><td colspan="3"></td><td colspan="2">2,507 </td><td></td><td colspan="3"></td><td colspan="2">2,535 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
50
, NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52:
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
52
|
NVIDIA Corporation and Subsidiaries
Consolidated Statements of Income
(In millions, except per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="15">Year Ended</td></tr><tr><td colspan="3"></td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td><td colspan="3"></td><td colspan="3">Jan 30, 2022</td></tr><tr><td colspan="3">Revenue</td><td>$</td><td>60,922 </td><td></td><td colspan="3"></td><td>$</td><td>26,974 </td><td></td><td colspan="3"></td><td>$</td><td>26,914 </td><td></td></tr><tr><td colspan="3">Cost of revenue</td><td colspan="2">16,621 </td><td></td><td colspan="3"></td><td colspan="2">11,618 </td><td></td><td colspan="3"></td><td colspan="2">9,439 </td><td></td></tr><tr><td colspan="3">Gross profit</td><td colspan="2">44,301 </td><td></td><td colspan="3"></td><td colspan="2">15,356 </td><td></td><td colspan="3"></td><td colspan="2">17,475 </td><td></td></tr><tr><td colspan="3">Operating expenses</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Research and development</td><td colspan="2">8,675 </td><td></td><td colspan="3"></td><td colspan="2">7,339 </td><td></td><td colspan="3"></td><td colspan="2">5,268 </td><td></td></tr><tr><td colspan="3">Sales, general and administrative</td><td colspan="2">2,654 </td><td></td><td colspan="3"></td><td colspan="2">2,440 </td><td></td><td colspan="3"></td><td colspan="2">2,166 </td><td></td></tr><tr><td colspan="3">Acquisition termination cost</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,353 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">11,329 </td><td></td><td colspan="3"></td><td colspan="2">11,132 </td><td></td><td colspan="3"></td><td colspan="2">7,434 </td><td></td></tr><tr><td colspan="3">Operating income</td><td colspan="2">32,972 </td><td></td><td colspan="3"></td><td colspan="2">4,224 </td><td></td><td colspan="3"></td><td colspan="2">10,041 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="2">866 </td><td></td><td colspan="3"></td><td colspan="2">267 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="2">(257)</td><td></td><td colspan="3"></td><td colspan="2">(262)</td><td></td><td colspan="3"></td><td colspan="2">(236)</td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">237 </td><td></td><td colspan="3"></td><td colspan="2">(48)</td><td></td><td colspan="3"></td><td colspan="2">107 </td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="2">846 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td><td colspan="3"></td><td colspan="2">(100)</td><td></td></tr><tr><td colspan="3">Income before income tax</td><td colspan="2">33,818 </td><td></td><td colspan="3"></td><td colspan="2">4,181 </td><td></td><td colspan="3"></td><td colspan="2">9,941 </td><td></td></tr><tr><td colspan="3">Income tax expense (benefit)</td><td colspan="2">4,058 </td><td></td><td colspan="3"></td><td colspan="2">(187)</td><td></td><td colspan="3"></td><td colspan="2">189 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>29,760 </td><td></td><td colspan="3"></td><td>$</td><td>4,368 </td><td></td><td colspan="3"></td><td>$</td><td>9,752 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income per share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>12.05 </td><td></td><td colspan="3"></td><td>$</td><td>1.76 </td><td></td><td colspan="3"></td><td>$</td><td>3.91 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>11.93 </td><td></td><td colspan="3"></td><td>$</td><td>1.74 </td><td></td><td colspan="3"></td><td>$</td><td>3.85 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Weighted average shares used in per share computation:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">2,469 </td><td></td><td colspan="3"></td><td colspan="2">2,487 </td><td></td><td colspan="3"></td><td colspan="2">2,496 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">2,494 </td><td></td><td colspan="3"></td><td colspan="2">2,507 </td><td></td><td colspan="3"></td><td colspan="2">2,535 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
50
,
NVIDIA Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions, except par value)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">Jan 28, 2024</td><td colspan="3"></td><td colspan="3">Jan 29, 2023</td></tr><tr><td colspan="3">Assets</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>7,280 </td><td></td><td colspan="3"></td><td>$</td><td>3,389 </td><td></td></tr><tr><td colspan="3">Marketable securities</td><td colspan="2">18,704 </td><td></td><td colspan="3"></td><td colspan="2">9,907 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net</td><td colspan="2">9,999 </td><td></td><td colspan="3"></td><td colspan="2">3,827 </td><td></td></tr><tr><td colspan="3">Inventories</td><td colspan="2">5,282 </td><td></td><td colspan="3"></td><td colspan="2">5,159 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">3,080 </td><td></td><td colspan="3"></td><td colspan="2">791 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">44,345 </td><td></td><td colspan="3"></td><td colspan="2">23,073 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">3,914 </td><td></td><td colspan="3"></td><td colspan="2">3,807 </td><td></td></tr><tr><td colspan="3">Operating lease assets</td><td colspan="2">1,346 </td><td></td><td colspan="3"></td><td colspan="2">1,038 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">4,430 </td><td></td><td colspan="3"></td><td colspan="2">4,372 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">1,112 </td><td></td><td colspan="3"></td><td colspan="2">1,676 </td><td></td></tr><tr><td colspan="3">Deferred income tax assets</td><td colspan="2">6,081 </td><td></td><td colspan="3"></td><td colspan="2">3,396 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">4,500 </td><td></td><td colspan="3"></td><td colspan="2">3,820 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>2,699 </td><td></td><td colspan="3"></td><td>$</td><td>1,193 </td><td></td></tr><tr><td colspan="3">Accrued and other current liabilities</td><td colspan="2">6,682 </td><td></td><td colspan="3"></td><td colspan="2">4,120 </td><td></td></tr><tr><td colspan="3">Short-term debt</td><td colspan="2">1,250 </td><td></td><td colspan="3"></td><td colspan="2">1,250 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">10,631 </td><td></td><td colspan="3"></td><td colspan="2">6,563 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="2">8,459 </td><td></td><td colspan="3"></td><td colspan="2">9,703 </td><td></td></tr><tr><td colspan="3">Long-term operating lease liabilities </td><td colspan="2">1,119 </td><td></td><td colspan="3"></td><td colspan="2">902 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">2,541 </td><td></td><td colspan="3"></td><td colspan="2">1,913 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">22,750 </td><td></td><td colspan="3"></td><td colspan="2">19,081 </td><td></td></tr><tr><td colspan="3">Commitments and contingencies - see Note 13</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' equity:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Preferred stock, $0.001 par value; 2 shares authorized; none issued</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common stock, $0.001 par value; 8,000 shares authorized; 2,464 shares issued and outstanding as of January 28, 2024; 2,466 shares issued and outstanding as of January 29, 2023</td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">13,132 </td><td></td><td colspan="3"></td><td colspan="2">11,971 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> Accumulated other comprehensive income (loss)</td><td colspan="2">27 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">29,817 </td><td></td><td colspan="3"></td><td colspan="2">10,171 </td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="2">42,978 </td><td></td><td colspan="3"></td><td colspan="2">22,101 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td>$</td><td>65,728 </td><td></td><td colspan="3"></td><td>$</td><td>41,182 </td><td></td></tr></table>See accompanying notes to the consolidated financial statements.
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q_an056
|
How has Nike's working capital changed from 2017 to 2018, and what does this indicate about its operational efficiency?
|
To calculate Nike's working capital and its change over the past year:
Formula:
Working Capital = Current Assets - Current Liabilities
Data from the document:
Current Assets (2018) = $15,134 million
Current Liabilities (2018) = $6,040 million
Current Assets (2017) = $16,061 million
Current Liabilities (2017) = $5,474 million
Calculation:
2018 Working Capital = 15,134 - 6,040 = $9,094 million
2017 Working Capital = 16,061 - 5,474 = $10,587 million
Change in Working Capital = 9,094 - 10,587 = -$1,493 million
Implications:
Nike's working capital decreased by $1,493 million from 2017 to 2018. This reduction may reflect tighter management of current assets and liabilities, improved operational efficiency, or a strategic shift in liquidity.
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Analysis
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46
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0000320187-18-000142
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ITEM 8. Financial Statements and Supplementary Data
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NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 46:
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| 2 | NIKE, Inc. Consolidated Balance Sheets |
| | | | | | | | |
|---:|:-----------------------------------------------------|:--------|:-------|:-----|:-------|:---|:-------|
| 2 | | May 31, | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | | |
| 4 | ASSETS | | | | | | |
| 5 | Current assets: | | | | | | |
| 6 | Cash and equivalents | $ | 4,249 | | | $ | 3,808 |
| 7 | Short-term investments | 996 | | | 2,371 | | |
| 8 | Accounts receivable, net | 3,498 | | | 3,677 | | |
| 9 | Inventories | 5,261 | | | 5,055 | | |
| 10 | Prepaid expenses and other current assets | 1,130 | | | 1,150 | | |
| 11 | Total current assets | 15,134 | | | 16,061 | | |
| 12 | Property, plant and equipment, net | 4,454 | | | 3,989 | | |
| 13 | Identifiable intangible assets, net | 285 | | | 283 | | |
| 14 | Goodwill | 154 | | | 139 | | |
| 15 | Deferred income taxes and other assets | 2,509 | | | 2,787 | | |
| 16 | TOTAL ASSETS | $ | 22,536 | | | $ | 23,259 |
| 17 | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| 18 | Current liabilities: | | | | | | |
| 19 | Current portion of long-term debt | $ | 6 | | | $ | 6 |
| 20 | Notes payable | 336 | | | 325 | | |
| 21 | Accounts payable | 2,279 | | | 2,048 | | |
| 22 | Accrued liabilities | 3,269 | | | 3,011 | | |
| 23 | Income taxes payable | 150 | | | 84 | | |
| 24 | Total current liabilities | 6,040 | | | 5,474 | | |
| 25 | Long-term debt | 3,468 | | | 3,471 | | |
| 26 | Deferred income taxes and other liabilities | 3,216 | | | 1,907 | | |
| 27 | Commitments and contingencies (Note 15) | | | | | | |
| 28 | Redeemable preferred stock | - | | | - | | |
| 29 | Shareholders' equity: | | | | | | |
| 30 | Common stock at stated value: | | | | | | |
| 31 | Class A convertible - 329 and 329 shares outstanding | - | | | - | | |
| 32 | Class B - 1,272 and 1,314 shares outstanding | 3 | | | 3 | | |
| 33 | Capital in excess of stated value | 6,384 | | | 5,710 | | |
| 34 | Accumulated other comprehensive loss | (92 | ) | | (213 | ) | |
| 35 | Retained earnings | 3,517 | | | 6,907 | | |
| 36 | Total shareholders' equity | 9,812 | | | 12,407 | | |
| 37 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 22,536 | | | $ | 23,259 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
| | |
|---:|:---------------------------------------|
| 2 | NIKE, Inc. Consolidated Balance Sheets |
| | | | | | | | |
|---:|:-----------------------------------------------------|:--------|:-------|:-----|:-------|:---|:-------|
| 2 | | May 31, | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | | |
| 4 | ASSETS | | | | | | |
| 5 | Current assets: | | | | | | |
| 6 | Cash and equivalents | $ | 4,249 | | | $ | 3,808 |
| 7 | Short-term investments | 996 | | | 2,371 | | |
| 8 | Accounts receivable, net | 3,498 | | | 3,677 | | |
| 9 | Inventories | 5,261 | | | 5,055 | | |
| 10 | Prepaid expenses and other current assets | 1,130 | | | 1,150 | | |
| 11 | Total current assets | 15,134 | | | 16,061 | | |
| 12 | Property, plant and equipment, net | 4,454 | | | 3,989 | | |
| 13 | Identifiable intangible assets, net | 285 | | | 283 | | |
| 14 | Goodwill | 154 | | | 139 | | |
| 15 | Deferred income taxes and other assets | 2,509 | | | 2,787 | | |
| 16 | TOTAL ASSETS | $ | 22,536 | | | $ | 23,259 |
| 17 | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| 18 | Current liabilities: | | | | | | |
| 19 | Current portion of long-term debt | $ | 6 | | | $ | 6 |
| 20 | Notes payable | 336 | | | 325 | | |
| 21 | Accounts payable | 2,279 | | | 2,048 | | |
| 22 | Accrued liabilities | 3,269 | | | 3,011 | | |
| 23 | Income taxes payable | 150 | | | 84 | | |
| 24 | Total current liabilities | 6,040 | | | 5,474 | | |
| 25 | Long-term debt | 3,468 | | | 3,471 | | |
| 26 | Deferred income taxes and other liabilities | 3,216 | | | 1,907 | | |
| 27 | Commitments and contingencies (Note 15) | | | | | | |
| 28 | Redeemable preferred stock | - | | | - | | |
| 29 | Shareholders' equity: | | | | | | |
| 30 | Common stock at stated value: | | | | | | |
| 31 | Class A convertible - 329 and 329 shares outstanding | - | | | - | | |
| 32 | Class B - 1,272 and 1,314 shares outstanding | 3 | | | 3 | | |
| 33 | Capital in excess of stated value | 6,384 | | | 5,710 | | |
| 34 | Accumulated other comprehensive loss | (92 | ) | | (213 | ) | |
| 35 | Retained earnings | 3,517 | | | 6,907 | | |
| 36 | Total shareholders' equity | 9,812 | | | 12,407 | | |
| 37 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 22,536 | | | $ | 23,259 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 46:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Balance Sheets</td></tr></table>
<table><tr><td colspan="9"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="7">May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>ASSETS</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current assets:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash and equivalents</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td></tr><tr><td>Short-term investments</td><td> </td><td colspan="2">996</td><td></td><td> </td><td colspan="2">2,371</td><td></td></tr><tr><td>Accounts receivable, net</td><td> </td><td colspan="2">3,498</td><td></td><td> </td><td colspan="2">3,677</td><td></td></tr><tr><td>Inventories</td><td> </td><td colspan="2">5,261</td><td></td><td> </td><td colspan="2">5,055</td><td></td></tr><tr><td>Prepaid expenses and other current assets</td><td> </td><td colspan="2">1,130</td><td></td><td> </td><td colspan="2">1,150</td><td></td></tr><tr><td>Total current assets</td><td> </td><td colspan="2">15,134</td><td></td><td> </td><td colspan="2">16,061</td><td></td></tr><tr><td>Property, plant and equipment, net</td><td> </td><td colspan="2">4,454</td><td></td><td> </td><td colspan="2">3,989</td><td></td></tr><tr><td>Identifiable intangible assets, net</td><td> </td><td colspan="2">285</td><td></td><td> </td><td colspan="2">283</td><td></td></tr><tr><td>Goodwill</td><td> </td><td colspan="2">154</td><td></td><td> </td><td colspan="2">139</td><td></td></tr><tr><td>Deferred income taxes and other assets</td><td> </td><td colspan="2">2,509</td><td></td><td> </td><td colspan="2">2,787</td><td></td></tr><tr><td>TOTAL ASSETS</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr><tr><td>LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current portion of long-term debt</td><td> </td><td>$</td><td>6</td><td></td><td> </td><td>$</td><td>6</td><td></td></tr><tr><td>Notes payable</td><td> </td><td colspan="2">336</td><td></td><td> </td><td colspan="2">325</td><td></td></tr><tr><td>Accounts payable</td><td> </td><td colspan="2">2,279</td><td></td><td> </td><td colspan="2">2,048</td><td></td></tr><tr><td>Accrued liabilities</td><td> </td><td colspan="2">3,269</td><td></td><td> </td><td colspan="2">3,011</td><td></td></tr><tr><td>Income taxes payable</td><td> </td><td colspan="2">150</td><td></td><td> </td><td colspan="2">84</td><td></td></tr><tr><td>Total current liabilities</td><td> </td><td colspan="2">6,040</td><td></td><td> </td><td colspan="2">5,474</td><td></td></tr><tr><td>Long-term debt</td><td> </td><td colspan="2">3,468</td><td></td><td> </td><td colspan="2">3,471</td><td></td></tr><tr><td>Deferred income taxes and other liabilities</td><td> </td><td colspan="2">3,216</td><td></td><td> </td><td colspan="2">1,907</td><td></td></tr><tr><td>Commitments and contingencies (Note 15)</td><td> </td><td colspan="2"></td><td></td><td> </td><td colspan="2"></td><td></td></tr><tr><td>Redeemable preferred stock</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Shareholders' equity:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Common stock at stated value:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Class A convertible - 329 and 329 shares outstanding</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Class B - 1,272 and 1,314 shares outstanding</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">3</td><td></td></tr><tr><td>Capital in excess of stated value</td><td> </td><td colspan="2">6,384</td><td></td><td> </td><td colspan="2">5,710</td><td></td></tr><tr><td>Accumulated other comprehensive loss</td><td> </td><td colspan="2">(92</td><td>)</td><td> </td><td colspan="2">(213</td><td>)</td></tr><tr><td>Retained earnings</td><td> </td><td colspan="2">3,517</td><td></td><td> </td><td colspan="2">6,907</td><td></td></tr><tr><td>Total shareholders' equity</td><td> </td><td colspan="2">9,812</td><td></td><td> </td><td colspan="2">12,407</td><td></td></tr><tr><td>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Balance Sheets</td></tr></table>
<table><tr><td colspan="9"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="7">May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>ASSETS</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current assets:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash and equivalents</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td></tr><tr><td>Short-term investments</td><td> </td><td colspan="2">996</td><td></td><td> </td><td colspan="2">2,371</td><td></td></tr><tr><td>Accounts receivable, net</td><td> </td><td colspan="2">3,498</td><td></td><td> </td><td colspan="2">3,677</td><td></td></tr><tr><td>Inventories</td><td> </td><td colspan="2">5,261</td><td></td><td> </td><td colspan="2">5,055</td><td></td></tr><tr><td>Prepaid expenses and other current assets</td><td> </td><td colspan="2">1,130</td><td></td><td> </td><td colspan="2">1,150</td><td></td></tr><tr><td>Total current assets</td><td> </td><td colspan="2">15,134</td><td></td><td> </td><td colspan="2">16,061</td><td></td></tr><tr><td>Property, plant and equipment, net</td><td> </td><td colspan="2">4,454</td><td></td><td> </td><td colspan="2">3,989</td><td></td></tr><tr><td>Identifiable intangible assets, net</td><td> </td><td colspan="2">285</td><td></td><td> </td><td colspan="2">283</td><td></td></tr><tr><td>Goodwill</td><td> </td><td colspan="2">154</td><td></td><td> </td><td colspan="2">139</td><td></td></tr><tr><td>Deferred income taxes and other assets</td><td> </td><td colspan="2">2,509</td><td></td><td> </td><td colspan="2">2,787</td><td></td></tr><tr><td>TOTAL ASSETS</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr><tr><td>LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current portion of long-term debt</td><td> </td><td>$</td><td>6</td><td></td><td> </td><td>$</td><td>6</td><td></td></tr><tr><td>Notes payable</td><td> </td><td colspan="2">336</td><td></td><td> </td><td colspan="2">325</td><td></td></tr><tr><td>Accounts payable</td><td> </td><td colspan="2">2,279</td><td></td><td> </td><td colspan="2">2,048</td><td></td></tr><tr><td>Accrued liabilities</td><td> </td><td colspan="2">3,269</td><td></td><td> </td><td colspan="2">3,011</td><td></td></tr><tr><td>Income taxes payable</td><td> </td><td colspan="2">150</td><td></td><td> </td><td colspan="2">84</td><td></td></tr><tr><td>Total current liabilities</td><td> </td><td colspan="2">6,040</td><td></td><td> </td><td colspan="2">5,474</td><td></td></tr><tr><td>Long-term debt</td><td> </td><td colspan="2">3,468</td><td></td><td> </td><td colspan="2">3,471</td><td></td></tr><tr><td>Deferred income taxes and other liabilities</td><td> </td><td colspan="2">3,216</td><td></td><td> </td><td colspan="2">1,907</td><td></td></tr><tr><td>Commitments and contingencies (Note 15)</td><td> </td><td colspan="2"></td><td></td><td> </td><td colspan="2"></td><td></td></tr><tr><td>Redeemable preferred stock</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Shareholders' equity:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Common stock at stated value:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Class A convertible - 329 and 329 shares outstanding</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Class B - 1,272 and 1,314 shares outstanding</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">3</td><td></td></tr><tr><td>Capital in excess of stated value</td><td> </td><td colspan="2">6,384</td><td></td><td> </td><td colspan="2">5,710</td><td></td></tr><tr><td>Accumulated other comprehensive loss</td><td> </td><td colspan="2">(92</td><td>)</td><td> </td><td colspan="2">(213</td><td>)</td></tr><tr><td>Retained earnings</td><td> </td><td colspan="2">3,517</td><td></td><td> </td><td colspan="2">6,907</td><td></td></tr><tr><td>Total shareholders' equity</td><td> </td><td colspan="2">9,812</td><td></td><td> </td><td colspan="2">12,407</td><td></td></tr><tr><td>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
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q_an057
|
What has been the trend in Nike's Capital Expenditure (CapEx) from 2016 to 2018, and what do the financial statements suggest about the reasons behind this trend?
|
Nike's Capital Expenditure (CapEx) trend over the years is as follows:
2018: $1,028 million
2017: $1,105 million
2016: $1,143 million
Interpretation:
The data reflects a gradual decrease in CapEx from 2016 to 2018. According to the financial statements, this trend suggests that Nike is optimizing its investments in property, plant, and equipment. It also reflects a potential shift in strategic focus towards digital capabilities and NIKE Direct stores, as stated in their investment plans
|
Analysis
|
47
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0000320187-18-000142
|
ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 47:
| | |
|---:|:-------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Cash Flows |
| | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------|:-------------------|:------|:-----|:-------|:-----|:------|:-------|:---|:---|:------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Cash provided by operations: | | | | | | | | | | |
| 5 | Net income | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 6 | Adjustments to reconcile net income to net cash provided by operations: | | | | | | | | | | |
| 7 | Depreciation | 747 | | | 706 | | | 649 | | | |
| 8 | Deferred income taxes | 647 | | | (273 | ) | | (80 | ) | | |
| 9 | Stock-based compensation | 218 | | | 215 | | | 236 | | | |
| 10 | Amortization and other | 27 | | | 10 | | | 13 | | | |
| 11 | Net foreign currency adjustments | (99 | ) | | (117 | ) | | 98 | | | |
| 12 | Changes in certain working capital components and other assets and liabilities: | | | | | | | | | | |
| 13 | Decrease (increase) in accounts receivable | 187 | | | (426 | ) | | 60 | | | |
| 14 | (Increase) in inventories | (255 | ) | | (231 | ) | | (590 | ) | | |
| 15 | Decrease (increase) in prepaid expenses and other current and non-current assets | 35 | | | (120 | ) | | (161 | ) | | |
| 16 | Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities | 1,515 | | | (158 | ) | | (586 | ) | | |
| 17 | Cash provided by operations | 4,955 | | | 3,846 | | | 3,399 | | | |
| 18 | Cash provided (used) by investing activities: | | | | | | | | | | |
| 19 | Purchases of short-term investments | (4,783 | ) | | (5,928 | ) | | (5,367 | ) | | |
| 20 | Maturities of short-term investments | 3,613 | | | 3,623 | | | 2,924 | | | |
| 21 | Sales of short-term investments | 2,496 | | | 2,423 | | | 2,386 | | | |
| 22 | Investments in reverse repurchase agreements | - | | | - | | | 150 | | | |
| 23 | Additions to property, plant and equipment | (1,028 | ) | | (1,105 | ) | | (1,143 | ) | | |
| 24 | Disposals of property, plant and equipment | 3 | | | 13 | | | 10 | | | |
| 25 | Other investing activities | (25 | ) | | (34 | ) | | 6 | | | |
| 26 | Cash provided (used) by investing activities | 276 | | | (1,008 | ) | | (1,034 | ) | | |
| 27 | Cash used by financing activities: | | | | | | | | | | |
| 28 | Net proceeds from long-term debt issuance | - | | | 1,482 | | | 981 | | | |
| 29 | Long-term debt payments, including current portion | (6 | ) | | (44 | ) | | (106 | ) | | |
| 30 | Increase (decrease) in notes payable | 13 | | | 327 | | | (67 | ) | | |
| 31 | Payments on capital lease and other financing obligations | (23 | ) | | (17 | ) | | (7 | ) | | |
| 32 | Proceeds from exercise of stock options and other stock issuances | 733 | | | 489 | | | 507 | | | |
| 33 | Repurchase of common stock | (4,254 | ) | | (3,223 | ) | | (3,238 | ) | | |
| 34 | Dividends - common and preferred | (1,243 | ) | | (1,133 | ) | | (1,022 | ) | | |
| 35 | Tax payments for net share settlement of equity awards | (55 | ) | | (29 | ) | | (22 | ) | | |
| 36 | Cash used by financing activities | (4,835 | ) | | (2,148 | ) | | (2,974 | ) | | |
| 37 | Effect of exchange rate changes on cash and equivalents | 45 | | | (20 | ) | | (105 | ) | | |
| 38 | Net increase (decrease) in cash and equivalents | 441 | | | 670 | | | (714 | ) | | |
| 39 | Cash and equivalents, beginning of year | 3,808 | | | 3,138 | | | 3,852 | | | |
| 40 | CASH AND EQUIVALENTS, END OF YEAR | $ | 4,249 | | | $ | 3,808 | | | $ | 3,138 |
| 41 | Supplemental disclosure of cash flow information: | | | | | | | | | | |
| 42 | Cash paid during the year for: | | | | | | | | | | |
| 43 | Interest, net of capitalized interest | $ | 125 | | | $ | 98 | | | $ | 70 |
| 44 | Income taxes | 529 | | | 703 | | | 748 | | | |
| 45 | Non-cash additions to property, plant and equipment | 294 | | | 266 | | | 252 | | | |
| 46 | Dividends declared and not paid | 320 | | | 300 | | | 271 | | | |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
47
|
| | |
|---:|:-------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Cash Flows |
| | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------|:-------------------|:------|:-----|:-------|:-----|:------|:-------|:---|:---|:------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Cash provided by operations: | | | | | | | | | | |
| 5 | Net income | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 6 | Adjustments to reconcile net income to net cash provided by operations: | | | | | | | | | | |
| 7 | Depreciation | 747 | | | 706 | | | 649 | | | |
| 8 | Deferred income taxes | 647 | | | (273 | ) | | (80 | ) | | |
| 9 | Stock-based compensation | 218 | | | 215 | | | 236 | | | |
| 10 | Amortization and other | 27 | | | 10 | | | 13 | | | |
| 11 | Net foreign currency adjustments | (99 | ) | | (117 | ) | | 98 | | | |
| 12 | Changes in certain working capital components and other assets and liabilities: | | | | | | | | | | |
| 13 | Decrease (increase) in accounts receivable | 187 | | | (426 | ) | | 60 | | | |
| 14 | (Increase) in inventories | (255 | ) | | (231 | ) | | (590 | ) | | |
| 15 | Decrease (increase) in prepaid expenses and other current and non-current assets | 35 | | | (120 | ) | | (161 | ) | | |
| 16 | Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities | 1,515 | | | (158 | ) | | (586 | ) | | |
| 17 | Cash provided by operations | 4,955 | | | 3,846 | | | 3,399 | | | |
| 18 | Cash provided (used) by investing activities: | | | | | | | | | | |
| 19 | Purchases of short-term investments | (4,783 | ) | | (5,928 | ) | | (5,367 | ) | | |
| 20 | Maturities of short-term investments | 3,613 | | | 3,623 | | | 2,924 | | | |
| 21 | Sales of short-term investments | 2,496 | | | 2,423 | | | 2,386 | | | |
| 22 | Investments in reverse repurchase agreements | - | | | - | | | 150 | | | |
| 23 | Additions to property, plant and equipment | (1,028 | ) | | (1,105 | ) | | (1,143 | ) | | |
| 24 | Disposals of property, plant and equipment | 3 | | | 13 | | | 10 | | | |
| 25 | Other investing activities | (25 | ) | | (34 | ) | | 6 | | | |
| 26 | Cash provided (used) by investing activities | 276 | | | (1,008 | ) | | (1,034 | ) | | |
| 27 | Cash used by financing activities: | | | | | | | | | | |
| 28 | Net proceeds from long-term debt issuance | - | | | 1,482 | | | 981 | | | |
| 29 | Long-term debt payments, including current portion | (6 | ) | | (44 | ) | | (106 | ) | | |
| 30 | Increase (decrease) in notes payable | 13 | | | 327 | | | (67 | ) | | |
| 31 | Payments on capital lease and other financing obligations | (23 | ) | | (17 | ) | | (7 | ) | | |
| 32 | Proceeds from exercise of stock options and other stock issuances | 733 | | | 489 | | | 507 | | | |
| 33 | Repurchase of common stock | (4,254 | ) | | (3,223 | ) | | (3,238 | ) | | |
| 34 | Dividends - common and preferred | (1,243 | ) | | (1,133 | ) | | (1,022 | ) | | |
| 35 | Tax payments for net share settlement of equity awards | (55 | ) | | (29 | ) | | (22 | ) | | |
| 36 | Cash used by financing activities | (4,835 | ) | | (2,148 | ) | | (2,974 | ) | | |
| 37 | Effect of exchange rate changes on cash and equivalents | 45 | | | (20 | ) | | (105 | ) | | |
| 38 | Net increase (decrease) in cash and equivalents | 441 | | | 670 | | | (714 | ) | | |
| 39 | Cash and equivalents, beginning of year | 3,808 | | | 3,138 | | | 3,852 | | | |
| 40 | CASH AND EQUIVALENTS, END OF YEAR | $ | 4,249 | | | $ | 3,808 | | | $ | 3,138 |
| 41 | Supplemental disclosure of cash flow information: | | | | | | | | | | |
| 42 | Cash paid during the year for: | | | | | | | | | | |
| 43 | Interest, net of capitalized interest | $ | 125 | | | $ | 98 | | | $ | 70 |
| 44 | Income taxes | 529 | | | 703 | | | 748 | | | |
| 45 | Non-cash additions to property, plant and equipment | 294 | | | 266 | | | 252 | | | |
| 46 | Dividends declared and not paid | 320 | | | 300 | | | 271 | | | |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
47
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NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 47:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Cash Flows</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net income</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td>Adjustments to reconcile net income to net cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Depreciation</td><td> </td><td colspan="2">747</td><td></td><td> </td><td colspan="2">706</td><td></td><td> </td><td colspan="2">649</td><td></td></tr><tr><td>Deferred income taxes</td><td> </td><td colspan="2">647</td><td></td><td> </td><td colspan="2">(273</td><td>)</td><td> </td><td colspan="2">(80</td><td>)</td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Amortization and other</td><td> </td><td colspan="2">27</td><td></td><td> </td><td colspan="2">10</td><td></td><td> </td><td colspan="2">13</td><td></td></tr><tr><td>Net foreign currency adjustments</td><td> </td><td colspan="2">(99</td><td>)</td><td> </td><td colspan="2">(117</td><td>)</td><td> </td><td colspan="2">98</td><td></td></tr><tr><td>Changes in certain working capital components and other assets and liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Decrease (increase) in accounts receivable</td><td> </td><td colspan="2">187</td><td></td><td> </td><td colspan="2">(426</td><td>)</td><td> </td><td colspan="2">60</td><td></td></tr><tr><td>(Increase) in inventories</td><td> </td><td colspan="2">(255</td><td>)</td><td> </td><td colspan="2">(231</td><td>)</td><td> </td><td colspan="2">(590</td><td>)</td></tr><tr><td>Decrease (increase) in prepaid expenses and other current and non-current assets</td><td> </td><td colspan="2">35</td><td></td><td> </td><td colspan="2">(120</td><td>)</td><td> </td><td colspan="2">(161</td><td>)</td></tr><tr><td>Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities</td><td> </td><td colspan="2">1,515</td><td></td><td> </td><td colspan="2">(158</td><td>)</td><td> </td><td colspan="2">(586</td><td>)</td></tr><tr><td>Cash provided by operations</td><td> </td><td colspan="2">4,955</td><td></td><td> </td><td colspan="2">3,846</td><td></td><td> </td><td colspan="2">3,399</td><td></td></tr><tr><td>Cash provided (used) by investing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Purchases of short-term investments</td><td> </td><td colspan="2">(4,783</td><td>)</td><td> </td><td colspan="2">(5,928</td><td>)</td><td> </td><td colspan="2">(5,367</td><td>)</td></tr><tr><td>Maturities of short-term investments</td><td> </td><td colspan="2">3,613</td><td></td><td> </td><td colspan="2">3,623</td><td></td><td> </td><td colspan="2">2,924</td><td></td></tr><tr><td>Sales of short-term investments</td><td> </td><td colspan="2">2,496</td><td></td><td> </td><td colspan="2">2,423</td><td></td><td> </td><td colspan="2">2,386</td><td></td></tr><tr><td>Investments in reverse repurchase agreements</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">150</td><td></td></tr><tr><td>Additions to property, plant and equipment</td><td> </td><td colspan="2">(1,028</td><td>)</td><td> </td><td colspan="2">(1,105</td><td>)</td><td> </td><td colspan="2">(1,143</td><td>)</td></tr><tr><td>Disposals of property, plant and equipment</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">10</td><td></td></tr><tr><td>Other investing activities</td><td> </td><td colspan="2">(25</td><td>)</td><td> </td><td colspan="2">(34</td><td>)</td><td> </td><td colspan="2">6</td><td></td></tr><tr><td>Cash provided (used) by investing activities</td><td> </td><td colspan="2">276</td><td></td><td> </td><td colspan="2">(1,008</td><td>)</td><td> </td><td colspan="2">(1,034</td><td>)</td></tr><tr><td>Cash used by financing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net proceeds from long-term debt issuance</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">1,482</td><td></td><td> </td><td colspan="2">981</td><td></td></tr><tr><td>Long-term debt payments, including current portion</td><td> </td><td colspan="2">(6</td><td>)</td><td> </td><td colspan="2">(44</td><td>)</td><td> </td><td colspan="2">(106</td><td>)</td></tr><tr><td>Increase (decrease) in notes payable</td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">327</td><td></td><td> </td><td colspan="2">(67</td><td>)</td></tr><tr><td>Payments on capital lease and other financing obligations</td><td> </td><td colspan="2">(23</td><td>)</td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">(7</td><td>)</td></tr><tr><td>Proceeds from exercise of stock options and other stock issuances</td><td> </td><td colspan="2">733</td><td></td><td> </td><td colspan="2">489</td><td></td><td> </td><td colspan="2">507</td><td></td></tr><tr><td>Repurchase of common stock</td><td> </td><td colspan="2">(4,254</td><td>)</td><td> </td><td colspan="2">(3,223</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends - common and preferred</td><td> </td><td colspan="2">(1,243</td><td>)</td><td> </td><td colspan="2">(1,133</td><td>)</td><td> </td><td colspan="2">(1,022</td><td>)</td></tr><tr><td>Tax payments for net share settlement of equity awards</td><td> </td><td colspan="2">(55</td><td>)</td><td> </td><td colspan="2">(29</td><td>)</td><td> </td><td colspan="2">(22</td><td>)</td></tr><tr><td>Cash used by financing activities</td><td> </td><td colspan="2">(4,835</td><td>)</td><td> </td><td colspan="2">(2,148</td><td>)</td><td> </td><td colspan="2">(2,974</td><td>)</td></tr><tr><td>Effect of exchange rate changes on cash and equivalents</td><td> </td><td colspan="2">45</td><td></td><td> </td><td colspan="2">(20</td><td>)</td><td> </td><td colspan="2">(105</td><td>)</td></tr><tr><td>Net increase (decrease) in cash and equivalents</td><td> </td><td colspan="2">441</td><td></td><td> </td><td colspan="2">670</td><td></td><td> </td><td colspan="2">(714</td><td>)</td></tr><tr><td>Cash and equivalents, beginning of year</td><td> </td><td colspan="2">3,808</td><td></td><td> </td><td colspan="2">3,138</td><td></td><td> </td><td colspan="2">3,852</td><td></td></tr><tr><td>CASH AND EQUIVALENTS, END OF YEAR</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td><td> </td><td>$</td><td>3,138</td><td></td></tr><tr><td>Supplemental disclosure of cash flow information:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash paid during the year for:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Interest, net of capitalized interest</td><td> </td><td>$</td><td>125</td><td></td><td> </td><td>$</td><td>98</td><td></td><td> </td><td>$</td><td>70</td><td></td></tr><tr><td>Income taxes</td><td> </td><td colspan="2">529</td><td></td><td> </td><td colspan="2">703</td><td></td><td> </td><td colspan="2">748</td><td></td></tr><tr><td>Non-cash additions to property, plant and equipment</td><td> </td><td colspan="2">294</td><td></td><td> </td><td colspan="2">266</td><td></td><td> </td><td colspan="2">252</td><td></td></tr><tr><td>Dividends declared and not paid</td><td> </td><td colspan="2">320</td><td></td><td> </td><td colspan="2">300</td><td></td><td> </td><td colspan="2">271</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
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<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Cash Flows</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net income</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td>Adjustments to reconcile net income to net cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Depreciation</td><td> </td><td colspan="2">747</td><td></td><td> </td><td colspan="2">706</td><td></td><td> </td><td colspan="2">649</td><td></td></tr><tr><td>Deferred income taxes</td><td> </td><td colspan="2">647</td><td></td><td> </td><td colspan="2">(273</td><td>)</td><td> </td><td colspan="2">(80</td><td>)</td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Amortization and other</td><td> </td><td colspan="2">27</td><td></td><td> </td><td colspan="2">10</td><td></td><td> </td><td colspan="2">13</td><td></td></tr><tr><td>Net foreign currency adjustments</td><td> </td><td colspan="2">(99</td><td>)</td><td> </td><td colspan="2">(117</td><td>)</td><td> </td><td colspan="2">98</td><td></td></tr><tr><td>Changes in certain working capital components and other assets and liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Decrease (increase) in accounts receivable</td><td> </td><td colspan="2">187</td><td></td><td> </td><td colspan="2">(426</td><td>)</td><td> </td><td colspan="2">60</td><td></td></tr><tr><td>(Increase) in inventories</td><td> </td><td colspan="2">(255</td><td>)</td><td> </td><td colspan="2">(231</td><td>)</td><td> </td><td colspan="2">(590</td><td>)</td></tr><tr><td>Decrease (increase) in prepaid expenses and other current and non-current assets</td><td> </td><td colspan="2">35</td><td></td><td> </td><td colspan="2">(120</td><td>)</td><td> </td><td colspan="2">(161</td><td>)</td></tr><tr><td>Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities</td><td> </td><td colspan="2">1,515</td><td></td><td> </td><td colspan="2">(158</td><td>)</td><td> </td><td colspan="2">(586</td><td>)</td></tr><tr><td>Cash provided by operations</td><td> </td><td colspan="2">4,955</td><td></td><td> </td><td colspan="2">3,846</td><td></td><td> </td><td colspan="2">3,399</td><td></td></tr><tr><td>Cash provided (used) by investing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Purchases of short-term investments</td><td> </td><td colspan="2">(4,783</td><td>)</td><td> </td><td colspan="2">(5,928</td><td>)</td><td> </td><td colspan="2">(5,367</td><td>)</td></tr><tr><td>Maturities of short-term investments</td><td> </td><td colspan="2">3,613</td><td></td><td> </td><td colspan="2">3,623</td><td></td><td> </td><td colspan="2">2,924</td><td></td></tr><tr><td>Sales of short-term investments</td><td> </td><td colspan="2">2,496</td><td></td><td> </td><td colspan="2">2,423</td><td></td><td> </td><td colspan="2">2,386</td><td></td></tr><tr><td>Investments in reverse repurchase agreements</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">150</td><td></td></tr><tr><td>Additions to property, plant and equipment</td><td> </td><td colspan="2">(1,028</td><td>)</td><td> </td><td colspan="2">(1,105</td><td>)</td><td> </td><td colspan="2">(1,143</td><td>)</td></tr><tr><td>Disposals of property, plant and equipment</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">10</td><td></td></tr><tr><td>Other investing activities</td><td> </td><td colspan="2">(25</td><td>)</td><td> </td><td colspan="2">(34</td><td>)</td><td> </td><td colspan="2">6</td><td></td></tr><tr><td>Cash provided (used) by investing activities</td><td> </td><td colspan="2">276</td><td></td><td> </td><td colspan="2">(1,008</td><td>)</td><td> </td><td colspan="2">(1,034</td><td>)</td></tr><tr><td>Cash used by financing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net proceeds from long-term debt issuance</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">1,482</td><td></td><td> </td><td colspan="2">981</td><td></td></tr><tr><td>Long-term debt payments, including current portion</td><td> </td><td colspan="2">(6</td><td>)</td><td> </td><td colspan="2">(44</td><td>)</td><td> </td><td colspan="2">(106</td><td>)</td></tr><tr><td>Increase (decrease) in notes payable</td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">327</td><td></td><td> </td><td colspan="2">(67</td><td>)</td></tr><tr><td>Payments on capital lease and other financing obligations</td><td> </td><td colspan="2">(23</td><td>)</td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">(7</td><td>)</td></tr><tr><td>Proceeds from exercise of stock options and other stock issuances</td><td> </td><td colspan="2">733</td><td></td><td> </td><td colspan="2">489</td><td></td><td> </td><td colspan="2">507</td><td></td></tr><tr><td>Repurchase of common stock</td><td> </td><td colspan="2">(4,254</td><td>)</td><td> </td><td colspan="2">(3,223</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends - common and preferred</td><td> </td><td colspan="2">(1,243</td><td>)</td><td> </td><td colspan="2">(1,133</td><td>)</td><td> </td><td colspan="2">(1,022</td><td>)</td></tr><tr><td>Tax payments for net share settlement of equity awards</td><td> </td><td colspan="2">(55</td><td>)</td><td> </td><td colspan="2">(29</td><td>)</td><td> </td><td colspan="2">(22</td><td>)</td></tr><tr><td>Cash used by financing activities</td><td> </td><td colspan="2">(4,835</td><td>)</td><td> </td><td colspan="2">(2,148</td><td>)</td><td> </td><td colspan="2">(2,974</td><td>)</td></tr><tr><td>Effect of exchange rate changes on cash and equivalents</td><td> </td><td colspan="2">45</td><td></td><td> </td><td colspan="2">(20</td><td>)</td><td> </td><td colspan="2">(105</td><td>)</td></tr><tr><td>Net increase (decrease) in cash and equivalents</td><td> </td><td colspan="2">441</td><td></td><td> </td><td colspan="2">670</td><td></td><td> </td><td colspan="2">(714</td><td>)</td></tr><tr><td>Cash and equivalents, beginning of year</td><td> </td><td colspan="2">3,808</td><td></td><td> </td><td colspan="2">3,138</td><td></td><td> </td><td colspan="2">3,852</td><td></td></tr><tr><td>CASH AND EQUIVALENTS, END OF YEAR</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td><td> </td><td>$</td><td>3,138</td><td></td></tr><tr><td>Supplemental disclosure of cash flow information:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash paid during the year for:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Interest, net of capitalized interest</td><td> </td><td>$</td><td>125</td><td></td><td> </td><td>$</td><td>98</td><td></td><td> </td><td>$</td><td>70</td><td></td></tr><tr><td>Income taxes</td><td> </td><td colspan="2">529</td><td></td><td> </td><td colspan="2">703</td><td></td><td> </td><td colspan="2">748</td><td></td></tr><tr><td>Non-cash additions to property, plant and equipment</td><td> </td><td colspan="2">294</td><td></td><td> </td><td colspan="2">266</td><td></td><td> </td><td colspan="2">252</td><td></td></tr><tr><td>Dividends declared and not paid</td><td> </td><td colspan="2">320</td><td></td><td> </td><td colspan="2">300</td><td></td><td> </td><td colspan="2">271</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
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q_an058
|
How did Nike's long-term debt structure in 2018 compare to 2017, and what does this indicate about the company's liquidity and financial strategy?
|
2018 Long-Term Debt Structure
May 1, 2023: $500 million at 2.25%
November 1, 2026: $1,000 million at 2.38%
May 1, 2043: $500 million at 3.63%
November 1, 2045: $1,000 million at 3.88%
November 1, 2046: $500 million at 3.38%
The total long-term debt for 2018 was $3,468 million.
2017 Long-Term Debt Structure
Debt structure and amounts were consistent with 2018, with a total of $3,471 million in long-term debt outstanding, reflecting minor changes due to adjustments in debt issuance costs or other accounting treatments.
Comparison and Liquidity Impact
The debt structure for both years indicates that Nike maintained stable long-term debt levels, with the majority of repayments scheduled far in the future (2023 and beyond). This structure minimizes near-term repayment pressures, ensuring strong liquidity and flexibility to invest in strategic initiatives. Nike's ample cash reserves further support this stable liquidity position.
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Analysis
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59
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0000320187-18-000142
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ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 59: | | |
|---:|:------------------------|
| 2 | NOTE 8 - Long-Term Debt |
Long-term debt, net of unamortized premiums, discounts and debt issuance costs, comprises the following:
| | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------|:------------------|:------|:-------------|:-----------------|:---|:------------------------------------|:--------------|:-----|:------|:----|:------|:----|:---|:----|
| 2 | | | | | | | Book Value Outstandingas of May 31, | | | | | | | | |
| 3 | Scheduled Maturity (Dollars and Yen in millions) | OriginalPrincipal | | InterestRate | InterestPayments | | 2018 | | 2017 | | | | | | |
| 4 | Corporate Bond Payables:(1)(2) | | | | | | | | | | | | | | |
| 5 | May 1, 2023 | $ | 500 | | 2.25 | % | | Semi-Annually | | $ | 498 | | | $ | 497 |
| 6 | November 1, 2026 | $ | 1,000 | | 2.38 | % | | Semi-Annually | | 994 | | | 993 | | |
| 7 | May 1, 2043 | $ | 500 | | 3.63 | % | | Semi-Annually | | 495 | | | 495 | | |
| 8 | November 1, 2045 | $ | 1,000 | | 3.88 | % | | Semi-Annually | | 982 | | | 981 | | |
| 9 | November 1, 2046 | $ | 500 | | 3.38 | % | | Semi-Annually | | 490 | | | 490 | | |
| 10 | Japanese Yen Notes:(3) | | | | | | | | | | | | | | |
| 11 | August 20, 2001 through November 20, 2020 | ¥ | 9,000 | | 2.60 | % | | Quarterly | | 10 | | | 14 | | |
| 12 | August 20, 2001 through November 20, 2020 | ¥ | 4,000 | | 2.00 | % | | Quarterly | | 5 | | | 7 | | |
| 13 | Total | | | | | | 3,474 | | | 3,477 | | | | | |
| 14 | Less current maturities | | | | | | | | 6 | | | 6 | | | |
| 15 | TOTAL LONG-TERM DEBT | | | | | | $ | 3,468 | | | $ | 3,471 | | | |
| | | |
|---:|:----|:--------------------------------------------------------------------------------------------------------------------|
| 1 | (1) | These senior unsecured obligations rank equally with the Company's other unsecured and unsubordinated indebtedness. |
| | | |
|---:|:----|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1 | (2) | The bonds are redeemable at the Company's option up to three months prior to the scheduled maturity date for the bonds maturing in 2023 and 2026, and up to six months prior to the scheduled maturity date for the bonds maturing in 2043, 2045 and 2046, at a price equal to the greater of (i) 100% of the aggregate principal amount of the notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments, plus in each case, accrued and unpaid interest. Within three and six months to scheduled maturity, respectively, the bonds also feature a par call provision, which allows for the bonds to be redeemed at a price equal to 100% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest. |
| | | |
|---:|:----|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1 | (3) | NIKE Logistics YK assumed a total of ¥13.0 billion in loans as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. These loans mature in equal quarterly installments during the period August 20, 2001 through November 20, 2020. |
The scheduled maturity of Long-term debt in each of the years ending May 31, 2019 through 2023 are $6 million, $6 million, $3 million, $0 million and $500 million, respectively, at face value.
The Company's Long-term debt is recorded at adjusted cost, net of unamortized premiums, discounts and debt issuance costs. The fair value of Long-term debt is estimated based upon quoted prices for similar instruments or quoted prices for identical instruments in inactive markets (Level 2). The fair value of the Company's Long-term debt, including the current portion, was approximately $3,294 million at May 31, 2018 and $3,401 million at May 31, 2017.
| | |
|---:|:----------------------|
| 2 | NOTE 9 - Income Taxes |
Income before income taxes is as follows:
| | | | | | | | | | | |
|---:|:---------------------------------|:-------------------|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 2 | | Year Ended May 31, | | | | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | 2016 | | | | |
| 4 | Income before income taxes: | | | | | | | | | |
| 5 | United States | $ | 744 | | | $ | 1,240 | | $ | 956 |
| 6 | Foreign | 3,581 | | | 3,646 | | | 3,667 | | |
| 7 | TOTAL INCOME BEFORE INCOME TAXES | $ | 4,325 | | | $ | 4,886 | | $ | 4,623 |
59
|
| | |
|---:|:------------------------|
| 2 | NOTE 8 - Long-Term Debt |
Long-term debt, net of unamortized premiums, discounts and debt issuance costs, comprises the following:
| | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------|:------------------|:------|:-------------|:-----------------|:---|:------------------------------------|:--------------|:-----|:------|:----|:------|:----|:---|:----|
| 2 | | | | | | | Book Value Outstandingas of May 31, | | | | | | | | |
| 3 | Scheduled Maturity (Dollars and Yen in millions) | OriginalPrincipal | | InterestRate | InterestPayments | | 2018 | | 2017 | | | | | | |
| 4 | Corporate Bond Payables:(1)(2) | | | | | | | | | | | | | | |
| 5 | May 1, 2023 | $ | 500 | | 2.25 | % | | Semi-Annually | | $ | 498 | | | $ | 497 |
| 6 | November 1, 2026 | $ | 1,000 | | 2.38 | % | | Semi-Annually | | 994 | | | 993 | | |
| 7 | May 1, 2043 | $ | 500 | | 3.63 | % | | Semi-Annually | | 495 | | | 495 | | |
| 8 | November 1, 2045 | $ | 1,000 | | 3.88 | % | | Semi-Annually | | 982 | | | 981 | | |
| 9 | November 1, 2046 | $ | 500 | | 3.38 | % | | Semi-Annually | | 490 | | | 490 | | |
| 10 | Japanese Yen Notes:(3) | | | | | | | | | | | | | | |
| 11 | August 20, 2001 through November 20, 2020 | ¥ | 9,000 | | 2.60 | % | | Quarterly | | 10 | | | 14 | | |
| 12 | August 20, 2001 through November 20, 2020 | ¥ | 4,000 | | 2.00 | % | | Quarterly | | 5 | | | 7 | | |
| 13 | Total | | | | | | 3,474 | | | 3,477 | | | | | |
| 14 | Less current maturities | | | | | | | | 6 | | | 6 | | | |
| 15 | TOTAL LONG-TERM DEBT | | | | | | $ | 3,468 | | | $ | 3,471 | | | |
| | | |
|---:|:----|:--------------------------------------------------------------------------------------------------------------------|
| 1 | (1) | These senior unsecured obligations rank equally with the Company's other unsecured and unsubordinated indebtedness. |
| | | |
|---:|:----|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1 | (2) | The bonds are redeemable at the Company's option up to three months prior to the scheduled maturity date for the bonds maturing in 2023 and 2026, and up to six months prior to the scheduled maturity date for the bonds maturing in 2043, 2045 and 2046, at a price equal to the greater of (i) 100% of the aggregate principal amount of the notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments, plus in each case, accrued and unpaid interest. Within three and six months to scheduled maturity, respectively, the bonds also feature a par call provision, which allows for the bonds to be redeemed at a price equal to 100% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest. |
| | | |
|---:|:----|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1 | (3) | NIKE Logistics YK assumed a total of ¥13.0 billion in loans as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. These loans mature in equal quarterly installments during the period August 20, 2001 through November 20, 2020. |
The scheduled maturity of Long-term debt in each of the years ending May 31, 2019 through 2023 are $6 million, $6 million, $3 million, $0 million and $500 million, respectively, at face value.
The Company's Long-term debt is recorded at adjusted cost, net of unamortized premiums, discounts and debt issuance costs. The fair value of Long-term debt is estimated based upon quoted prices for similar instruments or quoted prices for identical instruments in inactive markets (Level 2). The fair value of the Company's Long-term debt, including the current portion, was approximately $3,294 million at May 31, 2018 and $3,401 million at May 31, 2017.
| | |
|---:|:----------------------|
| 2 | NOTE 9 - Income Taxes |
Income before income taxes is as follows:
| | | | | | | | | | | |
|---:|:---------------------------------|:-------------------|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 2 | | Year Ended May 31, | | | | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | 2016 | | | | |
| 4 | Income before income taxes: | | | | | | | | | |
| 5 | United States | $ | 744 | | | $ | 1,240 | | $ | 956 |
| 6 | Foreign | 3,581 | | | 3,646 | | | 3,667 | | |
| 7 | TOTAL INCOME BEFORE INCOME TAXES | $ | 4,325 | | | $ | 4,886 | | $ | 4,623 |
59
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 59: <table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NOTE 8 - Long-Term Debt</td></tr></table>Long-term debt, net of unamortized premiums, discounts and debt issuance costs, comprises the following:
<table><tr><td colspan="18"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td colspan="7">Book Value Outstandingas of May 31,</td></tr><tr><td>Scheduled Maturity (Dollars and Yen in millions)</td><td> </td><td colspan="3">OriginalPrincipal</td><td> </td><td colspan="2">InterestRate</td><td> </td><td>InterestPayments</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>Corporate Bond Payables:(1)(2)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>May 1, 2023</td><td> </td><td>$</td><td>500</td><td></td><td> </td><td>2.25</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td>$</td><td>498</td><td></td><td> </td><td>$</td><td>497</td><td></td></tr><tr><td>November 1, 2026</td><td> </td><td>$</td><td>1,000</td><td></td><td> </td><td>2.38</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td colspan="2">994</td><td></td><td> </td><td colspan="2">993</td><td></td></tr><tr><td>May 1, 2043</td><td> </td><td>$</td><td>500</td><td></td><td> </td><td>3.63</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td colspan="2">495</td><td></td><td> </td><td colspan="2">495</td><td></td></tr><tr><td>November 1, 2045</td><td> </td><td>$</td><td>1,000</td><td></td><td> </td><td>3.88</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td colspan="2">982</td><td></td><td> </td><td colspan="2">981</td><td></td></tr><tr><td>November 1, 2046</td><td> </td><td>$</td><td>500</td><td></td><td> </td><td>3.38</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td colspan="2">490</td><td></td><td> </td><td colspan="2">490</td><td></td></tr><tr><td>Japanese Yen Notes:(3)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>August 20, 2001 through November 20, 2020</td><td> </td><td>¥</td><td>9,000</td><td></td><td> </td><td>2.60</td><td>%</td><td> </td><td>Quarterly</td><td> </td><td colspan="2">10</td><td></td><td> </td><td colspan="2">14</td><td></td></tr><tr><td>August 20, 2001 through November 20, 2020</td><td> </td><td>¥</td><td>4,000</td><td></td><td> </td><td>2.00</td><td>%</td><td> </td><td>Quarterly</td><td> </td><td colspan="2">5</td><td></td><td> </td><td colspan="2">7</td><td></td></tr><tr><td>Total</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td colspan="2">3,474</td><td></td><td> </td><td colspan="2">3,477</td><td></td></tr><tr><td>Less current maturities</td><td> </td><td colspan="2"> </td><td></td><td> </td><td> </td><td></td><td> </td><td> </td><td> </td><td colspan="2">6</td><td></td><td> </td><td colspan="2">6</td><td></td></tr><tr><td>TOTAL LONG-TERM DEBT</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td>$</td><td>3,468</td><td></td><td> </td><td>$</td><td>3,471</td><td></td></tr></table>
<table><tr><td></td><td></td></tr><tr><td>(1)</td><td>These senior unsecured obligations rank equally with the Company's other unsecured and unsubordinated indebtedness.</td></tr></table><table><tr><td></td><td></td></tr><tr><td>(2)</td><td>The bonds are redeemable at the Company's option up to three months prior to the scheduled maturity date for the bonds maturing in 2023 and 2026, and up to six months prior to the scheduled maturity date for the bonds maturing in 2043, 2045 and 2046, at a price equal to the greater of (i) 100% of the aggregate principal amount of the notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments, plus in each case, accrued and unpaid interest. Within three and six months to scheduled maturity, respectively, the bonds also feature a par call provision, which allows for the bonds to be redeemed at a price equal to 100% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest.</td></tr></table><table><tr><td></td><td></td></tr><tr><td>(3)</td><td>NIKE Logistics YK assumed a total of ¥13.0 billion in loans as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. These loans mature in equal quarterly installments during the period August 20, 2001 through November 20, 2020.</td></tr></table>The scheduled maturity of Long-term debt in each of the years ending May 31, 2019 through 2023 are $6 million, $6 million, $3 million, $0 million and $500 million, respectively, at face value.
The Company's Long-term debt is recorded at adjusted cost, net of unamortized premiums, discounts and debt issuance costs. The fair value of Long-term debt is estimated based upon quoted prices for similar instruments or quoted prices for identical instruments in inactive markets (Level 2). The fair value of the Company's Long-term debt, including the current portion, was approximately $3,294 million at May 31, 2018 and $3,401 million at May 31, 2017.
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NOTE 9 - Income Taxes</td></tr></table>
Income before income taxes is as follows:
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Income before income taxes:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>United States</td><td> </td><td>$</td><td>744</td><td></td><td> </td><td>$</td><td>1,240</td><td></td><td> </td><td>$</td><td>956</td><td></td></tr><tr><td>Foreign</td><td> </td><td colspan="2">3,581</td><td></td><td> </td><td colspan="2">3,646</td><td></td><td> </td><td colspan="2">3,667</td><td></td></tr><tr><td>TOTAL INCOME BEFORE INCOME TAXES</td><td> </td><td>$</td><td>4,325</td><td></td><td> </td><td>$</td><td>4,886</td><td></td><td> </td><td>$</td><td>4,623</td><td></td></tr></table>59
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NOTE 8 - Long-Term Debt</td></tr></table>Long-term debt, net of unamortized premiums, discounts and debt issuance costs, comprises the following:
<table><tr><td colspan="18"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td colspan="7">Book Value Outstandingas of May 31,</td></tr><tr><td>Scheduled Maturity (Dollars and Yen in millions)</td><td> </td><td colspan="3">OriginalPrincipal</td><td> </td><td colspan="2">InterestRate</td><td> </td><td>InterestPayments</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>Corporate Bond Payables:(1)(2)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>May 1, 2023</td><td> </td><td>$</td><td>500</td><td></td><td> </td><td>2.25</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td>$</td><td>498</td><td></td><td> </td><td>$</td><td>497</td><td></td></tr><tr><td>November 1, 2026</td><td> </td><td>$</td><td>1,000</td><td></td><td> </td><td>2.38</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td colspan="2">994</td><td></td><td> </td><td colspan="2">993</td><td></td></tr><tr><td>May 1, 2043</td><td> </td><td>$</td><td>500</td><td></td><td> </td><td>3.63</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td colspan="2">495</td><td></td><td> </td><td colspan="2">495</td><td></td></tr><tr><td>November 1, 2045</td><td> </td><td>$</td><td>1,000</td><td></td><td> </td><td>3.88</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td colspan="2">982</td><td></td><td> </td><td colspan="2">981</td><td></td></tr><tr><td>November 1, 2046</td><td> </td><td>$</td><td>500</td><td></td><td> </td><td>3.38</td><td>%</td><td> </td><td>Semi-Annually</td><td> </td><td colspan="2">490</td><td></td><td> </td><td colspan="2">490</td><td></td></tr><tr><td>Japanese Yen Notes:(3)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>August 20, 2001 through November 20, 2020</td><td> </td><td>¥</td><td>9,000</td><td></td><td> </td><td>2.60</td><td>%</td><td> </td><td>Quarterly</td><td> </td><td colspan="2">10</td><td></td><td> </td><td colspan="2">14</td><td></td></tr><tr><td>August 20, 2001 through November 20, 2020</td><td> </td><td>¥</td><td>4,000</td><td></td><td> </td><td>2.00</td><td>%</td><td> </td><td>Quarterly</td><td> </td><td colspan="2">5</td><td></td><td> </td><td colspan="2">7</td><td></td></tr><tr><td>Total</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td colspan="2">3,474</td><td></td><td> </td><td colspan="2">3,477</td><td></td></tr><tr><td>Less current maturities</td><td> </td><td colspan="2"> </td><td></td><td> </td><td> </td><td></td><td> </td><td> </td><td> </td><td colspan="2">6</td><td></td><td> </td><td colspan="2">6</td><td></td></tr><tr><td>TOTAL LONG-TERM DEBT</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td> </td><td>$</td><td>3,468</td><td></td><td> </td><td>$</td><td>3,471</td><td></td></tr></table>
<table><tr><td></td><td></td></tr><tr><td>(1)</td><td>These senior unsecured obligations rank equally with the Company's other unsecured and unsubordinated indebtedness.</td></tr></table><table><tr><td></td><td></td></tr><tr><td>(2)</td><td>The bonds are redeemable at the Company's option up to three months prior to the scheduled maturity date for the bonds maturing in 2023 and 2026, and up to six months prior to the scheduled maturity date for the bonds maturing in 2043, 2045 and 2046, at a price equal to the greater of (i) 100% of the aggregate principal amount of the notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments, plus in each case, accrued and unpaid interest. Within three and six months to scheduled maturity, respectively, the bonds also feature a par call provision, which allows for the bonds to be redeemed at a price equal to 100% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest.</td></tr></table><table><tr><td></td><td></td></tr><tr><td>(3)</td><td>NIKE Logistics YK assumed a total of ¥13.0 billion in loans as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. These loans mature in equal quarterly installments during the period August 20, 2001 through November 20, 2020.</td></tr></table>The scheduled maturity of Long-term debt in each of the years ending May 31, 2019 through 2023 are $6 million, $6 million, $3 million, $0 million and $500 million, respectively, at face value.
The Company's Long-term debt is recorded at adjusted cost, net of unamortized premiums, discounts and debt issuance costs. The fair value of Long-term debt is estimated based upon quoted prices for similar instruments or quoted prices for identical instruments in inactive markets (Level 2). The fair value of the Company's Long-term debt, including the current portion, was approximately $3,294 million at May 31, 2018 and $3,401 million at May 31, 2017.
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NOTE 9 - Income Taxes</td></tr></table>
Income before income taxes is as follows:
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Income before income taxes:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>United States</td><td> </td><td>$</td><td>744</td><td></td><td> </td><td>$</td><td>1,240</td><td></td><td> </td><td>$</td><td>956</td><td></td></tr><tr><td>Foreign</td><td> </td><td colspan="2">3,581</td><td></td><td> </td><td colspan="2">3,646</td><td></td><td> </td><td colspan="2">3,667</td><td></td></tr><tr><td>TOTAL INCOME BEFORE INCOME TAXES</td><td> </td><td>$</td><td>4,325</td><td></td><td> </td><td>$</td><td>4,886</td><td></td><td> </td><td>$</td><td>4,623</td><td></td></tr></table>59
|
q_an059
|
How has Nike's dividend payout ratio changed from 2017 to 2018, and what does it reflect about its dividend policy?
|
Based on Nike's 2018 financial statements:
2018 Dividend Payout Ratio:
Dividend per Share (2018): $0.78
Earnings per Share (EPS, 2018): $1.17
Payout Ratio (2018): ($0.78 / $1.17) × 100 ≈ 66.67%
2017 Dividend Payout Ratio:
Dividend per Share (2017): $0.70
Earnings per Share (EPS, 2017): $2.51
Payout Ratio (2017): ($0.70 / $2.51) × 100 ≈ 27.89%
Comparison and Interpretation:
Nike’s dividend payout ratio increased significantly from 27.89% in 2017 to 66.67% in 2018. This substantial rise reflects a strategic shift to distribute a larger portion of earnings to shareholders, despite the decline in net income in 2018. This increase highlights Nike's commitment to returning value to shareholders while maintaining financial flexibility
|
Analysis
|
44
|
0000320187-18-000142
|
ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
|
| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
|
q_an060
|
How did cash paid for interest in 2018 compare to 2017, and what does this suggest about borrowing costs?
|
Interest Paid 2018: $125 million
Interest Paid 2017: $98 million
Formula:
Percentage Change in Interest Paid = ((Interest Paid 2018 - Interest Paid 2017) / Interest Paid 2017) × 100
Calculation:
Percentage Change = ((125 - 98) / 98) × 100
Percentage Change = (27 / 98) × 100 ≈ 27.55%
Answer:
Cash paid for interest increased by approximately 27.55% from 2017 to 2018. This suggests that borrowing costs may have risen due to higher outstanding debt or increased interest rates during the period. Additionally, this could reflect the full-year impact of long-term debt issued in 2017, which increased total interest obligations.
|
Analysis
|
47
|
0000320187-18-000142
|
ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 47:
| | |
|---:|:-------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Cash Flows |
| | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------|:-------------------|:------|:-----|:-------|:-----|:------|:-------|:---|:---|:------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Cash provided by operations: | | | | | | | | | | |
| 5 | Net income | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 6 | Adjustments to reconcile net income to net cash provided by operations: | | | | | | | | | | |
| 7 | Depreciation | 747 | | | 706 | | | 649 | | | |
| 8 | Deferred income taxes | 647 | | | (273 | ) | | (80 | ) | | |
| 9 | Stock-based compensation | 218 | | | 215 | | | 236 | | | |
| 10 | Amortization and other | 27 | | | 10 | | | 13 | | | |
| 11 | Net foreign currency adjustments | (99 | ) | | (117 | ) | | 98 | | | |
| 12 | Changes in certain working capital components and other assets and liabilities: | | | | | | | | | | |
| 13 | Decrease (increase) in accounts receivable | 187 | | | (426 | ) | | 60 | | | |
| 14 | (Increase) in inventories | (255 | ) | | (231 | ) | | (590 | ) | | |
| 15 | Decrease (increase) in prepaid expenses and other current and non-current assets | 35 | | | (120 | ) | | (161 | ) | | |
| 16 | Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities | 1,515 | | | (158 | ) | | (586 | ) | | |
| 17 | Cash provided by operations | 4,955 | | | 3,846 | | | 3,399 | | | |
| 18 | Cash provided (used) by investing activities: | | | | | | | | | | |
| 19 | Purchases of short-term investments | (4,783 | ) | | (5,928 | ) | | (5,367 | ) | | |
| 20 | Maturities of short-term investments | 3,613 | | | 3,623 | | | 2,924 | | | |
| 21 | Sales of short-term investments | 2,496 | | | 2,423 | | | 2,386 | | | |
| 22 | Investments in reverse repurchase agreements | - | | | - | | | 150 | | | |
| 23 | Additions to property, plant and equipment | (1,028 | ) | | (1,105 | ) | | (1,143 | ) | | |
| 24 | Disposals of property, plant and equipment | 3 | | | 13 | | | 10 | | | |
| 25 | Other investing activities | (25 | ) | | (34 | ) | | 6 | | | |
| 26 | Cash provided (used) by investing activities | 276 | | | (1,008 | ) | | (1,034 | ) | | |
| 27 | Cash used by financing activities: | | | | | | | | | | |
| 28 | Net proceeds from long-term debt issuance | - | | | 1,482 | | | 981 | | | |
| 29 | Long-term debt payments, including current portion | (6 | ) | | (44 | ) | | (106 | ) | | |
| 30 | Increase (decrease) in notes payable | 13 | | | 327 | | | (67 | ) | | |
| 31 | Payments on capital lease and other financing obligations | (23 | ) | | (17 | ) | | (7 | ) | | |
| 32 | Proceeds from exercise of stock options and other stock issuances | 733 | | | 489 | | | 507 | | | |
| 33 | Repurchase of common stock | (4,254 | ) | | (3,223 | ) | | (3,238 | ) | | |
| 34 | Dividends - common and preferred | (1,243 | ) | | (1,133 | ) | | (1,022 | ) | | |
| 35 | Tax payments for net share settlement of equity awards | (55 | ) | | (29 | ) | | (22 | ) | | |
| 36 | Cash used by financing activities | (4,835 | ) | | (2,148 | ) | | (2,974 | ) | | |
| 37 | Effect of exchange rate changes on cash and equivalents | 45 | | | (20 | ) | | (105 | ) | | |
| 38 | Net increase (decrease) in cash and equivalents | 441 | | | 670 | | | (714 | ) | | |
| 39 | Cash and equivalents, beginning of year | 3,808 | | | 3,138 | | | 3,852 | | | |
| 40 | CASH AND EQUIVALENTS, END OF YEAR | $ | 4,249 | | | $ | 3,808 | | | $ | 3,138 |
| 41 | Supplemental disclosure of cash flow information: | | | | | | | | | | |
| 42 | Cash paid during the year for: | | | | | | | | | | |
| 43 | Interest, net of capitalized interest | $ | 125 | | | $ | 98 | | | $ | 70 |
| 44 | Income taxes | 529 | | | 703 | | | 748 | | | |
| 45 | Non-cash additions to property, plant and equipment | 294 | | | 266 | | | 252 | | | |
| 46 | Dividends declared and not paid | 320 | | | 300 | | | 271 | | | |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
47
|
| | |
|---:|:-------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Cash Flows |
| | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------|:-------------------|:------|:-----|:-------|:-----|:------|:-------|:---|:---|:------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Cash provided by operations: | | | | | | | | | | |
| 5 | Net income | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 6 | Adjustments to reconcile net income to net cash provided by operations: | | | | | | | | | | |
| 7 | Depreciation | 747 | | | 706 | | | 649 | | | |
| 8 | Deferred income taxes | 647 | | | (273 | ) | | (80 | ) | | |
| 9 | Stock-based compensation | 218 | | | 215 | | | 236 | | | |
| 10 | Amortization and other | 27 | | | 10 | | | 13 | | | |
| 11 | Net foreign currency adjustments | (99 | ) | | (117 | ) | | 98 | | | |
| 12 | Changes in certain working capital components and other assets and liabilities: | | | | | | | | | | |
| 13 | Decrease (increase) in accounts receivable | 187 | | | (426 | ) | | 60 | | | |
| 14 | (Increase) in inventories | (255 | ) | | (231 | ) | | (590 | ) | | |
| 15 | Decrease (increase) in prepaid expenses and other current and non-current assets | 35 | | | (120 | ) | | (161 | ) | | |
| 16 | Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities | 1,515 | | | (158 | ) | | (586 | ) | | |
| 17 | Cash provided by operations | 4,955 | | | 3,846 | | | 3,399 | | | |
| 18 | Cash provided (used) by investing activities: | | | | | | | | | | |
| 19 | Purchases of short-term investments | (4,783 | ) | | (5,928 | ) | | (5,367 | ) | | |
| 20 | Maturities of short-term investments | 3,613 | | | 3,623 | | | 2,924 | | | |
| 21 | Sales of short-term investments | 2,496 | | | 2,423 | | | 2,386 | | | |
| 22 | Investments in reverse repurchase agreements | - | | | - | | | 150 | | | |
| 23 | Additions to property, plant and equipment | (1,028 | ) | | (1,105 | ) | | (1,143 | ) | | |
| 24 | Disposals of property, plant and equipment | 3 | | | 13 | | | 10 | | | |
| 25 | Other investing activities | (25 | ) | | (34 | ) | | 6 | | | |
| 26 | Cash provided (used) by investing activities | 276 | | | (1,008 | ) | | (1,034 | ) | | |
| 27 | Cash used by financing activities: | | | | | | | | | | |
| 28 | Net proceeds from long-term debt issuance | - | | | 1,482 | | | 981 | | | |
| 29 | Long-term debt payments, including current portion | (6 | ) | | (44 | ) | | (106 | ) | | |
| 30 | Increase (decrease) in notes payable | 13 | | | 327 | | | (67 | ) | | |
| 31 | Payments on capital lease and other financing obligations | (23 | ) | | (17 | ) | | (7 | ) | | |
| 32 | Proceeds from exercise of stock options and other stock issuances | 733 | | | 489 | | | 507 | | | |
| 33 | Repurchase of common stock | (4,254 | ) | | (3,223 | ) | | (3,238 | ) | | |
| 34 | Dividends - common and preferred | (1,243 | ) | | (1,133 | ) | | (1,022 | ) | | |
| 35 | Tax payments for net share settlement of equity awards | (55 | ) | | (29 | ) | | (22 | ) | | |
| 36 | Cash used by financing activities | (4,835 | ) | | (2,148 | ) | | (2,974 | ) | | |
| 37 | Effect of exchange rate changes on cash and equivalents | 45 | | | (20 | ) | | (105 | ) | | |
| 38 | Net increase (decrease) in cash and equivalents | 441 | | | 670 | | | (714 | ) | | |
| 39 | Cash and equivalents, beginning of year | 3,808 | | | 3,138 | | | 3,852 | | | |
| 40 | CASH AND EQUIVALENTS, END OF YEAR | $ | 4,249 | | | $ | 3,808 | | | $ | 3,138 |
| 41 | Supplemental disclosure of cash flow information: | | | | | | | | | | |
| 42 | Cash paid during the year for: | | | | | | | | | | |
| 43 | Interest, net of capitalized interest | $ | 125 | | | $ | 98 | | | $ | 70 |
| 44 | Income taxes | 529 | | | 703 | | | 748 | | | |
| 45 | Non-cash additions to property, plant and equipment | 294 | | | 266 | | | 252 | | | |
| 46 | Dividends declared and not paid | 320 | | | 300 | | | 271 | | | |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
47
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 47:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Cash Flows</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net income</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td>Adjustments to reconcile net income to net cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Depreciation</td><td> </td><td colspan="2">747</td><td></td><td> </td><td colspan="2">706</td><td></td><td> </td><td colspan="2">649</td><td></td></tr><tr><td>Deferred income taxes</td><td> </td><td colspan="2">647</td><td></td><td> </td><td colspan="2">(273</td><td>)</td><td> </td><td colspan="2">(80</td><td>)</td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Amortization and other</td><td> </td><td colspan="2">27</td><td></td><td> </td><td colspan="2">10</td><td></td><td> </td><td colspan="2">13</td><td></td></tr><tr><td>Net foreign currency adjustments</td><td> </td><td colspan="2">(99</td><td>)</td><td> </td><td colspan="2">(117</td><td>)</td><td> </td><td colspan="2">98</td><td></td></tr><tr><td>Changes in certain working capital components and other assets and liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Decrease (increase) in accounts receivable</td><td> </td><td colspan="2">187</td><td></td><td> </td><td colspan="2">(426</td><td>)</td><td> </td><td colspan="2">60</td><td></td></tr><tr><td>(Increase) in inventories</td><td> </td><td colspan="2">(255</td><td>)</td><td> </td><td colspan="2">(231</td><td>)</td><td> </td><td colspan="2">(590</td><td>)</td></tr><tr><td>Decrease (increase) in prepaid expenses and other current and non-current assets</td><td> </td><td colspan="2">35</td><td></td><td> </td><td colspan="2">(120</td><td>)</td><td> </td><td colspan="2">(161</td><td>)</td></tr><tr><td>Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities</td><td> </td><td colspan="2">1,515</td><td></td><td> </td><td colspan="2">(158</td><td>)</td><td> </td><td colspan="2">(586</td><td>)</td></tr><tr><td>Cash provided by operations</td><td> </td><td colspan="2">4,955</td><td></td><td> </td><td colspan="2">3,846</td><td></td><td> </td><td colspan="2">3,399</td><td></td></tr><tr><td>Cash provided (used) by investing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Purchases of short-term investments</td><td> </td><td colspan="2">(4,783</td><td>)</td><td> </td><td colspan="2">(5,928</td><td>)</td><td> </td><td colspan="2">(5,367</td><td>)</td></tr><tr><td>Maturities of short-term investments</td><td> </td><td colspan="2">3,613</td><td></td><td> </td><td colspan="2">3,623</td><td></td><td> </td><td colspan="2">2,924</td><td></td></tr><tr><td>Sales of short-term investments</td><td> </td><td colspan="2">2,496</td><td></td><td> </td><td colspan="2">2,423</td><td></td><td> </td><td colspan="2">2,386</td><td></td></tr><tr><td>Investments in reverse repurchase agreements</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">150</td><td></td></tr><tr><td>Additions to property, plant and equipment</td><td> </td><td colspan="2">(1,028</td><td>)</td><td> </td><td colspan="2">(1,105</td><td>)</td><td> </td><td colspan="2">(1,143</td><td>)</td></tr><tr><td>Disposals of property, plant and equipment</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">10</td><td></td></tr><tr><td>Other investing activities</td><td> </td><td colspan="2">(25</td><td>)</td><td> </td><td colspan="2">(34</td><td>)</td><td> </td><td colspan="2">6</td><td></td></tr><tr><td>Cash provided (used) by investing activities</td><td> </td><td colspan="2">276</td><td></td><td> </td><td colspan="2">(1,008</td><td>)</td><td> </td><td colspan="2">(1,034</td><td>)</td></tr><tr><td>Cash used by financing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net proceeds from long-term debt issuance</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">1,482</td><td></td><td> </td><td colspan="2">981</td><td></td></tr><tr><td>Long-term debt payments, including current portion</td><td> </td><td colspan="2">(6</td><td>)</td><td> </td><td colspan="2">(44</td><td>)</td><td> </td><td colspan="2">(106</td><td>)</td></tr><tr><td>Increase (decrease) in notes payable</td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">327</td><td></td><td> </td><td colspan="2">(67</td><td>)</td></tr><tr><td>Payments on capital lease and other financing obligations</td><td> </td><td colspan="2">(23</td><td>)</td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">(7</td><td>)</td></tr><tr><td>Proceeds from exercise of stock options and other stock issuances</td><td> </td><td colspan="2">733</td><td></td><td> </td><td colspan="2">489</td><td></td><td> </td><td colspan="2">507</td><td></td></tr><tr><td>Repurchase of common stock</td><td> </td><td colspan="2">(4,254</td><td>)</td><td> </td><td colspan="2">(3,223</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends - common and preferred</td><td> </td><td colspan="2">(1,243</td><td>)</td><td> </td><td colspan="2">(1,133</td><td>)</td><td> </td><td colspan="2">(1,022</td><td>)</td></tr><tr><td>Tax payments for net share settlement of equity awards</td><td> </td><td colspan="2">(55</td><td>)</td><td> </td><td colspan="2">(29</td><td>)</td><td> </td><td colspan="2">(22</td><td>)</td></tr><tr><td>Cash used by financing activities</td><td> </td><td colspan="2">(4,835</td><td>)</td><td> </td><td colspan="2">(2,148</td><td>)</td><td> </td><td colspan="2">(2,974</td><td>)</td></tr><tr><td>Effect of exchange rate changes on cash and equivalents</td><td> </td><td colspan="2">45</td><td></td><td> </td><td colspan="2">(20</td><td>)</td><td> </td><td colspan="2">(105</td><td>)</td></tr><tr><td>Net increase (decrease) in cash and equivalents</td><td> </td><td colspan="2">441</td><td></td><td> </td><td colspan="2">670</td><td></td><td> </td><td colspan="2">(714</td><td>)</td></tr><tr><td>Cash and equivalents, beginning of year</td><td> </td><td colspan="2">3,808</td><td></td><td> </td><td colspan="2">3,138</td><td></td><td> </td><td colspan="2">3,852</td><td></td></tr><tr><td>CASH AND EQUIVALENTS, END OF YEAR</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td><td> </td><td>$</td><td>3,138</td><td></td></tr><tr><td>Supplemental disclosure of cash flow information:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash paid during the year for:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Interest, net of capitalized interest</td><td> </td><td>$</td><td>125</td><td></td><td> </td><td>$</td><td>98</td><td></td><td> </td><td>$</td><td>70</td><td></td></tr><tr><td>Income taxes</td><td> </td><td colspan="2">529</td><td></td><td> </td><td colspan="2">703</td><td></td><td> </td><td colspan="2">748</td><td></td></tr><tr><td>Non-cash additions to property, plant and equipment</td><td> </td><td colspan="2">294</td><td></td><td> </td><td colspan="2">266</td><td></td><td> </td><td colspan="2">252</td><td></td></tr><tr><td>Dividends declared and not paid</td><td> </td><td colspan="2">320</td><td></td><td> </td><td colspan="2">300</td><td></td><td> </td><td colspan="2">271</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
47
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Cash Flows</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net income</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td>Adjustments to reconcile net income to net cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Depreciation</td><td> </td><td colspan="2">747</td><td></td><td> </td><td colspan="2">706</td><td></td><td> </td><td colspan="2">649</td><td></td></tr><tr><td>Deferred income taxes</td><td> </td><td colspan="2">647</td><td></td><td> </td><td colspan="2">(273</td><td>)</td><td> </td><td colspan="2">(80</td><td>)</td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Amortization and other</td><td> </td><td colspan="2">27</td><td></td><td> </td><td colspan="2">10</td><td></td><td> </td><td colspan="2">13</td><td></td></tr><tr><td>Net foreign currency adjustments</td><td> </td><td colspan="2">(99</td><td>)</td><td> </td><td colspan="2">(117</td><td>)</td><td> </td><td colspan="2">98</td><td></td></tr><tr><td>Changes in certain working capital components and other assets and liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Decrease (increase) in accounts receivable</td><td> </td><td colspan="2">187</td><td></td><td> </td><td colspan="2">(426</td><td>)</td><td> </td><td colspan="2">60</td><td></td></tr><tr><td>(Increase) in inventories</td><td> </td><td colspan="2">(255</td><td>)</td><td> </td><td colspan="2">(231</td><td>)</td><td> </td><td colspan="2">(590</td><td>)</td></tr><tr><td>Decrease (increase) in prepaid expenses and other current and non-current assets</td><td> </td><td colspan="2">35</td><td></td><td> </td><td colspan="2">(120</td><td>)</td><td> </td><td colspan="2">(161</td><td>)</td></tr><tr><td>Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities</td><td> </td><td colspan="2">1,515</td><td></td><td> </td><td colspan="2">(158</td><td>)</td><td> </td><td colspan="2">(586</td><td>)</td></tr><tr><td>Cash provided by operations</td><td> </td><td colspan="2">4,955</td><td></td><td> </td><td colspan="2">3,846</td><td></td><td> </td><td colspan="2">3,399</td><td></td></tr><tr><td>Cash provided (used) by investing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Purchases of short-term investments</td><td> </td><td colspan="2">(4,783</td><td>)</td><td> </td><td colspan="2">(5,928</td><td>)</td><td> </td><td colspan="2">(5,367</td><td>)</td></tr><tr><td>Maturities of short-term investments</td><td> </td><td colspan="2">3,613</td><td></td><td> </td><td colspan="2">3,623</td><td></td><td> </td><td colspan="2">2,924</td><td></td></tr><tr><td>Sales of short-term investments</td><td> </td><td colspan="2">2,496</td><td></td><td> </td><td colspan="2">2,423</td><td></td><td> </td><td colspan="2">2,386</td><td></td></tr><tr><td>Investments in reverse repurchase agreements</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">150</td><td></td></tr><tr><td>Additions to property, plant and equipment</td><td> </td><td colspan="2">(1,028</td><td>)</td><td> </td><td colspan="2">(1,105</td><td>)</td><td> </td><td colspan="2">(1,143</td><td>)</td></tr><tr><td>Disposals of property, plant and equipment</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">10</td><td></td></tr><tr><td>Other investing activities</td><td> </td><td colspan="2">(25</td><td>)</td><td> </td><td colspan="2">(34</td><td>)</td><td> </td><td colspan="2">6</td><td></td></tr><tr><td>Cash provided (used) by investing activities</td><td> </td><td colspan="2">276</td><td></td><td> </td><td colspan="2">(1,008</td><td>)</td><td> </td><td colspan="2">(1,034</td><td>)</td></tr><tr><td>Cash used by financing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net proceeds from long-term debt issuance</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">1,482</td><td></td><td> </td><td colspan="2">981</td><td></td></tr><tr><td>Long-term debt payments, including current portion</td><td> </td><td colspan="2">(6</td><td>)</td><td> </td><td colspan="2">(44</td><td>)</td><td> </td><td colspan="2">(106</td><td>)</td></tr><tr><td>Increase (decrease) in notes payable</td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">327</td><td></td><td> </td><td colspan="2">(67</td><td>)</td></tr><tr><td>Payments on capital lease and other financing obligations</td><td> </td><td colspan="2">(23</td><td>)</td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">(7</td><td>)</td></tr><tr><td>Proceeds from exercise of stock options and other stock issuances</td><td> </td><td colspan="2">733</td><td></td><td> </td><td colspan="2">489</td><td></td><td> </td><td colspan="2">507</td><td></td></tr><tr><td>Repurchase of common stock</td><td> </td><td colspan="2">(4,254</td><td>)</td><td> </td><td colspan="2">(3,223</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends - common and preferred</td><td> </td><td colspan="2">(1,243</td><td>)</td><td> </td><td colspan="2">(1,133</td><td>)</td><td> </td><td colspan="2">(1,022</td><td>)</td></tr><tr><td>Tax payments for net share settlement of equity awards</td><td> </td><td colspan="2">(55</td><td>)</td><td> </td><td colspan="2">(29</td><td>)</td><td> </td><td colspan="2">(22</td><td>)</td></tr><tr><td>Cash used by financing activities</td><td> </td><td colspan="2">(4,835</td><td>)</td><td> </td><td colspan="2">(2,148</td><td>)</td><td> </td><td colspan="2">(2,974</td><td>)</td></tr><tr><td>Effect of exchange rate changes on cash and equivalents</td><td> </td><td colspan="2">45</td><td></td><td> </td><td colspan="2">(20</td><td>)</td><td> </td><td colspan="2">(105</td><td>)</td></tr><tr><td>Net increase (decrease) in cash and equivalents</td><td> </td><td colspan="2">441</td><td></td><td> </td><td colspan="2">670</td><td></td><td> </td><td colspan="2">(714</td><td>)</td></tr><tr><td>Cash and equivalents, beginning of year</td><td> </td><td colspan="2">3,808</td><td></td><td> </td><td colspan="2">3,138</td><td></td><td> </td><td colspan="2">3,852</td><td></td></tr><tr><td>CASH AND EQUIVALENTS, END OF YEAR</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td><td> </td><td>$</td><td>3,138</td><td></td></tr><tr><td>Supplemental disclosure of cash flow information:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash paid during the year for:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Interest, net of capitalized interest</td><td> </td><td>$</td><td>125</td><td></td><td> </td><td>$</td><td>98</td><td></td><td> </td><td>$</td><td>70</td><td></td></tr><tr><td>Income taxes</td><td> </td><td colspan="2">529</td><td></td><td> </td><td colspan="2">703</td><td></td><td> </td><td colspan="2">748</td><td></td></tr><tr><td>Non-cash additions to property, plant and equipment</td><td> </td><td colspan="2">294</td><td></td><td> </td><td colspan="2">266</td><td></td><td> </td><td colspan="2">252</td><td></td></tr><tr><td>Dividends declared and not paid</td><td> </td><td colspan="2">320</td><td></td><td> </td><td colspan="2">300</td><td></td><td> </td><td colspan="2">271</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
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q_an061
|
How did the repurchase of Class B common stock in 2018 compare to 2017, and what does this indicate about the company’s share buyback strategy?
|
Repurchase of Class B Common Stock 2018: $4,013 million
Repurchase of Class B Common Stock 2017: $3,060 million
Formula:
Percentage Change in Repurchase = ((Repurchase 2018 - Repurchase 2017) / Repurchase 2017) × 100
Calculation:
Percentage Change = ((4,013 - 3,060) / 3,060) × 100
Percentage Change = (953 / 3,060) × 100 ≈ 31.14%
Answer:
The repurchase of Class B common stock increased by approximately 31.14% from 2017 to 2018. This indicates that Nike significantly accelerated its share buyback strategy in 2018, reflecting a stronger commitment to returning value to shareholders. It may also signal confidence in the company’s financial performance and future prospects, or it could have been used to offset dilution from stock-based compensation.
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Analysis
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48
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0000320187-18-000142
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ITEM 8. Financial Statements and Supplementary Data
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NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 48:
| | |
|---:|:-----------------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Shareholders' Equity |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:-------------|:---|:-------------------------------|:---|:------------------------------------|:---|:-----------------|:------|:------|:-----|:-----|:---|:-------|:----|:-------|:-------|:----|:-------|:---|:------|:---|:---|:------|:---|:-------|
| 2 | | Common Stock | | Capital inExcessof StatedValue | | AccumulatedOtherComprehensiveIncome | | RetainedEarnings | | Total | | | | | | | | | | | | | | | | |
| 3 | | Class A | | Class B | | | | | | | | | | | | | | | | | | | | | | |
| 4 | (In millions, except per share data) | Shares | | Amount | | Shares | | Amount | | | | | | | | | | | | | | | | | | |
| 5 | Balance at May 31, 2015 | 355 | | | $ | - | | | 1,357 | | | $ | 3 | | | $ | 4,165 | | | $ | 1,246 | | $ | 7,293 | $ | 12,707 |
| 6 | Stock options exercised | | | | | 22 | | | | | 680 | | | | | | | 680 | | | | | | | | |
| 7 | Conversion to Class B Common Stock | (2 | ) | | - | | | 2 | | | - | | | | | | | | | - | | | | | | |
| 8 | Repurchase of Class B Common Stock | | | | | (55 | ) | | | | (148 | ) | | | | (3,090 | ) | | (3,238 | ) | | | | | | |
| 9 | Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,053 | ) | | (1,053 | ) | | | | | | | | |
| 10 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 3 | | | | | 105 | | | | | (11 | ) | | 94 | | | | | | | |
| 11 | Stock-based compensation | | | | | | | | | 236 | | | | | | | 236 | | | | | | | | | |
| 12 | Net income | | | | | | | | | | | | | 3,760 | | | 3,760 | | | | | | | | | |
| 13 | Other comprehensive income (loss) | | | | | | | | | | | (928 | ) | | | | (928 | ) | | | | | | | | |
| 14 | Balance at May 31, 2016 | 353 | | | $ | - | | | 1,329 | | | $ | 3 | | | $ | 5,038 | | | $ | 318 | | $ | 6,899 | $ | 12,258 |
| 15 | Stock options exercised | | | | | 17 | | | | | 525 | | | | | | | 525 | | | | | | | | |
| 16 | Conversion to Class B Common Stock | (24 | ) | | - | | | 24 | | | - | | | | | | | | | - | | | | | | |
| 17 | Repurchase of Class B Common Stock | | | | | (60 | ) | | | | (189 | ) | | | | (3,060 | ) | | (3,249 | ) | | | | | | |
| 18 | Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,159 | ) | | (1,159 | ) | | | | | | | | |
| 19 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 121 | | | | | (13 | ) | | 108 | | | | | | | |
| 20 | Stock-based compensation | | | | | | | | | 215 | | | | | | | 215 | | | | | | | | | |
| 21 | Net income | | | | | | | | | | | | | 4,240 | | | 4,240 | | | | | | | | | |
| 22 | Other comprehensive income (loss) | | | | | | | | | | | (531 | ) | | | | (531 | ) | | | | | | | | |
| 23 | Balance at May 31, 2017 | 329 | | | $ | - | | | 1,314 | | | $ | 3 | | | $ | 5,710 | | | $ | (213 | ) | $ | 6,907 | $ | 12,407 |
| 24 | Stock options exercised | | | | | 24 | | | | | 600 | | | | | | | 600 | | | | | | | | |
| 25 | Conversion to Class B Common Stock | - | | | - | | | - | | | - | | | | | | | | | - | | | | | | |
| 26 | Repurchase of Class B Common Stock | | | | | (70 | ) | | | | (254 | ) | | | | (4,013 | ) | | (4,267 | ) | | | | | | |
| 27 | Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,265 | ) | | (1,265 | ) | | | | | | | | |
| 28 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 110 | | | | | (28 | ) | | 82 | | | | | | | |
| 29 | Stock-based compensation | | | | | | | | | 218 | | | | | | | 218 | | | | | | | | | |
| 30 | Net income | | | | | | | | | | | | | 1,933 | | | 1,933 | | | | | | | | | |
| 31 | Other comprehensive income (loss) | | | | | | | | | | | 104 | | | | | 104 | | | | | | | | | |
| 32 | Reclassifications to retained earnings in accordance with ASU 2018-02 | | | | | | | | | | | 17 | | | (17 | ) | | - | | | | | | | | |
| 33 | Balance at May 31, 2018 | 329 | | | $ | - | | | 1,272 | | | $ | 3 | | | $ | 6,384 | | | $ | (92 | ) | $ | 3,517 | $ | 9,812 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
48
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| | |
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| 2 | NIKE, Inc. Consolidated Statements of Shareholders' Equity |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:-------------|:---|:-------------------------------|:---|:------------------------------------|:---|:-----------------|:------|:------|:-----|:-----|:---|:-------|:----|:-------|:-------|:----|:-------|:---|:------|:---|:---|:------|:---|:-------|
| 2 | | Common Stock | | Capital inExcessof StatedValue | | AccumulatedOtherComprehensiveIncome | | RetainedEarnings | | Total | | | | | | | | | | | | | | | | |
| 3 | | Class A | | Class B | | | | | | | | | | | | | | | | | | | | | | |
| 4 | (In millions, except per share data) | Shares | | Amount | | Shares | | Amount | | | | | | | | | | | | | | | | | | |
| 5 | Balance at May 31, 2015 | 355 | | | $ | - | | | 1,357 | | | $ | 3 | | | $ | 4,165 | | | $ | 1,246 | | $ | 7,293 | $ | 12,707 |
| 6 | Stock options exercised | | | | | 22 | | | | | 680 | | | | | | | 680 | | | | | | | | |
| 7 | Conversion to Class B Common Stock | (2 | ) | | - | | | 2 | | | - | | | | | | | | | - | | | | | | |
| 8 | Repurchase of Class B Common Stock | | | | | (55 | ) | | | | (148 | ) | | | | (3,090 | ) | | (3,238 | ) | | | | | | |
| 9 | Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,053 | ) | | (1,053 | ) | | | | | | | | |
| 10 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 3 | | | | | 105 | | | | | (11 | ) | | 94 | | | | | | | |
| 11 | Stock-based compensation | | | | | | | | | 236 | | | | | | | 236 | | | | | | | | | |
| 12 | Net income | | | | | | | | | | | | | 3,760 | | | 3,760 | | | | | | | | | |
| 13 | Other comprehensive income (loss) | | | | | | | | | | | (928 | ) | | | | (928 | ) | | | | | | | | |
| 14 | Balance at May 31, 2016 | 353 | | | $ | - | | | 1,329 | | | $ | 3 | | | $ | 5,038 | | | $ | 318 | | $ | 6,899 | $ | 12,258 |
| 15 | Stock options exercised | | | | | 17 | | | | | 525 | | | | | | | 525 | | | | | | | | |
| 16 | Conversion to Class B Common Stock | (24 | ) | | - | | | 24 | | | - | | | | | | | | | - | | | | | | |
| 17 | Repurchase of Class B Common Stock | | | | | (60 | ) | | | | (189 | ) | | | | (3,060 | ) | | (3,249 | ) | | | | | | |
| 18 | Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,159 | ) | | (1,159 | ) | | | | | | | | |
| 19 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 121 | | | | | (13 | ) | | 108 | | | | | | | |
| 20 | Stock-based compensation | | | | | | | | | 215 | | | | | | | 215 | | | | | | | | | |
| 21 | Net income | | | | | | | | | | | | | 4,240 | | | 4,240 | | | | | | | | | |
| 22 | Other comprehensive income (loss) | | | | | | | | | | | (531 | ) | | | | (531 | ) | | | | | | | | |
| 23 | Balance at May 31, 2017 | 329 | | | $ | - | | | 1,314 | | | $ | 3 | | | $ | 5,710 | | | $ | (213 | ) | $ | 6,907 | $ | 12,407 |
| 24 | Stock options exercised | | | | | 24 | | | | | 600 | | | | | | | 600 | | | | | | | | |
| 25 | Conversion to Class B Common Stock | - | | | - | | | - | | | - | | | | | | | | | - | | | | | | |
| 26 | Repurchase of Class B Common Stock | | | | | (70 | ) | | | | (254 | ) | | | | (4,013 | ) | | (4,267 | ) | | | | | | |
| 27 | Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,265 | ) | | (1,265 | ) | | | | | | | | |
| 28 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 110 | | | | | (28 | ) | | 82 | | | | | | | |
| 29 | Stock-based compensation | | | | | | | | | 218 | | | | | | | 218 | | | | | | | | | |
| 30 | Net income | | | | | | | | | | | | | 1,933 | | | 1,933 | | | | | | | | | |
| 31 | Other comprehensive income (loss) | | | | | | | | | | | 104 | | | | | 104 | | | | | | | | | |
| 32 | Reclassifications to retained earnings in accordance with ASU 2018-02 | | | | | | | | | | | 17 | | | (17 | ) | | - | | | | | | | | |
| 33 | Balance at May 31, 2018 | 329 | | | $ | - | | | 1,272 | | | $ | 3 | | | $ | 6,384 | | | $ | (92 | ) | $ | 3,517 | $ | 9,812 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
48
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NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 48:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Shareholders' Equity</td></tr></table>
<table><tr><td colspan="31"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="13">Common Stock</td><td> </td><td colspan="3" rowspan="3">Capital inExcessof StatedValue</td><td rowspan="3"> </td><td colspan="3" rowspan="3">AccumulatedOtherComprehensiveIncome</td><td rowspan="3"> </td><td colspan="3" rowspan="3">RetainedEarnings</td><td rowspan="3"> </td><td colspan="3" rowspan="3">Total</td></tr><tr><td> </td><td> </td><td colspan="6">Class A</td><td> </td><td colspan="6">Class B</td><td> </td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td></tr><tr><td>Balance at May 31, 2015</td><td> </td><td>355</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,357</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>4,165</td><td></td><td> </td><td>$</td><td>1,246</td><td></td><td> </td><td>$</td><td>7,293</td><td></td><td> </td><td>$</td><td>12,707</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>22</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(2</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>2</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(55</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(148</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,090</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,053</td><td>)</td><td> </td><td colspan="2">(1,053</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>3</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">105</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(11</td><td>)</td><td> </td><td colspan="2">94</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">3,760</td><td></td><td> </td><td colspan="2">3,760</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td></tr><tr><td>Balance at May 31, 2016</td><td> </td><td>353</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,329</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,038</td><td></td><td> </td><td>$</td><td>318</td><td></td><td> </td><td>$</td><td>6,899</td><td></td><td> </td><td>$</td><td>12,258</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>17</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(24</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>24</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(60</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(189</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,060</td><td>)</td><td> </td><td colspan="2">(3,249</td><td>)</td></tr><tr><td>Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,159</td><td>)</td><td> </td><td colspan="2">(1,159</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">121</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(13</td><td>)</td><td> </td><td colspan="2">108</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">4,240</td><td></td><td> </td><td colspan="2">4,240</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td></tr><tr><td>Balance at May 31, 2017</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,314</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,710</td><td></td><td> </td><td>$</td><td>(213</td><td>)</td><td> </td><td>$</td><td>6,907</td><td></td><td> </td><td>$</td><td>12,407</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>24</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(70</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(254</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(4,013</td><td>)</td><td> </td><td colspan="2">(4,267</td><td>)</td></tr><tr><td>Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,265</td><td>)</td><td> </td><td colspan="2">(1,265</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">110</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(28</td><td>)</td><td> </td><td colspan="2">82</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">1,933</td><td></td><td> </td><td colspan="2">1,933</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td></tr><tr><td>Reclassifications to retained earnings in accordance with ASU 2018-02</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">17</td><td></td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Balance at May 31, 2018</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,272</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>6,384</td><td></td><td> </td><td>$</td><td>(92</td><td>)</td><td> </td><td>$</td><td>3,517</td><td></td><td> </td><td>$</td><td>9,812</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
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<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Shareholders' Equity</td></tr></table>
<table><tr><td colspan="31"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="13">Common Stock</td><td> </td><td colspan="3" rowspan="3">Capital inExcessof StatedValue</td><td rowspan="3"> </td><td colspan="3" rowspan="3">AccumulatedOtherComprehensiveIncome</td><td rowspan="3"> </td><td colspan="3" rowspan="3">RetainedEarnings</td><td rowspan="3"> </td><td colspan="3" rowspan="3">Total</td></tr><tr><td> </td><td> </td><td colspan="6">Class A</td><td> </td><td colspan="6">Class B</td><td> </td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td></tr><tr><td>Balance at May 31, 2015</td><td> </td><td>355</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,357</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>4,165</td><td></td><td> </td><td>$</td><td>1,246</td><td></td><td> </td><td>$</td><td>7,293</td><td></td><td> </td><td>$</td><td>12,707</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>22</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(2</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>2</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(55</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(148</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,090</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,053</td><td>)</td><td> </td><td colspan="2">(1,053</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>3</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">105</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(11</td><td>)</td><td> </td><td colspan="2">94</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">3,760</td><td></td><td> </td><td colspan="2">3,760</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td></tr><tr><td>Balance at May 31, 2016</td><td> </td><td>353</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,329</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,038</td><td></td><td> </td><td>$</td><td>318</td><td></td><td> </td><td>$</td><td>6,899</td><td></td><td> </td><td>$</td><td>12,258</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>17</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(24</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>24</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(60</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(189</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,060</td><td>)</td><td> </td><td colspan="2">(3,249</td><td>)</td></tr><tr><td>Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,159</td><td>)</td><td> </td><td colspan="2">(1,159</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">121</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(13</td><td>)</td><td> </td><td colspan="2">108</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">4,240</td><td></td><td> </td><td colspan="2">4,240</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td></tr><tr><td>Balance at May 31, 2017</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,314</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,710</td><td></td><td> </td><td>$</td><td>(213</td><td>)</td><td> </td><td>$</td><td>6,907</td><td></td><td> </td><td>$</td><td>12,407</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>24</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(70</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(254</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(4,013</td><td>)</td><td> </td><td colspan="2">(4,267</td><td>)</td></tr><tr><td>Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,265</td><td>)</td><td> </td><td colspan="2">(1,265</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">110</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(28</td><td>)</td><td> </td><td colspan="2">82</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">1,933</td><td></td><td> </td><td colspan="2">1,933</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td></tr><tr><td>Reclassifications to retained earnings in accordance with ASU 2018-02</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">17</td><td></td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Balance at May 31, 2018</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,272</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>6,384</td><td></td><td> </td><td>$</td><td>(92</td><td>)</td><td> </td><td>$</td><td>3,517</td><td></td><td> </td><td>$</td><td>9,812</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
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q_an062
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How did the marketing expenses for American Express and Discover Financial Services change from 2021 to 2023, and what does this indicate about their marketing strategies?
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American Express's marketing expenses were relatively stable, with $5,291 million in 2021, $5,458 million in 2022, and $5,213 million in 2023. This stability suggests a consistent investment in marketing efforts to maintain or grow their market presence. In contrast, Discover Financial Services' marketing and business development expenses increased from $810 million in 2021 to $1,035 million in 2022, and to $1,164 million in 2023. This upward trend indicates a more aggressive marketing strategy, with increasing investments to potentially expand their customer base or enhance brand recognition. The comparison shows that while American Express maintained a steady marketing expenditure, Discover Financial Services significantly ramped up its marketing investments, reflecting different strategic approaches to market growth and customer acquisition.
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Analysis
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94;86
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0000004962-24-000013;0001393612-24-000010
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA;Item 8. Financial Statements and Supplementary Data
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
-86-
|
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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q_an063
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Analyze the net unrealized gains or losses on investment securities for American Express and Discover Financial Services in 2023. How do these gains or losses affect their comprehensive income?
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In 2023, American Express reported net unrealized gains on debt securities of $50 million, contributing positively to their other comprehensive income. This indicates that the value of their investment securities increased, enhancing their overall financial position. Discover Financial Services, on the other hand, reported net unrealized gains on available-for-sale investment securities of $99 million in 2023. This also positively impacted their other comprehensive income, reflecting an increase in the value of their investment portfolio. Both companies experienced positive net unrealized gains on investment securities, which contributed to higher comprehensive income and improved their financial health.
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Analysis
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95;87
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0000004962-24-000013;0001393612-24-000010
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA;Item 8. Financial Statements and Supplementary Data
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 95:
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | | | | | | | | | |
|---:|:---------------------------------------------------------------------|:-----|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | Year Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 3 | Other comprehensive income (loss): | | | | | | | | | |
| 4 | Net unrealized debt securities gains (losses), net of tax | | | | (87) | | | (42) | | |
| 5 | Foreign currency translation adjustments, net of hedges and tax | | | | (230) | | | (163) | | |
| 6 | Net unrealized pension and other postretirement benefits, net of tax | 37 | | | 52 | | | 155 | | |
| 7 | Other comprehensive income (loss) | 138 | | | (265) | | | (50) | | |
| 8 | Comprehensive income | $ | 8,512 | | | $ | 7,249 | | $ | 8,010 |
See Notes to Consolidated Financial Statements.
95
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 87:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:---------------------------------|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 4 | Other comprehensive income (loss), net of tax | | | | | | | | | |
| 5 | Unrealized gains (losses) on available-for-sale investment securities, net of tax | 99 | | | (250) | | | (170) | | |
| 6 | Unrealized gains (losses) on cash flow hedges, net of tax | 6 | | | (5) | | | 3 | | |
| 7 | Unrealized pension and post-retirement plan gains, net of tax | 9 | | | 10 | | | 28 | | |
| 8 | Other comprehensive income (loss) | 114 | | | (245) | | | (139) | | |
| 9 | Comprehensive income | $ | 3,054 | | | $ | 4,129 | | $ | 5,283 |
See Notes to the Consolidated Financial Statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | | | | | | | | | |
|---:|:---------------------------------------------------------------------|:-----|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | Year Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 3 | Other comprehensive income (loss): | | | | | | | | | |
| 4 | Net unrealized debt securities gains (losses), net of tax | | | | (87) | | | (42) | | |
| 5 | Foreign currency translation adjustments, net of hedges and tax | | | | (230) | | | (163) | | |
| 6 | Net unrealized pension and other postretirement benefits, net of tax | 37 | | | 52 | | | 155 | | |
| 7 | Other comprehensive income (loss) | 138 | | | (265) | | | (50) | | |
| 8 | Comprehensive income | $ | 8,512 | | | $ | 7,249 | | $ | 8,010 |
See Notes to Consolidated Financial Statements.
95
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:---------------------------------|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 4 | Other comprehensive income (loss), net of tax | | | | | | | | | |
| 5 | Unrealized gains (losses) on available-for-sale investment securities, net of tax | 99 | | | (250) | | | (170) | | |
| 6 | Unrealized gains (losses) on cash flow hedges, net of tax | 6 | | | (5) | | | 3 | | |
| 7 | Unrealized pension and post-retirement plan gains, net of tax | 9 | | | 10 | | | 28 | | |
| 8 | Other comprehensive income (loss) | 114 | | | (245) | | | (139) | | |
| 9 | Comprehensive income | $ | 3,054 | | | $ | 4,129 | | $ | 5,283 |
See Notes to the Consolidated Financial Statements.
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 95:
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net unrealized debt securities gains (losses), net of tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(87)</td><td></td><td colspan="3"></td><td colspan="2">(42)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustments, net of hedges and tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(230)</td><td></td><td colspan="3"></td><td colspan="2">(163)</td><td></td></tr><tr><td colspan="3">Net unrealized pension and other postretirement benefits, net of tax</td><td colspan="3"></td><td colspan="2">37 </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td><td colspan="3"></td><td colspan="2">155 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td colspan="3"></td><td>$</td><td>8,512 </td><td></td><td colspan="3"></td><td>$</td><td>7,249 </td><td></td><td colspan="3"></td><td>$</td><td>8,010 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
95
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 87:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss), net of tax</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Unrealized gains (losses) on available-for-sale investment securities, net of tax</td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">(250)</td><td></td><td colspan="3"></td><td colspan="2">(170)</td><td></td></tr><tr><td colspan="3">Unrealized gains (losses) on cash flow hedges, net of tax</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td></tr><tr><td colspan="3">Unrealized pension and post-retirement plan gains, net of tax</td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">114 </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td>$</td><td>3,054 </td><td></td><td colspan="3"></td><td>$</td><td>4,129 </td><td></td><td colspan="3"></td><td>$</td><td>5,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-87-
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net unrealized debt securities gains (losses), net of tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(87)</td><td></td><td colspan="3"></td><td colspan="2">(42)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustments, net of hedges and tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(230)</td><td></td><td colspan="3"></td><td colspan="2">(163)</td><td></td></tr><tr><td colspan="3">Net unrealized pension and other postretirement benefits, net of tax</td><td colspan="3"></td><td colspan="2">37 </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td><td colspan="3"></td><td colspan="2">155 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td colspan="3"></td><td>$</td><td>8,512 </td><td></td><td colspan="3"></td><td>$</td><td>7,249 </td><td></td><td colspan="3"></td><td>$</td><td>8,010 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
95
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss), net of tax</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Unrealized gains (losses) on available-for-sale investment securities, net of tax</td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">(250)</td><td></td><td colspan="3"></td><td colspan="2">(170)</td><td></td></tr><tr><td colspan="3">Unrealized gains (losses) on cash flow hedges, net of tax</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td></tr><tr><td colspan="3">Unrealized pension and post-retirement plan gains, net of tax</td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">114 </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td>$</td><td>3,054 </td><td></td><td colspan="3"></td><td>$</td><td>4,129 </td><td></td><td colspan="3"></td><td>$</td><td>5,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-87-
|
q_an064
|
Compare the total comprehensive income of American Express and Discover Financial Services in 2023. What does this indicate about their overall financial performance?
|
In 2023, American Express reported a total comprehensive income of $8,512 million, while Discover Financial Services reported a total comprehensive income of $3,054 million. This significant difference indicates that American Express had a much stronger overall financial performance compared to Discover Financial Services. The higher comprehensive income for American Express reflects better profitability, positive foreign currency adjustments, and gains on investment securities, contributing to a more robust financial position. In contrast, Discover's lower comprehensive income suggests challenges in maintaining profitability and managing other comprehensive income components.
|
Analysis
|
95;87
|
0000004962-24-000013;0001393612-24-000010
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA;Item 8. Financial Statements and Supplementary Data
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 95:
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | | | | | | | | | |
|---:|:---------------------------------------------------------------------|:-----|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | Year Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 3 | Other comprehensive income (loss): | | | | | | | | | |
| 4 | Net unrealized debt securities gains (losses), net of tax | | | | (87) | | | (42) | | |
| 5 | Foreign currency translation adjustments, net of hedges and tax | | | | (230) | | | (163) | | |
| 6 | Net unrealized pension and other postretirement benefits, net of tax | 37 | | | 52 | | | 155 | | |
| 7 | Other comprehensive income (loss) | 138 | | | (265) | | | (50) | | |
| 8 | Comprehensive income | $ | 8,512 | | | $ | 7,249 | | $ | 8,010 |
See Notes to Consolidated Financial Statements.
95
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 87:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:---------------------------------|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 4 | Other comprehensive income (loss), net of tax | | | | | | | | | |
| 5 | Unrealized gains (losses) on available-for-sale investment securities, net of tax | 99 | | | (250) | | | (170) | | |
| 6 | Unrealized gains (losses) on cash flow hedges, net of tax | 6 | | | (5) | | | 3 | | |
| 7 | Unrealized pension and post-retirement plan gains, net of tax | 9 | | | 10 | | | 28 | | |
| 8 | Other comprehensive income (loss) | 114 | | | (245) | | | (139) | | |
| 9 | Comprehensive income | $ | 3,054 | | | $ | 4,129 | | $ | 5,283 |
See Notes to the Consolidated Financial Statements.
-87-
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | | | | | | | | | |
|---:|:---------------------------------------------------------------------|:-----|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | Year Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 3 | Other comprehensive income (loss): | | | | | | | | | |
| 4 | Net unrealized debt securities gains (losses), net of tax | | | | (87) | | | (42) | | |
| 5 | Foreign currency translation adjustments, net of hedges and tax | | | | (230) | | | (163) | | |
| 6 | Net unrealized pension and other postretirement benefits, net of tax | 37 | | | 52 | | | 155 | | |
| 7 | Other comprehensive income (loss) | 138 | | | (265) | | | (50) | | |
| 8 | Comprehensive income | $ | 8,512 | | | $ | 7,249 | | $ | 8,010 |
See Notes to Consolidated Financial Statements.
95
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:---------------------------------|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 4 | Other comprehensive income (loss), net of tax | | | | | | | | | |
| 5 | Unrealized gains (losses) on available-for-sale investment securities, net of tax | 99 | | | (250) | | | (170) | | |
| 6 | Unrealized gains (losses) on cash flow hedges, net of tax | 6 | | | (5) | | | 3 | | |
| 7 | Unrealized pension and post-retirement plan gains, net of tax | 9 | | | 10 | | | 28 | | |
| 8 | Other comprehensive income (loss) | 114 | | | (245) | | | (139) | | |
| 9 | Comprehensive income | $ | 3,054 | | | $ | 4,129 | | $ | 5,283 |
See Notes to the Consolidated Financial Statements.
-87-
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 95:
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net unrealized debt securities gains (losses), net of tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(87)</td><td></td><td colspan="3"></td><td colspan="2">(42)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustments, net of hedges and tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(230)</td><td></td><td colspan="3"></td><td colspan="2">(163)</td><td></td></tr><tr><td colspan="3">Net unrealized pension and other postretirement benefits, net of tax</td><td colspan="3"></td><td colspan="2">37 </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td><td colspan="3"></td><td colspan="2">155 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td colspan="3"></td><td>$</td><td>8,512 </td><td></td><td colspan="3"></td><td>$</td><td>7,249 </td><td></td><td colspan="3"></td><td>$</td><td>8,010 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
95
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 87:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss), net of tax</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Unrealized gains (losses) on available-for-sale investment securities, net of tax</td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">(250)</td><td></td><td colspan="3"></td><td colspan="2">(170)</td><td></td></tr><tr><td colspan="3">Unrealized gains (losses) on cash flow hedges, net of tax</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td></tr><tr><td colspan="3">Unrealized pension and post-retirement plan gains, net of tax</td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">114 </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td>$</td><td>3,054 </td><td></td><td colspan="3"></td><td>$</td><td>4,129 </td><td></td><td colspan="3"></td><td>$</td><td>5,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-87-
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net unrealized debt securities gains (losses), net of tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(87)</td><td></td><td colspan="3"></td><td colspan="2">(42)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustments, net of hedges and tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(230)</td><td></td><td colspan="3"></td><td colspan="2">(163)</td><td></td></tr><tr><td colspan="3">Net unrealized pension and other postretirement benefits, net of tax</td><td colspan="3"></td><td colspan="2">37 </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td><td colspan="3"></td><td colspan="2">155 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td colspan="3"></td><td>$</td><td>8,512 </td><td></td><td colspan="3"></td><td>$</td><td>7,249 </td><td></td><td colspan="3"></td><td>$</td><td>8,010 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
95
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss), net of tax</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Unrealized gains (losses) on available-for-sale investment securities, net of tax</td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">(250)</td><td></td><td colspan="3"></td><td colspan="2">(170)</td><td></td></tr><tr><td colspan="3">Unrealized gains (losses) on cash flow hedges, net of tax</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td></tr><tr><td colspan="3">Unrealized pension and post-retirement plan gains, net of tax</td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">114 </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td>$</td><td>3,054 </td><td></td><td colspan="3"></td><td>$</td><td>4,129 </td><td></td><td colspan="3"></td><td>$</td><td>5,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-87-
|
q_an065
|
What does Nike's solvency position look like for fiscal year 2018, and how can it be assessed using Debt-to-Equity and Debt-to-Assets ratios?
|
Debt-to-Equity Ratio:
Formula: Debt-to-Equity Ratio = Total Debt / Shareholders’ Equity
Data:
Total Debt (Long-term) = $3,468 million
Shareholders' Equity = $9,812 million
Calculation:
Debt-to-Equity Ratio = 3,468 / 9,812 ≈ 0.35
Interpretation:
For every dollar of equity, Nike has $0.35 in long-term debt.
Debt-to-Assets Ratio:
Formula: Debt-to-Assets Ratio = Total Debt / Total Assets
Total Debt (Long-term) = $3,468 million
Total Assets = $22,536 million
Calculation:
Debt-to-Assets Ratio = 3,468 / 22,536 ≈ 0.15
Interpretation:
15% of Nike's assets are financed by debt.
Conclusion:
Nike's solvency position in 2018 appears strong, with a low reliance on debt compared to its equity and assets. This reflects a conservative capital structure and a robust capacity to meet its long-term obligations.
|
Analysis
|
46
|
0000320187-18-000142
|
ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 46:
| | |
|---:|:---------------------------------------|
| 2 | NIKE, Inc. Consolidated Balance Sheets |
| | | | | | | | |
|---:|:-----------------------------------------------------|:--------|:-------|:-----|:-------|:---|:-------|
| 2 | | May 31, | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | | |
| 4 | ASSETS | | | | | | |
| 5 | Current assets: | | | | | | |
| 6 | Cash and equivalents | $ | 4,249 | | | $ | 3,808 |
| 7 | Short-term investments | 996 | | | 2,371 | | |
| 8 | Accounts receivable, net | 3,498 | | | 3,677 | | |
| 9 | Inventories | 5,261 | | | 5,055 | | |
| 10 | Prepaid expenses and other current assets | 1,130 | | | 1,150 | | |
| 11 | Total current assets | 15,134 | | | 16,061 | | |
| 12 | Property, plant and equipment, net | 4,454 | | | 3,989 | | |
| 13 | Identifiable intangible assets, net | 285 | | | 283 | | |
| 14 | Goodwill | 154 | | | 139 | | |
| 15 | Deferred income taxes and other assets | 2,509 | | | 2,787 | | |
| 16 | TOTAL ASSETS | $ | 22,536 | | | $ | 23,259 |
| 17 | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| 18 | Current liabilities: | | | | | | |
| 19 | Current portion of long-term debt | $ | 6 | | | $ | 6 |
| 20 | Notes payable | 336 | | | 325 | | |
| 21 | Accounts payable | 2,279 | | | 2,048 | | |
| 22 | Accrued liabilities | 3,269 | | | 3,011 | | |
| 23 | Income taxes payable | 150 | | | 84 | | |
| 24 | Total current liabilities | 6,040 | | | 5,474 | | |
| 25 | Long-term debt | 3,468 | | | 3,471 | | |
| 26 | Deferred income taxes and other liabilities | 3,216 | | | 1,907 | | |
| 27 | Commitments and contingencies (Note 15) | | | | | | |
| 28 | Redeemable preferred stock | - | | | - | | |
| 29 | Shareholders' equity: | | | | | | |
| 30 | Common stock at stated value: | | | | | | |
| 31 | Class A convertible - 329 and 329 shares outstanding | - | | | - | | |
| 32 | Class B - 1,272 and 1,314 shares outstanding | 3 | | | 3 | | |
| 33 | Capital in excess of stated value | 6,384 | | | 5,710 | | |
| 34 | Accumulated other comprehensive loss | (92 | ) | | (213 | ) | |
| 35 | Retained earnings | 3,517 | | | 6,907 | | |
| 36 | Total shareholders' equity | 9,812 | | | 12,407 | | |
| 37 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 22,536 | | | $ | 23,259 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
| | |
|---:|:---------------------------------------|
| 2 | NIKE, Inc. Consolidated Balance Sheets |
| | | | | | | | |
|---:|:-----------------------------------------------------|:--------|:-------|:-----|:-------|:---|:-------|
| 2 | | May 31, | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | | |
| 4 | ASSETS | | | | | | |
| 5 | Current assets: | | | | | | |
| 6 | Cash and equivalents | $ | 4,249 | | | $ | 3,808 |
| 7 | Short-term investments | 996 | | | 2,371 | | |
| 8 | Accounts receivable, net | 3,498 | | | 3,677 | | |
| 9 | Inventories | 5,261 | | | 5,055 | | |
| 10 | Prepaid expenses and other current assets | 1,130 | | | 1,150 | | |
| 11 | Total current assets | 15,134 | | | 16,061 | | |
| 12 | Property, plant and equipment, net | 4,454 | | | 3,989 | | |
| 13 | Identifiable intangible assets, net | 285 | | | 283 | | |
| 14 | Goodwill | 154 | | | 139 | | |
| 15 | Deferred income taxes and other assets | 2,509 | | | 2,787 | | |
| 16 | TOTAL ASSETS | $ | 22,536 | | | $ | 23,259 |
| 17 | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| 18 | Current liabilities: | | | | | | |
| 19 | Current portion of long-term debt | $ | 6 | | | $ | 6 |
| 20 | Notes payable | 336 | | | 325 | | |
| 21 | Accounts payable | 2,279 | | | 2,048 | | |
| 22 | Accrued liabilities | 3,269 | | | 3,011 | | |
| 23 | Income taxes payable | 150 | | | 84 | | |
| 24 | Total current liabilities | 6,040 | | | 5,474 | | |
| 25 | Long-term debt | 3,468 | | | 3,471 | | |
| 26 | Deferred income taxes and other liabilities | 3,216 | | | 1,907 | | |
| 27 | Commitments and contingencies (Note 15) | | | | | | |
| 28 | Redeemable preferred stock | - | | | - | | |
| 29 | Shareholders' equity: | | | | | | |
| 30 | Common stock at stated value: | | | | | | |
| 31 | Class A convertible - 329 and 329 shares outstanding | - | | | - | | |
| 32 | Class B - 1,272 and 1,314 shares outstanding | 3 | | | 3 | | |
| 33 | Capital in excess of stated value | 6,384 | | | 5,710 | | |
| 34 | Accumulated other comprehensive loss | (92 | ) | | (213 | ) | |
| 35 | Retained earnings | 3,517 | | | 6,907 | | |
| 36 | Total shareholders' equity | 9,812 | | | 12,407 | | |
| 37 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 22,536 | | | $ | 23,259 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 46:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Balance Sheets</td></tr></table>
<table><tr><td colspan="9"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="7">May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>ASSETS</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current assets:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash and equivalents</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td></tr><tr><td>Short-term investments</td><td> </td><td colspan="2">996</td><td></td><td> </td><td colspan="2">2,371</td><td></td></tr><tr><td>Accounts receivable, net</td><td> </td><td colspan="2">3,498</td><td></td><td> </td><td colspan="2">3,677</td><td></td></tr><tr><td>Inventories</td><td> </td><td colspan="2">5,261</td><td></td><td> </td><td colspan="2">5,055</td><td></td></tr><tr><td>Prepaid expenses and other current assets</td><td> </td><td colspan="2">1,130</td><td></td><td> </td><td colspan="2">1,150</td><td></td></tr><tr><td>Total current assets</td><td> </td><td colspan="2">15,134</td><td></td><td> </td><td colspan="2">16,061</td><td></td></tr><tr><td>Property, plant and equipment, net</td><td> </td><td colspan="2">4,454</td><td></td><td> </td><td colspan="2">3,989</td><td></td></tr><tr><td>Identifiable intangible assets, net</td><td> </td><td colspan="2">285</td><td></td><td> </td><td colspan="2">283</td><td></td></tr><tr><td>Goodwill</td><td> </td><td colspan="2">154</td><td></td><td> </td><td colspan="2">139</td><td></td></tr><tr><td>Deferred income taxes and other assets</td><td> </td><td colspan="2">2,509</td><td></td><td> </td><td colspan="2">2,787</td><td></td></tr><tr><td>TOTAL ASSETS</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr><tr><td>LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current portion of long-term debt</td><td> </td><td>$</td><td>6</td><td></td><td> </td><td>$</td><td>6</td><td></td></tr><tr><td>Notes payable</td><td> </td><td colspan="2">336</td><td></td><td> </td><td colspan="2">325</td><td></td></tr><tr><td>Accounts payable</td><td> </td><td colspan="2">2,279</td><td></td><td> </td><td colspan="2">2,048</td><td></td></tr><tr><td>Accrued liabilities</td><td> </td><td colspan="2">3,269</td><td></td><td> </td><td colspan="2">3,011</td><td></td></tr><tr><td>Income taxes payable</td><td> </td><td colspan="2">150</td><td></td><td> </td><td colspan="2">84</td><td></td></tr><tr><td>Total current liabilities</td><td> </td><td colspan="2">6,040</td><td></td><td> </td><td colspan="2">5,474</td><td></td></tr><tr><td>Long-term debt</td><td> </td><td colspan="2">3,468</td><td></td><td> </td><td colspan="2">3,471</td><td></td></tr><tr><td>Deferred income taxes and other liabilities</td><td> </td><td colspan="2">3,216</td><td></td><td> </td><td colspan="2">1,907</td><td></td></tr><tr><td>Commitments and contingencies (Note 15)</td><td> </td><td colspan="2"></td><td></td><td> </td><td colspan="2"></td><td></td></tr><tr><td>Redeemable preferred stock</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Shareholders' equity:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Common stock at stated value:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Class A convertible - 329 and 329 shares outstanding</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Class B - 1,272 and 1,314 shares outstanding</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">3</td><td></td></tr><tr><td>Capital in excess of stated value</td><td> </td><td colspan="2">6,384</td><td></td><td> </td><td colspan="2">5,710</td><td></td></tr><tr><td>Accumulated other comprehensive loss</td><td> </td><td colspan="2">(92</td><td>)</td><td> </td><td colspan="2">(213</td><td>)</td></tr><tr><td>Retained earnings</td><td> </td><td colspan="2">3,517</td><td></td><td> </td><td colspan="2">6,907</td><td></td></tr><tr><td>Total shareholders' equity</td><td> </td><td colspan="2">9,812</td><td></td><td> </td><td colspan="2">12,407</td><td></td></tr><tr><td>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Balance Sheets</td></tr></table>
<table><tr><td colspan="9"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="7">May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>ASSETS</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current assets:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash and equivalents</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td></tr><tr><td>Short-term investments</td><td> </td><td colspan="2">996</td><td></td><td> </td><td colspan="2">2,371</td><td></td></tr><tr><td>Accounts receivable, net</td><td> </td><td colspan="2">3,498</td><td></td><td> </td><td colspan="2">3,677</td><td></td></tr><tr><td>Inventories</td><td> </td><td colspan="2">5,261</td><td></td><td> </td><td colspan="2">5,055</td><td></td></tr><tr><td>Prepaid expenses and other current assets</td><td> </td><td colspan="2">1,130</td><td></td><td> </td><td colspan="2">1,150</td><td></td></tr><tr><td>Total current assets</td><td> </td><td colspan="2">15,134</td><td></td><td> </td><td colspan="2">16,061</td><td></td></tr><tr><td>Property, plant and equipment, net</td><td> </td><td colspan="2">4,454</td><td></td><td> </td><td colspan="2">3,989</td><td></td></tr><tr><td>Identifiable intangible assets, net</td><td> </td><td colspan="2">285</td><td></td><td> </td><td colspan="2">283</td><td></td></tr><tr><td>Goodwill</td><td> </td><td colspan="2">154</td><td></td><td> </td><td colspan="2">139</td><td></td></tr><tr><td>Deferred income taxes and other assets</td><td> </td><td colspan="2">2,509</td><td></td><td> </td><td colspan="2">2,787</td><td></td></tr><tr><td>TOTAL ASSETS</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr><tr><td>LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current portion of long-term debt</td><td> </td><td>$</td><td>6</td><td></td><td> </td><td>$</td><td>6</td><td></td></tr><tr><td>Notes payable</td><td> </td><td colspan="2">336</td><td></td><td> </td><td colspan="2">325</td><td></td></tr><tr><td>Accounts payable</td><td> </td><td colspan="2">2,279</td><td></td><td> </td><td colspan="2">2,048</td><td></td></tr><tr><td>Accrued liabilities</td><td> </td><td colspan="2">3,269</td><td></td><td> </td><td colspan="2">3,011</td><td></td></tr><tr><td>Income taxes payable</td><td> </td><td colspan="2">150</td><td></td><td> </td><td colspan="2">84</td><td></td></tr><tr><td>Total current liabilities</td><td> </td><td colspan="2">6,040</td><td></td><td> </td><td colspan="2">5,474</td><td></td></tr><tr><td>Long-term debt</td><td> </td><td colspan="2">3,468</td><td></td><td> </td><td colspan="2">3,471</td><td></td></tr><tr><td>Deferred income taxes and other liabilities</td><td> </td><td colspan="2">3,216</td><td></td><td> </td><td colspan="2">1,907</td><td></td></tr><tr><td>Commitments and contingencies (Note 15)</td><td> </td><td colspan="2"></td><td></td><td> </td><td colspan="2"></td><td></td></tr><tr><td>Redeemable preferred stock</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Shareholders' equity:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Common stock at stated value:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Class A convertible - 329 and 329 shares outstanding</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Class B - 1,272 and 1,314 shares outstanding</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">3</td><td></td></tr><tr><td>Capital in excess of stated value</td><td> </td><td colspan="2">6,384</td><td></td><td> </td><td colspan="2">5,710</td><td></td></tr><tr><td>Accumulated other comprehensive loss</td><td> </td><td colspan="2">(92</td><td>)</td><td> </td><td colspan="2">(213</td><td>)</td></tr><tr><td>Retained earnings</td><td> </td><td colspan="2">3,517</td><td></td><td> </td><td colspan="2">6,907</td><td></td></tr><tr><td>Total shareholders' equity</td><td> </td><td colspan="2">9,812</td><td></td><td> </td><td colspan="2">12,407</td><td></td></tr><tr><td>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
q_an066
|
How can we calculate Nike's Days Payable Outstanding (DPO) for 2018, and what does the result indicate about the company's payment practices?
|
To calculate Nike's Days Payable Outstanding (DPO) for 2018:
Formula:
DPO = (Average Accounts Payable / Cost of Goods Sold) × 365
Accounts Payable at the end of 2017 = $2,048 million
Accounts Payable at the end of 2018 = $2,279 million
Cost of Goods Sold (COGS) for 2018 = $20,441 million
Step 1: Calculate Average Accounts Payable:
Average Accounts Payable = (Accounts Payable at 2017 + Accounts Payable at 2018) / 2
Average Accounts Payable = ($2,048 million + $2,279 million) / 2 = $2,163.5 million
Step 2: Calculate DPO:
DPO = ($2,163.5 million / $20,441 million) × 365 ≈ 38.6 days
Final Answer:
Nike's Days Payable Outstanding (DPO) for 2018 is approximately 39 days. This indicates that, on average, Nike took about 39 days to pay its suppliers, reflecting its payment practices and efficiency in managing outgoing payments.
|
Analysis
|
44, 46
|
0000320187-18-000142
|
ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
, NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 46:
| | |
|---:|:---------------------------------------|
| 2 | NIKE, Inc. Consolidated Balance Sheets |
| | | | | | | | |
|---:|:-----------------------------------------------------|:--------|:-------|:-----|:-------|:---|:-------|
| 2 | | May 31, | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | | |
| 4 | ASSETS | | | | | | |
| 5 | Current assets: | | | | | | |
| 6 | Cash and equivalents | $ | 4,249 | | | $ | 3,808 |
| 7 | Short-term investments | 996 | | | 2,371 | | |
| 8 | Accounts receivable, net | 3,498 | | | 3,677 | | |
| 9 | Inventories | 5,261 | | | 5,055 | | |
| 10 | Prepaid expenses and other current assets | 1,130 | | | 1,150 | | |
| 11 | Total current assets | 15,134 | | | 16,061 | | |
| 12 | Property, plant and equipment, net | 4,454 | | | 3,989 | | |
| 13 | Identifiable intangible assets, net | 285 | | | 283 | | |
| 14 | Goodwill | 154 | | | 139 | | |
| 15 | Deferred income taxes and other assets | 2,509 | | | 2,787 | | |
| 16 | TOTAL ASSETS | $ | 22,536 | | | $ | 23,259 |
| 17 | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| 18 | Current liabilities: | | | | | | |
| 19 | Current portion of long-term debt | $ | 6 | | | $ | 6 |
| 20 | Notes payable | 336 | | | 325 | | |
| 21 | Accounts payable | 2,279 | | | 2,048 | | |
| 22 | Accrued liabilities | 3,269 | | | 3,011 | | |
| 23 | Income taxes payable | 150 | | | 84 | | |
| 24 | Total current liabilities | 6,040 | | | 5,474 | | |
| 25 | Long-term debt | 3,468 | | | 3,471 | | |
| 26 | Deferred income taxes and other liabilities | 3,216 | | | 1,907 | | |
| 27 | Commitments and contingencies (Note 15) | | | | | | |
| 28 | Redeemable preferred stock | - | | | - | | |
| 29 | Shareholders' equity: | | | | | | |
| 30 | Common stock at stated value: | | | | | | |
| 31 | Class A convertible - 329 and 329 shares outstanding | - | | | - | | |
| 32 | Class B - 1,272 and 1,314 shares outstanding | 3 | | | 3 | | |
| 33 | Capital in excess of stated value | 6,384 | | | 5,710 | | |
| 34 | Accumulated other comprehensive loss | (92 | ) | | (213 | ) | |
| 35 | Retained earnings | 3,517 | | | 6,907 | | |
| 36 | Total shareholders' equity | 9,812 | | | 12,407 | | |
| 37 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 22,536 | | | $ | 23,259 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
,
| | |
|---:|:---------------------------------------|
| 2 | NIKE, Inc. Consolidated Balance Sheets |
| | | | | | | | |
|---:|:-----------------------------------------------------|:--------|:-------|:-----|:-------|:---|:-------|
| 2 | | May 31, | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | | |
| 4 | ASSETS | | | | | | |
| 5 | Current assets: | | | | | | |
| 6 | Cash and equivalents | $ | 4,249 | | | $ | 3,808 |
| 7 | Short-term investments | 996 | | | 2,371 | | |
| 8 | Accounts receivable, net | 3,498 | | | 3,677 | | |
| 9 | Inventories | 5,261 | | | 5,055 | | |
| 10 | Prepaid expenses and other current assets | 1,130 | | | 1,150 | | |
| 11 | Total current assets | 15,134 | | | 16,061 | | |
| 12 | Property, plant and equipment, net | 4,454 | | | 3,989 | | |
| 13 | Identifiable intangible assets, net | 285 | | | 283 | | |
| 14 | Goodwill | 154 | | | 139 | | |
| 15 | Deferred income taxes and other assets | 2,509 | | | 2,787 | | |
| 16 | TOTAL ASSETS | $ | 22,536 | | | $ | 23,259 |
| 17 | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| 18 | Current liabilities: | | | | | | |
| 19 | Current portion of long-term debt | $ | 6 | | | $ | 6 |
| 20 | Notes payable | 336 | | | 325 | | |
| 21 | Accounts payable | 2,279 | | | 2,048 | | |
| 22 | Accrued liabilities | 3,269 | | | 3,011 | | |
| 23 | Income taxes payable | 150 | | | 84 | | |
| 24 | Total current liabilities | 6,040 | | | 5,474 | | |
| 25 | Long-term debt | 3,468 | | | 3,471 | | |
| 26 | Deferred income taxes and other liabilities | 3,216 | | | 1,907 | | |
| 27 | Commitments and contingencies (Note 15) | | | | | | |
| 28 | Redeemable preferred stock | - | | | - | | |
| 29 | Shareholders' equity: | | | | | | |
| 30 | Common stock at stated value: | | | | | | |
| 31 | Class A convertible - 329 and 329 shares outstanding | - | | | - | | |
| 32 | Class B - 1,272 and 1,314 shares outstanding | 3 | | | 3 | | |
| 33 | Capital in excess of stated value | 6,384 | | | 5,710 | | |
| 34 | Accumulated other comprehensive loss | (92 | ) | | (213 | ) | |
| 35 | Retained earnings | 3,517 | | | 6,907 | | |
| 36 | Total shareholders' equity | 9,812 | | | 12,407 | | |
| 37 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 22,536 | | | $ | 23,259 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
, NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 46:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Balance Sheets</td></tr></table>
<table><tr><td colspan="9"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="7">May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>ASSETS</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current assets:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash and equivalents</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td></tr><tr><td>Short-term investments</td><td> </td><td colspan="2">996</td><td></td><td> </td><td colspan="2">2,371</td><td></td></tr><tr><td>Accounts receivable, net</td><td> </td><td colspan="2">3,498</td><td></td><td> </td><td colspan="2">3,677</td><td></td></tr><tr><td>Inventories</td><td> </td><td colspan="2">5,261</td><td></td><td> </td><td colspan="2">5,055</td><td></td></tr><tr><td>Prepaid expenses and other current assets</td><td> </td><td colspan="2">1,130</td><td></td><td> </td><td colspan="2">1,150</td><td></td></tr><tr><td>Total current assets</td><td> </td><td colspan="2">15,134</td><td></td><td> </td><td colspan="2">16,061</td><td></td></tr><tr><td>Property, plant and equipment, net</td><td> </td><td colspan="2">4,454</td><td></td><td> </td><td colspan="2">3,989</td><td></td></tr><tr><td>Identifiable intangible assets, net</td><td> </td><td colspan="2">285</td><td></td><td> </td><td colspan="2">283</td><td></td></tr><tr><td>Goodwill</td><td> </td><td colspan="2">154</td><td></td><td> </td><td colspan="2">139</td><td></td></tr><tr><td>Deferred income taxes and other assets</td><td> </td><td colspan="2">2,509</td><td></td><td> </td><td colspan="2">2,787</td><td></td></tr><tr><td>TOTAL ASSETS</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr><tr><td>LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current portion of long-term debt</td><td> </td><td>$</td><td>6</td><td></td><td> </td><td>$</td><td>6</td><td></td></tr><tr><td>Notes payable</td><td> </td><td colspan="2">336</td><td></td><td> </td><td colspan="2">325</td><td></td></tr><tr><td>Accounts payable</td><td> </td><td colspan="2">2,279</td><td></td><td> </td><td colspan="2">2,048</td><td></td></tr><tr><td>Accrued liabilities</td><td> </td><td colspan="2">3,269</td><td></td><td> </td><td colspan="2">3,011</td><td></td></tr><tr><td>Income taxes payable</td><td> </td><td colspan="2">150</td><td></td><td> </td><td colspan="2">84</td><td></td></tr><tr><td>Total current liabilities</td><td> </td><td colspan="2">6,040</td><td></td><td> </td><td colspan="2">5,474</td><td></td></tr><tr><td>Long-term debt</td><td> </td><td colspan="2">3,468</td><td></td><td> </td><td colspan="2">3,471</td><td></td></tr><tr><td>Deferred income taxes and other liabilities</td><td> </td><td colspan="2">3,216</td><td></td><td> </td><td colspan="2">1,907</td><td></td></tr><tr><td>Commitments and contingencies (Note 15)</td><td> </td><td colspan="2"></td><td></td><td> </td><td colspan="2"></td><td></td></tr><tr><td>Redeemable preferred stock</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Shareholders' equity:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Common stock at stated value:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Class A convertible - 329 and 329 shares outstanding</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Class B - 1,272 and 1,314 shares outstanding</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">3</td><td></td></tr><tr><td>Capital in excess of stated value</td><td> </td><td colspan="2">6,384</td><td></td><td> </td><td colspan="2">5,710</td><td></td></tr><tr><td>Accumulated other comprehensive loss</td><td> </td><td colspan="2">(92</td><td>)</td><td> </td><td colspan="2">(213</td><td>)</td></tr><tr><td>Retained earnings</td><td> </td><td colspan="2">3,517</td><td></td><td> </td><td colspan="2">6,907</td><td></td></tr><tr><td>Total shareholders' equity</td><td> </td><td colspan="2">9,812</td><td></td><td> </td><td colspan="2">12,407</td><td></td></tr><tr><td>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
,
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Balance Sheets</td></tr></table>
<table><tr><td colspan="9"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="7">May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>ASSETS</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current assets:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash and equivalents</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td></tr><tr><td>Short-term investments</td><td> </td><td colspan="2">996</td><td></td><td> </td><td colspan="2">2,371</td><td></td></tr><tr><td>Accounts receivable, net</td><td> </td><td colspan="2">3,498</td><td></td><td> </td><td colspan="2">3,677</td><td></td></tr><tr><td>Inventories</td><td> </td><td colspan="2">5,261</td><td></td><td> </td><td colspan="2">5,055</td><td></td></tr><tr><td>Prepaid expenses and other current assets</td><td> </td><td colspan="2">1,130</td><td></td><td> </td><td colspan="2">1,150</td><td></td></tr><tr><td>Total current assets</td><td> </td><td colspan="2">15,134</td><td></td><td> </td><td colspan="2">16,061</td><td></td></tr><tr><td>Property, plant and equipment, net</td><td> </td><td colspan="2">4,454</td><td></td><td> </td><td colspan="2">3,989</td><td></td></tr><tr><td>Identifiable intangible assets, net</td><td> </td><td colspan="2">285</td><td></td><td> </td><td colspan="2">283</td><td></td></tr><tr><td>Goodwill</td><td> </td><td colspan="2">154</td><td></td><td> </td><td colspan="2">139</td><td></td></tr><tr><td>Deferred income taxes and other assets</td><td> </td><td colspan="2">2,509</td><td></td><td> </td><td colspan="2">2,787</td><td></td></tr><tr><td>TOTAL ASSETS</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr><tr><td>LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current portion of long-term debt</td><td> </td><td>$</td><td>6</td><td></td><td> </td><td>$</td><td>6</td><td></td></tr><tr><td>Notes payable</td><td> </td><td colspan="2">336</td><td></td><td> </td><td colspan="2">325</td><td></td></tr><tr><td>Accounts payable</td><td> </td><td colspan="2">2,279</td><td></td><td> </td><td colspan="2">2,048</td><td></td></tr><tr><td>Accrued liabilities</td><td> </td><td colspan="2">3,269</td><td></td><td> </td><td colspan="2">3,011</td><td></td></tr><tr><td>Income taxes payable</td><td> </td><td colspan="2">150</td><td></td><td> </td><td colspan="2">84</td><td></td></tr><tr><td>Total current liabilities</td><td> </td><td colspan="2">6,040</td><td></td><td> </td><td colspan="2">5,474</td><td></td></tr><tr><td>Long-term debt</td><td> </td><td colspan="2">3,468</td><td></td><td> </td><td colspan="2">3,471</td><td></td></tr><tr><td>Deferred income taxes and other liabilities</td><td> </td><td colspan="2">3,216</td><td></td><td> </td><td colspan="2">1,907</td><td></td></tr><tr><td>Commitments and contingencies (Note 15)</td><td> </td><td colspan="2"></td><td></td><td> </td><td colspan="2"></td><td></td></tr><tr><td>Redeemable preferred stock</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Shareholders' equity:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Common stock at stated value:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Class A convertible - 329 and 329 shares outstanding</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Class B - 1,272 and 1,314 shares outstanding</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">3</td><td></td></tr><tr><td>Capital in excess of stated value</td><td> </td><td colspan="2">6,384</td><td></td><td> </td><td colspan="2">5,710</td><td></td></tr><tr><td>Accumulated other comprehensive loss</td><td> </td><td colspan="2">(92</td><td>)</td><td> </td><td colspan="2">(213</td><td>)</td></tr><tr><td>Retained earnings</td><td> </td><td colspan="2">3,517</td><td></td><td> </td><td colspan="2">6,907</td><td></td></tr><tr><td>Total shareholders' equity</td><td> </td><td colspan="2">9,812</td><td></td><td> </td><td colspan="2">12,407</td><td></td></tr><tr><td>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
q_an067
|
What is Nike's Dividend Payout Ratio for 2018, and what does it indicate about the company's dividend policy?
|
To calculate Nike's Dividend Payout Ratio for 2018:
Formula:
Dividend Payout Ratio (%) = (Dividend per Share / Earnings per Share (EPS)) × 100
Dividend per Share (2018) = $0.78
Earnings per Share (EPS, 2018) = $1.17
Calculation:
Dividend Payout Ratio (%) = (0.78 / 1.17) × 100 ≈ 66.67%
Nike’s Dividend Payout Ratio for 2018 is approximately 66.7%. This indicates that the company distributed about two-thirds of its earnings to shareholders as dividends, demonstrating a strong commitment to returning value to shareholders.
|
Analysis
|
44
|
0000320187-18-000142
|
ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
|
| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
|
q_an068
|
What is Nike’s Free Cash Flow (FCF) for 2018, and how does it reflect the company's financial flexibility?
|
Free Cash Flow = Cash from Operating Activities - Capital Expenditures
Data from 2018 Financial Statements:
Cash from Operating Activities: $4,955 million
Capital Expenditures (CapEx): $1,028 million
Calculation:
FCF = $4,955 - $1,028 = $3,927 million
This figure reflects Nike’s ability to generate cash after covering operational and capital investment needs, showcasing strong financial flexibility.
|
Analysis
|
47
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0000320187-18-000142
|
ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 47:
| | |
|---:|:-------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Cash Flows |
| | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------|:-------------------|:------|:-----|:-------|:-----|:------|:-------|:---|:---|:------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Cash provided by operations: | | | | | | | | | | |
| 5 | Net income | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 6 | Adjustments to reconcile net income to net cash provided by operations: | | | | | | | | | | |
| 7 | Depreciation | 747 | | | 706 | | | 649 | | | |
| 8 | Deferred income taxes | 647 | | | (273 | ) | | (80 | ) | | |
| 9 | Stock-based compensation | 218 | | | 215 | | | 236 | | | |
| 10 | Amortization and other | 27 | | | 10 | | | 13 | | | |
| 11 | Net foreign currency adjustments | (99 | ) | | (117 | ) | | 98 | | | |
| 12 | Changes in certain working capital components and other assets and liabilities: | | | | | | | | | | |
| 13 | Decrease (increase) in accounts receivable | 187 | | | (426 | ) | | 60 | | | |
| 14 | (Increase) in inventories | (255 | ) | | (231 | ) | | (590 | ) | | |
| 15 | Decrease (increase) in prepaid expenses and other current and non-current assets | 35 | | | (120 | ) | | (161 | ) | | |
| 16 | Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities | 1,515 | | | (158 | ) | | (586 | ) | | |
| 17 | Cash provided by operations | 4,955 | | | 3,846 | | | 3,399 | | | |
| 18 | Cash provided (used) by investing activities: | | | | | | | | | | |
| 19 | Purchases of short-term investments | (4,783 | ) | | (5,928 | ) | | (5,367 | ) | | |
| 20 | Maturities of short-term investments | 3,613 | | | 3,623 | | | 2,924 | | | |
| 21 | Sales of short-term investments | 2,496 | | | 2,423 | | | 2,386 | | | |
| 22 | Investments in reverse repurchase agreements | - | | | - | | | 150 | | | |
| 23 | Additions to property, plant and equipment | (1,028 | ) | | (1,105 | ) | | (1,143 | ) | | |
| 24 | Disposals of property, plant and equipment | 3 | | | 13 | | | 10 | | | |
| 25 | Other investing activities | (25 | ) | | (34 | ) | | 6 | | | |
| 26 | Cash provided (used) by investing activities | 276 | | | (1,008 | ) | | (1,034 | ) | | |
| 27 | Cash used by financing activities: | | | | | | | | | | |
| 28 | Net proceeds from long-term debt issuance | - | | | 1,482 | | | 981 | | | |
| 29 | Long-term debt payments, including current portion | (6 | ) | | (44 | ) | | (106 | ) | | |
| 30 | Increase (decrease) in notes payable | 13 | | | 327 | | | (67 | ) | | |
| 31 | Payments on capital lease and other financing obligations | (23 | ) | | (17 | ) | | (7 | ) | | |
| 32 | Proceeds from exercise of stock options and other stock issuances | 733 | | | 489 | | | 507 | | | |
| 33 | Repurchase of common stock | (4,254 | ) | | (3,223 | ) | | (3,238 | ) | | |
| 34 | Dividends - common and preferred | (1,243 | ) | | (1,133 | ) | | (1,022 | ) | | |
| 35 | Tax payments for net share settlement of equity awards | (55 | ) | | (29 | ) | | (22 | ) | | |
| 36 | Cash used by financing activities | (4,835 | ) | | (2,148 | ) | | (2,974 | ) | | |
| 37 | Effect of exchange rate changes on cash and equivalents | 45 | | | (20 | ) | | (105 | ) | | |
| 38 | Net increase (decrease) in cash and equivalents | 441 | | | 670 | | | (714 | ) | | |
| 39 | Cash and equivalents, beginning of year | 3,808 | | | 3,138 | | | 3,852 | | | |
| 40 | CASH AND EQUIVALENTS, END OF YEAR | $ | 4,249 | | | $ | 3,808 | | | $ | 3,138 |
| 41 | Supplemental disclosure of cash flow information: | | | | | | | | | | |
| 42 | Cash paid during the year for: | | | | | | | | | | |
| 43 | Interest, net of capitalized interest | $ | 125 | | | $ | 98 | | | $ | 70 |
| 44 | Income taxes | 529 | | | 703 | | | 748 | | | |
| 45 | Non-cash additions to property, plant and equipment | 294 | | | 266 | | | 252 | | | |
| 46 | Dividends declared and not paid | 320 | | | 300 | | | 271 | | | |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
47
|
| | |
|---:|:-------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Cash Flows |
| | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------|:-------------------|:------|:-----|:-------|:-----|:------|:-------|:---|:---|:------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Cash provided by operations: | | | | | | | | | | |
| 5 | Net income | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 6 | Adjustments to reconcile net income to net cash provided by operations: | | | | | | | | | | |
| 7 | Depreciation | 747 | | | 706 | | | 649 | | | |
| 8 | Deferred income taxes | 647 | | | (273 | ) | | (80 | ) | | |
| 9 | Stock-based compensation | 218 | | | 215 | | | 236 | | | |
| 10 | Amortization and other | 27 | | | 10 | | | 13 | | | |
| 11 | Net foreign currency adjustments | (99 | ) | | (117 | ) | | 98 | | | |
| 12 | Changes in certain working capital components and other assets and liabilities: | | | | | | | | | | |
| 13 | Decrease (increase) in accounts receivable | 187 | | | (426 | ) | | 60 | | | |
| 14 | (Increase) in inventories | (255 | ) | | (231 | ) | | (590 | ) | | |
| 15 | Decrease (increase) in prepaid expenses and other current and non-current assets | 35 | | | (120 | ) | | (161 | ) | | |
| 16 | Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities | 1,515 | | | (158 | ) | | (586 | ) | | |
| 17 | Cash provided by operations | 4,955 | | | 3,846 | | | 3,399 | | | |
| 18 | Cash provided (used) by investing activities: | | | | | | | | | | |
| 19 | Purchases of short-term investments | (4,783 | ) | | (5,928 | ) | | (5,367 | ) | | |
| 20 | Maturities of short-term investments | 3,613 | | | 3,623 | | | 2,924 | | | |
| 21 | Sales of short-term investments | 2,496 | | | 2,423 | | | 2,386 | | | |
| 22 | Investments in reverse repurchase agreements | - | | | - | | | 150 | | | |
| 23 | Additions to property, plant and equipment | (1,028 | ) | | (1,105 | ) | | (1,143 | ) | | |
| 24 | Disposals of property, plant and equipment | 3 | | | 13 | | | 10 | | | |
| 25 | Other investing activities | (25 | ) | | (34 | ) | | 6 | | | |
| 26 | Cash provided (used) by investing activities | 276 | | | (1,008 | ) | | (1,034 | ) | | |
| 27 | Cash used by financing activities: | | | | | | | | | | |
| 28 | Net proceeds from long-term debt issuance | - | | | 1,482 | | | 981 | | | |
| 29 | Long-term debt payments, including current portion | (6 | ) | | (44 | ) | | (106 | ) | | |
| 30 | Increase (decrease) in notes payable | 13 | | | 327 | | | (67 | ) | | |
| 31 | Payments on capital lease and other financing obligations | (23 | ) | | (17 | ) | | (7 | ) | | |
| 32 | Proceeds from exercise of stock options and other stock issuances | 733 | | | 489 | | | 507 | | | |
| 33 | Repurchase of common stock | (4,254 | ) | | (3,223 | ) | | (3,238 | ) | | |
| 34 | Dividends - common and preferred | (1,243 | ) | | (1,133 | ) | | (1,022 | ) | | |
| 35 | Tax payments for net share settlement of equity awards | (55 | ) | | (29 | ) | | (22 | ) | | |
| 36 | Cash used by financing activities | (4,835 | ) | | (2,148 | ) | | (2,974 | ) | | |
| 37 | Effect of exchange rate changes on cash and equivalents | 45 | | | (20 | ) | | (105 | ) | | |
| 38 | Net increase (decrease) in cash and equivalents | 441 | | | 670 | | | (714 | ) | | |
| 39 | Cash and equivalents, beginning of year | 3,808 | | | 3,138 | | | 3,852 | | | |
| 40 | CASH AND EQUIVALENTS, END OF YEAR | $ | 4,249 | | | $ | 3,808 | | | $ | 3,138 |
| 41 | Supplemental disclosure of cash flow information: | | | | | | | | | | |
| 42 | Cash paid during the year for: | | | | | | | | | | |
| 43 | Interest, net of capitalized interest | $ | 125 | | | $ | 98 | | | $ | 70 |
| 44 | Income taxes | 529 | | | 703 | | | 748 | | | |
| 45 | Non-cash additions to property, plant and equipment | 294 | | | 266 | | | 252 | | | |
| 46 | Dividends declared and not paid | 320 | | | 300 | | | 271 | | | |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
47
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 47:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Cash Flows</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net income</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td>Adjustments to reconcile net income to net cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Depreciation</td><td> </td><td colspan="2">747</td><td></td><td> </td><td colspan="2">706</td><td></td><td> </td><td colspan="2">649</td><td></td></tr><tr><td>Deferred income taxes</td><td> </td><td colspan="2">647</td><td></td><td> </td><td colspan="2">(273</td><td>)</td><td> </td><td colspan="2">(80</td><td>)</td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Amortization and other</td><td> </td><td colspan="2">27</td><td></td><td> </td><td colspan="2">10</td><td></td><td> </td><td colspan="2">13</td><td></td></tr><tr><td>Net foreign currency adjustments</td><td> </td><td colspan="2">(99</td><td>)</td><td> </td><td colspan="2">(117</td><td>)</td><td> </td><td colspan="2">98</td><td></td></tr><tr><td>Changes in certain working capital components and other assets and liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Decrease (increase) in accounts receivable</td><td> </td><td colspan="2">187</td><td></td><td> </td><td colspan="2">(426</td><td>)</td><td> </td><td colspan="2">60</td><td></td></tr><tr><td>(Increase) in inventories</td><td> </td><td colspan="2">(255</td><td>)</td><td> </td><td colspan="2">(231</td><td>)</td><td> </td><td colspan="2">(590</td><td>)</td></tr><tr><td>Decrease (increase) in prepaid expenses and other current and non-current assets</td><td> </td><td colspan="2">35</td><td></td><td> </td><td colspan="2">(120</td><td>)</td><td> </td><td colspan="2">(161</td><td>)</td></tr><tr><td>Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities</td><td> </td><td colspan="2">1,515</td><td></td><td> </td><td colspan="2">(158</td><td>)</td><td> </td><td colspan="2">(586</td><td>)</td></tr><tr><td>Cash provided by operations</td><td> </td><td colspan="2">4,955</td><td></td><td> </td><td colspan="2">3,846</td><td></td><td> </td><td colspan="2">3,399</td><td></td></tr><tr><td>Cash provided (used) by investing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Purchases of short-term investments</td><td> </td><td colspan="2">(4,783</td><td>)</td><td> </td><td colspan="2">(5,928</td><td>)</td><td> </td><td colspan="2">(5,367</td><td>)</td></tr><tr><td>Maturities of short-term investments</td><td> </td><td colspan="2">3,613</td><td></td><td> </td><td colspan="2">3,623</td><td></td><td> </td><td colspan="2">2,924</td><td></td></tr><tr><td>Sales of short-term investments</td><td> </td><td colspan="2">2,496</td><td></td><td> </td><td colspan="2">2,423</td><td></td><td> </td><td colspan="2">2,386</td><td></td></tr><tr><td>Investments in reverse repurchase agreements</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">150</td><td></td></tr><tr><td>Additions to property, plant and equipment</td><td> </td><td colspan="2">(1,028</td><td>)</td><td> </td><td colspan="2">(1,105</td><td>)</td><td> </td><td colspan="2">(1,143</td><td>)</td></tr><tr><td>Disposals of property, plant and equipment</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">10</td><td></td></tr><tr><td>Other investing activities</td><td> </td><td colspan="2">(25</td><td>)</td><td> </td><td colspan="2">(34</td><td>)</td><td> </td><td colspan="2">6</td><td></td></tr><tr><td>Cash provided (used) by investing activities</td><td> </td><td colspan="2">276</td><td></td><td> </td><td colspan="2">(1,008</td><td>)</td><td> </td><td colspan="2">(1,034</td><td>)</td></tr><tr><td>Cash used by financing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net proceeds from long-term debt issuance</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">1,482</td><td></td><td> </td><td colspan="2">981</td><td></td></tr><tr><td>Long-term debt payments, including current portion</td><td> </td><td colspan="2">(6</td><td>)</td><td> </td><td colspan="2">(44</td><td>)</td><td> </td><td colspan="2">(106</td><td>)</td></tr><tr><td>Increase (decrease) in notes payable</td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">327</td><td></td><td> </td><td colspan="2">(67</td><td>)</td></tr><tr><td>Payments on capital lease and other financing obligations</td><td> </td><td colspan="2">(23</td><td>)</td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">(7</td><td>)</td></tr><tr><td>Proceeds from exercise of stock options and other stock issuances</td><td> </td><td colspan="2">733</td><td></td><td> </td><td colspan="2">489</td><td></td><td> </td><td colspan="2">507</td><td></td></tr><tr><td>Repurchase of common stock</td><td> </td><td colspan="2">(4,254</td><td>)</td><td> </td><td colspan="2">(3,223</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends - common and preferred</td><td> </td><td colspan="2">(1,243</td><td>)</td><td> </td><td colspan="2">(1,133</td><td>)</td><td> </td><td colspan="2">(1,022</td><td>)</td></tr><tr><td>Tax payments for net share settlement of equity awards</td><td> </td><td colspan="2">(55</td><td>)</td><td> </td><td colspan="2">(29</td><td>)</td><td> </td><td colspan="2">(22</td><td>)</td></tr><tr><td>Cash used by financing activities</td><td> </td><td colspan="2">(4,835</td><td>)</td><td> </td><td colspan="2">(2,148</td><td>)</td><td> </td><td colspan="2">(2,974</td><td>)</td></tr><tr><td>Effect of exchange rate changes on cash and equivalents</td><td> </td><td colspan="2">45</td><td></td><td> </td><td colspan="2">(20</td><td>)</td><td> </td><td colspan="2">(105</td><td>)</td></tr><tr><td>Net increase (decrease) in cash and equivalents</td><td> </td><td colspan="2">441</td><td></td><td> </td><td colspan="2">670</td><td></td><td> </td><td colspan="2">(714</td><td>)</td></tr><tr><td>Cash and equivalents, beginning of year</td><td> </td><td colspan="2">3,808</td><td></td><td> </td><td colspan="2">3,138</td><td></td><td> </td><td colspan="2">3,852</td><td></td></tr><tr><td>CASH AND EQUIVALENTS, END OF YEAR</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td><td> </td><td>$</td><td>3,138</td><td></td></tr><tr><td>Supplemental disclosure of cash flow information:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash paid during the year for:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Interest, net of capitalized interest</td><td> </td><td>$</td><td>125</td><td></td><td> </td><td>$</td><td>98</td><td></td><td> </td><td>$</td><td>70</td><td></td></tr><tr><td>Income taxes</td><td> </td><td colspan="2">529</td><td></td><td> </td><td colspan="2">703</td><td></td><td> </td><td colspan="2">748</td><td></td></tr><tr><td>Non-cash additions to property, plant and equipment</td><td> </td><td colspan="2">294</td><td></td><td> </td><td colspan="2">266</td><td></td><td> </td><td colspan="2">252</td><td></td></tr><tr><td>Dividends declared and not paid</td><td> </td><td colspan="2">320</td><td></td><td> </td><td colspan="2">300</td><td></td><td> </td><td colspan="2">271</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
47
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Cash Flows</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net income</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td>Adjustments to reconcile net income to net cash provided by operations:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Depreciation</td><td> </td><td colspan="2">747</td><td></td><td> </td><td colspan="2">706</td><td></td><td> </td><td colspan="2">649</td><td></td></tr><tr><td>Deferred income taxes</td><td> </td><td colspan="2">647</td><td></td><td> </td><td colspan="2">(273</td><td>)</td><td> </td><td colspan="2">(80</td><td>)</td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Amortization and other</td><td> </td><td colspan="2">27</td><td></td><td> </td><td colspan="2">10</td><td></td><td> </td><td colspan="2">13</td><td></td></tr><tr><td>Net foreign currency adjustments</td><td> </td><td colspan="2">(99</td><td>)</td><td> </td><td colspan="2">(117</td><td>)</td><td> </td><td colspan="2">98</td><td></td></tr><tr><td>Changes in certain working capital components and other assets and liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Decrease (increase) in accounts receivable</td><td> </td><td colspan="2">187</td><td></td><td> </td><td colspan="2">(426</td><td>)</td><td> </td><td colspan="2">60</td><td></td></tr><tr><td>(Increase) in inventories</td><td> </td><td colspan="2">(255</td><td>)</td><td> </td><td colspan="2">(231</td><td>)</td><td> </td><td colspan="2">(590</td><td>)</td></tr><tr><td>Decrease (increase) in prepaid expenses and other current and non-current assets</td><td> </td><td colspan="2">35</td><td></td><td> </td><td colspan="2">(120</td><td>)</td><td> </td><td colspan="2">(161</td><td>)</td></tr><tr><td>Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities</td><td> </td><td colspan="2">1,515</td><td></td><td> </td><td colspan="2">(158</td><td>)</td><td> </td><td colspan="2">(586</td><td>)</td></tr><tr><td>Cash provided by operations</td><td> </td><td colspan="2">4,955</td><td></td><td> </td><td colspan="2">3,846</td><td></td><td> </td><td colspan="2">3,399</td><td></td></tr><tr><td>Cash provided (used) by investing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Purchases of short-term investments</td><td> </td><td colspan="2">(4,783</td><td>)</td><td> </td><td colspan="2">(5,928</td><td>)</td><td> </td><td colspan="2">(5,367</td><td>)</td></tr><tr><td>Maturities of short-term investments</td><td> </td><td colspan="2">3,613</td><td></td><td> </td><td colspan="2">3,623</td><td></td><td> </td><td colspan="2">2,924</td><td></td></tr><tr><td>Sales of short-term investments</td><td> </td><td colspan="2">2,496</td><td></td><td> </td><td colspan="2">2,423</td><td></td><td> </td><td colspan="2">2,386</td><td></td></tr><tr><td>Investments in reverse repurchase agreements</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">150</td><td></td></tr><tr><td>Additions to property, plant and equipment</td><td> </td><td colspan="2">(1,028</td><td>)</td><td> </td><td colspan="2">(1,105</td><td>)</td><td> </td><td colspan="2">(1,143</td><td>)</td></tr><tr><td>Disposals of property, plant and equipment</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">10</td><td></td></tr><tr><td>Other investing activities</td><td> </td><td colspan="2">(25</td><td>)</td><td> </td><td colspan="2">(34</td><td>)</td><td> </td><td colspan="2">6</td><td></td></tr><tr><td>Cash provided (used) by investing activities</td><td> </td><td colspan="2">276</td><td></td><td> </td><td colspan="2">(1,008</td><td>)</td><td> </td><td colspan="2">(1,034</td><td>)</td></tr><tr><td>Cash used by financing activities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Net proceeds from long-term debt issuance</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">1,482</td><td></td><td> </td><td colspan="2">981</td><td></td></tr><tr><td>Long-term debt payments, including current portion</td><td> </td><td colspan="2">(6</td><td>)</td><td> </td><td colspan="2">(44</td><td>)</td><td> </td><td colspan="2">(106</td><td>)</td></tr><tr><td>Increase (decrease) in notes payable</td><td> </td><td colspan="2">13</td><td></td><td> </td><td colspan="2">327</td><td></td><td> </td><td colspan="2">(67</td><td>)</td></tr><tr><td>Payments on capital lease and other financing obligations</td><td> </td><td colspan="2">(23</td><td>)</td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">(7</td><td>)</td></tr><tr><td>Proceeds from exercise of stock options and other stock issuances</td><td> </td><td colspan="2">733</td><td></td><td> </td><td colspan="2">489</td><td></td><td> </td><td colspan="2">507</td><td></td></tr><tr><td>Repurchase of common stock</td><td> </td><td colspan="2">(4,254</td><td>)</td><td> </td><td colspan="2">(3,223</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends - common and preferred</td><td> </td><td colspan="2">(1,243</td><td>)</td><td> </td><td colspan="2">(1,133</td><td>)</td><td> </td><td colspan="2">(1,022</td><td>)</td></tr><tr><td>Tax payments for net share settlement of equity awards</td><td> </td><td colspan="2">(55</td><td>)</td><td> </td><td colspan="2">(29</td><td>)</td><td> </td><td colspan="2">(22</td><td>)</td></tr><tr><td>Cash used by financing activities</td><td> </td><td colspan="2">(4,835</td><td>)</td><td> </td><td colspan="2">(2,148</td><td>)</td><td> </td><td colspan="2">(2,974</td><td>)</td></tr><tr><td>Effect of exchange rate changes on cash and equivalents</td><td> </td><td colspan="2">45</td><td></td><td> </td><td colspan="2">(20</td><td>)</td><td> </td><td colspan="2">(105</td><td>)</td></tr><tr><td>Net increase (decrease) in cash and equivalents</td><td> </td><td colspan="2">441</td><td></td><td> </td><td colspan="2">670</td><td></td><td> </td><td colspan="2">(714</td><td>)</td></tr><tr><td>Cash and equivalents, beginning of year</td><td> </td><td colspan="2">3,808</td><td></td><td> </td><td colspan="2">3,138</td><td></td><td> </td><td colspan="2">3,852</td><td></td></tr><tr><td>CASH AND EQUIVALENTS, END OF YEAR</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td><td> </td><td>$</td><td>3,138</td><td></td></tr><tr><td>Supplemental disclosure of cash flow information:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash paid during the year for:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Interest, net of capitalized interest</td><td> </td><td>$</td><td>125</td><td></td><td> </td><td>$</td><td>98</td><td></td><td> </td><td>$</td><td>70</td><td></td></tr><tr><td>Income taxes</td><td> </td><td colspan="2">529</td><td></td><td> </td><td colspan="2">703</td><td></td><td> </td><td colspan="2">748</td><td></td></tr><tr><td>Non-cash additions to property, plant and equipment</td><td> </td><td colspan="2">294</td><td></td><td> </td><td colspan="2">266</td><td></td><td> </td><td colspan="2">252</td><td></td></tr><tr><td>Dividends declared and not paid</td><td> </td><td colspan="2">320</td><td></td><td> </td><td colspan="2">300</td><td></td><td> </td><td colspan="2">271</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
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q_an069
|
How has Nike's working capital changed from 2017 to 2018, and what implications does this have for operational efficiency?
|
Working Capital Comparison:
Working Capital 2018:
Total Current Assets: $15,134 million
Total Current Liabilities: $6,040 million
Working Capital = $15,134 - $6,040 = $9,094 million
Working Capital 2017:
Total Current Assets: $16,061 million
Total Current Liabilities: $5,474 million
Working Capital = $16,061 - $5,474 = $10,587 million
Change in Working Capital:
Change = $9,094 - $10,587 = -$1,493 million
Implications:
The decrease in working capital suggests tighter management of current assets and liabilities, possibly to enhance operational efficiency or reflect strategic investment in inventory and accounts payable adjustments
|
Analysis
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46
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0000320187-18-000142
|
ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 46:
| | |
|---:|:---------------------------------------|
| 2 | NIKE, Inc. Consolidated Balance Sheets |
| | | | | | | | |
|---:|:-----------------------------------------------------|:--------|:-------|:-----|:-------|:---|:-------|
| 2 | | May 31, | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | | |
| 4 | ASSETS | | | | | | |
| 5 | Current assets: | | | | | | |
| 6 | Cash and equivalents | $ | 4,249 | | | $ | 3,808 |
| 7 | Short-term investments | 996 | | | 2,371 | | |
| 8 | Accounts receivable, net | 3,498 | | | 3,677 | | |
| 9 | Inventories | 5,261 | | | 5,055 | | |
| 10 | Prepaid expenses and other current assets | 1,130 | | | 1,150 | | |
| 11 | Total current assets | 15,134 | | | 16,061 | | |
| 12 | Property, plant and equipment, net | 4,454 | | | 3,989 | | |
| 13 | Identifiable intangible assets, net | 285 | | | 283 | | |
| 14 | Goodwill | 154 | | | 139 | | |
| 15 | Deferred income taxes and other assets | 2,509 | | | 2,787 | | |
| 16 | TOTAL ASSETS | $ | 22,536 | | | $ | 23,259 |
| 17 | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| 18 | Current liabilities: | | | | | | |
| 19 | Current portion of long-term debt | $ | 6 | | | $ | 6 |
| 20 | Notes payable | 336 | | | 325 | | |
| 21 | Accounts payable | 2,279 | | | 2,048 | | |
| 22 | Accrued liabilities | 3,269 | | | 3,011 | | |
| 23 | Income taxes payable | 150 | | | 84 | | |
| 24 | Total current liabilities | 6,040 | | | 5,474 | | |
| 25 | Long-term debt | 3,468 | | | 3,471 | | |
| 26 | Deferred income taxes and other liabilities | 3,216 | | | 1,907 | | |
| 27 | Commitments and contingencies (Note 15) | | | | | | |
| 28 | Redeemable preferred stock | - | | | - | | |
| 29 | Shareholders' equity: | | | | | | |
| 30 | Common stock at stated value: | | | | | | |
| 31 | Class A convertible - 329 and 329 shares outstanding | - | | | - | | |
| 32 | Class B - 1,272 and 1,314 shares outstanding | 3 | | | 3 | | |
| 33 | Capital in excess of stated value | 6,384 | | | 5,710 | | |
| 34 | Accumulated other comprehensive loss | (92 | ) | | (213 | ) | |
| 35 | Retained earnings | 3,517 | | | 6,907 | | |
| 36 | Total shareholders' equity | 9,812 | | | 12,407 | | |
| 37 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 22,536 | | | $ | 23,259 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
| | |
|---:|:---------------------------------------|
| 2 | NIKE, Inc. Consolidated Balance Sheets |
| | | | | | | | |
|---:|:-----------------------------------------------------|:--------|:-------|:-----|:-------|:---|:-------|
| 2 | | May 31, | | | | | |
| 3 | (In millions) | 2018 | | 2017 | | | |
| 4 | ASSETS | | | | | | |
| 5 | Current assets: | | | | | | |
| 6 | Cash and equivalents | $ | 4,249 | | | $ | 3,808 |
| 7 | Short-term investments | 996 | | | 2,371 | | |
| 8 | Accounts receivable, net | 3,498 | | | 3,677 | | |
| 9 | Inventories | 5,261 | | | 5,055 | | |
| 10 | Prepaid expenses and other current assets | 1,130 | | | 1,150 | | |
| 11 | Total current assets | 15,134 | | | 16,061 | | |
| 12 | Property, plant and equipment, net | 4,454 | | | 3,989 | | |
| 13 | Identifiable intangible assets, net | 285 | | | 283 | | |
| 14 | Goodwill | 154 | | | 139 | | |
| 15 | Deferred income taxes and other assets | 2,509 | | | 2,787 | | |
| 16 | TOTAL ASSETS | $ | 22,536 | | | $ | 23,259 |
| 17 | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| 18 | Current liabilities: | | | | | | |
| 19 | Current portion of long-term debt | $ | 6 | | | $ | 6 |
| 20 | Notes payable | 336 | | | 325 | | |
| 21 | Accounts payable | 2,279 | | | 2,048 | | |
| 22 | Accrued liabilities | 3,269 | | | 3,011 | | |
| 23 | Income taxes payable | 150 | | | 84 | | |
| 24 | Total current liabilities | 6,040 | | | 5,474 | | |
| 25 | Long-term debt | 3,468 | | | 3,471 | | |
| 26 | Deferred income taxes and other liabilities | 3,216 | | | 1,907 | | |
| 27 | Commitments and contingencies (Note 15) | | | | | | |
| 28 | Redeemable preferred stock | - | | | - | | |
| 29 | Shareholders' equity: | | | | | | |
| 30 | Common stock at stated value: | | | | | | |
| 31 | Class A convertible - 329 and 329 shares outstanding | - | | | - | | |
| 32 | Class B - 1,272 and 1,314 shares outstanding | 3 | | | 3 | | |
| 33 | Capital in excess of stated value | 6,384 | | | 5,710 | | |
| 34 | Accumulated other comprehensive loss | (92 | ) | | (213 | ) | |
| 35 | Retained earnings | 3,517 | | | 6,907 | | |
| 36 | Total shareholders' equity | 9,812 | | | 12,407 | | |
| 37 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 22,536 | | | $ | 23,259 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 46:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Balance Sheets</td></tr></table>
<table><tr><td colspan="9"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="7">May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>ASSETS</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current assets:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash and equivalents</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td></tr><tr><td>Short-term investments</td><td> </td><td colspan="2">996</td><td></td><td> </td><td colspan="2">2,371</td><td></td></tr><tr><td>Accounts receivable, net</td><td> </td><td colspan="2">3,498</td><td></td><td> </td><td colspan="2">3,677</td><td></td></tr><tr><td>Inventories</td><td> </td><td colspan="2">5,261</td><td></td><td> </td><td colspan="2">5,055</td><td></td></tr><tr><td>Prepaid expenses and other current assets</td><td> </td><td colspan="2">1,130</td><td></td><td> </td><td colspan="2">1,150</td><td></td></tr><tr><td>Total current assets</td><td> </td><td colspan="2">15,134</td><td></td><td> </td><td colspan="2">16,061</td><td></td></tr><tr><td>Property, plant and equipment, net</td><td> </td><td colspan="2">4,454</td><td></td><td> </td><td colspan="2">3,989</td><td></td></tr><tr><td>Identifiable intangible assets, net</td><td> </td><td colspan="2">285</td><td></td><td> </td><td colspan="2">283</td><td></td></tr><tr><td>Goodwill</td><td> </td><td colspan="2">154</td><td></td><td> </td><td colspan="2">139</td><td></td></tr><tr><td>Deferred income taxes and other assets</td><td> </td><td colspan="2">2,509</td><td></td><td> </td><td colspan="2">2,787</td><td></td></tr><tr><td>TOTAL ASSETS</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr><tr><td>LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current portion of long-term debt</td><td> </td><td>$</td><td>6</td><td></td><td> </td><td>$</td><td>6</td><td></td></tr><tr><td>Notes payable</td><td> </td><td colspan="2">336</td><td></td><td> </td><td colspan="2">325</td><td></td></tr><tr><td>Accounts payable</td><td> </td><td colspan="2">2,279</td><td></td><td> </td><td colspan="2">2,048</td><td></td></tr><tr><td>Accrued liabilities</td><td> </td><td colspan="2">3,269</td><td></td><td> </td><td colspan="2">3,011</td><td></td></tr><tr><td>Income taxes payable</td><td> </td><td colspan="2">150</td><td></td><td> </td><td colspan="2">84</td><td></td></tr><tr><td>Total current liabilities</td><td> </td><td colspan="2">6,040</td><td></td><td> </td><td colspan="2">5,474</td><td></td></tr><tr><td>Long-term debt</td><td> </td><td colspan="2">3,468</td><td></td><td> </td><td colspan="2">3,471</td><td></td></tr><tr><td>Deferred income taxes and other liabilities</td><td> </td><td colspan="2">3,216</td><td></td><td> </td><td colspan="2">1,907</td><td></td></tr><tr><td>Commitments and contingencies (Note 15)</td><td> </td><td colspan="2"></td><td></td><td> </td><td colspan="2"></td><td></td></tr><tr><td>Redeemable preferred stock</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Shareholders' equity:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Common stock at stated value:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Class A convertible - 329 and 329 shares outstanding</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Class B - 1,272 and 1,314 shares outstanding</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">3</td><td></td></tr><tr><td>Capital in excess of stated value</td><td> </td><td colspan="2">6,384</td><td></td><td> </td><td colspan="2">5,710</td><td></td></tr><tr><td>Accumulated other comprehensive loss</td><td> </td><td colspan="2">(92</td><td>)</td><td> </td><td colspan="2">(213</td><td>)</td></tr><tr><td>Retained earnings</td><td> </td><td colspan="2">3,517</td><td></td><td> </td><td colspan="2">6,907</td><td></td></tr><tr><td>Total shareholders' equity</td><td> </td><td colspan="2">9,812</td><td></td><td> </td><td colspan="2">12,407</td><td></td></tr><tr><td>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Balance Sheets</td></tr></table>
<table><tr><td colspan="9"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="7">May 31,</td></tr><tr><td>(In millions)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td></tr><tr><td>ASSETS</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current assets:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Cash and equivalents</td><td> </td><td>$</td><td>4,249</td><td></td><td> </td><td>$</td><td>3,808</td><td></td></tr><tr><td>Short-term investments</td><td> </td><td colspan="2">996</td><td></td><td> </td><td colspan="2">2,371</td><td></td></tr><tr><td>Accounts receivable, net</td><td> </td><td colspan="2">3,498</td><td></td><td> </td><td colspan="2">3,677</td><td></td></tr><tr><td>Inventories</td><td> </td><td colspan="2">5,261</td><td></td><td> </td><td colspan="2">5,055</td><td></td></tr><tr><td>Prepaid expenses and other current assets</td><td> </td><td colspan="2">1,130</td><td></td><td> </td><td colspan="2">1,150</td><td></td></tr><tr><td>Total current assets</td><td> </td><td colspan="2">15,134</td><td></td><td> </td><td colspan="2">16,061</td><td></td></tr><tr><td>Property, plant and equipment, net</td><td> </td><td colspan="2">4,454</td><td></td><td> </td><td colspan="2">3,989</td><td></td></tr><tr><td>Identifiable intangible assets, net</td><td> </td><td colspan="2">285</td><td></td><td> </td><td colspan="2">283</td><td></td></tr><tr><td>Goodwill</td><td> </td><td colspan="2">154</td><td></td><td> </td><td colspan="2">139</td><td></td></tr><tr><td>Deferred income taxes and other assets</td><td> </td><td colspan="2">2,509</td><td></td><td> </td><td colspan="2">2,787</td><td></td></tr><tr><td>TOTAL ASSETS</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr><tr><td>LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current liabilities:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Current portion of long-term debt</td><td> </td><td>$</td><td>6</td><td></td><td> </td><td>$</td><td>6</td><td></td></tr><tr><td>Notes payable</td><td> </td><td colspan="2">336</td><td></td><td> </td><td colspan="2">325</td><td></td></tr><tr><td>Accounts payable</td><td> </td><td colspan="2">2,279</td><td></td><td> </td><td colspan="2">2,048</td><td></td></tr><tr><td>Accrued liabilities</td><td> </td><td colspan="2">3,269</td><td></td><td> </td><td colspan="2">3,011</td><td></td></tr><tr><td>Income taxes payable</td><td> </td><td colspan="2">150</td><td></td><td> </td><td colspan="2">84</td><td></td></tr><tr><td>Total current liabilities</td><td> </td><td colspan="2">6,040</td><td></td><td> </td><td colspan="2">5,474</td><td></td></tr><tr><td>Long-term debt</td><td> </td><td colspan="2">3,468</td><td></td><td> </td><td colspan="2">3,471</td><td></td></tr><tr><td>Deferred income taxes and other liabilities</td><td> </td><td colspan="2">3,216</td><td></td><td> </td><td colspan="2">1,907</td><td></td></tr><tr><td>Commitments and contingencies (Note 15)</td><td> </td><td colspan="2"></td><td></td><td> </td><td colspan="2"></td><td></td></tr><tr><td>Redeemable preferred stock</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Shareholders' equity:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Common stock at stated value:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Class A convertible - 329 and 329 shares outstanding</td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Class B - 1,272 and 1,314 shares outstanding</td><td> </td><td colspan="2">3</td><td></td><td> </td><td colspan="2">3</td><td></td></tr><tr><td>Capital in excess of stated value</td><td> </td><td colspan="2">6,384</td><td></td><td> </td><td colspan="2">5,710</td><td></td></tr><tr><td>Accumulated other comprehensive loss</td><td> </td><td colspan="2">(92</td><td>)</td><td> </td><td colspan="2">(213</td><td>)</td></tr><tr><td>Retained earnings</td><td> </td><td colspan="2">3,517</td><td></td><td> </td><td colspan="2">6,907</td><td></td></tr><tr><td>Total shareholders' equity</td><td> </td><td colspan="2">9,812</td><td></td><td> </td><td colspan="2">12,407</td><td></td></tr><tr><td>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td><td>$</td><td>22,536</td><td></td><td> </td><td>$</td><td>23,259</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
46
|
q_an070
|
How did the net income in 2018 compare to 2017, and what was its impact on retained earnings?
|
Net Income 2018: $1,933 million
Net Income 2017: $4,240 million
Formula:
Percentage Change in Net Income = ((Net Income 2018 - Net Income 2017) / Net Income 2017) × 100
Calculation:
Percentage Change = ((1,933 - 4,240) / 4,240) × 100
Percentage Change = (-2,307 / 4,240) × 100 ≈ -54.44%
Impact on Retained Earnings:
Net income directly impacts retained earnings, as it represents the company's profit added to the retained earnings after dividends are paid. Despite a positive net income in 2018, retained earnings declined significantly due to higher dividend payouts ($1,265 million) and share repurchases, coupled with the significant decrease in net income.
Answer:
Net income decreased by approximately 54.44% from 2017 to 2018. This substantial decline negatively impacted retained earnings, which dropped from $6,907 million in 2017 to $3,517 million in 2018, driven by reduced profitability and higher shareholder returns.
|
Analysis
|
44, 48
|
0000320187-18-000142
|
ITEM 8. Financial Statements and Supplementary Data
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
, NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 48:
| | |
|---:|:-----------------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Shareholders' Equity |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:-------------|:---|:-------------------------------|:---|:------------------------------------|:---|:-----------------|:------|:------|:-----|:-----|:---|:-------|:----|:-------|:-------|:----|:-------|:---|:------|:---|:---|:------|:---|:-------|
| 2 | | Common Stock | | Capital inExcessof StatedValue | | AccumulatedOtherComprehensiveIncome | | RetainedEarnings | | Total | | | | | | | | | | | | | | | | |
| 3 | | Class A | | Class B | | | | | | | | | | | | | | | | | | | | | | |
| 4 | (In millions, except per share data) | Shares | | Amount | | Shares | | Amount | | | | | | | | | | | | | | | | | | |
| 5 | Balance at May 31, 2015 | 355 | | | $ | - | | | 1,357 | | | $ | 3 | | | $ | 4,165 | | | $ | 1,246 | | $ | 7,293 | $ | 12,707 |
| 6 | Stock options exercised | | | | | 22 | | | | | 680 | | | | | | | 680 | | | | | | | | |
| 7 | Conversion to Class B Common Stock | (2 | ) | | - | | | 2 | | | - | | | | | | | | | - | | | | | | |
| 8 | Repurchase of Class B Common Stock | | | | | (55 | ) | | | | (148 | ) | | | | (3,090 | ) | | (3,238 | ) | | | | | | |
| 9 | Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,053 | ) | | (1,053 | ) | | | | | | | | |
| 10 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 3 | | | | | 105 | | | | | (11 | ) | | 94 | | | | | | | |
| 11 | Stock-based compensation | | | | | | | | | 236 | | | | | | | 236 | | | | | | | | | |
| 12 | Net income | | | | | | | | | | | | | 3,760 | | | 3,760 | | | | | | | | | |
| 13 | Other comprehensive income (loss) | | | | | | | | | | | (928 | ) | | | | (928 | ) | | | | | | | | |
| 14 | Balance at May 31, 2016 | 353 | | | $ | - | | | 1,329 | | | $ | 3 | | | $ | 5,038 | | | $ | 318 | | $ | 6,899 | $ | 12,258 |
| 15 | Stock options exercised | | | | | 17 | | | | | 525 | | | | | | | 525 | | | | | | | | |
| 16 | Conversion to Class B Common Stock | (24 | ) | | - | | | 24 | | | - | | | | | | | | | - | | | | | | |
| 17 | Repurchase of Class B Common Stock | | | | | (60 | ) | | | | (189 | ) | | | | (3,060 | ) | | (3,249 | ) | | | | | | |
| 18 | Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,159 | ) | | (1,159 | ) | | | | | | | | |
| 19 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 121 | | | | | (13 | ) | | 108 | | | | | | | |
| 20 | Stock-based compensation | | | | | | | | | 215 | | | | | | | 215 | | | | | | | | | |
| 21 | Net income | | | | | | | | | | | | | 4,240 | | | 4,240 | | | | | | | | | |
| 22 | Other comprehensive income (loss) | | | | | | | | | | | (531 | ) | | | | (531 | ) | | | | | | | | |
| 23 | Balance at May 31, 2017 | 329 | | | $ | - | | | 1,314 | | | $ | 3 | | | $ | 5,710 | | | $ | (213 | ) | $ | 6,907 | $ | 12,407 |
| 24 | Stock options exercised | | | | | 24 | | | | | 600 | | | | | | | 600 | | | | | | | | |
| 25 | Conversion to Class B Common Stock | - | | | - | | | - | | | - | | | | | | | | | - | | | | | | |
| 26 | Repurchase of Class B Common Stock | | | | | (70 | ) | | | | (254 | ) | | | | (4,013 | ) | | (4,267 | ) | | | | | | |
| 27 | Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,265 | ) | | (1,265 | ) | | | | | | | | |
| 28 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 110 | | | | | (28 | ) | | 82 | | | | | | | |
| 29 | Stock-based compensation | | | | | | | | | 218 | | | | | | | 218 | | | | | | | | | |
| 30 | Net income | | | | | | | | | | | | | 1,933 | | | 1,933 | | | | | | | | | |
| 31 | Other comprehensive income (loss) | | | | | | | | | | | 104 | | | | | 104 | | | | | | | | | |
| 32 | Reclassifications to retained earnings in accordance with ASU 2018-02 | | | | | | | | | | | 17 | | | (17 | ) | | - | | | | | | | | |
| 33 | Balance at May 31, 2018 | 329 | | | $ | - | | | 1,272 | | | $ | 3 | | | $ | 6,384 | | | $ | (92 | ) | $ | 3,517 | $ | 9,812 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
48
|
| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
,
| | |
|---:|:-----------------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Shareholders' Equity |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:-------------|:---|:-------------------------------|:---|:------------------------------------|:---|:-----------------|:------|:------|:-----|:-----|:---|:-------|:----|:-------|:-------|:----|:-------|:---|:------|:---|:---|:------|:---|:-------|
| 2 | | Common Stock | | Capital inExcessof StatedValue | | AccumulatedOtherComprehensiveIncome | | RetainedEarnings | | Total | | | | | | | | | | | | | | | | |
| 3 | | Class A | | Class B | | | | | | | | | | | | | | | | | | | | | | |
| 4 | (In millions, except per share data) | Shares | | Amount | | Shares | | Amount | | | | | | | | | | | | | | | | | | |
| 5 | Balance at May 31, 2015 | 355 | | | $ | - | | | 1,357 | | | $ | 3 | | | $ | 4,165 | | | $ | 1,246 | | $ | 7,293 | $ | 12,707 |
| 6 | Stock options exercised | | | | | 22 | | | | | 680 | | | | | | | 680 | | | | | | | | |
| 7 | Conversion to Class B Common Stock | (2 | ) | | - | | | 2 | | | - | | | | | | | | | - | | | | | | |
| 8 | Repurchase of Class B Common Stock | | | | | (55 | ) | | | | (148 | ) | | | | (3,090 | ) | | (3,238 | ) | | | | | | |
| 9 | Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,053 | ) | | (1,053 | ) | | | | | | | | |
| 10 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 3 | | | | | 105 | | | | | (11 | ) | | 94 | | | | | | | |
| 11 | Stock-based compensation | | | | | | | | | 236 | | | | | | | 236 | | | | | | | | | |
| 12 | Net income | | | | | | | | | | | | | 3,760 | | | 3,760 | | | | | | | | | |
| 13 | Other comprehensive income (loss) | | | | | | | | | | | (928 | ) | | | | (928 | ) | | | | | | | | |
| 14 | Balance at May 31, 2016 | 353 | | | $ | - | | | 1,329 | | | $ | 3 | | | $ | 5,038 | | | $ | 318 | | $ | 6,899 | $ | 12,258 |
| 15 | Stock options exercised | | | | | 17 | | | | | 525 | | | | | | | 525 | | | | | | | | |
| 16 | Conversion to Class B Common Stock | (24 | ) | | - | | | 24 | | | - | | | | | | | | | - | | | | | | |
| 17 | Repurchase of Class B Common Stock | | | | | (60 | ) | | | | (189 | ) | | | | (3,060 | ) | | (3,249 | ) | | | | | | |
| 18 | Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,159 | ) | | (1,159 | ) | | | | | | | | |
| 19 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 121 | | | | | (13 | ) | | 108 | | | | | | | |
| 20 | Stock-based compensation | | | | | | | | | 215 | | | | | | | 215 | | | | | | | | | |
| 21 | Net income | | | | | | | | | | | | | 4,240 | | | 4,240 | | | | | | | | | |
| 22 | Other comprehensive income (loss) | | | | | | | | | | | (531 | ) | | | | (531 | ) | | | | | | | | |
| 23 | Balance at May 31, 2017 | 329 | | | $ | - | | | 1,314 | | | $ | 3 | | | $ | 5,710 | | | $ | (213 | ) | $ | 6,907 | $ | 12,407 |
| 24 | Stock options exercised | | | | | 24 | | | | | 600 | | | | | | | 600 | | | | | | | | |
| 25 | Conversion to Class B Common Stock | - | | | - | | | - | | | - | | | | | | | | | - | | | | | | |
| 26 | Repurchase of Class B Common Stock | | | | | (70 | ) | | | | (254 | ) | | | | (4,013 | ) | | (4,267 | ) | | | | | | |
| 27 | Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,265 | ) | | (1,265 | ) | | | | | | | | |
| 28 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 110 | | | | | (28 | ) | | 82 | | | | | | | |
| 29 | Stock-based compensation | | | | | | | | | 218 | | | | | | | 218 | | | | | | | | | |
| 30 | Net income | | | | | | | | | | | | | 1,933 | | | 1,933 | | | | | | | | | |
| 31 | Other comprehensive income (loss) | | | | | | | | | | | 104 | | | | | 104 | | | | | | | | | |
| 32 | Reclassifications to retained earnings in accordance with ASU 2018-02 | | | | | | | | | | | 17 | | | (17 | ) | | - | | | | | | | | |
| 33 | Balance at May 31, 2018 | 329 | | | $ | - | | | 1,272 | | | $ | 3 | | | $ | 6,384 | | | $ | (92 | ) | $ | 3,517 | $ | 9,812 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
48
|
NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
, NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 48:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Shareholders' Equity</td></tr></table>
<table><tr><td colspan="31"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="13">Common Stock</td><td> </td><td colspan="3" rowspan="3">Capital inExcessof StatedValue</td><td rowspan="3"> </td><td colspan="3" rowspan="3">AccumulatedOtherComprehensiveIncome</td><td rowspan="3"> </td><td colspan="3" rowspan="3">RetainedEarnings</td><td rowspan="3"> </td><td colspan="3" rowspan="3">Total</td></tr><tr><td> </td><td> </td><td colspan="6">Class A</td><td> </td><td colspan="6">Class B</td><td> </td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td></tr><tr><td>Balance at May 31, 2015</td><td> </td><td>355</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,357</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>4,165</td><td></td><td> </td><td>$</td><td>1,246</td><td></td><td> </td><td>$</td><td>7,293</td><td></td><td> </td><td>$</td><td>12,707</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>22</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(2</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>2</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(55</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(148</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,090</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,053</td><td>)</td><td> </td><td colspan="2">(1,053</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>3</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">105</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(11</td><td>)</td><td> </td><td colspan="2">94</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">3,760</td><td></td><td> </td><td colspan="2">3,760</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td></tr><tr><td>Balance at May 31, 2016</td><td> </td><td>353</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,329</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,038</td><td></td><td> </td><td>$</td><td>318</td><td></td><td> </td><td>$</td><td>6,899</td><td></td><td> </td><td>$</td><td>12,258</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>17</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(24</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>24</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(60</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(189</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,060</td><td>)</td><td> </td><td colspan="2">(3,249</td><td>)</td></tr><tr><td>Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,159</td><td>)</td><td> </td><td colspan="2">(1,159</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">121</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(13</td><td>)</td><td> </td><td colspan="2">108</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">4,240</td><td></td><td> </td><td colspan="2">4,240</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td></tr><tr><td>Balance at May 31, 2017</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,314</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,710</td><td></td><td> </td><td>$</td><td>(213</td><td>)</td><td> </td><td>$</td><td>6,907</td><td></td><td> </td><td>$</td><td>12,407</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>24</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(70</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(254</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(4,013</td><td>)</td><td> </td><td colspan="2">(4,267</td><td>)</td></tr><tr><td>Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,265</td><td>)</td><td> </td><td colspan="2">(1,265</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">110</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(28</td><td>)</td><td> </td><td colspan="2">82</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">1,933</td><td></td><td> </td><td colspan="2">1,933</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td></tr><tr><td>Reclassifications to retained earnings in accordance with ASU 2018-02</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">17</td><td></td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Balance at May 31, 2018</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,272</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>6,384</td><td></td><td> </td><td>$</td><td>(92</td><td>)</td><td> </td><td>$</td><td>3,517</td><td></td><td> </td><td>$</td><td>9,812</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
48
|
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
,
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Shareholders' Equity</td></tr></table>
<table><tr><td colspan="31"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="13">Common Stock</td><td> </td><td colspan="3" rowspan="3">Capital inExcessof StatedValue</td><td rowspan="3"> </td><td colspan="3" rowspan="3">AccumulatedOtherComprehensiveIncome</td><td rowspan="3"> </td><td colspan="3" rowspan="3">RetainedEarnings</td><td rowspan="3"> </td><td colspan="3" rowspan="3">Total</td></tr><tr><td> </td><td> </td><td colspan="6">Class A</td><td> </td><td colspan="6">Class B</td><td> </td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td></tr><tr><td>Balance at May 31, 2015</td><td> </td><td>355</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,357</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>4,165</td><td></td><td> </td><td>$</td><td>1,246</td><td></td><td> </td><td>$</td><td>7,293</td><td></td><td> </td><td>$</td><td>12,707</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>22</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(2</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>2</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(55</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(148</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,090</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,053</td><td>)</td><td> </td><td colspan="2">(1,053</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>3</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">105</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(11</td><td>)</td><td> </td><td colspan="2">94</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">3,760</td><td></td><td> </td><td colspan="2">3,760</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td></tr><tr><td>Balance at May 31, 2016</td><td> </td><td>353</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,329</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,038</td><td></td><td> </td><td>$</td><td>318</td><td></td><td> </td><td>$</td><td>6,899</td><td></td><td> </td><td>$</td><td>12,258</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>17</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(24</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>24</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(60</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(189</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,060</td><td>)</td><td> </td><td colspan="2">(3,249</td><td>)</td></tr><tr><td>Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,159</td><td>)</td><td> </td><td colspan="2">(1,159</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">121</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(13</td><td>)</td><td> </td><td colspan="2">108</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">4,240</td><td></td><td> </td><td colspan="2">4,240</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td></tr><tr><td>Balance at May 31, 2017</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,314</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,710</td><td></td><td> </td><td>$</td><td>(213</td><td>)</td><td> </td><td>$</td><td>6,907</td><td></td><td> </td><td>$</td><td>12,407</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>24</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(70</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(254</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(4,013</td><td>)</td><td> </td><td colspan="2">(4,267</td><td>)</td></tr><tr><td>Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,265</td><td>)</td><td> </td><td colspan="2">(1,265</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">110</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(28</td><td>)</td><td> </td><td colspan="2">82</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">1,933</td><td></td><td> </td><td colspan="2">1,933</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td></tr><tr><td>Reclassifications to retained earnings in accordance with ASU 2018-02</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">17</td><td></td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Balance at May 31, 2018</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,272</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>6,384</td><td></td><td> </td><td>$</td><td>(92</td><td>)</td><td> </td><td>$</td><td>3,517</td><td></td><td> </td><td>$</td><td>9,812</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
48
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q_an071
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How does the change in "Capital in Excess of Stated Value" from 2017 to 2018 reflect the company’s equity transactions?
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Capital in Excess of Stated Value 2018: $6,384 million
Capital in Excess of Stated Value 2017: $5,710 million
Formula:
Percentage Change in Capital in Excess of Stated Value = ((Capital 2018 - Capital 2017) / Capital 2017) × 100
Calculation:
Change: $6,384 million - $5,710 million = $674 million
Percentage Change = ((6,384 - 5,710) / 5,710) × 100
Percentage Change = (674 / 5,710) × 100 ≈ 11.80%
Answer:
The "Capital in Excess of Stated Value" increased by approximately 11.80% from 2017 to 2018. This increase reflects equity transactions such as the issuance of stock to employees through stock-based compensation programs and stock options exercised, which added to the capital base. Despite share repurchases reducing total shareholders' equity, the issuance of new equity for employee incentives contributed positively to this account, indicating a balanced equity transaction strategy by the company
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Analysis
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48
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0000320187-18-000142
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ITEM 8. Financial Statements and Supplementary Data
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NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 48:
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|---:|:-----------------------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Shareholders' Equity |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:-------------|:---|:-------------------------------|:---|:------------------------------------|:---|:-----------------|:------|:------|:-----|:-----|:---|:-------|:----|:-------|:-------|:----|:-------|:---|:------|:---|:---|:------|:---|:-------|
| 2 | | Common Stock | | Capital inExcessof StatedValue | | AccumulatedOtherComprehensiveIncome | | RetainedEarnings | | Total | | | | | | | | | | | | | | | | |
| 3 | | Class A | | Class B | | | | | | | | | | | | | | | | | | | | | | |
| 4 | (In millions, except per share data) | Shares | | Amount | | Shares | | Amount | | | | | | | | | | | | | | | | | | |
| 5 | Balance at May 31, 2015 | 355 | | | $ | - | | | 1,357 | | | $ | 3 | | | $ | 4,165 | | | $ | 1,246 | | $ | 7,293 | $ | 12,707 |
| 6 | Stock options exercised | | | | | 22 | | | | | 680 | | | | | | | 680 | | | | | | | | |
| 7 | Conversion to Class B Common Stock | (2 | ) | | - | | | 2 | | | - | | | | | | | | | - | | | | | | |
| 8 | Repurchase of Class B Common Stock | | | | | (55 | ) | | | | (148 | ) | | | | (3,090 | ) | | (3,238 | ) | | | | | | |
| 9 | Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,053 | ) | | (1,053 | ) | | | | | | | | |
| 10 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 3 | | | | | 105 | | | | | (11 | ) | | 94 | | | | | | | |
| 11 | Stock-based compensation | | | | | | | | | 236 | | | | | | | 236 | | | | | | | | | |
| 12 | Net income | | | | | | | | | | | | | 3,760 | | | 3,760 | | | | | | | | | |
| 13 | Other comprehensive income (loss) | | | | | | | | | | | (928 | ) | | | | (928 | ) | | | | | | | | |
| 14 | Balance at May 31, 2016 | 353 | | | $ | - | | | 1,329 | | | $ | 3 | | | $ | 5,038 | | | $ | 318 | | $ | 6,899 | $ | 12,258 |
| 15 | Stock options exercised | | | | | 17 | | | | | 525 | | | | | | | 525 | | | | | | | | |
| 16 | Conversion to Class B Common Stock | (24 | ) | | - | | | 24 | | | - | | | | | | | | | - | | | | | | |
| 17 | Repurchase of Class B Common Stock | | | | | (60 | ) | | | | (189 | ) | | | | (3,060 | ) | | (3,249 | ) | | | | | | |
| 18 | Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,159 | ) | | (1,159 | ) | | | | | | | | |
| 19 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 121 | | | | | (13 | ) | | 108 | | | | | | | |
| 20 | Stock-based compensation | | | | | | | | | 215 | | | | | | | 215 | | | | | | | | | |
| 21 | Net income | | | | | | | | | | | | | 4,240 | | | 4,240 | | | | | | | | | |
| 22 | Other comprehensive income (loss) | | | | | | | | | | | (531 | ) | | | | (531 | ) | | | | | | | | |
| 23 | Balance at May 31, 2017 | 329 | | | $ | - | | | 1,314 | | | $ | 3 | | | $ | 5,710 | | | $ | (213 | ) | $ | 6,907 | $ | 12,407 |
| 24 | Stock options exercised | | | | | 24 | | | | | 600 | | | | | | | 600 | | | | | | | | |
| 25 | Conversion to Class B Common Stock | - | | | - | | | - | | | - | | | | | | | | | - | | | | | | |
| 26 | Repurchase of Class B Common Stock | | | | | (70 | ) | | | | (254 | ) | | | | (4,013 | ) | | (4,267 | ) | | | | | | |
| 27 | Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,265 | ) | | (1,265 | ) | | | | | | | | |
| 28 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 110 | | | | | (28 | ) | | 82 | | | | | | | |
| 29 | Stock-based compensation | | | | | | | | | 218 | | | | | | | 218 | | | | | | | | | |
| 30 | Net income | | | | | | | | | | | | | 1,933 | | | 1,933 | | | | | | | | | |
| 31 | Other comprehensive income (loss) | | | | | | | | | | | 104 | | | | | 104 | | | | | | | | | |
| 32 | Reclassifications to retained earnings in accordance with ASU 2018-02 | | | | | | | | | | | 17 | | | (17 | ) | | - | | | | | | | | |
| 33 | Balance at May 31, 2018 | 329 | | | $ | - | | | 1,272 | | | $ | 3 | | | $ | 6,384 | | | $ | (92 | ) | $ | 3,517 | $ | 9,812 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
48
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| 2 | NIKE, Inc. Consolidated Statements of Shareholders' Equity |
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| 2 | | Common Stock | | Capital inExcessof StatedValue | | AccumulatedOtherComprehensiveIncome | | RetainedEarnings | | Total | | | | | | | | | | | | | | | | |
| 3 | | Class A | | Class B | | | | | | | | | | | | | | | | | | | | | | |
| 4 | (In millions, except per share data) | Shares | | Amount | | Shares | | Amount | | | | | | | | | | | | | | | | | | |
| 5 | Balance at May 31, 2015 | 355 | | | $ | - | | | 1,357 | | | $ | 3 | | | $ | 4,165 | | | $ | 1,246 | | $ | 7,293 | $ | 12,707 |
| 6 | Stock options exercised | | | | | 22 | | | | | 680 | | | | | | | 680 | | | | | | | | |
| 7 | Conversion to Class B Common Stock | (2 | ) | | - | | | 2 | | | - | | | | | | | | | - | | | | | | |
| 8 | Repurchase of Class B Common Stock | | | | | (55 | ) | | | | (148 | ) | | | | (3,090 | ) | | (3,238 | ) | | | | | | |
| 9 | Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,053 | ) | | (1,053 | ) | | | | | | | | |
| 10 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 3 | | | | | 105 | | | | | (11 | ) | | 94 | | | | | | | |
| 11 | Stock-based compensation | | | | | | | | | 236 | | | | | | | 236 | | | | | | | | | |
| 12 | Net income | | | | | | | | | | | | | 3,760 | | | 3,760 | | | | | | | | | |
| 13 | Other comprehensive income (loss) | | | | | | | | | | | (928 | ) | | | | (928 | ) | | | | | | | | |
| 14 | Balance at May 31, 2016 | 353 | | | $ | - | | | 1,329 | | | $ | 3 | | | $ | 5,038 | | | $ | 318 | | $ | 6,899 | $ | 12,258 |
| 15 | Stock options exercised | | | | | 17 | | | | | 525 | | | | | | | 525 | | | | | | | | |
| 16 | Conversion to Class B Common Stock | (24 | ) | | - | | | 24 | | | - | | | | | | | | | - | | | | | | |
| 17 | Repurchase of Class B Common Stock | | | | | (60 | ) | | | | (189 | ) | | | | (3,060 | ) | | (3,249 | ) | | | | | | |
| 18 | Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,159 | ) | | (1,159 | ) | | | | | | | | |
| 19 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 121 | | | | | (13 | ) | | 108 | | | | | | | |
| 20 | Stock-based compensation | | | | | | | | | 215 | | | | | | | 215 | | | | | | | | | |
| 21 | Net income | | | | | | | | | | | | | 4,240 | | | 4,240 | | | | | | | | | |
| 22 | Other comprehensive income (loss) | | | | | | | | | | | (531 | ) | | | | (531 | ) | | | | | | | | |
| 23 | Balance at May 31, 2017 | 329 | | | $ | - | | | 1,314 | | | $ | 3 | | | $ | 5,710 | | | $ | (213 | ) | $ | 6,907 | $ | 12,407 |
| 24 | Stock options exercised | | | | | 24 | | | | | 600 | | | | | | | 600 | | | | | | | | |
| 25 | Conversion to Class B Common Stock | - | | | - | | | - | | | - | | | | | | | | | - | | | | | | |
| 26 | Repurchase of Class B Common Stock | | | | | (70 | ) | | | | (254 | ) | | | | (4,013 | ) | | (4,267 | ) | | | | | | |
| 27 | Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share) | | | | | | | | | | | | | (1,265 | ) | | (1,265 | ) | | | | | | | | |
| 28 | Issuance of shares to employees, net of shares withheld for employee taxes | | | | | 4 | | | | | 110 | | | | | (28 | ) | | 82 | | | | | | | |
| 29 | Stock-based compensation | | | | | | | | | 218 | | | | | | | 218 | | | | | | | | | |
| 30 | Net income | | | | | | | | | | | | | 1,933 | | | 1,933 | | | | | | | | | |
| 31 | Other comprehensive income (loss) | | | | | | | | | | | 104 | | | | | 104 | | | | | | | | | |
| 32 | Reclassifications to retained earnings in accordance with ASU 2018-02 | | | | | | | | | | | 17 | | | (17 | ) | | - | | | | | | | | |
| 33 | Balance at May 31, 2018 | 329 | | | $ | - | | | 1,272 | | | $ | 3 | | | $ | 6,384 | | | $ | (92 | ) | $ | 3,517 | $ | 9,812 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
48
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NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 48:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Shareholders' Equity</td></tr></table>
<table><tr><td colspan="31"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="13">Common Stock</td><td> </td><td colspan="3" rowspan="3">Capital inExcessof StatedValue</td><td rowspan="3"> </td><td colspan="3" rowspan="3">AccumulatedOtherComprehensiveIncome</td><td rowspan="3"> </td><td colspan="3" rowspan="3">RetainedEarnings</td><td rowspan="3"> </td><td colspan="3" rowspan="3">Total</td></tr><tr><td> </td><td> </td><td colspan="6">Class A</td><td> </td><td colspan="6">Class B</td><td> </td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td></tr><tr><td>Balance at May 31, 2015</td><td> </td><td>355</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,357</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>4,165</td><td></td><td> </td><td>$</td><td>1,246</td><td></td><td> </td><td>$</td><td>7,293</td><td></td><td> </td><td>$</td><td>12,707</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>22</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(2</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>2</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(55</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(148</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,090</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,053</td><td>)</td><td> </td><td colspan="2">(1,053</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>3</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">105</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(11</td><td>)</td><td> </td><td colspan="2">94</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">3,760</td><td></td><td> </td><td colspan="2">3,760</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td></tr><tr><td>Balance at May 31, 2016</td><td> </td><td>353</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,329</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,038</td><td></td><td> </td><td>$</td><td>318</td><td></td><td> </td><td>$</td><td>6,899</td><td></td><td> </td><td>$</td><td>12,258</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>17</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(24</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>24</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(60</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(189</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,060</td><td>)</td><td> </td><td colspan="2">(3,249</td><td>)</td></tr><tr><td>Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,159</td><td>)</td><td> </td><td colspan="2">(1,159</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">121</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(13</td><td>)</td><td> </td><td colspan="2">108</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">4,240</td><td></td><td> </td><td colspan="2">4,240</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td></tr><tr><td>Balance at May 31, 2017</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,314</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,710</td><td></td><td> </td><td>$</td><td>(213</td><td>)</td><td> </td><td>$</td><td>6,907</td><td></td><td> </td><td>$</td><td>12,407</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>24</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(70</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(254</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(4,013</td><td>)</td><td> </td><td colspan="2">(4,267</td><td>)</td></tr><tr><td>Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,265</td><td>)</td><td> </td><td colspan="2">(1,265</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">110</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(28</td><td>)</td><td> </td><td colspan="2">82</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">1,933</td><td></td><td> </td><td colspan="2">1,933</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td></tr><tr><td>Reclassifications to retained earnings in accordance with ASU 2018-02</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">17</td><td></td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Balance at May 31, 2018</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,272</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>6,384</td><td></td><td> </td><td>$</td><td>(92</td><td>)</td><td> </td><td>$</td><td>3,517</td><td></td><td> </td><td>$</td><td>9,812</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
48
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<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Shareholders' Equity</td></tr></table>
<table><tr><td colspan="31"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="13">Common Stock</td><td> </td><td colspan="3" rowspan="3">Capital inExcessof StatedValue</td><td rowspan="3"> </td><td colspan="3" rowspan="3">AccumulatedOtherComprehensiveIncome</td><td rowspan="3"> </td><td colspan="3" rowspan="3">RetainedEarnings</td><td rowspan="3"> </td><td colspan="3" rowspan="3">Total</td></tr><tr><td> </td><td> </td><td colspan="6">Class A</td><td> </td><td colspan="6">Class B</td><td> </td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td><td colspan="2">Shares</td><td> </td><td colspan="3">Amount</td><td> </td></tr><tr><td>Balance at May 31, 2015</td><td> </td><td>355</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,357</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>4,165</td><td></td><td> </td><td>$</td><td>1,246</td><td></td><td> </td><td>$</td><td>7,293</td><td></td><td> </td><td>$</td><td>12,707</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>22</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">680</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(2</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>2</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(55</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(148</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,090</td><td>)</td><td> </td><td colspan="2">(3,238</td><td>)</td></tr><tr><td>Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,053</td><td>)</td><td> </td><td colspan="2">(1,053</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>3</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">105</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(11</td><td>)</td><td> </td><td colspan="2">94</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">236</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">3,760</td><td></td><td> </td><td colspan="2">3,760</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(928</td><td>)</td></tr><tr><td>Balance at May 31, 2016</td><td> </td><td>353</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,329</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,038</td><td></td><td> </td><td>$</td><td>318</td><td></td><td> </td><td>$</td><td>6,899</td><td></td><td> </td><td>$</td><td>12,258</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>17</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">525</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>(24</td><td>)</td><td> </td><td colspan="2">-</td><td></td><td> </td><td>24</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(60</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(189</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(3,060</td><td>)</td><td> </td><td colspan="2">(3,249</td><td>)</td></tr><tr><td>Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,159</td><td>)</td><td> </td><td colspan="2">(1,159</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">121</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(13</td><td>)</td><td> </td><td colspan="2">108</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">215</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">4,240</td><td></td><td> </td><td colspan="2">4,240</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(531</td><td>)</td></tr><tr><td>Balance at May 31, 2017</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,314</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>5,710</td><td></td><td> </td><td>$</td><td>(213</td><td>)</td><td> </td><td>$</td><td>6,907</td><td></td><td> </td><td>$</td><td>12,407</td><td></td></tr><tr><td>Stock options exercised</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>24</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">600</td><td></td></tr><tr><td>Conversion to Class B Common Stock</td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td>-</td><td></td><td> </td><td colspan="2">-</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Repurchase of Class B Common Stock</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>(70</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(254</td><td>)</td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(4,013</td><td>)</td><td> </td><td colspan="2">(4,267</td><td>)</td></tr><tr><td>Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(1,265</td><td>)</td><td> </td><td colspan="2">(1,265</td><td>)</td></tr><tr><td>Issuance of shares to employees, net of shares withheld for employee taxes</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td>4</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">110</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">(28</td><td>)</td><td> </td><td colspan="2">82</td><td></td></tr><tr><td>Stock-based compensation</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">218</td><td></td></tr><tr><td>Net income</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">1,933</td><td></td><td> </td><td colspan="2">1,933</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">104</td><td></td></tr><tr><td>Reclassifications to retained earnings in accordance with ASU 2018-02</td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="2">17</td><td></td><td> </td><td colspan="2">(17</td><td>)</td><td> </td><td colspan="2">-</td><td></td></tr><tr><td>Balance at May 31, 2018</td><td> </td><td>329</td><td></td><td> </td><td>$</td><td>-</td><td></td><td> </td><td>1,272</td><td></td><td> </td><td>$</td><td>3</td><td></td><td> </td><td>$</td><td>6,384</td><td></td><td> </td><td>$</td><td>(92</td><td>)</td><td> </td><td>$</td><td>3,517</td><td></td><td> </td><td>$</td><td>9,812</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
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q_an072
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What is the percentage change in income tax expense from 2017 to 2018, and how did it affect net income?
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Income Tax Expense 2018: $2,392 million
Income Tax Expense 2017: $646 million
Net Income 2018: $1,933 million
Net Income 2017: $4,240 million
Formula:
Percentage Change in Income Tax Expense = ((Income Tax Expense 2018 - Income Tax Expense 2017) / Income Tax Expense 2017) × 100
Calculation for Income Tax Expense:
Percentage Change = ((2,392 - 646) / 646) × 100
Percentage Change = (1,746 / 646) × 100 ≈ 270.43%
Effect on Net Income:
Despite a higher income tax expense, Nike’s pre-tax income decreased only slightly from $4,886 million in 2017 to $4,325 million in 2018. However, the significant increase in income tax expense (270.43%) caused net income to drop by 54.44% from $4,240 million in 2017 to $1,933 million in 2018. This steep increase in tax expense was driven by the enactment of the Tax Cuts and Jobs Act, which included a one-time transition tax on foreign earnings.
Answer:
Income tax expense increased by 270.43% from 2017 to 2018, primarily due to the Tax Cuts and Jobs Act. This substantial rise in tax expense significantly impacted net income, resulting in a decrease of 54.44%, even though pre-tax income saw only a modest decline.
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Analysis
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44
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0000320187-18-000142
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ITEM 8. Financial Statements and Supplementary Data
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NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
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| | |
|---:|:---------------------------------------------|
| 2 | NIKE, Inc. Consolidated Statements of Income |
| | | | | | | | | | | | |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
| 2 | | Year Ended May 31, | | | | | | | | | |
| 3 | (In millions, except per share data) | 2018 | | 2017 | | 2016 | | | | | |
| 4 | Revenues | $ | 36,397 | | | $ | 34,350 | | | $ | 32,376 |
| 5 | Cost of sales | 20,441 | | | 19,038 | | | 17,405 | | | |
| 6 | Gross profit | 15,956 | | | 15,312 | | | 14,971 | | | |
| 7 | Demand creation expense | 3,577 | | | 3,341 | | | 3,278 | | | |
| 8 | Operating overhead expense | 7,934 | | | 7,222 | | | 7,191 | | | |
| 9 | Total selling and administrative expense | 11,511 | | | 10,563 | | | 10,469 | | | |
| 10 | Interest expense (income), net | 54 | | | 59 | | | 19 | | | |
| 11 | Other expense (income), net | 66 | | | (196 | ) | | (140 | ) | | |
| 12 | Income before income taxes | 4,325 | | | 4,886 | | | 4,623 | | | |
| 13 | Income tax expense | 2,392 | | | 646 | | | 863 | | | |
| 14 | NET INCOME | $ | 1,933 | | | $ | 4,240 | | | $ | 3,760 |
| 16 | Earnings per common share: | | | | | | | | | | |
| 17 | Basic | $ | 1.19 | | | $ | 2.56 | | | $ | 2.21 |
| 18 | Diluted | $ | 1.17 | | | $ | 2.51 | | | $ | 2.16 |
| 20 | Dividends declared per common share | $ | 0.78 | | | $ | 0.70 | | | $ | 0.62 |
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
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NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44:
<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
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<table><tr><td colspan="1"></td></tr><tr><td></td></tr><tr><td>NIKE, Inc. Consolidated Statements of Income</td></tr></table>
<table><tr><td colspan="13"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> </td><td> </td><td colspan="11">Year Ended May 31,</td></tr><tr><td>(In millions, except per share data)</td><td> </td><td colspan="3">2018</td><td> </td><td colspan="3">2017</td><td> </td><td colspan="3">2016</td></tr><tr><td>Revenues</td><td> </td><td>$</td><td>36,397</td><td></td><td> </td><td>$</td><td>34,350</td><td></td><td> </td><td>$</td><td>32,376</td><td></td></tr><tr><td>Cost of sales</td><td> </td><td colspan="2">20,441</td><td></td><td> </td><td colspan="2">19,038</td><td></td><td> </td><td colspan="2">17,405</td><td></td></tr><tr><td>Gross profit</td><td> </td><td colspan="2">15,956</td><td></td><td> </td><td colspan="2">15,312</td><td></td><td> </td><td colspan="2">14,971</td><td></td></tr><tr><td>Demand creation expense</td><td> </td><td colspan="2">3,577</td><td></td><td> </td><td colspan="2">3,341</td><td></td><td> </td><td colspan="2">3,278</td><td></td></tr><tr><td>Operating overhead expense</td><td> </td><td colspan="2">7,934</td><td></td><td> </td><td colspan="2">7,222</td><td></td><td> </td><td colspan="2">7,191</td><td></td></tr><tr><td>Total selling and administrative expense</td><td> </td><td colspan="2">11,511</td><td></td><td> </td><td colspan="2">10,563</td><td></td><td> </td><td colspan="2">10,469</td><td></td></tr><tr><td>Interest expense (income), net</td><td> </td><td colspan="2">54</td><td></td><td> </td><td colspan="2">59</td><td></td><td> </td><td colspan="2">19</td><td></td></tr><tr><td>Other expense (income), net</td><td> </td><td colspan="2">66</td><td></td><td> </td><td colspan="2">(196</td><td>)</td><td> </td><td colspan="2">(140</td><td>)</td></tr><tr><td>Income before income taxes</td><td> </td><td colspan="2">4,325</td><td></td><td> </td><td colspan="2">4,886</td><td></td><td> </td><td colspan="2">4,623</td><td></td></tr><tr><td>Income tax expense</td><td> </td><td colspan="2">2,392</td><td></td><td> </td><td colspan="2">646</td><td></td><td> </td><td colspan="2">863</td><td></td></tr><tr><td>NET INCOME</td><td> </td><td>$</td><td>1,933</td><td></td><td> </td><td>$</td><td>4,240</td><td></td><td> </td><td>$</td><td>3,760</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Earnings per common share:</td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Basic</td><td> </td><td>$</td><td>1.19</td><td></td><td> </td><td>$</td><td>2.56</td><td></td><td> </td><td>$</td><td>2.21</td><td></td></tr><tr><td>Diluted</td><td> </td><td>$</td><td>1.17</td><td></td><td> </td><td>$</td><td>2.51</td><td></td><td> </td><td>$</td><td>2.16</td><td></td></tr><tr><td> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td><td> </td><td colspan="3"> </td></tr><tr><td>Dividends declared per common share</td><td> </td><td>$</td><td>0.78</td><td></td><td> </td><td>$</td><td>0.70</td><td></td><td> </td><td>$</td><td>0.62</td><td></td></tr></table>
The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.
44
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q_com001
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What is the relation between Billed Business and Discount Revenue of Amerian Express between the year 2021 to 2023?
|
Billed Business Trend (2021-2023):
2021: $1,089.8 billion
2022: $1,338.3 billion (23% increase from 2021)
2023: $1,459.6 billion (9% increase from 2022)
Discount Revenue Trend:
2021: $24,563 million
2022: $30,739 million (25.1% increase)
2023: $33,416 million (8.7% increase)
Analysis: The growth in billed business, which increased by 23% from 2021 to 2022 and 9% from 2022 to 2023, correlates with the rise in discount revenue. The percentage of discount revenue relative to billed business remained stable at around 2.25% to 2.30%, indicating that higher billed business directly boosts discount revenue while maintaining a consistent discount margin.
|
Comparison
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43, 45
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0000004962-24-000013
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 45:
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:-------|:---|:------|:------|:------|:---|:---|:---|:---|:-------|:---|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 | $ | 2,677 | | | 9 | % | | $ | 6,176 | 25 | % |
| 4 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | 1,185 | 20 | | | 875 | | | 17 | | | | |
| 5 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | 484 | 11 | | | 1,205 | | | 36 | | | | |
| 6 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | 68 | 4 | | | 81 | | | 5 | | | | |
| 7 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | 4,414 | 10 | | | 8,337 | | | 24 | | | | |
| 8 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | 7,325 | 58 | | | 3,625 | | | 40 | | | | |
| 9 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | 4,086 | # | | 1,480 | | | # | | | | | |
| 10 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | 3,239 | 33 | | | 2,145 | | | 28 | | | | |
| 11 | Total revenues net of interest expense | $ | 60,515 | | | $ | 52,862 | | $ | 42,380 | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 12 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
45
|
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
,
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:-------|:---|:------|:------|:------|:---|:---|:---|:---|:-------|:---|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 | $ | 2,677 | | | 9 | % | | $ | 6,176 | 25 | % |
| 4 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | 1,185 | 20 | | | 875 | | | 17 | | | | |
| 5 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | 484 | 11 | | | 1,205 | | | 36 | | | | |
| 6 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | 68 | 4 | | | 81 | | | 5 | | | | |
| 7 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | 4,414 | 10 | | | 8,337 | | | 24 | | | | |
| 8 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | 7,325 | 58 | | | 3,625 | | | 40 | | | | |
| 9 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | 4,086 | # | | 1,480 | | | # | | | | | |
| 10 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | 3,239 | 33 | | | 2,145 | | | 28 | | | | |
| 11 | Total revenues net of interest expense | $ | 60,515 | | | $ | 52,862 | | $ | 42,380 | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 12 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
45
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 45:
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td><td colspan="3"></td><td>$</td><td>2,677 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>6,176 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td><td colspan="3"></td><td colspan="2">1,185 </td><td></td><td colspan="3"></td><td colspan="2">20 </td><td></td><td colspan="3"></td><td colspan="2">875 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td><td colspan="3"></td><td colspan="2">484 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,205 </td><td></td><td colspan="3"></td><td colspan="2">36 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">81 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td><td colspan="3"></td><td colspan="2">4,414 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">8,337 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td><td colspan="3"></td><td colspan="2">7,325 </td><td></td><td colspan="3"></td><td colspan="2">58 </td><td></td><td colspan="3"></td><td colspan="2">3,625 </td><td></td><td colspan="3"></td><td colspan="2">40 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td><td colspan="3"></td><td colspan="2">4,086 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">1,480 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td><td colspan="3"></td><td colspan="2">3,239 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">2,145 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td>60,515 </td><td></td><td colspan="3"></td><td>$</td><td>52,862 </td><td></td><td colspan="3"></td><td>$</td><td>42,380 </td><td></td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
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TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
,
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td><td colspan="3"></td><td>$</td><td>2,677 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>6,176 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td><td colspan="3"></td><td colspan="2">1,185 </td><td></td><td colspan="3"></td><td colspan="2">20 </td><td></td><td colspan="3"></td><td colspan="2">875 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td><td colspan="3"></td><td colspan="2">484 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,205 </td><td></td><td colspan="3"></td><td colspan="2">36 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">81 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td><td colspan="3"></td><td colspan="2">4,414 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">8,337 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td><td colspan="3"></td><td colspan="2">7,325 </td><td></td><td colspan="3"></td><td colspan="2">58 </td><td></td><td colspan="3"></td><td colspan="2">3,625 </td><td></td><td colspan="3"></td><td colspan="2">40 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td><td colspan="3"></td><td colspan="2">4,086 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">1,480 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td><td colspan="3"></td><td colspan="2">3,239 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">2,145 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td>60,515 </td><td></td><td colspan="3"></td><td>$</td><td>52,862 </td><td></td><td colspan="3"></td><td>$</td><td>42,380 </td><td></td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
45
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q_com002
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Which segment has shown highest increase in the billed business? What is the correlation of billed business to non-interest revenue?
|
The correlation between billed business and non-interest revenue is evident across all segments. USCS's billed business growth of 38% aligns with its non-interest revenue growth of 42%. CS's billed business grew by 25%, which is closely related to its non-interest revenue growth of 31%. ICS shows a similar trend, with billed business growing by 44% and non-interest revenue increasing by 40%, demonstrating a strong link between increased billed business and non-interest revenue.
|
Comparison
|
52, 54, 55, 57, 58, 60
|
0000004962-24-000013
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 52:
U.S. CONSUMER SERVICES
TABLE 9: USCS SELECTED INCOME STATEMENT DATA
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:-------|:---|:------|:------|:------|:---|:---|:---|:---|:------|:----|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Revenues | | | | | | | | | | | | | | | | | | | | |
| 4 | Non-interest revenues | $ | 18,464 | | | $ | 16,440 | | $ | 12,989 | $ | 2,024 | | | 12 | % | | $ | 3,451 | 27 | % |
| 5 | Interest income | 12,336 | | | 8,457 | | | 6,328 | | 3,879 | 46 | | | 2,129 | | | 34 | | | | |
| 6 | Interest expense | 2,684 | | | 983 | | | 395 | | 1,701 | # | | 588 | | | # | | | | | |
| 7 | Net interest income | 9,652 | | | 7,474 | | | 5,933 | | 2,178 | 29 | | | 1,541 | | | 26 | | | | |
| 8 | Total revenues net of interest expense | 28,116 | | | 23,914 | | | 18,922 | | 4,202 | 18 | | | 4,992 | | | 26 | | | | |
| 9 | Provisions for credit losses | 2,855 | | | 1,021 | | | (919) | | 1,834 | # | | 1,940 | | | # | | | | | |
| 10 | Total revenues net of interest expense after provisions for credit losses | 25,261 | | | 22,893 | | | 19,841 | | 2,368 | 10 | | | 3,052 | | | 15 | | | | |
| 11 | Expenses | | | | | | | | | | | | | | | | | | | | |
| 12 | Card Member rewards, business development, Card Member services and marketing | 15,393 | | | 13,535 | | | 10,665 | | 1,858 | 14 | | | 2,870 | | | 27 | | | | |
| 13 | Salaries and employee benefits and other operating expenses | 4,435 | | | 3,958 | | | 3,218 | | 477 | 12 | | | 740 | | | 23 | | | | |
| 14 | Total expenses | 19,828 | | | 17,493 | | | 13,883 | | 2,335 | 13 | | | 3,610 | | | 26 | | | | |
| 15 | Pretax segment income | $ | 5,433 | | | $ | 5,400 | | $ | 5,958 | $ | 33 | | | 1 | % | | $ | (558) | (9) | % |
| 16 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
USCS issues a wide range of proprietary consumer cards and provides services to U.S. consumers, including travel and lifestyle services as well as banking and non-card financing products.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 10 percent, primarily driven by an increase in U.S. consumer billed business. See Tables 5, 6 and 10 for more details on billed business performance.
Net card fees increased 21 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 5 percent, primarily driven by higher travel commissions and fees from our consumer travel business and growth in delinquency fees, partially offset by the change in the allocation of TLS revenues described above.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and higher delinquencies. The reserve build in the prior year was driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts at that time, partially offset by the release of COVID-19 pandemic-driven reserves.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding. The reserve build in the prior year was primarily driven by higher delinquencies and an increase in receivables outstanding.
52
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 54:
TABLE 10: USCS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------|:------|:-------|:------|:-----|:-------|:--------------|:-------|:--------------|:---|:---|:----|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 610.8 | | $ | 553.0 | $ | 444.2 | | 10 | % | 24 | % |
| 4 | Proprietary cards-in-force | 43.8 | | 41.7 | | 39.0 | 5 | | | 7 | | | |
| 5 | Proprietary basic cards-in-force | 30.7 | | 29.2 | | 27.3 | 5 | | | 7 | | | |
| 6 | Average proprietary basic Card Member spending (dollars) | $ | 20,303 | | $ | 19,514 | $ | 16,498 | | 4 | | 18 | |
| 7 | Total segment assets (billions) | $ | 107.2 | | $ | 94.4 | $ | 76.5 | | 14 | | 23 | |
| 8 | Card Member loans: | | | | | | | | | | | | |
| 9 | Total loans (billions) | $ | 83.2 | | $ | 72.7 | $ | 59.8 | | 14 | | 22 | |
| 10 | Average loans (billions) | $ | 76.0 | | $ | 63.7 | $ | 52.0 | | 19 | | 23 | |
| 11 | Net write-off rate - principal, interest and fees (a) | 2.2 | % | | 1.1 | % | 1.1 | % | | | | | |
| 12 | Net write-off rate - principal only (a) | 1.7 | % | | 0.9 | % | 0.8 | % | | | | | |
| 13 | 30+ days past due as a % of total | 1.4 | % | | 1.0 | % | 0.7 | % | | | | | |
| 14 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 15 | Net interest income | $ | 9,652 | | $ | 7,474 | $ | 5,933 | | | | | |
| 16 | Exclude: | | | | | | | | | | | | |
| 17 | Interest expense not attributable to our Card Member loan portfolio (b) | 192 | | 139 | | 158 | | | | | | | |
| 18 | Interest income not attributable to our Card Member loan portfolio (c) | (386) | | (228) | | (110) | | | | | | | |
| 19 | Adjusted net interest income (d) | $ | 9,458 | | $ | 7,385 | $ | 5,981 | | | | | |
| 20 | Average Card Member loans (billions) | $ | 76.0 | | $ | 63.7 | $ | 52.0 | | | | | |
| 21 | Net interest income divided by average Card Member loans (d) | 12.7 | % | | 11.7 | % | 11.4 | % | | | | | |
| 22 | Net interest yield on average Card Member loans (d) | 12.4 | % | | 11.6 | % | 11.5 | % | | | | | |
| 23 | Card Member receivables: | | | | | | | | | | | | |
| 24 | Total receivables (billions) | $ | 14.8 | | $ | 14.3 | $ | 14.7 | | 3 | % | (3) | % |
| 25 | Net write-off rate - principal and fees (a) | 1.3 | % | | 0.6 | % | 0.1 | % | | | | | |
| 26 | Net write-off rate - principal only (a) | 1.2 | % | | 0.6 | % | - | % | | | | | |
| 27 | 30+ days past due as a % of total | 0.8 | % | | 0.9 | % | 0.4 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
54
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 55:
COMMERCIAL SERVICES
TABLE 11: CS SELECTED INCOME STATEMENT DATA
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:------|:---|:-----|:----|:------|:----|:---|:---|:---|:------|:----|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Revenues | | | | | | | | | | | | | | | | | | | | |
| 4 | Non-interest revenues | $ | 12,931 | | | $ | 12,196 | | $ | 9,833 | $ | 735 | | | 6 | % | | $ | 2,363 | 24 | % |
| 5 | Interest income | 3,328 | | | 2,070 | | | 1,408 | | 1,258 | 61 | | | 662 | | | 47 | | | | |
| 6 | Interest expense | 1,483 | | | 697 | | | 330 | | 786 | # | | 367 | | | # | | | | | |
| 7 | Net interest income | 1,845 | | | 1,373 | | | 1,078 | | 472 | 34 | | | 295 | | | 27 | | | | |
| 8 | Total revenues net of interest expense | 14,776 | | | 13,569 | | | 10,911 | | 1,207 | 9 | | | 2,658 | | | 24 | | | | |
| 9 | Provisions for credit losses | 1,313 | | | 565 | | | (420) | | 748 | # | | 985 | | | # | | | | | |
| 10 | Total revenues net of interest expense after provisions for credit losses | 13,463 | | | 13,004 | | | 11,331 | | 459 | 4 | | | 1,673 | | | 15 | | | | |
| 11 | Expenses | | | | | | | | | | | | | | | | | | | | |
| 12 | Card Member rewards, business development, Card Member services and marketing | 7,422 | | | 7,238 | | | 5,762 | | 184 | 3 | | | 1,476 | | | 26 | | | | |
| 13 | Salaries and employee benefits and other operating expenses | 3,180 | | | 2,886 | | | 2,633 | | 294 | 10 | | | 253 | | | 10 | | | | |
| 14 | Total expenses | 10,602 | | | 10,124 | | | 8,395 | | 478 | 5 | | | 1,729 | | | 21 | | | | |
| 15 | Pretax segment income | $ | 2,861 | | | $ | 2,880 | | $ | 2,936 | $ | (19) | | | (1) | % | | $ | (56) | (2) | % |
| 16 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
CS issues a wide range of proprietary corporate and small business cards and provides services to U.S. businesses, including payment and expense management, banking and non-card financing products. CS also issues proprietary corporate cards and provides services to select global corporate clients.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased, primarily driven by higher Discount revenue and Service fees and other revenue.
Discount revenue increased 4 percent, primarily driven by an increase in commercial billed business. See Tables 5, 6 and 12 for more details on billed business performance.
Net card fees increased 18 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 53 percent, largely driven by the change in the allocation of TLS revenues described above, as well as growth in delinquency fees.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and higher delinquencies. The reserve build in the prior year was driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts at that time, partially offset by the release of COVID-19 pandemic-driven reserves.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding. The reserve build in the prior year was primarily driven by higher delinquencies and an increase in receivables outstanding.
55
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 57:
TABLE 12: CS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------|:------|:-------|:-----|:----|:-------|:--------------|:-------|:--------------|:----|:---|:---|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 516.0 | | $ | 499.5 | $ | 411.6 | | 3 | % | 21 | % |
| 4 | Proprietary cards-in-force | 15.4 | | 14.9 | | 13.4 | 3 | | | 11 | | | |
| 5 | Average Card Member spending (dollars) | $ | 33,745 | | $ | 35,202 | $ | 32,042 | | (4) | | 10 | |
| 6 | Total segment assets (billions) | $ | 55.4 | | $ | 51.4 | $ | 44.5 | | 8 | | 16 | |
| 7 | Card Member loans: | | | | | | | | | | | | |
| 8 | Total loans (billions) | $ | 25.8 | | $ | 21.4 | $ | 17.0 | | 21 | | 26 | |
| 9 | Average loans (billions) | $ | 23.9 | | $ | 19.3 | $ | 14.4 | | 24 | | 34 | |
| 10 | Net write-off rate - principal, interest and fees(a) | 2.0 | % | | 0.8 | % | 0.8 | % | | | | | |
| 11 | Net write-off rate - principal only(a) | 1.7 | % | | 0.7 | % | 0.6 | % | | | | | |
| 12 | 30+ days past due as a % of total | 1.4 | % | | 0.9 | % | 0.5 | % | | | | | |
| 13 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 14 | Net interest income | $ | 1,845 | | $ | 1,373 | $ | 1,078 | | | | | |
| 15 | Exclude: | | | | | | | | | | | | |
| 16 | Interest expense not attributable to our Card Member loan portfolio(b) | 711 | | 430 | | 251 | | | | | | | |
| 17 | Interest income not attributable to our Card Member loan portfolio(c) | (204) | | (89) | | (76) | | | | | | | |
| 18 | Adjusted net interest income(d) | $ | 2,352 | | $ | 1,714 | $ | 1,253 | | | | | |
| 19 | Average Card Member loans (billions) | $ | 23.9 | | $ | 19.3 | $ | 14.4 | | | | | |
| 20 | Net interest income divided by average Card Member loans(d) | 7.7 | % | | 7.1 | % | 7.5 | % | | | | | |
| 21 | Net interest yield on average Card Member loans(d) | 9.9 | % | | 8.9 | % | 8.7 | % | | | | | |
| 22 | Card Member receivables: | | | | | | | | | | | | |
| 23 | Total receivables (billions) | $ | 26.2 | | $ | 26.9 | $ | 24.6 | | (3) | % | 9 | % |
| 24 | Net write-off rate - principal and fees(e) | 1.5 | % | | 0.7 | % | 0.2 | % | | | | | |
| 25 | Net write-off rate - principal only(a) - small business | 2.1 | % | | 0.9 | % | 0.2 | % | | | | | |
| 26 | 30+ days past due as a % of total - small business | 1.5 | % | | 1.6 | % | 0.8 | % | | | | | |
| 27 | 90+ days past billing as a % of total(e) - corporate | 0.4 | % | | 0.6 | % | 0.3 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
57
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 58:
INTERNATIONAL CARD SERVICES
TABLE 13: ICS SELECTED INCOME STATEMENT DATA
| | | | | | | | | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------|:-------|:------|:-----|:------|:-----|:------|:--------------|:--------------|:------|:---|:------|:------|:---|:---|:---|:---|:------|:-----|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Revenues | | | | | | | | | | | | | | | | | | | |
| 4 | Non-interest revenues | $ | 9,472 | | | $ | 8,262 | | $ | 6,761 | $ | 1,210 | | 15 | % | | $ | 1,501 | 22 | % |
| 5 | Interest income | 2,076 | | | 1,453 | | | 1,116 | | 623 | 43 | | 337 | | | 30 | | | | |
| 6 | Interest expense | 1,118 | | | 654 | | | 442 | | 464 | 71 | | 212 | | | 48 | | | | |
| 7 | Net interest income | 958 | | | 799 | | | 674 | | 159 | 20 | | 125 | | | 19 | | | | |
| 8 | Total revenues net of interest expense | 10,430 | | | 9,061 | | | 7,435 | | 1,369 | 15 | | 1,626 | | | 22 | | | | |
| 9 | Provisions for credit losses | 727 | | | 584 | | | (43) | | 143 | 24 | | 627 | | | # | | | | |
| 10 | Total revenues net of interest expense after provisions for credit losses | 9,703 | | | 8,477 | | | 7,478 | | 1,226 | 14 | | 999 | | | 13 | | | | |
| 11 | Expenses | | | | | | | | | | | | | | | | | | | |
| 12 | Card Member rewards, business development, Card Member services and marketing | 5,669 | | | 4,962 | | | 3,995 | | 707 | 14 | | 967 | | | 24 | | | | |
| 13 | Salaries and employee benefits and other operating expenses | 3,061 | | | 2,937 | | | 2,554 | | 124 | 4 | | 383 | | | 15 | | | | |
| 14 | Total expenses | 8,730 | | | 7,899 | | | 6,549 | | 831 | 11 | | 1,350 | | | 21 | | | | |
| 15 | Pretax segment income | $ | 973 | | | $ | 578 | | $ | 929 | $ | 395 | | 68 | % | | $ | (351) | (38) | % |
| 16 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
ICS issues a wide range of proprietary consumer, small business and corporate cards outside the United States. ICS also provides services to our international customers, including travel and lifestyle services, and manages certain international joint ventures and our loyalty coalition businesses.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 17 percent, primarily reflecting an increase in billed business. See Tables 5, 6 and 14 for more details on billed business performance.
Net card fees increased 17 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 9 percent, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding, partially offset by the performance of portfolios in certain international markets. The reserve build in the prior year was primarily driven by an increase in loans outstanding and higher delinquencies.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding. The reserve build in the prior year was primarily driven by an increase in receivables outstanding and higher delinquencies.
58
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 60:
TABLE 14: ICS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------|:-----|:-------|:-----|:----|:-------|:--------------|:-------|:--------------|:---|:---|:---|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 329.5 | | $ | 281.6 | $ | 228.2 | | 17 | % | 23 | % |
| 4 | Proprietary cards-in-force | 21.0 | | 20.1 | | 19.0 | 4 | | | 6 | | | |
| 5 | Proprietary basic cards-in-force | 15.6 | | 14.9 | | 13.9 | 5 | | | 7 | | | |
| 6 | Average proprietary basic Card Member spending (dollars) | $ | 21,550 | | $ | 19,519 | $ | 16,689 | | 10 | | 17 | |
| 7 | Total segment assets (billions) | $ | 42.2 | | $ | 36.9 | $ | 32.6 | | 14 | | 13 | |
| 8 | Card Member loans - consumer and small business: | | | | | | | | | | | | |
| 9 | Total loans (billions) | $ | 17.0 | | $ | 13.8 | $ | 11.6 | | 23 | | 19 | |
| 10 | Average loans (billions) | $ | 15.0 | | $ | 12.3 | $ | 9.6 | | 22 | | 28 | |
| 11 | Net write-off rate - principal, interest and fees(a) | 2.5 | % | | 1.4 | % | 2.1 | % | | | | | |
| 12 | Net write-off rate - principal only(a) | 2.1 | % | | 1.2 | % | 1.6 | % | | | | | |
| 13 | 30+ days past due as a % of total | 1.3 | % | | 1.2 | % | 0.8 | % | | | | | |
| 14 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 15 | Net interest income | $ | 958 | | $ | 799 | $ | 674 | | | | | |
| 16 | Exclude: | | | | | | | | | | | | |
| 17 | Interest expense not attributable to our Card Member loan portfolio(b) | 475 | | 270 | | 211 | | | | | | | |
| 18 | Interest income not attributable to our Card Member loan portfolio(c) | (62) | | (28) | | (11) | | | | | | | |
| 19 | Adjusted net interest income(d) | $ | 1,371 | | $ | 1,041 | $ | 874 | | | | | |
| 20 | Average Card Member loans (billions) | $ | 15.0 | | $ | 12.4 | $ | 9.6 | | | | | |
| 21 | Net interest income divided by average Card Member loans(d) | 6.4 | % | | 6.5 | % | 7.0 | % | | | | | |
| 22 | Net interest yield on average Card Member loans(d) | 9.2 | % | | 8.4 | % | 9.1 | % | | | | | |
| 23 | Card Member receivables: | | | | | | | | | | | | |
| 24 | Total receivables (billions) | $ | 19.4 | | $ | 16.4 | $ | 14.3 | | 18 | % | 15 | % |
| 25 | Net write-off rate - principal and fees(e)(f) | 2.1 | % | | 1.3 | % | 0.6 | % | | | | | |
| 26 | Net write-off rate - principal only(a) - consumer and small business | 2.2 | % | | 1.4 | % | 0.8 | % | | | | | |
| 27 | 30+ days past due as a % of total - consumer and small business | 1.0 | % | | 1.3 | % | 0.7 | % | | | | | |
| 28 | 90+ days past billing as a % of total(e) - corporate | 0.5 | % | | 0.5 | % | 0.3 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
(f)Refer to Table 7 footnote (e).
60
|
U.S. CONSUMER SERVICES
TABLE 9: USCS SELECTED INCOME STATEMENT DATA
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:-------|:---|:------|:------|:------|:---|:---|:---|:---|:------|:----|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Revenues | | | | | | | | | | | | | | | | | | | | |
| 4 | Non-interest revenues | $ | 18,464 | | | $ | 16,440 | | $ | 12,989 | $ | 2,024 | | | 12 | % | | $ | 3,451 | 27 | % |
| 5 | Interest income | 12,336 | | | 8,457 | | | 6,328 | | 3,879 | 46 | | | 2,129 | | | 34 | | | | |
| 6 | Interest expense | 2,684 | | | 983 | | | 395 | | 1,701 | # | | 588 | | | # | | | | | |
| 7 | Net interest income | 9,652 | | | 7,474 | | | 5,933 | | 2,178 | 29 | | | 1,541 | | | 26 | | | | |
| 8 | Total revenues net of interest expense | 28,116 | | | 23,914 | | | 18,922 | | 4,202 | 18 | | | 4,992 | | | 26 | | | | |
| 9 | Provisions for credit losses | 2,855 | | | 1,021 | | | (919) | | 1,834 | # | | 1,940 | | | # | | | | | |
| 10 | Total revenues net of interest expense after provisions for credit losses | 25,261 | | | 22,893 | | | 19,841 | | 2,368 | 10 | | | 3,052 | | | 15 | | | | |
| 11 | Expenses | | | | | | | | | | | | | | | | | | | | |
| 12 | Card Member rewards, business development, Card Member services and marketing | 15,393 | | | 13,535 | | | 10,665 | | 1,858 | 14 | | | 2,870 | | | 27 | | | | |
| 13 | Salaries and employee benefits and other operating expenses | 4,435 | | | 3,958 | | | 3,218 | | 477 | 12 | | | 740 | | | 23 | | | | |
| 14 | Total expenses | 19,828 | | | 17,493 | | | 13,883 | | 2,335 | 13 | | | 3,610 | | | 26 | | | | |
| 15 | Pretax segment income | $ | 5,433 | | | $ | 5,400 | | $ | 5,958 | $ | 33 | | | 1 | % | | $ | (558) | (9) | % |
| 16 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
USCS issues a wide range of proprietary consumer cards and provides services to U.S. consumers, including travel and lifestyle services as well as banking and non-card financing products.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 10 percent, primarily driven by an increase in U.S. consumer billed business. See Tables 5, 6 and 10 for more details on billed business performance.
Net card fees increased 21 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 5 percent, primarily driven by higher travel commissions and fees from our consumer travel business and growth in delinquency fees, partially offset by the change in the allocation of TLS revenues described above.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and higher delinquencies. The reserve build in the prior year was driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts at that time, partially offset by the release of COVID-19 pandemic-driven reserves.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding. The reserve build in the prior year was primarily driven by higher delinquencies and an increase in receivables outstanding.
52
,
TABLE 10: USCS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------|:------|:-------|:------|:-----|:-------|:--------------|:-------|:--------------|:---|:---|:----|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 610.8 | | $ | 553.0 | $ | 444.2 | | 10 | % | 24 | % |
| 4 | Proprietary cards-in-force | 43.8 | | 41.7 | | 39.0 | 5 | | | 7 | | | |
| 5 | Proprietary basic cards-in-force | 30.7 | | 29.2 | | 27.3 | 5 | | | 7 | | | |
| 6 | Average proprietary basic Card Member spending (dollars) | $ | 20,303 | | $ | 19,514 | $ | 16,498 | | 4 | | 18 | |
| 7 | Total segment assets (billions) | $ | 107.2 | | $ | 94.4 | $ | 76.5 | | 14 | | 23 | |
| 8 | Card Member loans: | | | | | | | | | | | | |
| 9 | Total loans (billions) | $ | 83.2 | | $ | 72.7 | $ | 59.8 | | 14 | | 22 | |
| 10 | Average loans (billions) | $ | 76.0 | | $ | 63.7 | $ | 52.0 | | 19 | | 23 | |
| 11 | Net write-off rate - principal, interest and fees (a) | 2.2 | % | | 1.1 | % | 1.1 | % | | | | | |
| 12 | Net write-off rate - principal only (a) | 1.7 | % | | 0.9 | % | 0.8 | % | | | | | |
| 13 | 30+ days past due as a % of total | 1.4 | % | | 1.0 | % | 0.7 | % | | | | | |
| 14 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 15 | Net interest income | $ | 9,652 | | $ | 7,474 | $ | 5,933 | | | | | |
| 16 | Exclude: | | | | | | | | | | | | |
| 17 | Interest expense not attributable to our Card Member loan portfolio (b) | 192 | | 139 | | 158 | | | | | | | |
| 18 | Interest income not attributable to our Card Member loan portfolio (c) | (386) | | (228) | | (110) | | | | | | | |
| 19 | Adjusted net interest income (d) | $ | 9,458 | | $ | 7,385 | $ | 5,981 | | | | | |
| 20 | Average Card Member loans (billions) | $ | 76.0 | | $ | 63.7 | $ | 52.0 | | | | | |
| 21 | Net interest income divided by average Card Member loans (d) | 12.7 | % | | 11.7 | % | 11.4 | % | | | | | |
| 22 | Net interest yield on average Card Member loans (d) | 12.4 | % | | 11.6 | % | 11.5 | % | | | | | |
| 23 | Card Member receivables: | | | | | | | | | | | | |
| 24 | Total receivables (billions) | $ | 14.8 | | $ | 14.3 | $ | 14.7 | | 3 | % | (3) | % |
| 25 | Net write-off rate - principal and fees (a) | 1.3 | % | | 0.6 | % | 0.1 | % | | | | | |
| 26 | Net write-off rate - principal only (a) | 1.2 | % | | 0.6 | % | - | % | | | | | |
| 27 | 30+ days past due as a % of total | 0.8 | % | | 0.9 | % | 0.4 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
54
,
COMMERCIAL SERVICES
TABLE 11: CS SELECTED INCOME STATEMENT DATA
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:------|:---|:-----|:----|:------|:----|:---|:---|:---|:------|:----|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Revenues | | | | | | | | | | | | | | | | | | | | |
| 4 | Non-interest revenues | $ | 12,931 | | | $ | 12,196 | | $ | 9,833 | $ | 735 | | | 6 | % | | $ | 2,363 | 24 | % |
| 5 | Interest income | 3,328 | | | 2,070 | | | 1,408 | | 1,258 | 61 | | | 662 | | | 47 | | | | |
| 6 | Interest expense | 1,483 | | | 697 | | | 330 | | 786 | # | | 367 | | | # | | | | | |
| 7 | Net interest income | 1,845 | | | 1,373 | | | 1,078 | | 472 | 34 | | | 295 | | | 27 | | | | |
| 8 | Total revenues net of interest expense | 14,776 | | | 13,569 | | | 10,911 | | 1,207 | 9 | | | 2,658 | | | 24 | | | | |
| 9 | Provisions for credit losses | 1,313 | | | 565 | | | (420) | | 748 | # | | 985 | | | # | | | | | |
| 10 | Total revenues net of interest expense after provisions for credit losses | 13,463 | | | 13,004 | | | 11,331 | | 459 | 4 | | | 1,673 | | | 15 | | | | |
| 11 | Expenses | | | | | | | | | | | | | | | | | | | | |
| 12 | Card Member rewards, business development, Card Member services and marketing | 7,422 | | | 7,238 | | | 5,762 | | 184 | 3 | | | 1,476 | | | 26 | | | | |
| 13 | Salaries and employee benefits and other operating expenses | 3,180 | | | 2,886 | | | 2,633 | | 294 | 10 | | | 253 | | | 10 | | | | |
| 14 | Total expenses | 10,602 | | | 10,124 | | | 8,395 | | 478 | 5 | | | 1,729 | | | 21 | | | | |
| 15 | Pretax segment income | $ | 2,861 | | | $ | 2,880 | | $ | 2,936 | $ | (19) | | | (1) | % | | $ | (56) | (2) | % |
| 16 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
CS issues a wide range of proprietary corporate and small business cards and provides services to U.S. businesses, including payment and expense management, banking and non-card financing products. CS also issues proprietary corporate cards and provides services to select global corporate clients.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased, primarily driven by higher Discount revenue and Service fees and other revenue.
Discount revenue increased 4 percent, primarily driven by an increase in commercial billed business. See Tables 5, 6 and 12 for more details on billed business performance.
Net card fees increased 18 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 53 percent, largely driven by the change in the allocation of TLS revenues described above, as well as growth in delinquency fees.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and higher delinquencies. The reserve build in the prior year was driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts at that time, partially offset by the release of COVID-19 pandemic-driven reserves.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding. The reserve build in the prior year was primarily driven by higher delinquencies and an increase in receivables outstanding.
55
,
TABLE 12: CS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------|:------|:-------|:-----|:----|:-------|:--------------|:-------|:--------------|:----|:---|:---|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 516.0 | | $ | 499.5 | $ | 411.6 | | 3 | % | 21 | % |
| 4 | Proprietary cards-in-force | 15.4 | | 14.9 | | 13.4 | 3 | | | 11 | | | |
| 5 | Average Card Member spending (dollars) | $ | 33,745 | | $ | 35,202 | $ | 32,042 | | (4) | | 10 | |
| 6 | Total segment assets (billions) | $ | 55.4 | | $ | 51.4 | $ | 44.5 | | 8 | | 16 | |
| 7 | Card Member loans: | | | | | | | | | | | | |
| 8 | Total loans (billions) | $ | 25.8 | | $ | 21.4 | $ | 17.0 | | 21 | | 26 | |
| 9 | Average loans (billions) | $ | 23.9 | | $ | 19.3 | $ | 14.4 | | 24 | | 34 | |
| 10 | Net write-off rate - principal, interest and fees(a) | 2.0 | % | | 0.8 | % | 0.8 | % | | | | | |
| 11 | Net write-off rate - principal only(a) | 1.7 | % | | 0.7 | % | 0.6 | % | | | | | |
| 12 | 30+ days past due as a % of total | 1.4 | % | | 0.9 | % | 0.5 | % | | | | | |
| 13 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 14 | Net interest income | $ | 1,845 | | $ | 1,373 | $ | 1,078 | | | | | |
| 15 | Exclude: | | | | | | | | | | | | |
| 16 | Interest expense not attributable to our Card Member loan portfolio(b) | 711 | | 430 | | 251 | | | | | | | |
| 17 | Interest income not attributable to our Card Member loan portfolio(c) | (204) | | (89) | | (76) | | | | | | | |
| 18 | Adjusted net interest income(d) | $ | 2,352 | | $ | 1,714 | $ | 1,253 | | | | | |
| 19 | Average Card Member loans (billions) | $ | 23.9 | | $ | 19.3 | $ | 14.4 | | | | | |
| 20 | Net interest income divided by average Card Member loans(d) | 7.7 | % | | 7.1 | % | 7.5 | % | | | | | |
| 21 | Net interest yield on average Card Member loans(d) | 9.9 | % | | 8.9 | % | 8.7 | % | | | | | |
| 22 | Card Member receivables: | | | | | | | | | | | | |
| 23 | Total receivables (billions) | $ | 26.2 | | $ | 26.9 | $ | 24.6 | | (3) | % | 9 | % |
| 24 | Net write-off rate - principal and fees(e) | 1.5 | % | | 0.7 | % | 0.2 | % | | | | | |
| 25 | Net write-off rate - principal only(a) - small business | 2.1 | % | | 0.9 | % | 0.2 | % | | | | | |
| 26 | 30+ days past due as a % of total - small business | 1.5 | % | | 1.6 | % | 0.8 | % | | | | | |
| 27 | 90+ days past billing as a % of total(e) - corporate | 0.4 | % | | 0.6 | % | 0.3 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
57
,
INTERNATIONAL CARD SERVICES
TABLE 13: ICS SELECTED INCOME STATEMENT DATA
| | | | | | | | | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------|:-------|:------|:-----|:------|:-----|:------|:--------------|:--------------|:------|:---|:------|:------|:---|:---|:---|:---|:------|:-----|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Revenues | | | | | | | | | | | | | | | | | | | |
| 4 | Non-interest revenues | $ | 9,472 | | | $ | 8,262 | | $ | 6,761 | $ | 1,210 | | 15 | % | | $ | 1,501 | 22 | % |
| 5 | Interest income | 2,076 | | | 1,453 | | | 1,116 | | 623 | 43 | | 337 | | | 30 | | | | |
| 6 | Interest expense | 1,118 | | | 654 | | | 442 | | 464 | 71 | | 212 | | | 48 | | | | |
| 7 | Net interest income | 958 | | | 799 | | | 674 | | 159 | 20 | | 125 | | | 19 | | | | |
| 8 | Total revenues net of interest expense | 10,430 | | | 9,061 | | | 7,435 | | 1,369 | 15 | | 1,626 | | | 22 | | | | |
| 9 | Provisions for credit losses | 727 | | | 584 | | | (43) | | 143 | 24 | | 627 | | | # | | | | |
| 10 | Total revenues net of interest expense after provisions for credit losses | 9,703 | | | 8,477 | | | 7,478 | | 1,226 | 14 | | 999 | | | 13 | | | | |
| 11 | Expenses | | | | | | | | | | | | | | | | | | | |
| 12 | Card Member rewards, business development, Card Member services and marketing | 5,669 | | | 4,962 | | | 3,995 | | 707 | 14 | | 967 | | | 24 | | | | |
| 13 | Salaries and employee benefits and other operating expenses | 3,061 | | | 2,937 | | | 2,554 | | 124 | 4 | | 383 | | | 15 | | | | |
| 14 | Total expenses | 8,730 | | | 7,899 | | | 6,549 | | 831 | 11 | | 1,350 | | | 21 | | | | |
| 15 | Pretax segment income | $ | 973 | | | $ | 578 | | $ | 929 | $ | 395 | | 68 | % | | $ | (351) | (38) | % |
| 16 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
ICS issues a wide range of proprietary consumer, small business and corporate cards outside the United States. ICS also provides services to our international customers, including travel and lifestyle services, and manages certain international joint ventures and our loyalty coalition businesses.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 17 percent, primarily reflecting an increase in billed business. See Tables 5, 6 and 14 for more details on billed business performance.
Net card fees increased 17 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 9 percent, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding, partially offset by the performance of portfolios in certain international markets. The reserve build in the prior year was primarily driven by an increase in loans outstanding and higher delinquencies.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding. The reserve build in the prior year was primarily driven by an increase in receivables outstanding and higher delinquencies.
58
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TABLE 14: ICS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------|:-----|:-------|:-----|:----|:-------|:--------------|:-------|:--------------|:---|:---|:---|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 329.5 | | $ | 281.6 | $ | 228.2 | | 17 | % | 23 | % |
| 4 | Proprietary cards-in-force | 21.0 | | 20.1 | | 19.0 | 4 | | | 6 | | | |
| 5 | Proprietary basic cards-in-force | 15.6 | | 14.9 | | 13.9 | 5 | | | 7 | | | |
| 6 | Average proprietary basic Card Member spending (dollars) | $ | 21,550 | | $ | 19,519 | $ | 16,689 | | 10 | | 17 | |
| 7 | Total segment assets (billions) | $ | 42.2 | | $ | 36.9 | $ | 32.6 | | 14 | | 13 | |
| 8 | Card Member loans - consumer and small business: | | | | | | | | | | | | |
| 9 | Total loans (billions) | $ | 17.0 | | $ | 13.8 | $ | 11.6 | | 23 | | 19 | |
| 10 | Average loans (billions) | $ | 15.0 | | $ | 12.3 | $ | 9.6 | | 22 | | 28 | |
| 11 | Net write-off rate - principal, interest and fees(a) | 2.5 | % | | 1.4 | % | 2.1 | % | | | | | |
| 12 | Net write-off rate - principal only(a) | 2.1 | % | | 1.2 | % | 1.6 | % | | | | | |
| 13 | 30+ days past due as a % of total | 1.3 | % | | 1.2 | % | 0.8 | % | | | | | |
| 14 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 15 | Net interest income | $ | 958 | | $ | 799 | $ | 674 | | | | | |
| 16 | Exclude: | | | | | | | | | | | | |
| 17 | Interest expense not attributable to our Card Member loan portfolio(b) | 475 | | 270 | | 211 | | | | | | | |
| 18 | Interest income not attributable to our Card Member loan portfolio(c) | (62) | | (28) | | (11) | | | | | | | |
| 19 | Adjusted net interest income(d) | $ | 1,371 | | $ | 1,041 | $ | 874 | | | | | |
| 20 | Average Card Member loans (billions) | $ | 15.0 | | $ | 12.4 | $ | 9.6 | | | | | |
| 21 | Net interest income divided by average Card Member loans(d) | 6.4 | % | | 6.5 | % | 7.0 | % | | | | | |
| 22 | Net interest yield on average Card Member loans(d) | 9.2 | % | | 8.4 | % | 9.1 | % | | | | | |
| 23 | Card Member receivables: | | | | | | | | | | | | |
| 24 | Total receivables (billions) | $ | 19.4 | | $ | 16.4 | $ | 14.3 | | 18 | % | 15 | % |
| 25 | Net write-off rate - principal and fees(e)(f) | 2.1 | % | | 1.3 | % | 0.6 | % | | | | | |
| 26 | Net write-off rate - principal only(a) - consumer and small business | 2.2 | % | | 1.4 | % | 0.8 | % | | | | | |
| 27 | 30+ days past due as a % of total - consumer and small business | 1.0 | % | | 1.3 | % | 0.7 | % | | | | | |
| 28 | 90+ days past billing as a % of total(e) - corporate | 0.5 | % | | 0.5 | % | 0.3 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
(f)Refer to Table 7 footnote (e).
60
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 52:
U.S. CONSUMER SERVICES
TABLE 9: USCS SELECTED INCOME STATEMENT DATA
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td>$</td><td>18,464 </td><td></td><td colspan="3"></td><td>$</td><td>16,440 </td><td></td><td colspan="3"></td><td>$</td><td>12,989 </td><td></td><td colspan="3"></td><td>$</td><td>2,024 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,451 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="2">12,336 </td><td></td><td colspan="3"></td><td colspan="2">8,457 </td><td></td><td colspan="3"></td><td colspan="2">6,328 </td><td></td><td colspan="3"></td><td colspan="2">3,879 </td><td></td><td colspan="3"></td><td colspan="2">46 </td><td></td><td colspan="3"></td><td colspan="2">2,129 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="2">2,684 </td><td></td><td colspan="3"></td><td colspan="2">983 </td><td></td><td colspan="3"></td><td colspan="2">395 </td><td></td><td colspan="3"></td><td colspan="2">1,701 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">588 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">9,652 </td><td></td><td colspan="3"></td><td colspan="2">7,474 </td><td></td><td colspan="3"></td><td colspan="2">5,933 </td><td></td><td colspan="3"></td><td colspan="2">2,178 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td><td colspan="3"></td><td colspan="2">1,541 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">28,116 </td><td></td><td colspan="3"></td><td colspan="2">23,914 </td><td></td><td colspan="3"></td><td colspan="2">18,922 </td><td></td><td colspan="3"></td><td colspan="2">4,202 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td><td colspan="3"></td><td colspan="2">4,992 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">2,855 </td><td></td><td colspan="3"></td><td colspan="2">1,021 </td><td></td><td colspan="3"></td><td colspan="2">(919)</td><td></td><td colspan="3"></td><td colspan="2">1,834 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">1,940 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">25,261 </td><td></td><td colspan="3"></td><td colspan="2">22,893 </td><td></td><td colspan="3"></td><td colspan="2">19,841 </td><td></td><td colspan="3"></td><td colspan="2">2,368 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">3,052 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards, business development, Card Member services and marketing</td><td colspan="3"></td><td colspan="2">15,393 </td><td></td><td colspan="3"></td><td colspan="2">13,535 </td><td></td><td colspan="3"></td><td colspan="2">10,665 </td><td></td><td colspan="3"></td><td colspan="2">1,858 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">2,870 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits and other operating expenses</td><td colspan="3"></td><td colspan="2">4,435 </td><td></td><td colspan="3"></td><td colspan="2">3,958 </td><td></td><td colspan="3"></td><td colspan="2">3,218 </td><td></td><td colspan="3"></td><td colspan="2">477 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td></td><td colspan="3"></td><td colspan="2">740 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">19,828 </td><td></td><td colspan="3"></td><td colspan="2">17,493 </td><td></td><td colspan="3"></td><td colspan="2">13,883 </td><td></td><td colspan="3"></td><td colspan="2">2,335 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td><td colspan="3"></td><td colspan="2">3,610 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Pretax segment income</td><td colspan="3"></td><td>$</td><td>5,433 </td><td></td><td colspan="3"></td><td>$</td><td>5,400 </td><td></td><td colspan="3"></td><td>$</td><td>5,958 </td><td></td><td colspan="3"></td><td>$</td><td>33 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td>%</td><td colspan="3"></td><td>$</td><td>(558)</td><td></td><td colspan="3"></td><td colspan="2">(9)</td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>USCS issues a wide range of proprietary consumer cards and provides services to U.S. consumers, including travel and lifestyle services as well as banking and non-card financing products.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 10 percent, primarily driven by an increase in U.S. consumer billed business. See Tables 5, 6 and 10 for more details on billed business performance.
Net card fees increased 21 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 5 percent, primarily driven by higher travel commissions and fees from our consumer travel business and growth in delinquency fees, partially offset by the change in the allocation of TLS revenues described above.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and higher delinquencies. The reserve build in the prior year was driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts at that time, partially offset by the release of COVID-19 pandemic-driven reserves.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding. The reserve build in the prior year was primarily driven by higher delinquencies and an increase in receivables outstanding.
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, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 54:
TABLE 10: USCS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">610.8</td><td colspan="3"></td><td>$</td><td colspan="2">553.0</td><td colspan="3"></td><td>$</td><td colspan="2">444.2</td><td colspan="3"></td><td colspan="2">10 </td><td>%</td><td colspan="3"></td><td colspan="2">24 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">43.8</td><td colspan="3"></td><td colspan="3">41.7</td><td colspan="3"></td><td colspan="3">39.0</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Proprietary basic cards-in-force</td><td colspan="3"></td><td colspan="3">30.7</td><td colspan="3"></td><td colspan="3">29.2</td><td colspan="3"></td><td colspan="3">27.3</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Average proprietary basic Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">20,303</td><td colspan="3"></td><td>$</td><td colspan="2">19,514</td><td colspan="3"></td><td>$</td><td colspan="2">16,498</td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">107.2</td><td colspan="3"></td><td>$</td><td colspan="2">94.4</td><td colspan="3"></td><td>$</td><td colspan="2">76.5</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Card Member loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">83.2</td><td colspan="3"></td><td>$</td><td colspan="2">72.7</td><td colspan="3"></td><td>$</td><td colspan="2">59.8</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">76.0</td><td colspan="3"></td><td>$</td><td colspan="2">63.7</td><td colspan="3"></td><td>$</td><td colspan="2">52.0</td><td colspan="3"></td><td colspan="2">19 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (a)</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only (a)</td><td colspan="3"></td><td colspan="2">1.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">9,652</td><td colspan="3"></td><td>$</td><td colspan="2">7,474</td><td colspan="3"></td><td>$</td><td colspan="2">5,933</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio (b)</td><td colspan="3"></td><td colspan="3">192</td><td colspan="3"></td><td colspan="3">139</td><td colspan="3"></td><td colspan="3">158</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio (c)</td><td colspan="3"></td><td colspan="3">(386)</td><td colspan="3"></td><td colspan="3">(228)</td><td colspan="3"></td><td colspan="3">(110)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income (d)</td><td colspan="3"></td><td>$</td><td colspan="2">9,458</td><td colspan="3"></td><td>$</td><td colspan="2">7,385</td><td colspan="3"></td><td>$</td><td colspan="2">5,981</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">76.0</td><td colspan="3"></td><td>$</td><td colspan="2">63.7</td><td colspan="3"></td><td>$</td><td colspan="2">52.0</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans (d)</td><td colspan="3"></td><td colspan="2">12.7 </td><td>%</td><td colspan="3"></td><td colspan="2">11.7 </td><td>%</td><td colspan="3"></td><td colspan="2">11.4 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans (d)</td><td colspan="3"></td><td colspan="2">12.4 </td><td>%</td><td colspan="3"></td><td colspan="2">11.6 </td><td>%</td><td colspan="3"></td><td colspan="2">11.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">14.8</td><td colspan="3"></td><td>$</td><td colspan="2">14.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.7</td><td colspan="3"></td><td colspan="2">3 </td><td>%</td><td colspan="3"></td><td colspan="2">(3)</td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees (a)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only (a)</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">- </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
54
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 55:
COMMERCIAL SERVICES
TABLE 11: CS SELECTED INCOME STATEMENT DATA
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td>$</td><td>12,931 </td><td></td><td colspan="3"></td><td>$</td><td>12,196 </td><td></td><td colspan="3"></td><td>$</td><td>9,833 </td><td></td><td colspan="3"></td><td>$</td><td>735 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,363 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td>%</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="2">3,328 </td><td></td><td colspan="3"></td><td colspan="2">2,070 </td><td></td><td colspan="3"></td><td colspan="2">1,408 </td><td></td><td colspan="3"></td><td colspan="2">1,258 </td><td></td><td colspan="3"></td><td colspan="2">61 </td><td></td><td colspan="3"></td><td colspan="2">662 </td><td></td><td colspan="3"></td><td colspan="2">47 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="2">1,483 </td><td></td><td colspan="3"></td><td colspan="2">697 </td><td></td><td colspan="3"></td><td colspan="2">330 </td><td></td><td colspan="3"></td><td colspan="2">786 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">367 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">1,845 </td><td></td><td colspan="3"></td><td colspan="2">1,373 </td><td></td><td colspan="3"></td><td colspan="2">1,078 </td><td></td><td colspan="3"></td><td colspan="2">472 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td></td><td colspan="3"></td><td colspan="2">295 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">14,776 </td><td></td><td colspan="3"></td><td colspan="2">13,569 </td><td></td><td colspan="3"></td><td colspan="2">10,911 </td><td></td><td colspan="3"></td><td colspan="2">1,207 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">2,658 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">1,313 </td><td></td><td colspan="3"></td><td colspan="2">565 </td><td></td><td colspan="3"></td><td colspan="2">(420)</td><td></td><td colspan="3"></td><td colspan="2">748 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">985 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">13,463 </td><td></td><td colspan="3"></td><td colspan="2">13,004 </td><td></td><td colspan="3"></td><td colspan="2">11,331 </td><td></td><td colspan="3"></td><td colspan="2">459 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">1,673 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards, business development, Card Member services and marketing</td><td colspan="3"></td><td colspan="2">7,422 </td><td></td><td colspan="3"></td><td colspan="2">7,238 </td><td></td><td colspan="3"></td><td colspan="2">5,762 </td><td></td><td colspan="3"></td><td colspan="2">184 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">1,476 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits and other operating expenses</td><td colspan="3"></td><td colspan="2">3,180 </td><td></td><td colspan="3"></td><td colspan="2">2,886 </td><td></td><td colspan="3"></td><td colspan="2">2,633 </td><td></td><td colspan="3"></td><td colspan="2">294 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">253 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">10,602 </td><td></td><td colspan="3"></td><td colspan="2">10,124 </td><td></td><td colspan="3"></td><td colspan="2">8,395 </td><td></td><td colspan="3"></td><td colspan="2">478 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">1,729 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td></td></tr><tr><td colspan="3">Pretax segment income</td><td colspan="3"></td><td>$</td><td>2,861 </td><td></td><td colspan="3"></td><td>$</td><td>2,880 </td><td></td><td colspan="3"></td><td>$</td><td>2,936 </td><td></td><td colspan="3"></td><td>$</td><td>(19)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td>%</td><td colspan="3"></td><td>$</td><td>(56)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>CS issues a wide range of proprietary corporate and small business cards and provides services to U.S. businesses, including payment and expense management, banking and non-card financing products. CS also issues proprietary corporate cards and provides services to select global corporate clients.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased, primarily driven by higher Discount revenue and Service fees and other revenue.
Discount revenue increased 4 percent, primarily driven by an increase in commercial billed business. See Tables 5, 6 and 12 for more details on billed business performance.
Net card fees increased 18 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 53 percent, largely driven by the change in the allocation of TLS revenues described above, as well as growth in delinquency fees.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and higher delinquencies. The reserve build in the prior year was driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts at that time, partially offset by the release of COVID-19 pandemic-driven reserves.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding. The reserve build in the prior year was primarily driven by higher delinquencies and an increase in receivables outstanding.
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, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 57:
TABLE 12: CS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">516.0</td><td colspan="3"></td><td>$</td><td colspan="2">499.5</td><td colspan="3"></td><td>$</td><td colspan="2">411.6</td><td colspan="3"></td><td colspan="2">3 </td><td>%</td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">15.4</td><td colspan="3"></td><td colspan="3">14.9</td><td colspan="3"></td><td colspan="3">13.4</td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td></tr><tr><td colspan="3">Average Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">33,745</td><td colspan="3"></td><td>$</td><td colspan="2">35,202</td><td colspan="3"></td><td>$</td><td colspan="2">32,042</td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">55.4</td><td colspan="3"></td><td>$</td><td colspan="2">51.4</td><td colspan="3"></td><td>$</td><td colspan="2">44.5</td><td colspan="3"></td><td colspan="2">8 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td></tr><tr><td colspan="3">Card Member loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">25.8</td><td colspan="3"></td><td>$</td><td colspan="2">21.4</td><td colspan="3"></td><td>$</td><td colspan="2">17.0</td><td colspan="3"></td><td colspan="2">21 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">23.9</td><td colspan="3"></td><td>$</td><td colspan="2">19.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.4</td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees(a)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a)</td><td colspan="3"></td><td colspan="2">1.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">1,845</td><td colspan="3"></td><td>$</td><td colspan="2">1,373</td><td colspan="3"></td><td>$</td><td colspan="2">1,078</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio(b)</td><td colspan="3"></td><td colspan="3">711</td><td colspan="3"></td><td colspan="3">430</td><td colspan="3"></td><td colspan="3">251</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio(c)</td><td colspan="3"></td><td colspan="3">(204)</td><td colspan="3"></td><td colspan="3">(89)</td><td colspan="3"></td><td colspan="3">(76)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income(d)</td><td colspan="3"></td><td>$</td><td colspan="2">2,352</td><td colspan="3"></td><td>$</td><td colspan="2">1,714</td><td colspan="3"></td><td>$</td><td colspan="2">1,253</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">23.9</td><td colspan="3"></td><td>$</td><td colspan="2">19.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.4</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">7.7 </td><td>%</td><td colspan="3"></td><td colspan="2">7.1 </td><td>%</td><td colspan="3"></td><td colspan="2">7.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">9.9 </td><td>%</td><td colspan="3"></td><td colspan="2">8.9 </td><td>%</td><td colspan="3"></td><td colspan="2">8.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">26.2</td><td colspan="3"></td><td>$</td><td colspan="2">26.9</td><td colspan="3"></td><td>$</td><td colspan="2">24.6</td><td colspan="3"></td><td colspan="2">(3)</td><td>%</td><td colspan="3"></td><td colspan="2">9 </td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees(e)</td><td colspan="3"></td><td colspan="2">1.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a) - small business</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - small business</td><td colspan="3"></td><td colspan="2">1.5 </td><td>%</td><td colspan="3"></td><td colspan="2">1.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">90+ days past billing as a % of total(e) - corporate</td><td colspan="3"></td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
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INTERNATIONAL CARD SERVICES
TABLE 13: ICS SELECTED INCOME STATEMENT DATA
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td>$</td><td>9,472 </td><td></td><td colspan="3"></td><td>$</td><td>8,262 </td><td></td><td colspan="3"></td><td>$</td><td>6,761 </td><td></td><td colspan="3"></td><td>$</td><td>1,210 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,501 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td>%</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="2">2,076 </td><td></td><td colspan="3"></td><td colspan="2">1,453 </td><td></td><td colspan="3"></td><td colspan="2">1,116 </td><td></td><td colspan="3"></td><td colspan="2">623 </td><td></td><td colspan="3"></td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">337 </td><td></td><td colspan="3"></td><td colspan="2">30 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="2">1,118 </td><td></td><td colspan="3"></td><td colspan="2">654 </td><td></td><td colspan="3"></td><td colspan="2">442 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td><td colspan="3"></td><td colspan="2">71 </td><td></td><td colspan="3"></td><td colspan="2">212 </td><td></td><td colspan="3"></td><td colspan="2">48 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">958 </td><td></td><td colspan="3"></td><td colspan="2">799 </td><td></td><td colspan="3"></td><td colspan="2">674 </td><td></td><td colspan="3"></td><td colspan="2">159 </td><td></td><td colspan="3"></td><td colspan="2">20 </td><td></td><td colspan="3"></td><td colspan="2">125 </td><td></td><td colspan="3"></td><td colspan="2">19 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">10,430 </td><td></td><td colspan="3"></td><td colspan="2">9,061 </td><td></td><td colspan="3"></td><td colspan="2">7,435 </td><td></td><td colspan="3"></td><td colspan="2">1,369 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">1,626 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">727 </td><td></td><td colspan="3"></td><td colspan="2">584 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td><td colspan="3"></td><td colspan="2">143 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">9,703 </td><td></td><td colspan="3"></td><td colspan="2">8,477 </td><td></td><td colspan="3"></td><td colspan="2">7,478 </td><td></td><td colspan="3"></td><td colspan="2">1,226 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">999 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards, business development, Card Member services and marketing</td><td colspan="3"></td><td colspan="2">5,669 </td><td></td><td colspan="3"></td><td colspan="2">4,962 </td><td></td><td colspan="3"></td><td colspan="2">3,995 </td><td></td><td colspan="3"></td><td colspan="2">707 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">967 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits and other operating expenses</td><td colspan="3"></td><td colspan="2">3,061 </td><td></td><td colspan="3"></td><td colspan="2">2,937 </td><td></td><td colspan="3"></td><td colspan="2">2,554 </td><td></td><td colspan="3"></td><td colspan="2">124 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">383 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">8,730 </td><td></td><td colspan="3"></td><td colspan="2">7,899 </td><td></td><td colspan="3"></td><td colspan="2">6,549 </td><td></td><td colspan="3"></td><td colspan="2">831 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,350 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td></td></tr><tr><td colspan="3">Pretax segment income</td><td colspan="3"></td><td>$</td><td>973 </td><td></td><td colspan="3"></td><td>$</td><td>578 </td><td></td><td colspan="3"></td><td>$</td><td>929 </td><td></td><td colspan="3"></td><td>$</td><td>395 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td>%</td><td colspan="3"></td><td>$</td><td>(351)</td><td></td><td colspan="3"></td><td colspan="2">(38)</td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>ICS issues a wide range of proprietary consumer, small business and corporate cards outside the United States. ICS also provides services to our international customers, including travel and lifestyle services, and manages certain international joint ventures and our loyalty coalition businesses.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 17 percent, primarily reflecting an increase in billed business. See Tables 5, 6 and 14 for more details on billed business performance.
Net card fees increased 17 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 9 percent, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding, partially offset by the performance of portfolios in certain international markets. The reserve build in the prior year was primarily driven by an increase in loans outstanding and higher delinquencies.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding. The reserve build in the prior year was primarily driven by an increase in receivables outstanding and higher delinquencies.
58
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 60:
TABLE 14: ICS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">329.5</td><td colspan="3"></td><td>$</td><td colspan="2">281.6</td><td colspan="3"></td><td>$</td><td colspan="2">228.2</td><td colspan="3"></td><td colspan="2">17 </td><td>%</td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">21.0</td><td colspan="3"></td><td colspan="3">20.1</td><td colspan="3"></td><td colspan="3">19.0</td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Proprietary basic cards-in-force</td><td colspan="3"></td><td colspan="3">15.6</td><td colspan="3"></td><td colspan="3">14.9</td><td colspan="3"></td><td colspan="3">13.9</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Average proprietary basic Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">21,550</td><td colspan="3"></td><td>$</td><td colspan="2">19,519</td><td colspan="3"></td><td>$</td><td colspan="2">16,689</td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">42.2</td><td colspan="3"></td><td>$</td><td colspan="2">36.9</td><td colspan="3"></td><td>$</td><td colspan="2">32.6</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td></tr><tr><td colspan="3">Card Member loans - consumer and small business:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">17.0</td><td colspan="3"></td><td>$</td><td colspan="2">13.8</td><td colspan="3"></td><td>$</td><td colspan="2">11.6</td><td colspan="3"></td><td colspan="2">23 </td><td></td><td colspan="3"></td><td colspan="2">19 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">15.0</td><td colspan="3"></td><td>$</td><td colspan="2">12.3</td><td colspan="3"></td><td>$</td><td colspan="2">9.6</td><td colspan="3"></td><td colspan="2">22 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees(a)</td><td colspan="3"></td><td colspan="2">2.5 </td><td>%</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a)</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">958</td><td colspan="3"></td><td>$</td><td colspan="2">799</td><td colspan="3"></td><td>$</td><td colspan="2">674</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio(b)</td><td colspan="3"></td><td colspan="3">475</td><td colspan="3"></td><td colspan="3">270</td><td colspan="3"></td><td colspan="3">211</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio(c)</td><td colspan="3"></td><td colspan="3">(62)</td><td colspan="3"></td><td colspan="3">(28)</td><td colspan="3"></td><td colspan="3">(11)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income(d)</td><td colspan="3"></td><td>$</td><td colspan="2">1,371</td><td colspan="3"></td><td>$</td><td colspan="2">1,041</td><td colspan="3"></td><td>$</td><td colspan="2">874</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">15.0</td><td colspan="3"></td><td>$</td><td colspan="2">12.4</td><td colspan="3"></td><td>$</td><td colspan="2">9.6</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">6.4 </td><td>%</td><td colspan="3"></td><td colspan="2">6.5 </td><td>%</td><td colspan="3"></td><td colspan="2">7.0 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">9.2 </td><td>%</td><td colspan="3"></td><td colspan="2">8.4 </td><td>%</td><td colspan="3"></td><td colspan="2">9.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">19.4</td><td colspan="3"></td><td>$</td><td colspan="2">16.4</td><td colspan="3"></td><td>$</td><td colspan="2">14.3</td><td colspan="3"></td><td colspan="2">18 </td><td>%</td><td colspan="3"></td><td colspan="2">15 </td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees(e)(f)</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a) - consumer and small business</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">90+ days past billing as a % of total(e) - corporate</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
(f)Refer to Table 7 footnote (e).
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U.S. CONSUMER SERVICES
TABLE 9: USCS SELECTED INCOME STATEMENT DATA
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td>$</td><td>18,464 </td><td></td><td colspan="3"></td><td>$</td><td>16,440 </td><td></td><td colspan="3"></td><td>$</td><td>12,989 </td><td></td><td colspan="3"></td><td>$</td><td>2,024 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,451 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="2">12,336 </td><td></td><td colspan="3"></td><td colspan="2">8,457 </td><td></td><td colspan="3"></td><td colspan="2">6,328 </td><td></td><td colspan="3"></td><td colspan="2">3,879 </td><td></td><td colspan="3"></td><td colspan="2">46 </td><td></td><td colspan="3"></td><td colspan="2">2,129 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="2">2,684 </td><td></td><td colspan="3"></td><td colspan="2">983 </td><td></td><td colspan="3"></td><td colspan="2">395 </td><td></td><td colspan="3"></td><td colspan="2">1,701 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">588 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">9,652 </td><td></td><td colspan="3"></td><td colspan="2">7,474 </td><td></td><td colspan="3"></td><td colspan="2">5,933 </td><td></td><td colspan="3"></td><td colspan="2">2,178 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td><td colspan="3"></td><td colspan="2">1,541 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">28,116 </td><td></td><td colspan="3"></td><td colspan="2">23,914 </td><td></td><td colspan="3"></td><td colspan="2">18,922 </td><td></td><td colspan="3"></td><td colspan="2">4,202 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td><td colspan="3"></td><td colspan="2">4,992 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">2,855 </td><td></td><td colspan="3"></td><td colspan="2">1,021 </td><td></td><td colspan="3"></td><td colspan="2">(919)</td><td></td><td colspan="3"></td><td colspan="2">1,834 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">1,940 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">25,261 </td><td></td><td colspan="3"></td><td colspan="2">22,893 </td><td></td><td colspan="3"></td><td colspan="2">19,841 </td><td></td><td colspan="3"></td><td colspan="2">2,368 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">3,052 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards, business development, Card Member services and marketing</td><td colspan="3"></td><td colspan="2">15,393 </td><td></td><td colspan="3"></td><td colspan="2">13,535 </td><td></td><td colspan="3"></td><td colspan="2">10,665 </td><td></td><td colspan="3"></td><td colspan="2">1,858 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">2,870 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits and other operating expenses</td><td colspan="3"></td><td colspan="2">4,435 </td><td></td><td colspan="3"></td><td colspan="2">3,958 </td><td></td><td colspan="3"></td><td colspan="2">3,218 </td><td></td><td colspan="3"></td><td colspan="2">477 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td></td><td colspan="3"></td><td colspan="2">740 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">19,828 </td><td></td><td colspan="3"></td><td colspan="2">17,493 </td><td></td><td colspan="3"></td><td colspan="2">13,883 </td><td></td><td colspan="3"></td><td colspan="2">2,335 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td><td colspan="3"></td><td colspan="2">3,610 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Pretax segment income</td><td colspan="3"></td><td>$</td><td>5,433 </td><td></td><td colspan="3"></td><td>$</td><td>5,400 </td><td></td><td colspan="3"></td><td>$</td><td>5,958 </td><td></td><td colspan="3"></td><td>$</td><td>33 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td>%</td><td colspan="3"></td><td>$</td><td>(558)</td><td></td><td colspan="3"></td><td colspan="2">(9)</td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>USCS issues a wide range of proprietary consumer cards and provides services to U.S. consumers, including travel and lifestyle services as well as banking and non-card financing products.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 10 percent, primarily driven by an increase in U.S. consumer billed business. See Tables 5, 6 and 10 for more details on billed business performance.
Net card fees increased 21 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 5 percent, primarily driven by higher travel commissions and fees from our consumer travel business and growth in delinquency fees, partially offset by the change in the allocation of TLS revenues described above.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and higher delinquencies. The reserve build in the prior year was driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts at that time, partially offset by the release of COVID-19 pandemic-driven reserves.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding. The reserve build in the prior year was primarily driven by higher delinquencies and an increase in receivables outstanding.
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TABLE 10: USCS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">610.8</td><td colspan="3"></td><td>$</td><td colspan="2">553.0</td><td colspan="3"></td><td>$</td><td colspan="2">444.2</td><td colspan="3"></td><td colspan="2">10 </td><td>%</td><td colspan="3"></td><td colspan="2">24 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">43.8</td><td colspan="3"></td><td colspan="3">41.7</td><td colspan="3"></td><td colspan="3">39.0</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Proprietary basic cards-in-force</td><td colspan="3"></td><td colspan="3">30.7</td><td colspan="3"></td><td colspan="3">29.2</td><td colspan="3"></td><td colspan="3">27.3</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Average proprietary basic Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">20,303</td><td colspan="3"></td><td>$</td><td colspan="2">19,514</td><td colspan="3"></td><td>$</td><td colspan="2">16,498</td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">107.2</td><td colspan="3"></td><td>$</td><td colspan="2">94.4</td><td colspan="3"></td><td>$</td><td colspan="2">76.5</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Card Member loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">83.2</td><td colspan="3"></td><td>$</td><td colspan="2">72.7</td><td colspan="3"></td><td>$</td><td colspan="2">59.8</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">76.0</td><td colspan="3"></td><td>$</td><td colspan="2">63.7</td><td colspan="3"></td><td>$</td><td colspan="2">52.0</td><td colspan="3"></td><td colspan="2">19 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (a)</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only (a)</td><td colspan="3"></td><td colspan="2">1.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">9,652</td><td colspan="3"></td><td>$</td><td colspan="2">7,474</td><td colspan="3"></td><td>$</td><td colspan="2">5,933</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio (b)</td><td colspan="3"></td><td colspan="3">192</td><td colspan="3"></td><td colspan="3">139</td><td colspan="3"></td><td colspan="3">158</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio (c)</td><td colspan="3"></td><td colspan="3">(386)</td><td colspan="3"></td><td colspan="3">(228)</td><td colspan="3"></td><td colspan="3">(110)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income (d)</td><td colspan="3"></td><td>$</td><td colspan="2">9,458</td><td colspan="3"></td><td>$</td><td colspan="2">7,385</td><td colspan="3"></td><td>$</td><td colspan="2">5,981</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">76.0</td><td colspan="3"></td><td>$</td><td colspan="2">63.7</td><td colspan="3"></td><td>$</td><td colspan="2">52.0</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans (d)</td><td colspan="3"></td><td colspan="2">12.7 </td><td>%</td><td colspan="3"></td><td colspan="2">11.7 </td><td>%</td><td colspan="3"></td><td colspan="2">11.4 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans (d)</td><td colspan="3"></td><td colspan="2">12.4 </td><td>%</td><td colspan="3"></td><td colspan="2">11.6 </td><td>%</td><td colspan="3"></td><td colspan="2">11.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">14.8</td><td colspan="3"></td><td>$</td><td colspan="2">14.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.7</td><td colspan="3"></td><td colspan="2">3 </td><td>%</td><td colspan="3"></td><td colspan="2">(3)</td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees (a)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only (a)</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">- </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
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COMMERCIAL SERVICES
TABLE 11: CS SELECTED INCOME STATEMENT DATA
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td>$</td><td>12,931 </td><td></td><td colspan="3"></td><td>$</td><td>12,196 </td><td></td><td colspan="3"></td><td>$</td><td>9,833 </td><td></td><td colspan="3"></td><td>$</td><td>735 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,363 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td>%</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="2">3,328 </td><td></td><td colspan="3"></td><td colspan="2">2,070 </td><td></td><td colspan="3"></td><td colspan="2">1,408 </td><td></td><td colspan="3"></td><td colspan="2">1,258 </td><td></td><td colspan="3"></td><td colspan="2">61 </td><td></td><td colspan="3"></td><td colspan="2">662 </td><td></td><td colspan="3"></td><td colspan="2">47 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="2">1,483 </td><td></td><td colspan="3"></td><td colspan="2">697 </td><td></td><td colspan="3"></td><td colspan="2">330 </td><td></td><td colspan="3"></td><td colspan="2">786 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">367 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">1,845 </td><td></td><td colspan="3"></td><td colspan="2">1,373 </td><td></td><td colspan="3"></td><td colspan="2">1,078 </td><td></td><td colspan="3"></td><td colspan="2">472 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td></td><td colspan="3"></td><td colspan="2">295 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">14,776 </td><td></td><td colspan="3"></td><td colspan="2">13,569 </td><td></td><td colspan="3"></td><td colspan="2">10,911 </td><td></td><td colspan="3"></td><td colspan="2">1,207 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">2,658 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">1,313 </td><td></td><td colspan="3"></td><td colspan="2">565 </td><td></td><td colspan="3"></td><td colspan="2">(420)</td><td></td><td colspan="3"></td><td colspan="2">748 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">985 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">13,463 </td><td></td><td colspan="3"></td><td colspan="2">13,004 </td><td></td><td colspan="3"></td><td colspan="2">11,331 </td><td></td><td colspan="3"></td><td colspan="2">459 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">1,673 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards, business development, Card Member services and marketing</td><td colspan="3"></td><td colspan="2">7,422 </td><td></td><td colspan="3"></td><td colspan="2">7,238 </td><td></td><td colspan="3"></td><td colspan="2">5,762 </td><td></td><td colspan="3"></td><td colspan="2">184 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">1,476 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits and other operating expenses</td><td colspan="3"></td><td colspan="2">3,180 </td><td></td><td colspan="3"></td><td colspan="2">2,886 </td><td></td><td colspan="3"></td><td colspan="2">2,633 </td><td></td><td colspan="3"></td><td colspan="2">294 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">253 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">10,602 </td><td></td><td colspan="3"></td><td colspan="2">10,124 </td><td></td><td colspan="3"></td><td colspan="2">8,395 </td><td></td><td colspan="3"></td><td colspan="2">478 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">1,729 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td></td></tr><tr><td colspan="3">Pretax segment income</td><td colspan="3"></td><td>$</td><td>2,861 </td><td></td><td colspan="3"></td><td>$</td><td>2,880 </td><td></td><td colspan="3"></td><td>$</td><td>2,936 </td><td></td><td colspan="3"></td><td>$</td><td>(19)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td>%</td><td colspan="3"></td><td>$</td><td>(56)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>CS issues a wide range of proprietary corporate and small business cards and provides services to U.S. businesses, including payment and expense management, banking and non-card financing products. CS also issues proprietary corporate cards and provides services to select global corporate clients.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased, primarily driven by higher Discount revenue and Service fees and other revenue.
Discount revenue increased 4 percent, primarily driven by an increase in commercial billed business. See Tables 5, 6 and 12 for more details on billed business performance.
Net card fees increased 18 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 53 percent, largely driven by the change in the allocation of TLS revenues described above, as well as growth in delinquency fees.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and higher delinquencies. The reserve build in the prior year was driven by an increase in loans outstanding, higher delinquencies and changes in macroeconomic forecasts at that time, partially offset by the release of COVID-19 pandemic-driven reserves.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies and a decrease in receivables outstanding. The reserve build in the prior year was primarily driven by higher delinquencies and an increase in receivables outstanding.
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TABLE 12: CS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">516.0</td><td colspan="3"></td><td>$</td><td colspan="2">499.5</td><td colspan="3"></td><td>$</td><td colspan="2">411.6</td><td colspan="3"></td><td colspan="2">3 </td><td>%</td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">15.4</td><td colspan="3"></td><td colspan="3">14.9</td><td colspan="3"></td><td colspan="3">13.4</td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td></tr><tr><td colspan="3">Average Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">33,745</td><td colspan="3"></td><td>$</td><td colspan="2">35,202</td><td colspan="3"></td><td>$</td><td colspan="2">32,042</td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">55.4</td><td colspan="3"></td><td>$</td><td colspan="2">51.4</td><td colspan="3"></td><td>$</td><td colspan="2">44.5</td><td colspan="3"></td><td colspan="2">8 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td></tr><tr><td colspan="3">Card Member loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">25.8</td><td colspan="3"></td><td>$</td><td colspan="2">21.4</td><td colspan="3"></td><td>$</td><td colspan="2">17.0</td><td colspan="3"></td><td colspan="2">21 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">23.9</td><td colspan="3"></td><td>$</td><td colspan="2">19.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.4</td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees(a)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a)</td><td colspan="3"></td><td colspan="2">1.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">1,845</td><td colspan="3"></td><td>$</td><td colspan="2">1,373</td><td colspan="3"></td><td>$</td><td colspan="2">1,078</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio(b)</td><td colspan="3"></td><td colspan="3">711</td><td colspan="3"></td><td colspan="3">430</td><td colspan="3"></td><td colspan="3">251</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio(c)</td><td colspan="3"></td><td colspan="3">(204)</td><td colspan="3"></td><td colspan="3">(89)</td><td colspan="3"></td><td colspan="3">(76)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income(d)</td><td colspan="3"></td><td>$</td><td colspan="2">2,352</td><td colspan="3"></td><td>$</td><td colspan="2">1,714</td><td colspan="3"></td><td>$</td><td colspan="2">1,253</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">23.9</td><td colspan="3"></td><td>$</td><td colspan="2">19.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.4</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">7.7 </td><td>%</td><td colspan="3"></td><td colspan="2">7.1 </td><td>%</td><td colspan="3"></td><td colspan="2">7.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">9.9 </td><td>%</td><td colspan="3"></td><td colspan="2">8.9 </td><td>%</td><td colspan="3"></td><td colspan="2">8.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">26.2</td><td colspan="3"></td><td>$</td><td colspan="2">26.9</td><td colspan="3"></td><td>$</td><td colspan="2">24.6</td><td colspan="3"></td><td colspan="2">(3)</td><td>%</td><td colspan="3"></td><td colspan="2">9 </td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees(e)</td><td colspan="3"></td><td colspan="2">1.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a) - small business</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - small business</td><td colspan="3"></td><td colspan="2">1.5 </td><td>%</td><td colspan="3"></td><td colspan="2">1.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">90+ days past billing as a % of total(e) - corporate</td><td colspan="3"></td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
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INTERNATIONAL CARD SERVICES
TABLE 13: ICS SELECTED INCOME STATEMENT DATA
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td>$</td><td>9,472 </td><td></td><td colspan="3"></td><td>$</td><td>8,262 </td><td></td><td colspan="3"></td><td>$</td><td>6,761 </td><td></td><td colspan="3"></td><td>$</td><td>1,210 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,501 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td>%</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="2">2,076 </td><td></td><td colspan="3"></td><td colspan="2">1,453 </td><td></td><td colspan="3"></td><td colspan="2">1,116 </td><td></td><td colspan="3"></td><td colspan="2">623 </td><td></td><td colspan="3"></td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">337 </td><td></td><td colspan="3"></td><td colspan="2">30 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="2">1,118 </td><td></td><td colspan="3"></td><td colspan="2">654 </td><td></td><td colspan="3"></td><td colspan="2">442 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td><td colspan="3"></td><td colspan="2">71 </td><td></td><td colspan="3"></td><td colspan="2">212 </td><td></td><td colspan="3"></td><td colspan="2">48 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">958 </td><td></td><td colspan="3"></td><td colspan="2">799 </td><td></td><td colspan="3"></td><td colspan="2">674 </td><td></td><td colspan="3"></td><td colspan="2">159 </td><td></td><td colspan="3"></td><td colspan="2">20 </td><td></td><td colspan="3"></td><td colspan="2">125 </td><td></td><td colspan="3"></td><td colspan="2">19 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">10,430 </td><td></td><td colspan="3"></td><td colspan="2">9,061 </td><td></td><td colspan="3"></td><td colspan="2">7,435 </td><td></td><td colspan="3"></td><td colspan="2">1,369 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">1,626 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">727 </td><td></td><td colspan="3"></td><td colspan="2">584 </td><td></td><td colspan="3"></td><td colspan="2">(43)</td><td></td><td colspan="3"></td><td colspan="2">143 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">9,703 </td><td></td><td colspan="3"></td><td colspan="2">8,477 </td><td></td><td colspan="3"></td><td colspan="2">7,478 </td><td></td><td colspan="3"></td><td colspan="2">1,226 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">999 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards, business development, Card Member services and marketing</td><td colspan="3"></td><td colspan="2">5,669 </td><td></td><td colspan="3"></td><td colspan="2">4,962 </td><td></td><td colspan="3"></td><td colspan="2">3,995 </td><td></td><td colspan="3"></td><td colspan="2">707 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">967 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits and other operating expenses</td><td colspan="3"></td><td colspan="2">3,061 </td><td></td><td colspan="3"></td><td colspan="2">2,937 </td><td></td><td colspan="3"></td><td colspan="2">2,554 </td><td></td><td colspan="3"></td><td colspan="2">124 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">383 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">8,730 </td><td></td><td colspan="3"></td><td colspan="2">7,899 </td><td></td><td colspan="3"></td><td colspan="2">6,549 </td><td></td><td colspan="3"></td><td colspan="2">831 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,350 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td></td></tr><tr><td colspan="3">Pretax segment income</td><td colspan="3"></td><td>$</td><td>973 </td><td></td><td colspan="3"></td><td>$</td><td>578 </td><td></td><td colspan="3"></td><td>$</td><td>929 </td><td></td><td colspan="3"></td><td>$</td><td>395 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td>%</td><td colspan="3"></td><td>$</td><td>(351)</td><td></td><td colspan="3"></td><td colspan="2">(38)</td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>ICS issues a wide range of proprietary consumer, small business and corporate cards outside the United States. ICS also provides services to our international customers, including travel and lifestyle services, and manages certain international joint ventures and our loyalty coalition businesses.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 17 percent, primarily reflecting an increase in billed business. See Tables 5, 6 and 14 for more details on billed business performance.
Net card fees increased 17 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 9 percent, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates.
Interest expense increased, primarily driven by a higher cost of funds.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding, partially offset by the performance of portfolios in certain international markets. The reserve build in the prior year was primarily driven by an increase in loans outstanding and higher delinquencies.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs, partially offset by a reserve release in the current year versus a reserve build in the prior year. The reserve release in the current year was primarily driven by lower delinquencies, partially offset by an increase in receivables outstanding. The reserve build in the prior year was primarily driven by an increase in receivables outstanding and higher delinquencies.
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TABLE 14: ICS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">329.5</td><td colspan="3"></td><td>$</td><td colspan="2">281.6</td><td colspan="3"></td><td>$</td><td colspan="2">228.2</td><td colspan="3"></td><td colspan="2">17 </td><td>%</td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">21.0</td><td colspan="3"></td><td colspan="3">20.1</td><td colspan="3"></td><td colspan="3">19.0</td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Proprietary basic cards-in-force</td><td colspan="3"></td><td colspan="3">15.6</td><td colspan="3"></td><td colspan="3">14.9</td><td colspan="3"></td><td colspan="3">13.9</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Average proprietary basic Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">21,550</td><td colspan="3"></td><td>$</td><td colspan="2">19,519</td><td colspan="3"></td><td>$</td><td colspan="2">16,689</td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">42.2</td><td colspan="3"></td><td>$</td><td colspan="2">36.9</td><td colspan="3"></td><td>$</td><td colspan="2">32.6</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td></tr><tr><td colspan="3">Card Member loans - consumer and small business:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">17.0</td><td colspan="3"></td><td>$</td><td colspan="2">13.8</td><td colspan="3"></td><td>$</td><td colspan="2">11.6</td><td colspan="3"></td><td colspan="2">23 </td><td></td><td colspan="3"></td><td colspan="2">19 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">15.0</td><td colspan="3"></td><td>$</td><td colspan="2">12.3</td><td colspan="3"></td><td>$</td><td colspan="2">9.6</td><td colspan="3"></td><td colspan="2">22 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees(a)</td><td colspan="3"></td><td colspan="2">2.5 </td><td>%</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a)</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">958</td><td colspan="3"></td><td>$</td><td colspan="2">799</td><td colspan="3"></td><td>$</td><td colspan="2">674</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio(b)</td><td colspan="3"></td><td colspan="3">475</td><td colspan="3"></td><td colspan="3">270</td><td colspan="3"></td><td colspan="3">211</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio(c)</td><td colspan="3"></td><td colspan="3">(62)</td><td colspan="3"></td><td colspan="3">(28)</td><td colspan="3"></td><td colspan="3">(11)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income(d)</td><td colspan="3"></td><td>$</td><td colspan="2">1,371</td><td colspan="3"></td><td>$</td><td colspan="2">1,041</td><td colspan="3"></td><td>$</td><td colspan="2">874</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">15.0</td><td colspan="3"></td><td>$</td><td colspan="2">12.4</td><td colspan="3"></td><td>$</td><td colspan="2">9.6</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">6.4 </td><td>%</td><td colspan="3"></td><td colspan="2">6.5 </td><td>%</td><td colspan="3"></td><td colspan="2">7.0 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">9.2 </td><td>%</td><td colspan="3"></td><td colspan="2">8.4 </td><td>%</td><td colspan="3"></td><td colspan="2">9.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">19.4</td><td colspan="3"></td><td>$</td><td colspan="2">16.4</td><td colspan="3"></td><td>$</td><td colspan="2">14.3</td><td colspan="3"></td><td colspan="2">18 </td><td>%</td><td colspan="3"></td><td colspan="2">15 </td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees(e)(f)</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a) - consumer and small business</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">90+ days past billing as a % of total(e) - corporate</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
(f)Refer to Table 7 footnote (e).
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q_com003
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What is the trend in Amex's streams revenues in the between 2021 and 2023?
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American Express demonstrated strong revenue growth across all revenue streams from 2021 to 2023:
1. Discount Revenue grew from $24.6 billion in 2021 to $30.7 billion in 2022 (25.1% increase), and to $33.4 billion in 2023 (8.7% increase).
2. Net Card Fees rose from $5.2 billion in 2021 to $6.1 billion in 2022 (16.8% increase), and to $7.3 billion in 2023 (19.5% increase).
3. Service Fees and Other Revenue increased from $3.3 billion in 2021 to $4.5 billion in 2022 (36.4% increase), and to $5.0 billion in 2023 (10.7% increase).
4. Processed Revenue grew modestly, from $1.55 billion in 2021 to $1.63 billion in 2022 (5.2% increase), and to $1.7 billion in 2023 (4.2% increase).
5. Total Interest Income surged from $9.0 billion in 2021 to $12.7 billion in 2022 (40.1% increase), and to $20.0 billion in 2023 (57.8% increase).
Overall, total revenues increased from $42.4 billion in 2021 to $52.9 billion in 2022 (24.7% increase), and to $60.5 billion in 2023 (14.5% increase).
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Comparison
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0000004962-24-000013
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 45:
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:-------|:---|:------|:------|:------|:---|:---|:---|:---|:-------|:---|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 | $ | 2,677 | | | 9 | % | | $ | 6,176 | 25 | % |
| 4 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | 1,185 | 20 | | | 875 | | | 17 | | | | |
| 5 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | 484 | 11 | | | 1,205 | | | 36 | | | | |
| 6 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | 68 | 4 | | | 81 | | | 5 | | | | |
| 7 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | 4,414 | 10 | | | 8,337 | | | 24 | | | | |
| 8 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | 7,325 | 58 | | | 3,625 | | | 40 | | | | |
| 9 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | 4,086 | # | | 1,480 | | | # | | | | | |
| 10 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | 3,239 | 33 | | | 2,145 | | | 28 | | | | |
| 11 | Total revenues net of interest expense | $ | 60,515 | | | $ | 52,862 | | $ | 42,380 | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 12 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
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CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:-------|:---|:------|:------|:------|:---|:---|:---|:---|:-------|:---|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 | $ | 2,677 | | | 9 | % | | $ | 6,176 | 25 | % |
| 4 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | 1,185 | 20 | | | 875 | | | 17 | | | | |
| 5 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | 484 | 11 | | | 1,205 | | | 36 | | | | |
| 6 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | 68 | 4 | | | 81 | | | 5 | | | | |
| 7 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | 4,414 | 10 | | | 8,337 | | | 24 | | | | |
| 8 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | 7,325 | 58 | | | 3,625 | | | 40 | | | | |
| 9 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | 4,086 | # | | 1,480 | | | # | | | | | |
| 10 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | 3,239 | 33 | | | 2,145 | | | 28 | | | | |
| 11 | Total revenues net of interest expense | $ | 60,515 | | | $ | 52,862 | | $ | 42,380 | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 12 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 45:
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td><td colspan="3"></td><td>$</td><td>2,677 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>6,176 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td><td colspan="3"></td><td colspan="2">1,185 </td><td></td><td colspan="3"></td><td colspan="2">20 </td><td></td><td colspan="3"></td><td colspan="2">875 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td><td colspan="3"></td><td colspan="2">484 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,205 </td><td></td><td colspan="3"></td><td colspan="2">36 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">81 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td><td colspan="3"></td><td colspan="2">4,414 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">8,337 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td><td colspan="3"></td><td colspan="2">7,325 </td><td></td><td colspan="3"></td><td colspan="2">58 </td><td></td><td colspan="3"></td><td colspan="2">3,625 </td><td></td><td colspan="3"></td><td colspan="2">40 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td><td colspan="3"></td><td colspan="2">4,086 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">1,480 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td><td colspan="3"></td><td colspan="2">3,239 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">2,145 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td>60,515 </td><td></td><td colspan="3"></td><td>$</td><td>52,862 </td><td></td><td colspan="3"></td><td>$</td><td>42,380 </td><td></td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
45
|
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td><td colspan="3"></td><td>$</td><td>2,677 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>6,176 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td><td colspan="3"></td><td colspan="2">1,185 </td><td></td><td colspan="3"></td><td colspan="2">20 </td><td></td><td colspan="3"></td><td colspan="2">875 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td><td colspan="3"></td><td colspan="2">484 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,205 </td><td></td><td colspan="3"></td><td colspan="2">36 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">81 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td><td colspan="3"></td><td colspan="2">4,414 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">8,337 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td><td colspan="3"></td><td colspan="2">7,325 </td><td></td><td colspan="3"></td><td colspan="2">58 </td><td></td><td colspan="3"></td><td colspan="2">3,625 </td><td></td><td colspan="3"></td><td colspan="2">40 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td><td colspan="3"></td><td colspan="2">4,086 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">1,480 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td><td colspan="3"></td><td colspan="2">3,239 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">2,145 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td>60,515 </td><td></td><td colspan="3"></td><td>$</td><td>52,862 </td><td></td><td colspan="3"></td><td>$</td><td>42,380 </td><td></td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
45
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q_com004
|
Which segment has shown highest increase in the billed business?
|
International Consumer Services (ICS) has shown the highest growth in billed business, increasing from $228.2 billion in 2021 to $329.5 billion in 2023, which represents a growth rate of 44%. This growth rate is notably higher than those of U.S. Consumer Services (USCS) and Corporate Services (CS).
For U.S. Consumer Services (USCS), billed business grew from $444.2 billion in 2021 to $610.8 billion in 2023, achieving a growth rate of 38%. Commerical Services (CS) experienced growth from $411.6 billion in 2021 to $516.0 billion in 2023, reflecting a growth rate of 25%.
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Comparison
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54, 57, 60
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0000004962-24-000013
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 54:
TABLE 10: USCS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------|:------|:-------|:------|:-----|:-------|:--------------|:-------|:--------------|:---|:---|:----|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 610.8 | | $ | 553.0 | $ | 444.2 | | 10 | % | 24 | % |
| 4 | Proprietary cards-in-force | 43.8 | | 41.7 | | 39.0 | 5 | | | 7 | | | |
| 5 | Proprietary basic cards-in-force | 30.7 | | 29.2 | | 27.3 | 5 | | | 7 | | | |
| 6 | Average proprietary basic Card Member spending (dollars) | $ | 20,303 | | $ | 19,514 | $ | 16,498 | | 4 | | 18 | |
| 7 | Total segment assets (billions) | $ | 107.2 | | $ | 94.4 | $ | 76.5 | | 14 | | 23 | |
| 8 | Card Member loans: | | | | | | | | | | | | |
| 9 | Total loans (billions) | $ | 83.2 | | $ | 72.7 | $ | 59.8 | | 14 | | 22 | |
| 10 | Average loans (billions) | $ | 76.0 | | $ | 63.7 | $ | 52.0 | | 19 | | 23 | |
| 11 | Net write-off rate - principal, interest and fees (a) | 2.2 | % | | 1.1 | % | 1.1 | % | | | | | |
| 12 | Net write-off rate - principal only (a) | 1.7 | % | | 0.9 | % | 0.8 | % | | | | | |
| 13 | 30+ days past due as a % of total | 1.4 | % | | 1.0 | % | 0.7 | % | | | | | |
| 14 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 15 | Net interest income | $ | 9,652 | | $ | 7,474 | $ | 5,933 | | | | | |
| 16 | Exclude: | | | | | | | | | | | | |
| 17 | Interest expense not attributable to our Card Member loan portfolio (b) | 192 | | 139 | | 158 | | | | | | | |
| 18 | Interest income not attributable to our Card Member loan portfolio (c) | (386) | | (228) | | (110) | | | | | | | |
| 19 | Adjusted net interest income (d) | $ | 9,458 | | $ | 7,385 | $ | 5,981 | | | | | |
| 20 | Average Card Member loans (billions) | $ | 76.0 | | $ | 63.7 | $ | 52.0 | | | | | |
| 21 | Net interest income divided by average Card Member loans (d) | 12.7 | % | | 11.7 | % | 11.4 | % | | | | | |
| 22 | Net interest yield on average Card Member loans (d) | 12.4 | % | | 11.6 | % | 11.5 | % | | | | | |
| 23 | Card Member receivables: | | | | | | | | | | | | |
| 24 | Total receivables (billions) | $ | 14.8 | | $ | 14.3 | $ | 14.7 | | 3 | % | (3) | % |
| 25 | Net write-off rate - principal and fees (a) | 1.3 | % | | 0.6 | % | 0.1 | % | | | | | |
| 26 | Net write-off rate - principal only (a) | 1.2 | % | | 0.6 | % | - | % | | | | | |
| 27 | 30+ days past due as a % of total | 0.8 | % | | 0.9 | % | 0.4 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
54
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 57:
TABLE 12: CS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------|:------|:-------|:-----|:----|:-------|:--------------|:-------|:--------------|:----|:---|:---|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 516.0 | | $ | 499.5 | $ | 411.6 | | 3 | % | 21 | % |
| 4 | Proprietary cards-in-force | 15.4 | | 14.9 | | 13.4 | 3 | | | 11 | | | |
| 5 | Average Card Member spending (dollars) | $ | 33,745 | | $ | 35,202 | $ | 32,042 | | (4) | | 10 | |
| 6 | Total segment assets (billions) | $ | 55.4 | | $ | 51.4 | $ | 44.5 | | 8 | | 16 | |
| 7 | Card Member loans: | | | | | | | | | | | | |
| 8 | Total loans (billions) | $ | 25.8 | | $ | 21.4 | $ | 17.0 | | 21 | | 26 | |
| 9 | Average loans (billions) | $ | 23.9 | | $ | 19.3 | $ | 14.4 | | 24 | | 34 | |
| 10 | Net write-off rate - principal, interest and fees(a) | 2.0 | % | | 0.8 | % | 0.8 | % | | | | | |
| 11 | Net write-off rate - principal only(a) | 1.7 | % | | 0.7 | % | 0.6 | % | | | | | |
| 12 | 30+ days past due as a % of total | 1.4 | % | | 0.9 | % | 0.5 | % | | | | | |
| 13 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 14 | Net interest income | $ | 1,845 | | $ | 1,373 | $ | 1,078 | | | | | |
| 15 | Exclude: | | | | | | | | | | | | |
| 16 | Interest expense not attributable to our Card Member loan portfolio(b) | 711 | | 430 | | 251 | | | | | | | |
| 17 | Interest income not attributable to our Card Member loan portfolio(c) | (204) | | (89) | | (76) | | | | | | | |
| 18 | Adjusted net interest income(d) | $ | 2,352 | | $ | 1,714 | $ | 1,253 | | | | | |
| 19 | Average Card Member loans (billions) | $ | 23.9 | | $ | 19.3 | $ | 14.4 | | | | | |
| 20 | Net interest income divided by average Card Member loans(d) | 7.7 | % | | 7.1 | % | 7.5 | % | | | | | |
| 21 | Net interest yield on average Card Member loans(d) | 9.9 | % | | 8.9 | % | 8.7 | % | | | | | |
| 22 | Card Member receivables: | | | | | | | | | | | | |
| 23 | Total receivables (billions) | $ | 26.2 | | $ | 26.9 | $ | 24.6 | | (3) | % | 9 | % |
| 24 | Net write-off rate - principal and fees(e) | 1.5 | % | | 0.7 | % | 0.2 | % | | | | | |
| 25 | Net write-off rate - principal only(a) - small business | 2.1 | % | | 0.9 | % | 0.2 | % | | | | | |
| 26 | 30+ days past due as a % of total - small business | 1.5 | % | | 1.6 | % | 0.8 | % | | | | | |
| 27 | 90+ days past billing as a % of total(e) - corporate | 0.4 | % | | 0.6 | % | 0.3 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
57
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 60:
TABLE 14: ICS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------|:-----|:-------|:-----|:----|:-------|:--------------|:-------|:--------------|:---|:---|:---|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 329.5 | | $ | 281.6 | $ | 228.2 | | 17 | % | 23 | % |
| 4 | Proprietary cards-in-force | 21.0 | | 20.1 | | 19.0 | 4 | | | 6 | | | |
| 5 | Proprietary basic cards-in-force | 15.6 | | 14.9 | | 13.9 | 5 | | | 7 | | | |
| 6 | Average proprietary basic Card Member spending (dollars) | $ | 21,550 | | $ | 19,519 | $ | 16,689 | | 10 | | 17 | |
| 7 | Total segment assets (billions) | $ | 42.2 | | $ | 36.9 | $ | 32.6 | | 14 | | 13 | |
| 8 | Card Member loans - consumer and small business: | | | | | | | | | | | | |
| 9 | Total loans (billions) | $ | 17.0 | | $ | 13.8 | $ | 11.6 | | 23 | | 19 | |
| 10 | Average loans (billions) | $ | 15.0 | | $ | 12.3 | $ | 9.6 | | 22 | | 28 | |
| 11 | Net write-off rate - principal, interest and fees(a) | 2.5 | % | | 1.4 | % | 2.1 | % | | | | | |
| 12 | Net write-off rate - principal only(a) | 2.1 | % | | 1.2 | % | 1.6 | % | | | | | |
| 13 | 30+ days past due as a % of total | 1.3 | % | | 1.2 | % | 0.8 | % | | | | | |
| 14 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 15 | Net interest income | $ | 958 | | $ | 799 | $ | 674 | | | | | |
| 16 | Exclude: | | | | | | | | | | | | |
| 17 | Interest expense not attributable to our Card Member loan portfolio(b) | 475 | | 270 | | 211 | | | | | | | |
| 18 | Interest income not attributable to our Card Member loan portfolio(c) | (62) | | (28) | | (11) | | | | | | | |
| 19 | Adjusted net interest income(d) | $ | 1,371 | | $ | 1,041 | $ | 874 | | | | | |
| 20 | Average Card Member loans (billions) | $ | 15.0 | | $ | 12.4 | $ | 9.6 | | | | | |
| 21 | Net interest income divided by average Card Member loans(d) | 6.4 | % | | 6.5 | % | 7.0 | % | | | | | |
| 22 | Net interest yield on average Card Member loans(d) | 9.2 | % | | 8.4 | % | 9.1 | % | | | | | |
| 23 | Card Member receivables: | | | | | | | | | | | | |
| 24 | Total receivables (billions) | $ | 19.4 | | $ | 16.4 | $ | 14.3 | | 18 | % | 15 | % |
| 25 | Net write-off rate - principal and fees(e)(f) | 2.1 | % | | 1.3 | % | 0.6 | % | | | | | |
| 26 | Net write-off rate - principal only(a) - consumer and small business | 2.2 | % | | 1.4 | % | 0.8 | % | | | | | |
| 27 | 30+ days past due as a % of total - consumer and small business | 1.0 | % | | 1.3 | % | 0.7 | % | | | | | |
| 28 | 90+ days past billing as a % of total(e) - corporate | 0.5 | % | | 0.5 | % | 0.3 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
(f)Refer to Table 7 footnote (e).
60
|
TABLE 10: USCS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:------------------------------------------------------------------------|:------|:-------|:------|:-----|:-------|:--------------|:-------|:--------------|:---|:---|:----|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 610.8 | | $ | 553.0 | $ | 444.2 | | 10 | % | 24 | % |
| 4 | Proprietary cards-in-force | 43.8 | | 41.7 | | 39.0 | 5 | | | 7 | | | |
| 5 | Proprietary basic cards-in-force | 30.7 | | 29.2 | | 27.3 | 5 | | | 7 | | | |
| 6 | Average proprietary basic Card Member spending (dollars) | $ | 20,303 | | $ | 19,514 | $ | 16,498 | | 4 | | 18 | |
| 7 | Total segment assets (billions) | $ | 107.2 | | $ | 94.4 | $ | 76.5 | | 14 | | 23 | |
| 8 | Card Member loans: | | | | | | | | | | | | |
| 9 | Total loans (billions) | $ | 83.2 | | $ | 72.7 | $ | 59.8 | | 14 | | 22 | |
| 10 | Average loans (billions) | $ | 76.0 | | $ | 63.7 | $ | 52.0 | | 19 | | 23 | |
| 11 | Net write-off rate - principal, interest and fees (a) | 2.2 | % | | 1.1 | % | 1.1 | % | | | | | |
| 12 | Net write-off rate - principal only (a) | 1.7 | % | | 0.9 | % | 0.8 | % | | | | | |
| 13 | 30+ days past due as a % of total | 1.4 | % | | 1.0 | % | 0.7 | % | | | | | |
| 14 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 15 | Net interest income | $ | 9,652 | | $ | 7,474 | $ | 5,933 | | | | | |
| 16 | Exclude: | | | | | | | | | | | | |
| 17 | Interest expense not attributable to our Card Member loan portfolio (b) | 192 | | 139 | | 158 | | | | | | | |
| 18 | Interest income not attributable to our Card Member loan portfolio (c) | (386) | | (228) | | (110) | | | | | | | |
| 19 | Adjusted net interest income (d) | $ | 9,458 | | $ | 7,385 | $ | 5,981 | | | | | |
| 20 | Average Card Member loans (billions) | $ | 76.0 | | $ | 63.7 | $ | 52.0 | | | | | |
| 21 | Net interest income divided by average Card Member loans (d) | 12.7 | % | | 11.7 | % | 11.4 | % | | | | | |
| 22 | Net interest yield on average Card Member loans (d) | 12.4 | % | | 11.6 | % | 11.5 | % | | | | | |
| 23 | Card Member receivables: | | | | | | | | | | | | |
| 24 | Total receivables (billions) | $ | 14.8 | | $ | 14.3 | $ | 14.7 | | 3 | % | (3) | % |
| 25 | Net write-off rate - principal and fees (a) | 1.3 | % | | 0.6 | % | 0.1 | % | | | | | |
| 26 | Net write-off rate - principal only (a) | 1.2 | % | | 0.6 | % | - | % | | | | | |
| 27 | 30+ days past due as a % of total | 0.8 | % | | 0.9 | % | 0.4 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
54
,
TABLE 12: CS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------|:------|:-------|:-----|:----|:-------|:--------------|:-------|:--------------|:----|:---|:---|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 516.0 | | $ | 499.5 | $ | 411.6 | | 3 | % | 21 | % |
| 4 | Proprietary cards-in-force | 15.4 | | 14.9 | | 13.4 | 3 | | | 11 | | | |
| 5 | Average Card Member spending (dollars) | $ | 33,745 | | $ | 35,202 | $ | 32,042 | | (4) | | 10 | |
| 6 | Total segment assets (billions) | $ | 55.4 | | $ | 51.4 | $ | 44.5 | | 8 | | 16 | |
| 7 | Card Member loans: | | | | | | | | | | | | |
| 8 | Total loans (billions) | $ | 25.8 | | $ | 21.4 | $ | 17.0 | | 21 | | 26 | |
| 9 | Average loans (billions) | $ | 23.9 | | $ | 19.3 | $ | 14.4 | | 24 | | 34 | |
| 10 | Net write-off rate - principal, interest and fees(a) | 2.0 | % | | 0.8 | % | 0.8 | % | | | | | |
| 11 | Net write-off rate - principal only(a) | 1.7 | % | | 0.7 | % | 0.6 | % | | | | | |
| 12 | 30+ days past due as a % of total | 1.4 | % | | 0.9 | % | 0.5 | % | | | | | |
| 13 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 14 | Net interest income | $ | 1,845 | | $ | 1,373 | $ | 1,078 | | | | | |
| 15 | Exclude: | | | | | | | | | | | | |
| 16 | Interest expense not attributable to our Card Member loan portfolio(b) | 711 | | 430 | | 251 | | | | | | | |
| 17 | Interest income not attributable to our Card Member loan portfolio(c) | (204) | | (89) | | (76) | | | | | | | |
| 18 | Adjusted net interest income(d) | $ | 2,352 | | $ | 1,714 | $ | 1,253 | | | | | |
| 19 | Average Card Member loans (billions) | $ | 23.9 | | $ | 19.3 | $ | 14.4 | | | | | |
| 20 | Net interest income divided by average Card Member loans(d) | 7.7 | % | | 7.1 | % | 7.5 | % | | | | | |
| 21 | Net interest yield on average Card Member loans(d) | 9.9 | % | | 8.9 | % | 8.7 | % | | | | | |
| 22 | Card Member receivables: | | | | | | | | | | | | |
| 23 | Total receivables (billions) | $ | 26.2 | | $ | 26.9 | $ | 24.6 | | (3) | % | 9 | % |
| 24 | Net write-off rate - principal and fees(e) | 1.5 | % | | 0.7 | % | 0.2 | % | | | | | |
| 25 | Net write-off rate - principal only(a) - small business | 2.1 | % | | 0.9 | % | 0.2 | % | | | | | |
| 26 | 30+ days past due as a % of total - small business | 1.5 | % | | 1.6 | % | 0.8 | % | | | | | |
| 27 | 90+ days past billing as a % of total(e) - corporate | 0.4 | % | | 0.6 | % | 0.3 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
57
,
TABLE 14: ICS SELECTED STATISTICAL INFORMATION
| | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------------|:-----|:-------|:-----|:----|:-------|:--------------|:-------|:--------------|:---|:---|:---|:---|
| 1 | As of or for the Years Ended December 31, | | | | | | Change | | Change | | | | |
| 2 | (Millions, except percentages and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | |
| 3 | Billed business (billions) | $ | 329.5 | | $ | 281.6 | $ | 228.2 | | 17 | % | 23 | % |
| 4 | Proprietary cards-in-force | 21.0 | | 20.1 | | 19.0 | 4 | | | 6 | | | |
| 5 | Proprietary basic cards-in-force | 15.6 | | 14.9 | | 13.9 | 5 | | | 7 | | | |
| 6 | Average proprietary basic Card Member spending (dollars) | $ | 21,550 | | $ | 19,519 | $ | 16,689 | | 10 | | 17 | |
| 7 | Total segment assets (billions) | $ | 42.2 | | $ | 36.9 | $ | 32.6 | | 14 | | 13 | |
| 8 | Card Member loans - consumer and small business: | | | | | | | | | | | | |
| 9 | Total loans (billions) | $ | 17.0 | | $ | 13.8 | $ | 11.6 | | 23 | | 19 | |
| 10 | Average loans (billions) | $ | 15.0 | | $ | 12.3 | $ | 9.6 | | 22 | | 28 | |
| 11 | Net write-off rate - principal, interest and fees(a) | 2.5 | % | | 1.4 | % | 2.1 | % | | | | | |
| 12 | Net write-off rate - principal only(a) | 2.1 | % | | 1.2 | % | 1.6 | % | | | | | |
| 13 | 30+ days past due as a % of total | 1.3 | % | | 1.2 | % | 0.8 | % | | | | | |
| 14 | Calculation of Net Interest Yield on Average Card Member Loans: | | | | | | | | | | | | |
| 15 | Net interest income | $ | 958 | | $ | 799 | $ | 674 | | | | | |
| 16 | Exclude: | | | | | | | | | | | | |
| 17 | Interest expense not attributable to our Card Member loan portfolio(b) | 475 | | 270 | | 211 | | | | | | | |
| 18 | Interest income not attributable to our Card Member loan portfolio(c) | (62) | | (28) | | (11) | | | | | | | |
| 19 | Adjusted net interest income(d) | $ | 1,371 | | $ | 1,041 | $ | 874 | | | | | |
| 20 | Average Card Member loans (billions) | $ | 15.0 | | $ | 12.4 | $ | 9.6 | | | | | |
| 21 | Net interest income divided by average Card Member loans(d) | 6.4 | % | | 6.5 | % | 7.0 | % | | | | | |
| 22 | Net interest yield on average Card Member loans(d) | 9.2 | % | | 8.4 | % | 9.1 | % | | | | | |
| 23 | Card Member receivables: | | | | | | | | | | | | |
| 24 | Total receivables (billions) | $ | 19.4 | | $ | 16.4 | $ | 14.3 | | 18 | % | 15 | % |
| 25 | Net write-off rate - principal and fees(e)(f) | 2.1 | % | | 1.3 | % | 0.6 | % | | | | | |
| 26 | Net write-off rate - principal only(a) - consumer and small business | 2.2 | % | | 1.4 | % | 0.8 | % | | | | | |
| 27 | 30+ days past due as a % of total - consumer and small business | 1.0 | % | | 1.3 | % | 0.7 | % | | | | | |
| 28 | 90+ days past billing as a % of total(e) - corporate | 0.5 | % | | 0.5 | % | 0.3 | % | | | | | |
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
(f)Refer to Table 7 footnote (e).
60
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 54:
TABLE 10: USCS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">610.8</td><td colspan="3"></td><td>$</td><td colspan="2">553.0</td><td colspan="3"></td><td>$</td><td colspan="2">444.2</td><td colspan="3"></td><td colspan="2">10 </td><td>%</td><td colspan="3"></td><td colspan="2">24 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">43.8</td><td colspan="3"></td><td colspan="3">41.7</td><td colspan="3"></td><td colspan="3">39.0</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Proprietary basic cards-in-force</td><td colspan="3"></td><td colspan="3">30.7</td><td colspan="3"></td><td colspan="3">29.2</td><td colspan="3"></td><td colspan="3">27.3</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Average proprietary basic Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">20,303</td><td colspan="3"></td><td>$</td><td colspan="2">19,514</td><td colspan="3"></td><td>$</td><td colspan="2">16,498</td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">107.2</td><td colspan="3"></td><td>$</td><td colspan="2">94.4</td><td colspan="3"></td><td>$</td><td colspan="2">76.5</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Card Member loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">83.2</td><td colspan="3"></td><td>$</td><td colspan="2">72.7</td><td colspan="3"></td><td>$</td><td colspan="2">59.8</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">76.0</td><td colspan="3"></td><td>$</td><td colspan="2">63.7</td><td colspan="3"></td><td>$</td><td colspan="2">52.0</td><td colspan="3"></td><td colspan="2">19 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (a)</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only (a)</td><td colspan="3"></td><td colspan="2">1.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">9,652</td><td colspan="3"></td><td>$</td><td colspan="2">7,474</td><td colspan="3"></td><td>$</td><td colspan="2">5,933</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio (b)</td><td colspan="3"></td><td colspan="3">192</td><td colspan="3"></td><td colspan="3">139</td><td colspan="3"></td><td colspan="3">158</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio (c)</td><td colspan="3"></td><td colspan="3">(386)</td><td colspan="3"></td><td colspan="3">(228)</td><td colspan="3"></td><td colspan="3">(110)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income (d)</td><td colspan="3"></td><td>$</td><td colspan="2">9,458</td><td colspan="3"></td><td>$</td><td colspan="2">7,385</td><td colspan="3"></td><td>$</td><td colspan="2">5,981</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">76.0</td><td colspan="3"></td><td>$</td><td colspan="2">63.7</td><td colspan="3"></td><td>$</td><td colspan="2">52.0</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans (d)</td><td colspan="3"></td><td colspan="2">12.7 </td><td>%</td><td colspan="3"></td><td colspan="2">11.7 </td><td>%</td><td colspan="3"></td><td colspan="2">11.4 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans (d)</td><td colspan="3"></td><td colspan="2">12.4 </td><td>%</td><td colspan="3"></td><td colspan="2">11.6 </td><td>%</td><td colspan="3"></td><td colspan="2">11.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">14.8</td><td colspan="3"></td><td>$</td><td colspan="2">14.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.7</td><td colspan="3"></td><td colspan="2">3 </td><td>%</td><td colspan="3"></td><td colspan="2">(3)</td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees (a)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only (a)</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">- </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
54
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 57:
TABLE 12: CS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">516.0</td><td colspan="3"></td><td>$</td><td colspan="2">499.5</td><td colspan="3"></td><td>$</td><td colspan="2">411.6</td><td colspan="3"></td><td colspan="2">3 </td><td>%</td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">15.4</td><td colspan="3"></td><td colspan="3">14.9</td><td colspan="3"></td><td colspan="3">13.4</td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td></tr><tr><td colspan="3">Average Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">33,745</td><td colspan="3"></td><td>$</td><td colspan="2">35,202</td><td colspan="3"></td><td>$</td><td colspan="2">32,042</td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">55.4</td><td colspan="3"></td><td>$</td><td colspan="2">51.4</td><td colspan="3"></td><td>$</td><td colspan="2">44.5</td><td colspan="3"></td><td colspan="2">8 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td></tr><tr><td colspan="3">Card Member loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">25.8</td><td colspan="3"></td><td>$</td><td colspan="2">21.4</td><td colspan="3"></td><td>$</td><td colspan="2">17.0</td><td colspan="3"></td><td colspan="2">21 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">23.9</td><td colspan="3"></td><td>$</td><td colspan="2">19.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.4</td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees(a)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a)</td><td colspan="3"></td><td colspan="2">1.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">1,845</td><td colspan="3"></td><td>$</td><td colspan="2">1,373</td><td colspan="3"></td><td>$</td><td colspan="2">1,078</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio(b)</td><td colspan="3"></td><td colspan="3">711</td><td colspan="3"></td><td colspan="3">430</td><td colspan="3"></td><td colspan="3">251</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio(c)</td><td colspan="3"></td><td colspan="3">(204)</td><td colspan="3"></td><td colspan="3">(89)</td><td colspan="3"></td><td colspan="3">(76)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income(d)</td><td colspan="3"></td><td>$</td><td colspan="2">2,352</td><td colspan="3"></td><td>$</td><td colspan="2">1,714</td><td colspan="3"></td><td>$</td><td colspan="2">1,253</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">23.9</td><td colspan="3"></td><td>$</td><td colspan="2">19.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.4</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">7.7 </td><td>%</td><td colspan="3"></td><td colspan="2">7.1 </td><td>%</td><td colspan="3"></td><td colspan="2">7.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">9.9 </td><td>%</td><td colspan="3"></td><td colspan="2">8.9 </td><td>%</td><td colspan="3"></td><td colspan="2">8.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">26.2</td><td colspan="3"></td><td>$</td><td colspan="2">26.9</td><td colspan="3"></td><td>$</td><td colspan="2">24.6</td><td colspan="3"></td><td colspan="2">(3)</td><td>%</td><td colspan="3"></td><td colspan="2">9 </td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees(e)</td><td colspan="3"></td><td colspan="2">1.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a) - small business</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - small business</td><td colspan="3"></td><td colspan="2">1.5 </td><td>%</td><td colspan="3"></td><td colspan="2">1.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">90+ days past billing as a % of total(e) - corporate</td><td colspan="3"></td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
57
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 60:
TABLE 14: ICS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">329.5</td><td colspan="3"></td><td>$</td><td colspan="2">281.6</td><td colspan="3"></td><td>$</td><td colspan="2">228.2</td><td colspan="3"></td><td colspan="2">17 </td><td>%</td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">21.0</td><td colspan="3"></td><td colspan="3">20.1</td><td colspan="3"></td><td colspan="3">19.0</td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Proprietary basic cards-in-force</td><td colspan="3"></td><td colspan="3">15.6</td><td colspan="3"></td><td colspan="3">14.9</td><td colspan="3"></td><td colspan="3">13.9</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Average proprietary basic Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">21,550</td><td colspan="3"></td><td>$</td><td colspan="2">19,519</td><td colspan="3"></td><td>$</td><td colspan="2">16,689</td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">42.2</td><td colspan="3"></td><td>$</td><td colspan="2">36.9</td><td colspan="3"></td><td>$</td><td colspan="2">32.6</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td></tr><tr><td colspan="3">Card Member loans - consumer and small business:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">17.0</td><td colspan="3"></td><td>$</td><td colspan="2">13.8</td><td colspan="3"></td><td>$</td><td colspan="2">11.6</td><td colspan="3"></td><td colspan="2">23 </td><td></td><td colspan="3"></td><td colspan="2">19 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">15.0</td><td colspan="3"></td><td>$</td><td colspan="2">12.3</td><td colspan="3"></td><td>$</td><td colspan="2">9.6</td><td colspan="3"></td><td colspan="2">22 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees(a)</td><td colspan="3"></td><td colspan="2">2.5 </td><td>%</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a)</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">958</td><td colspan="3"></td><td>$</td><td colspan="2">799</td><td colspan="3"></td><td>$</td><td colspan="2">674</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio(b)</td><td colspan="3"></td><td colspan="3">475</td><td colspan="3"></td><td colspan="3">270</td><td colspan="3"></td><td colspan="3">211</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio(c)</td><td colspan="3"></td><td colspan="3">(62)</td><td colspan="3"></td><td colspan="3">(28)</td><td colspan="3"></td><td colspan="3">(11)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income(d)</td><td colspan="3"></td><td>$</td><td colspan="2">1,371</td><td colspan="3"></td><td>$</td><td colspan="2">1,041</td><td colspan="3"></td><td>$</td><td colspan="2">874</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">15.0</td><td colspan="3"></td><td>$</td><td colspan="2">12.4</td><td colspan="3"></td><td>$</td><td colspan="2">9.6</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">6.4 </td><td>%</td><td colspan="3"></td><td colspan="2">6.5 </td><td>%</td><td colspan="3"></td><td colspan="2">7.0 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">9.2 </td><td>%</td><td colspan="3"></td><td colspan="2">8.4 </td><td>%</td><td colspan="3"></td><td colspan="2">9.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">19.4</td><td colspan="3"></td><td>$</td><td colspan="2">16.4</td><td colspan="3"></td><td>$</td><td colspan="2">14.3</td><td colspan="3"></td><td colspan="2">18 </td><td>%</td><td colspan="3"></td><td colspan="2">15 </td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees(e)(f)</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a) - consumer and small business</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">90+ days past billing as a % of total(e) - corporate</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
(f)Refer to Table 7 footnote (e).
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TABLE 10: USCS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">610.8</td><td colspan="3"></td><td>$</td><td colspan="2">553.0</td><td colspan="3"></td><td>$</td><td colspan="2">444.2</td><td colspan="3"></td><td colspan="2">10 </td><td>%</td><td colspan="3"></td><td colspan="2">24 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">43.8</td><td colspan="3"></td><td colspan="3">41.7</td><td colspan="3"></td><td colspan="3">39.0</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Proprietary basic cards-in-force</td><td colspan="3"></td><td colspan="3">30.7</td><td colspan="3"></td><td colspan="3">29.2</td><td colspan="3"></td><td colspan="3">27.3</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Average proprietary basic Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">20,303</td><td colspan="3"></td><td>$</td><td colspan="2">19,514</td><td colspan="3"></td><td>$</td><td colspan="2">16,498</td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">107.2</td><td colspan="3"></td><td>$</td><td colspan="2">94.4</td><td colspan="3"></td><td>$</td><td colspan="2">76.5</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Card Member loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">83.2</td><td colspan="3"></td><td>$</td><td colspan="2">72.7</td><td colspan="3"></td><td>$</td><td colspan="2">59.8</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">76.0</td><td colspan="3"></td><td>$</td><td colspan="2">63.7</td><td colspan="3"></td><td>$</td><td colspan="2">52.0</td><td colspan="3"></td><td colspan="2">19 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (a)</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only (a)</td><td colspan="3"></td><td colspan="2">1.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">9,652</td><td colspan="3"></td><td>$</td><td colspan="2">7,474</td><td colspan="3"></td><td>$</td><td colspan="2">5,933</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio (b)</td><td colspan="3"></td><td colspan="3">192</td><td colspan="3"></td><td colspan="3">139</td><td colspan="3"></td><td colspan="3">158</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio (c)</td><td colspan="3"></td><td colspan="3">(386)</td><td colspan="3"></td><td colspan="3">(228)</td><td colspan="3"></td><td colspan="3">(110)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income (d)</td><td colspan="3"></td><td>$</td><td colspan="2">9,458</td><td colspan="3"></td><td>$</td><td colspan="2">7,385</td><td colspan="3"></td><td>$</td><td colspan="2">5,981</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">76.0</td><td colspan="3"></td><td>$</td><td colspan="2">63.7</td><td colspan="3"></td><td>$</td><td colspan="2">52.0</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans (d)</td><td colspan="3"></td><td colspan="2">12.7 </td><td>%</td><td colspan="3"></td><td colspan="2">11.7 </td><td>%</td><td colspan="3"></td><td colspan="2">11.4 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans (d)</td><td colspan="3"></td><td colspan="2">12.4 </td><td>%</td><td colspan="3"></td><td colspan="2">11.6 </td><td>%</td><td colspan="3"></td><td colspan="2">11.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">14.8</td><td colspan="3"></td><td>$</td><td colspan="2">14.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.7</td><td colspan="3"></td><td colspan="2">3 </td><td>%</td><td colspan="3"></td><td colspan="2">(3)</td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees (a)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only (a)</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">- </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
54
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TABLE 12: CS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">516.0</td><td colspan="3"></td><td>$</td><td colspan="2">499.5</td><td colspan="3"></td><td>$</td><td colspan="2">411.6</td><td colspan="3"></td><td colspan="2">3 </td><td>%</td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">15.4</td><td colspan="3"></td><td colspan="3">14.9</td><td colspan="3"></td><td colspan="3">13.4</td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td></tr><tr><td colspan="3">Average Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">33,745</td><td colspan="3"></td><td>$</td><td colspan="2">35,202</td><td colspan="3"></td><td>$</td><td colspan="2">32,042</td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">55.4</td><td colspan="3"></td><td>$</td><td colspan="2">51.4</td><td colspan="3"></td><td>$</td><td colspan="2">44.5</td><td colspan="3"></td><td colspan="2">8 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td></tr><tr><td colspan="3">Card Member loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">25.8</td><td colspan="3"></td><td>$</td><td colspan="2">21.4</td><td colspan="3"></td><td>$</td><td colspan="2">17.0</td><td colspan="3"></td><td colspan="2">21 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">23.9</td><td colspan="3"></td><td>$</td><td colspan="2">19.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.4</td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees(a)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a)</td><td colspan="3"></td><td colspan="2">1.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">1,845</td><td colspan="3"></td><td>$</td><td colspan="2">1,373</td><td colspan="3"></td><td>$</td><td colspan="2">1,078</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio(b)</td><td colspan="3"></td><td colspan="3">711</td><td colspan="3"></td><td colspan="3">430</td><td colspan="3"></td><td colspan="3">251</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio(c)</td><td colspan="3"></td><td colspan="3">(204)</td><td colspan="3"></td><td colspan="3">(89)</td><td colspan="3"></td><td colspan="3">(76)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income(d)</td><td colspan="3"></td><td>$</td><td colspan="2">2,352</td><td colspan="3"></td><td>$</td><td colspan="2">1,714</td><td colspan="3"></td><td>$</td><td colspan="2">1,253</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">23.9</td><td colspan="3"></td><td>$</td><td colspan="2">19.3</td><td colspan="3"></td><td>$</td><td colspan="2">14.4</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">7.7 </td><td>%</td><td colspan="3"></td><td colspan="2">7.1 </td><td>%</td><td colspan="3"></td><td colspan="2">7.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">9.9 </td><td>%</td><td colspan="3"></td><td colspan="2">8.9 </td><td>%</td><td colspan="3"></td><td colspan="2">8.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">26.2</td><td colspan="3"></td><td>$</td><td colspan="2">26.9</td><td colspan="3"></td><td>$</td><td colspan="2">24.6</td><td colspan="3"></td><td colspan="2">(3)</td><td>%</td><td colspan="3"></td><td colspan="2">9 </td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees(e)</td><td colspan="3"></td><td colspan="2">1.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="2">0.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a) - small business</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.2 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - small business</td><td colspan="3"></td><td colspan="2">1.5 </td><td>%</td><td colspan="3"></td><td colspan="2">1.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">90+ days past billing as a % of total(e) - corporate</td><td colspan="3"></td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="2">0.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
57
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TABLE 14: ICS SELECTED STATISTICAL INFORMATION
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">As of or for the Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">Change</td></tr><tr><td colspan="3">(Millions, except percentages and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">2023 vs. 2022</td><td colspan="3"></td><td colspan="3">2022 vs. 2021</td></tr><tr><td colspan="3">Billed business (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">329.5</td><td colspan="3"></td><td>$</td><td colspan="2">281.6</td><td colspan="3"></td><td>$</td><td colspan="2">228.2</td><td colspan="3"></td><td colspan="2">17 </td><td>%</td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Proprietary cards-in-force</td><td colspan="3"></td><td colspan="3">21.0</td><td colspan="3"></td><td colspan="3">20.1</td><td colspan="3"></td><td colspan="3">19.0</td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Proprietary basic cards-in-force</td><td colspan="3"></td><td colspan="3">15.6</td><td colspan="3"></td><td colspan="3">14.9</td><td colspan="3"></td><td colspan="3">13.9</td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Average proprietary basic Card Member spending (dollars)</td><td colspan="3"></td><td>$</td><td colspan="2">21,550</td><td colspan="3"></td><td>$</td><td colspan="2">19,519</td><td colspan="3"></td><td>$</td><td colspan="2">16,689</td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Total segment assets (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">42.2</td><td colspan="3"></td><td>$</td><td colspan="2">36.9</td><td colspan="3"></td><td>$</td><td colspan="2">32.6</td><td colspan="3"></td><td colspan="2">14 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td></tr><tr><td colspan="3">Card Member loans - consumer and small business:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">17.0</td><td colspan="3"></td><td>$</td><td colspan="2">13.8</td><td colspan="3"></td><td>$</td><td colspan="2">11.6</td><td colspan="3"></td><td colspan="2">23 </td><td></td><td colspan="3"></td><td colspan="2">19 </td><td></td></tr><tr><td colspan="3">Average loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">15.0</td><td colspan="3"></td><td>$</td><td colspan="2">12.3</td><td colspan="3"></td><td>$</td><td colspan="2">9.6</td><td colspan="3"></td><td colspan="2">22 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees(a)</td><td colspan="3"></td><td colspan="2">2.5 </td><td>%</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a)</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.2 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Calculation of Net Interest Yield on Average Card Member Loans:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td>$</td><td colspan="2">958</td><td colspan="3"></td><td>$</td><td colspan="2">799</td><td colspan="3"></td><td>$</td><td colspan="2">674</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Exclude:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense not attributable to our Card Member loan portfolio(b)</td><td colspan="3"></td><td colspan="3">475</td><td colspan="3"></td><td colspan="3">270</td><td colspan="3"></td><td colspan="3">211</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income not attributable to our Card Member loan portfolio(c)</td><td colspan="3"></td><td colspan="3">(62)</td><td colspan="3"></td><td colspan="3">(28)</td><td colspan="3"></td><td colspan="3">(11)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Adjusted net interest income(d)</td><td colspan="3"></td><td>$</td><td colspan="2">1,371</td><td colspan="3"></td><td>$</td><td colspan="2">1,041</td><td colspan="3"></td><td>$</td><td colspan="2">874</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Average Card Member loans (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">15.0</td><td colspan="3"></td><td>$</td><td colspan="2">12.4</td><td colspan="3"></td><td>$</td><td colspan="2">9.6</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest income divided by average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">6.4 </td><td>%</td><td colspan="3"></td><td colspan="2">6.5 </td><td>%</td><td colspan="3"></td><td colspan="2">7.0 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net interest yield on average Card Member loans(d)</td><td colspan="3"></td><td colspan="2">9.2 </td><td>%</td><td colspan="3"></td><td colspan="2">8.4 </td><td>%</td><td colspan="3"></td><td colspan="2">9.1 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total receivables (billions)</td><td colspan="3"></td><td>$</td><td colspan="2">19.4</td><td colspan="3"></td><td>$</td><td colspan="2">16.4</td><td colspan="3"></td><td>$</td><td colspan="2">14.3</td><td colspan="3"></td><td colspan="2">18 </td><td>%</td><td colspan="3"></td><td colspan="2">15 </td><td>%</td></tr><tr><td colspan="3">Net write-off rate - principal and fees(e)(f)</td><td colspan="3"></td><td colspan="2">2.1 </td><td>%</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only(a) - consumer and small business</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">1.4 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">90+ days past billing as a % of total(e) - corporate</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.5 </td><td>%</td><td colspan="3"></td><td colspan="2">0.3 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td></tr></table>
(a)Refer to Table 7 footnote (a).
(b)Refer to Table 8 footnote (a).
(c)Refer to Table 8 footnote (b).
(d)Refer to Table 8 footnote (c).
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
(f)Refer to Table 7 footnote (e).
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Evaluate the impact of provisions for credit losses on the overall profitability of American Express and Discover Financial Services from 2021 to 2023.
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For American Express, the provision for credit losses was $(1,419) million in 2021, indicating a net release of credit loss reserves, which positively impacted profitability. However, in 2022, the provision increased to $2,182 million, and further to $4,923 million in 2023. This increase in provisions indicates higher credit risk and potential defaults among card members, which negatively impacted profitability. Despite the increase in provisions, American Express managed to recover its net income in 2023, indicating effective management of credit risk and other operational factors.
For Discover Financial Services, the provision for credit losses was $218 million in 2021, which increased to $2,359 million in 2022, and further to $6,018 million in 2023. The substantial increase in provisions over the three years indicates higher credit risk and potential defaults among borrowers, which significantly impacted profitability. The continuous increase in provisions contributed to the decline in net income from $5,422 million in 2021 to $2,940 million in 2023, highlighting the challenges faced by Discover Financial Services in managing credit risk and maintaining profitability.
Overall, the provisions for credit losses have a more pronounced impact on the profitability of Discover Financial Services compared to American Express. The substantial increase in provisions for Discover Financial Services indicates higher credit risk and potential defaults, which significantly impacted its profitability. In contrast, while American Express also experienced an increase in provisions, it managed to recover its net income in 2023, indicating effective management of credit risk and other operational factors.
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Comparison
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0000004962-24-000013;0001393612-24-000010
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA;Item 8. Financial Statements and Supplementary Data
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
-86-
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CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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|
CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-86-
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q_com006
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Analyze the profit margins of American Express and Discover Financial Services for 2022 and 2023. How do these margins reflect the companies' ability to manage costs and generate profits?
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Profit margin is calculated as net income divided by total revenues. For American Express, the profit margin in 2023 is approximately 12.4% ($8,374 million net income / $67,364 million total revenues), and in 2022, it is about 13.5% ($7,514 million net income / $55,625 million total revenues). For Discover Financial Services, the profit margin in 2023 is approximately 14.3% ($2,940 million net income / $20,606 million total revenues), and in 2022, it is about 28.9% ($4,374 million net income / $15,158 million total revenues). These margins indicate that American Express has a slightly declining but relatively stable ability to manage costs and generate profits, whereas Discover Financial Services experienced a significant drop in profit margin, suggesting increased challenges in cost management and profit generation in 2023.
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Comparison
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94;86
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0000004962-24-000013;0001393612-24-000010
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA;Item 8. Financial Statements and Supplementary Data
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
-86-
|
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-86-
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q_com007
|
Evaluate the impact of accumulated other comprehensive income (loss) on the shareholders' equity of American Express and Discover Financial Services in 2023.
|
In 2023, American Express reported an accumulated other comprehensive loss of $3,072 million, which negatively impacted their shareholders' equity. Despite this, their total shareholders' equity stood at $28,057 million, indicating a strong equity base. Discover Financial Services reported an accumulated other comprehensive loss of $225 million in 2023, which also negatively impacted their shareholders' equity. However, their total shareholders' equity was $14,828 million.
|
Comparison
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96;85
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0000004962-24-000013;0001393612-24-000010
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA;Item 8. Financial Statements and Supplementary Data
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 96:
CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:--------|:--------|:-----|:--------|:---|:--------|
| 1 | December 31 (Millions, except share data) | 2023 | | 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Cash and cash equivalents | | | | | | |
| 4 | Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5) | $ | 7,118 | | | $ | 5,510 |
| 5 | Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318) | 39,312 | | | 28,097 | | |
| 6 | Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54) | 166 | | | 307 | | |
| 7 | Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544) | 46,596 | | | 33,914 | | |
| 8 | Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229 | 60,237 | | | 57,384 | | |
| 10 | Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747 | 120,877 | | | 104,217 | | |
| 11 | Other loans, less reserves for credit losses: 2023, $126; 2022, $59 | 6,960 | | | 5,357 | | |
| 12 | Investment securities | 2,186 | | | 4,578 | | |
| 13 | Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850 | 5,138 | | | 5,215 | | |
| 14 | Other assets, less reserves for credit losses: 2023, $27; 2022, $22 | 19,114 | | | 17,689 | | |
| 15 | Total assets | $ | 261,108 | | | $ | 228,354 |
| 16 | Liabilities and Shareholders' Equity | | | | | | |
| 17 | Liabilities | | | | | | |
| 18 | Customer deposits | $ | 129,144 | | | $ | 110,239 |
| 19 | Accounts payable | 13,109 | | | 12,133 | | |
| 20 | Short-term borrowings | 1,293 | | | 1,348 | | |
| 21 | Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662) | 47,866 | | | 42,573 | | |
| 22 | Other liabilities | 41,639 | | | 37,350 | | |
| 23 | Total liabilities | $ | 233,051 | | | $ | 203,643 |
| 24 | Contingencies and Commitments (Note 12) | | | | | | |
| 25 | Shareholders' Equity | | | | | | |
| 26 | Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16) | - | | | - | | |
| 27 | Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 | 145 | | | 149 | | |
| 28 | Additional paid-in capital | 11,372 | | | 11,493 | | |
| 29 | Retained earnings | 19,612 | | | 16,279 | | |
| 30 | Accumulated other comprehensive income (loss) | (3,072) | | | (3,210) | | |
| 31 | Total shareholders' equity | 28,057 | | | 24,711 | | |
| 32 | Total liabilities and shareholders' equity | $ | 261,108 | | | $ | 228,354 |
See Notes to Consolidated Financial Statements.
96
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
-85-
|
CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:--------|:--------|:-----|:--------|:---|:--------|
| 1 | December 31 (Millions, except share data) | 2023 | | 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Cash and cash equivalents | | | | | | |
| 4 | Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5) | $ | 7,118 | | | $ | 5,510 |
| 5 | Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318) | 39,312 | | | 28,097 | | |
| 6 | Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54) | 166 | | | 307 | | |
| 7 | Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544) | 46,596 | | | 33,914 | | |
| 8 | Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229 | 60,237 | | | 57,384 | | |
| 10 | Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747 | 120,877 | | | 104,217 | | |
| 11 | Other loans, less reserves for credit losses: 2023, $126; 2022, $59 | 6,960 | | | 5,357 | | |
| 12 | Investment securities | 2,186 | | | 4,578 | | |
| 13 | Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850 | 5,138 | | | 5,215 | | |
| 14 | Other assets, less reserves for credit losses: 2023, $27; 2022, $22 | 19,114 | | | 17,689 | | |
| 15 | Total assets | $ | 261,108 | | | $ | 228,354 |
| 16 | Liabilities and Shareholders' Equity | | | | | | |
| 17 | Liabilities | | | | | | |
| 18 | Customer deposits | $ | 129,144 | | | $ | 110,239 |
| 19 | Accounts payable | 13,109 | | | 12,133 | | |
| 20 | Short-term borrowings | 1,293 | | | 1,348 | | |
| 21 | Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662) | 47,866 | | | 42,573 | | |
| 22 | Other liabilities | 41,639 | | | 37,350 | | |
| 23 | Total liabilities | $ | 233,051 | | | $ | 203,643 |
| 24 | Contingencies and Commitments (Note 12) | | | | | | |
| 25 | Shareholders' Equity | | | | | | |
| 26 | Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16) | - | | | - | | |
| 27 | Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 | 145 | | | 149 | | |
| 28 | Additional paid-in capital | 11,372 | | | 11,493 | | |
| 29 | Retained earnings | 19,612 | | | 16,279 | | |
| 30 | Accumulated other comprehensive income (loss) | (3,072) | | | (3,210) | | |
| 31 | Total shareholders' equity | 28,057 | | | 24,711 | | |
| 32 | Total liabilities and shareholders' equity | $ | 261,108 | | | $ | 228,354 |
See Notes to Consolidated Financial Statements.
96
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
-85-
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 96:
CONSOLIDATED BALANCE SHEETS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">December 31 (Millions, except share data)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5)</td><td colspan="3"></td><td>$</td><td>7,118 </td><td></td><td colspan="3"></td><td>$</td><td>5,510 </td><td></td></tr><tr><td colspan="3">Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318)</td><td colspan="3"></td><td colspan="2">39,312 </td><td></td><td colspan="3"></td><td colspan="2">28,097 </td><td></td></tr><tr><td colspan="3">Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54)</td><td colspan="3"></td><td colspan="2">166 </td><td></td><td colspan="3"></td><td colspan="2">307 </td><td></td></tr><tr><td colspan="3">Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544)</td><td colspan="3"></td><td colspan="2">46,596 </td><td></td><td colspan="3"></td><td colspan="2">33,914 </td><td></td></tr><tr><td colspan="3">Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229</td><td colspan="3"></td><td colspan="2">60,237 </td><td></td><td colspan="3"></td><td colspan="2">57,384 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747</td><td colspan="3"></td><td colspan="2">120,877 </td><td></td><td colspan="3"></td><td colspan="2">104,217 </td><td></td></tr><tr><td colspan="3">Other loans, less reserves for credit losses: 2023, $126; 2022, $59</td><td colspan="3"></td><td colspan="2">6,960 </td><td></td><td colspan="3"></td><td colspan="2">5,357 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="3"></td><td colspan="2">2,186 </td><td></td><td colspan="3"></td><td colspan="2">4,578 </td><td></td></tr><tr><td colspan="3">Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850</td><td colspan="3"></td><td colspan="2">5,138 </td><td></td><td colspan="3"></td><td colspan="2">5,215 </td><td></td></tr><tr><td colspan="3">Other assets, less reserves for credit losses: 2023, $27; 2022, $22</td><td colspan="3"></td><td colspan="2">19,114 </td><td></td><td colspan="3"></td><td colspan="2">17,689 </td><td></td></tr><tr><td colspan="3">Total assets</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td>$</td><td>129,144 </td><td></td><td colspan="3"></td><td>$</td><td>110,239 </td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="3"></td><td colspan="2">13,109 </td><td></td><td colspan="3"></td><td colspan="2">12,133 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="3"></td><td colspan="2">1,293 </td><td></td><td colspan="3"></td><td colspan="2">1,348 </td><td></td></tr><tr><td colspan="3">Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662)</td><td colspan="3"></td><td colspan="2">47,866 </td><td></td><td colspan="3"></td><td colspan="2">42,573 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="3"></td><td colspan="2">41,639 </td><td></td><td colspan="3"></td><td colspan="2">37,350 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="3"></td><td>$</td><td>233,051 </td><td></td><td colspan="3"></td><td>$</td><td>203,643 </td><td></td></tr><tr><td colspan="3">Contingencies and Commitments (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16)</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 </td><td colspan="3"></td><td colspan="2">145 </td><td></td><td colspan="3"></td><td colspan="2">149 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="3"></td><td colspan="2">11,372 </td><td></td><td colspan="3"></td><td colspan="2">11,493 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="3"></td><td colspan="2">19,612 </td><td></td><td colspan="3"></td><td colspan="2">16,279 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">(3,072)</td><td></td><td colspan="3"></td><td colspan="2">(3,210)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="3"></td><td colspan="2">28,057 </td><td></td><td colspan="3"></td><td colspan="2">24,711 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
96
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-85-
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CONSOLIDATED BALANCE SHEETS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">December 31 (Millions, except share data)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5)</td><td colspan="3"></td><td>$</td><td>7,118 </td><td></td><td colspan="3"></td><td>$</td><td>5,510 </td><td></td></tr><tr><td colspan="3">Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318)</td><td colspan="3"></td><td colspan="2">39,312 </td><td></td><td colspan="3"></td><td colspan="2">28,097 </td><td></td></tr><tr><td colspan="3">Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54)</td><td colspan="3"></td><td colspan="2">166 </td><td></td><td colspan="3"></td><td colspan="2">307 </td><td></td></tr><tr><td colspan="3">Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544)</td><td colspan="3"></td><td colspan="2">46,596 </td><td></td><td colspan="3"></td><td colspan="2">33,914 </td><td></td></tr><tr><td colspan="3">Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229</td><td colspan="3"></td><td colspan="2">60,237 </td><td></td><td colspan="3"></td><td colspan="2">57,384 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747</td><td colspan="3"></td><td colspan="2">120,877 </td><td></td><td colspan="3"></td><td colspan="2">104,217 </td><td></td></tr><tr><td colspan="3">Other loans, less reserves for credit losses: 2023, $126; 2022, $59</td><td colspan="3"></td><td colspan="2">6,960 </td><td></td><td colspan="3"></td><td colspan="2">5,357 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="3"></td><td colspan="2">2,186 </td><td></td><td colspan="3"></td><td colspan="2">4,578 </td><td></td></tr><tr><td colspan="3">Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850</td><td colspan="3"></td><td colspan="2">5,138 </td><td></td><td colspan="3"></td><td colspan="2">5,215 </td><td></td></tr><tr><td colspan="3">Other assets, less reserves for credit losses: 2023, $27; 2022, $22</td><td colspan="3"></td><td colspan="2">19,114 </td><td></td><td colspan="3"></td><td colspan="2">17,689 </td><td></td></tr><tr><td colspan="3">Total assets</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td>$</td><td>129,144 </td><td></td><td colspan="3"></td><td>$</td><td>110,239 </td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="3"></td><td colspan="2">13,109 </td><td></td><td colspan="3"></td><td colspan="2">12,133 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="3"></td><td colspan="2">1,293 </td><td></td><td colspan="3"></td><td colspan="2">1,348 </td><td></td></tr><tr><td colspan="3">Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662)</td><td colspan="3"></td><td colspan="2">47,866 </td><td></td><td colspan="3"></td><td colspan="2">42,573 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="3"></td><td colspan="2">41,639 </td><td></td><td colspan="3"></td><td colspan="2">37,350 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="3"></td><td>$</td><td>233,051 </td><td></td><td colspan="3"></td><td>$</td><td>203,643 </td><td></td></tr><tr><td colspan="3">Contingencies and Commitments (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16)</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 </td><td colspan="3"></td><td colspan="2">145 </td><td></td><td colspan="3"></td><td colspan="2">149 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="3"></td><td colspan="2">11,372 </td><td></td><td colspan="3"></td><td colspan="2">11,493 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="3"></td><td colspan="2">19,612 </td><td></td><td colspan="3"></td><td colspan="2">16,279 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">(3,072)</td><td></td><td colspan="3"></td><td colspan="2">(3,210)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="3"></td><td colspan="2">28,057 </td><td></td><td colspan="3"></td><td colspan="2">24,711 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
96
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-85-
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q_com008
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Compare the solvency ratios of Fortinet Inc. and Rapid7 Inc. for the year 2023.
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Solvency ratios help in assessing a company's ability to meet its long-term obligations. The debt-to-equity ratio is a common measure of solvency, calculated as total debt divided by total equity.Fortinet -->Long term debt (2023): $992.3 million, Total Equity (2023): -$463.4 million (stockholders' deficit)->Debt-to-Equity Ratio (2023): 992.3/ -463.4 = -2.14 (negative due to stockholders' deficit). Rapid 7 - Total Debt (2023): $1,011,126 thousand, Total Equity (2023): -$118,179 thousand (stockholders' deficit)--> Debt-to-Equity Ratio (2023): $1,011,126 / -118,179 = -8.56 (negative due to stockholders' deficit).
Both companies have negative equity, resulting in negative debt-to-equity ratios. This indicates that both Fortinet Inc. and Rapid7 Inc. are highly leveraged and have more liabilities than equity.
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Comparison
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71;61
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0001262039-24-000014;0001560327-24-000021
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ITEM 8. Financial Statements and Supplementary Data;Item 8. Financial Statements and Supplementary Data.
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Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 61:
Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
61
|
FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
,
Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
61
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Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
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Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
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Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
61
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q_com009
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Compare the efficiency ratios of Fortinet Inc. and Rapid7 Inc. for the year 2023.
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Efficiency ratios, such as the asset turnover ratio, measure how effectively a company uses its assets to generate revenue.
The asset turnover ratio can be calculated in two ways.
Method 1:
The asset turnover ratio is calculated as total revenue divided by total assets.For Fortinet Inc.:Total Revenue (2023): $5,304.8 million, Total Assets (2023): $7,258.9 million--> Asset Turnover Ratio (2023): 5,304.8 / 7,258.9 = 0.73. For Rapid7 Inc.: Total Revenue (2023): $777,707 thousand, Total Assets (2023): $1,505,348 thousand-->Asset Turnover Ratio (2023): 777,707 / 1,505,348 = 0.52.
Method 2:
The asset turnover ratio is calculated as total revenue divided by average total assets.For Fortinet Inc.:Total Revenue (2023): $5,304.8 million, Total Assets (2023): $7,258.9 million, Total assets (2022): $6,228.0 million--> Asset Turnover Ratio (2023): 5,304.8 / (7,258.9+6,228.0)+J54 = 0.73. For Rapid7 Inc.: Total Revenue (2023): $777,707 thousand, Total Assets (2023): $1,505,348 thousand-->Asset Turnover Ratio (2023): 777,707 / 1,505,348 = 0.54.
Comparing the two, Fortinet Inc. has a higher asset turnover ratio of 0.73 compared to Rapid7 Inc.'s 0.52 (0.73 vs. 0.52 for Method 1, 0.79 vs. 0.54 for Method 2). This indicates that Fortinet Inc. is more efficient in using its assets to generate revenue. A higher asset turnover ratio suggests that Fortinet Inc. is better at converting its investment in assets into sales, which can positively impact overall profitability.
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Comparison
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71,72;61,62
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0001262039-24-000014;0001560327-24-000021
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ITEM 8. Financial Statements and Supplementary Data;Item 8. Financial Statements and Supplementary Data.
|
Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 72: FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
| | | | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------|:------------------------|:--------|:--------|:---|:--------|:--------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | |
| 2 | 2023 | | 2022 | 2021 | | | | | |
| 3 | REVENUE: | | | | | | | | |
| 4 | Product | $ | 1,927.3 | | $ | 1,780.5 | | $ | 1,255.0 |
| 5 | Service | 3,377.5 | | 2,636.9 | | | 2,087.2 | | |
| 6 | Total revenue | 5,304.8 | | 4,417.4 | | | 3,342.2 | | |
| 7 | COST OF REVENUE: | | | | | | | | |
| 8 | Product | 763.6 | | 691.3 | | | 487.7 | | |
| 9 | Service | 473.6 | | 393.6 | | | 295.3 | | |
| 10 | Total cost of revenue | 1,237.2 | | 1,084.9 | | | 783.0 | | |
| 11 | GROSS PROFIT: | | | | | | | | |
| 12 | Product | 1,163.7 | | 1,089.2 | | | 767.3 | | |
| 13 | Service | 2,903.9 | | 2,243.3 | | | 1,791.9 | | |
| 14 | Total gross profit | 4,067.6 | | 3,332.5 | | | 2,559.2 | | |
| 15 | OPERATING EXPENSES: | | | | | | | | |
| 16 | Research and development | 613.8 | | 512.4 | | | 424.2 | | |
| 17 | Sales and marketing | 2,006.0 | | 1,686.1 | | | 1,345.7 | | |
| 18 | General and administrative | 211.3 | | 169.0 | | | 143.5 | | |
| 19 | Gain on intellectual property matter | (4.6) | | (4.6) | | | (4.6) | | |
| 20 | Total operating expenses | 2,826.5 | | 2,362.9 | | | 1,908.8 | | |
| 21 | OPERATING INCOME | 1,241.1 | | 969.6 | | | 650.4 | | |
| 22 | INTEREST INCOME | 119.7 | | 17.4 | | | 4.5 | | |
| 23 | INTEREST EXPENSE | (21.0) | | (18.0) | | | (14.9) | | |
| 24 | OTHER EXPENSE-NET | (6.1) | | (13.5) | | | (11.6) | | |
| 25 | INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS | 1,333.7 | | 955.5 | | | 628.4 | | |
| 26 | PROVISION FOR INCOME TAXES | 143.8 | | 30.8 | | | 14.1 | | |
| 27 | LOSS FROM EQUITY METHOD INVESTMENTS | (42.1) | | (68.1) | | | (7.6) | | |
| 28 | NET INCOME INCLUDING NON-CONTROLLING INTERESTS | 1,147.8 | | 856.6 | | | 606.7 | | |
| 29 | LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX | - | | (0.7) | | | (0.1) | | |
| 30 | NET INCOME ATTRIBUTABLE TO FORTINET, INC. | $ | 1,147.8 | | $ | 857.3 | | $ | 606.8 |
| 31 | Net income per share attributable to Fortinet, Inc. (Note 9): | | | | | | | | |
| 32 | Basic | $ | 1.47 | | $ | 1.08 | | $ | 0.74 |
| 33 | Diluted | $ | 1.46 | | $ | 1.06 | | $ | 0.73 |
| 34 | Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.: | | | | | | | | |
| 35 | Basic | 778.6 | | 791.4 | | | 816.1 | | |
| 36 | Diluted | 788.2 | | 805.3 | | | 835.3 | | |
See notes to consolidated financial statements.
72
, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 61:
Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
61
, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 62:
Table of Contents
RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)| | | | | | | | | | | | |
|---:|:--------------------------------------------------------------|:------------------------|:-----------|:----------|:-----|:-----------|:-----|:----------|:-----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Revenue: | | | | | | | | | | |
| 4 | Products | | $ | 740,168 | | | $ | 647,535 | | $ | 500,843 |
| 5 | Professional services | | 37,539 | | | 37,548 | | | 34,561 | | |
| 6 | Total revenue | | 777,707 | | | 685,083 | | | 535,404 | | |
| 7 | Cost of revenue: | | | | | | | | | | |
| 8 | Products | | 202,904 | | | 182,212 | | | 140,773 | | |
| 9 | Professional services | | 28,837 | | | 32,137 | | | 28,175 | | |
| 10 | Total cost of revenue | | 231,741 | | | 214,349 | | | 168,948 | | |
| 11 | Total gross profit | | 545,966 | | | 470,734 | | | 366,456 | | |
| 12 | Operating expenses: | | | | | | | | | | |
| 13 | Research and development | | 176,776 | | | 189,970 | | | 160,779 | | |
| 14 | Sales and marketing | | 312,636 | | | 307,409 | | | 247,453 | | |
| 15 | General and administrative | | 84,276 | | | 84,969 | | | 78,289 | | |
| 16 | Impairment of long-lived assets | | 30,784 | | | - | | | - | | |
| 17 | Restructuring | | 22,227 | | | - | | | - | | |
| 18 | Total operating expenses | | 626,699 | | | 582,348 | | | 486,521 | | |
| 19 | Loss from operations | | (80,733) | | | (111,614) | | | (120,065) | | |
| 20 | Other income (expense), net: | | | | | | | | | | |
| 21 | Interest income | | 10,177 | | | 1,813 | | | 365 | | |
| 22 | Interest expense | | (64,700) | | | (10,982) | | | (14,292) | | |
| 23 | Other income (expense), net | | (14,522) | | | (1,522) | | | (1,921) | | |
| 24 | Loss before income taxes | | (149,778) | | | (122,305) | | | (135,913) | | |
| 25 | (Benefit from) provision for income taxes | | (518) | | | 2,412 | | | 10,421 | | |
| 26 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 27 | Net loss per share, basic and diluted | | $ | (2.46) | | | $ | (2.13) | | $ | (2.65) |
| 28 | Weighted-average common shares outstanding, basic and diluted | | 60,756,087 | | | 58,552,065 | | | 55,270,998 | | |
See accompanying notes to consolidated financial statements.
62
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FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
| | | | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------|:------------------------|:--------|:--------|:---|:--------|:--------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | |
| 2 | 2023 | | 2022 | 2021 | | | | | |
| 3 | REVENUE: | | | | | | | | |
| 4 | Product | $ | 1,927.3 | | $ | 1,780.5 | | $ | 1,255.0 |
| 5 | Service | 3,377.5 | | 2,636.9 | | | 2,087.2 | | |
| 6 | Total revenue | 5,304.8 | | 4,417.4 | | | 3,342.2 | | |
| 7 | COST OF REVENUE: | | | | | | | | |
| 8 | Product | 763.6 | | 691.3 | | | 487.7 | | |
| 9 | Service | 473.6 | | 393.6 | | | 295.3 | | |
| 10 | Total cost of revenue | 1,237.2 | | 1,084.9 | | | 783.0 | | |
| 11 | GROSS PROFIT: | | | | | | | | |
| 12 | Product | 1,163.7 | | 1,089.2 | | | 767.3 | | |
| 13 | Service | 2,903.9 | | 2,243.3 | | | 1,791.9 | | |
| 14 | Total gross profit | 4,067.6 | | 3,332.5 | | | 2,559.2 | | |
| 15 | OPERATING EXPENSES: | | | | | | | | |
| 16 | Research and development | 613.8 | | 512.4 | | | 424.2 | | |
| 17 | Sales and marketing | 2,006.0 | | 1,686.1 | | | 1,345.7 | | |
| 18 | General and administrative | 211.3 | | 169.0 | | | 143.5 | | |
| 19 | Gain on intellectual property matter | (4.6) | | (4.6) | | | (4.6) | | |
| 20 | Total operating expenses | 2,826.5 | | 2,362.9 | | | 1,908.8 | | |
| 21 | OPERATING INCOME | 1,241.1 | | 969.6 | | | 650.4 | | |
| 22 | INTEREST INCOME | 119.7 | | 17.4 | | | 4.5 | | |
| 23 | INTEREST EXPENSE | (21.0) | | (18.0) | | | (14.9) | | |
| 24 | OTHER EXPENSE-NET | (6.1) | | (13.5) | | | (11.6) | | |
| 25 | INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS | 1,333.7 | | 955.5 | | | 628.4 | | |
| 26 | PROVISION FOR INCOME TAXES | 143.8 | | 30.8 | | | 14.1 | | |
| 27 | LOSS FROM EQUITY METHOD INVESTMENTS | (42.1) | | (68.1) | | | (7.6) | | |
| 28 | NET INCOME INCLUDING NON-CONTROLLING INTERESTS | 1,147.8 | | 856.6 | | | 606.7 | | |
| 29 | LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX | - | | (0.7) | | | (0.1) | | |
| 30 | NET INCOME ATTRIBUTABLE TO FORTINET, INC. | $ | 1,147.8 | | $ | 857.3 | | $ | 606.8 |
| 31 | Net income per share attributable to Fortinet, Inc. (Note 9): | | | | | | | | |
| 32 | Basic | $ | 1.47 | | $ | 1.08 | | $ | 0.74 |
| 33 | Diluted | $ | 1.46 | | $ | 1.06 | | $ | 0.73 |
| 34 | Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.: | | | | | | | | |
| 35 | Basic | 778.6 | | 791.4 | | | 816.1 | | |
| 36 | Diluted | 788.2 | | 805.3 | | | 835.3 | | |
See notes to consolidated financial statements.
72
,
Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
61
,
Table of Contents
RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)| | | | | | | | | | | | |
|---:|:--------------------------------------------------------------|:------------------------|:-----------|:----------|:-----|:-----------|:-----|:----------|:-----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Revenue: | | | | | | | | | | |
| 4 | Products | | $ | 740,168 | | | $ | 647,535 | | $ | 500,843 |
| 5 | Professional services | | 37,539 | | | 37,548 | | | 34,561 | | |
| 6 | Total revenue | | 777,707 | | | 685,083 | | | 535,404 | | |
| 7 | Cost of revenue: | | | | | | | | | | |
| 8 | Products | | 202,904 | | | 182,212 | | | 140,773 | | |
| 9 | Professional services | | 28,837 | | | 32,137 | | | 28,175 | | |
| 10 | Total cost of revenue | | 231,741 | | | 214,349 | | | 168,948 | | |
| 11 | Total gross profit | | 545,966 | | | 470,734 | | | 366,456 | | |
| 12 | Operating expenses: | | | | | | | | | | |
| 13 | Research and development | | 176,776 | | | 189,970 | | | 160,779 | | |
| 14 | Sales and marketing | | 312,636 | | | 307,409 | | | 247,453 | | |
| 15 | General and administrative | | 84,276 | | | 84,969 | | | 78,289 | | |
| 16 | Impairment of long-lived assets | | 30,784 | | | - | | | - | | |
| 17 | Restructuring | | 22,227 | | | - | | | - | | |
| 18 | Total operating expenses | | 626,699 | | | 582,348 | | | 486,521 | | |
| 19 | Loss from operations | | (80,733) | | | (111,614) | | | (120,065) | | |
| 20 | Other income (expense), net: | | | | | | | | | | |
| 21 | Interest income | | 10,177 | | | 1,813 | | | 365 | | |
| 22 | Interest expense | | (64,700) | | | (10,982) | | | (14,292) | | |
| 23 | Other income (expense), net | | (14,522) | | | (1,522) | | | (1,921) | | |
| 24 | Loss before income taxes | | (149,778) | | | (122,305) | | | (135,913) | | |
| 25 | (Benefit from) provision for income taxes | | (518) | | | 2,412 | | | 10,421 | | |
| 26 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 27 | Net loss per share, basic and diluted | | $ | (2.46) | | | $ | (2.13) | | $ | (2.65) |
| 28 | Weighted-average common shares outstanding, basic and diluted | | 60,756,087 | | | 58,552,065 | | | 55,270,998 | | |
See accompanying notes to consolidated financial statements.
62
|
Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
71
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 72: FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td>$</td><td>1,927.3 </td><td></td><td colspan="3"></td><td>$</td><td>1,780.5 </td><td></td><td colspan="3"></td><td>$</td><td>1,255.0 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">3,377.5 </td><td></td><td colspan="3"></td><td colspan="2">2,636.9 </td><td></td><td colspan="3"></td><td colspan="2">2,087.2 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="2">5,304.8 </td><td></td><td colspan="3"></td><td colspan="2">4,417.4 </td><td></td><td colspan="3"></td><td colspan="2">3,342.2 </td><td></td></tr><tr><td colspan="3">COST OF REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">763.6 </td><td></td><td colspan="3"></td><td colspan="2">691.3 </td><td></td><td colspan="3"></td><td colspan="2">487.7 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">473.6 </td><td></td><td colspan="3"></td><td colspan="2">393.6 </td><td></td><td colspan="3"></td><td colspan="2">295.3 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="2">1,237.2 </td><td></td><td colspan="3"></td><td colspan="2">1,084.9 </td><td></td><td colspan="3"></td><td colspan="2">783.0 </td><td></td></tr><tr><td colspan="3">GROSS PROFIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">1,163.7 </td><td></td><td colspan="3"></td><td colspan="2">1,089.2 </td><td></td><td colspan="3"></td><td colspan="2">767.3 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">2,903.9 </td><td></td><td colspan="3"></td><td colspan="2">2,243.3 </td><td></td><td colspan="3"></td><td colspan="2">1,791.9 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="2">4,067.6 </td><td></td><td colspan="3"></td><td colspan="2">3,332.5 </td><td></td><td colspan="3"></td><td colspan="2">2,559.2 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">613.8 </td><td></td><td colspan="3"></td><td colspan="2">512.4 </td><td></td><td colspan="3"></td><td colspan="2">424.2 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="2">2,006.0 </td><td></td><td colspan="3"></td><td colspan="2">1,686.1 </td><td></td><td colspan="3"></td><td colspan="2">1,345.7 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">211.3 </td><td></td><td colspan="3"></td><td colspan="2">169.0 </td><td></td><td colspan="3"></td><td colspan="2">143.5 </td><td></td></tr><tr><td colspan="3">Gain on intellectual property matter</td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">2,826.5 </td><td></td><td colspan="3"></td><td colspan="2">2,362.9 </td><td></td><td colspan="3"></td><td colspan="2">1,908.8 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="2">1,241.1 </td><td></td><td colspan="3"></td><td colspan="2">969.6 </td><td></td><td colspan="3"></td><td colspan="2">650.4 </td><td></td></tr><tr><td colspan="3">INTEREST INCOME</td><td colspan="2">119.7 </td><td></td><td colspan="3"></td><td colspan="2">17.4 </td><td></td><td colspan="3"></td><td colspan="2">4.5 </td><td></td></tr><tr><td colspan="3">INTEREST EXPENSE</td><td colspan="2">(21.0)</td><td></td><td colspan="3"></td><td colspan="2">(18.0)</td><td></td><td colspan="3"></td><td colspan="2">(14.9)</td><td></td></tr><tr><td colspan="3">OTHER EXPENSE-NET</td><td colspan="2">(6.1)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td><td colspan="3"></td><td colspan="2">(11.6)</td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">1,333.7 </td><td></td><td colspan="3"></td><td colspan="2">955.5 </td><td></td><td colspan="3"></td><td colspan="2">628.4 </td><td></td></tr><tr><td colspan="3">PROVISION FOR INCOME TAXES</td><td colspan="2">143.8 </td><td></td><td colspan="3"></td><td colspan="2">30.8 </td><td></td><td colspan="3"></td><td colspan="2">14.1 </td><td></td></tr><tr><td colspan="3">LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">(42.1)</td><td></td><td colspan="3"></td><td colspan="2">(68.1)</td><td></td><td colspan="3"></td><td colspan="2">(7.6)</td><td></td></tr><tr><td colspan="3">NET INCOME INCLUDING NON-CONTROLLING INTERESTS</td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO FORTINET, INC.</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>857.3 </td><td></td><td colspan="3"></td><td>$</td><td>606.8 </td><td></td></tr><tr><td colspan="3">Net income per share attributable to Fortinet, Inc. (Note 9):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>1.47 </td><td></td><td colspan="3"></td><td>$</td><td>1.08 </td><td></td><td colspan="3"></td><td>$</td><td>0.74 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>1.46 </td><td></td><td colspan="3"></td><td>$</td><td>1.06 </td><td></td><td colspan="3"></td><td>$</td><td>0.73 </td><td></td></tr><tr><td colspan="3">Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">778.6 </td><td></td><td colspan="3"></td><td colspan="2">791.4 </td><td></td><td colspan="3"></td><td colspan="2">816.1 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">788.2 </td><td></td><td colspan="3"></td><td colspan="2">805.3 </td><td></td><td colspan="3"></td><td colspan="2">835.3 </td><td></td></tr></table>See notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>740,168 </td><td></td><td colspan="3"></td><td>$</td><td>647,535 </td><td></td><td colspan="3"></td><td>$</td><td>500,843 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,539 </td><td></td><td colspan="3"></td><td colspan="2">37,548 </td><td></td><td colspan="3"></td><td colspan="2">34,561 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">777,707 </td><td></td><td colspan="3"></td><td colspan="2">685,083 </td><td></td><td colspan="3"></td><td colspan="2">535,404 </td><td></td></tr><tr><td colspan="3">Cost of revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">202,904 </td><td></td><td colspan="3"></td><td colspan="2">182,212 </td><td></td><td colspan="3"></td><td colspan="2">140,773 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">28,837 </td><td></td><td colspan="3"></td><td colspan="2">32,137 </td><td></td><td colspan="3"></td><td colspan="2">28,175 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">231,741 </td><td></td><td colspan="3"></td><td colspan="2">214,349 </td><td></td><td colspan="3"></td><td colspan="2">168,948 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">545,966 </td><td></td><td colspan="3"></td><td colspan="2">470,734 </td><td></td><td colspan="3"></td><td colspan="2">366,456 </td><td></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">176,776 </td><td></td><td colspan="3"></td><td colspan="2">189,970 </td><td></td><td colspan="3"></td><td colspan="2">160,779 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">312,636 </td><td></td><td colspan="3"></td><td colspan="2">307,409 </td><td></td><td colspan="3"></td><td colspan="2">247,453 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">84,276 </td><td></td><td colspan="3"></td><td colspan="2">84,969 </td><td></td><td colspan="3"></td><td colspan="2">78,289 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Restructuring</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">22,227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">626,699 </td><td></td><td colspan="3"></td><td colspan="2">582,348 </td><td></td><td colspan="3"></td><td colspan="2">486,521 </td><td></td></tr><tr><td colspan="3">Loss from operations</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(80,733)</td><td></td><td colspan="3"></td><td colspan="2">(111,614)</td><td></td><td colspan="3"></td><td colspan="2">(120,065)</td><td></td></tr><tr><td colspan="3">Other income (expense), net:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">10,177 </td><td></td><td colspan="3"></td><td colspan="2">1,813 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(64,700)</td><td></td><td colspan="3"></td><td colspan="2">(10,982)</td><td></td><td colspan="3"></td><td colspan="2">(14,292)</td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(14,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,921)</td><td></td></tr><tr><td colspan="3">Loss before income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(149,778)</td><td></td><td colspan="3"></td><td colspan="2">(122,305)</td><td></td><td colspan="3"></td><td colspan="2">(135,913)</td><td></td></tr><tr><td colspan="3">(Benefit from) provision for income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(518)</td><td></td><td colspan="3"></td><td colspan="2">2,412 </td><td></td><td colspan="3"></td><td colspan="2">10,421 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Net loss per share, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(2.46)</td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>(2.65)</td><td></td></tr><tr><td colspan="3">Weighted-average common shares outstanding, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">60,756,087 </td><td></td><td colspan="3"></td><td colspan="2">58,552,065 </td><td></td><td colspan="3"></td><td colspan="2">55,270,998 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
71
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td>$</td><td>1,927.3 </td><td></td><td colspan="3"></td><td>$</td><td>1,780.5 </td><td></td><td colspan="3"></td><td>$</td><td>1,255.0 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">3,377.5 </td><td></td><td colspan="3"></td><td colspan="2">2,636.9 </td><td></td><td colspan="3"></td><td colspan="2">2,087.2 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="2">5,304.8 </td><td></td><td colspan="3"></td><td colspan="2">4,417.4 </td><td></td><td colspan="3"></td><td colspan="2">3,342.2 </td><td></td></tr><tr><td colspan="3">COST OF REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">763.6 </td><td></td><td colspan="3"></td><td colspan="2">691.3 </td><td></td><td colspan="3"></td><td colspan="2">487.7 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">473.6 </td><td></td><td colspan="3"></td><td colspan="2">393.6 </td><td></td><td colspan="3"></td><td colspan="2">295.3 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="2">1,237.2 </td><td></td><td colspan="3"></td><td colspan="2">1,084.9 </td><td></td><td colspan="3"></td><td colspan="2">783.0 </td><td></td></tr><tr><td colspan="3">GROSS PROFIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">1,163.7 </td><td></td><td colspan="3"></td><td colspan="2">1,089.2 </td><td></td><td colspan="3"></td><td colspan="2">767.3 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">2,903.9 </td><td></td><td colspan="3"></td><td colspan="2">2,243.3 </td><td></td><td colspan="3"></td><td colspan="2">1,791.9 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="2">4,067.6 </td><td></td><td colspan="3"></td><td colspan="2">3,332.5 </td><td></td><td colspan="3"></td><td colspan="2">2,559.2 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">613.8 </td><td></td><td colspan="3"></td><td colspan="2">512.4 </td><td></td><td colspan="3"></td><td colspan="2">424.2 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="2">2,006.0 </td><td></td><td colspan="3"></td><td colspan="2">1,686.1 </td><td></td><td colspan="3"></td><td colspan="2">1,345.7 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">211.3 </td><td></td><td colspan="3"></td><td colspan="2">169.0 </td><td></td><td colspan="3"></td><td colspan="2">143.5 </td><td></td></tr><tr><td colspan="3">Gain on intellectual property matter</td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">2,826.5 </td><td></td><td colspan="3"></td><td colspan="2">2,362.9 </td><td></td><td colspan="3"></td><td colspan="2">1,908.8 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="2">1,241.1 </td><td></td><td colspan="3"></td><td colspan="2">969.6 </td><td></td><td colspan="3"></td><td colspan="2">650.4 </td><td></td></tr><tr><td colspan="3">INTEREST INCOME</td><td colspan="2">119.7 </td><td></td><td colspan="3"></td><td colspan="2">17.4 </td><td></td><td colspan="3"></td><td colspan="2">4.5 </td><td></td></tr><tr><td colspan="3">INTEREST EXPENSE</td><td colspan="2">(21.0)</td><td></td><td colspan="3"></td><td colspan="2">(18.0)</td><td></td><td colspan="3"></td><td colspan="2">(14.9)</td><td></td></tr><tr><td colspan="3">OTHER EXPENSE-NET</td><td colspan="2">(6.1)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td><td colspan="3"></td><td colspan="2">(11.6)</td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">1,333.7 </td><td></td><td colspan="3"></td><td colspan="2">955.5 </td><td></td><td colspan="3"></td><td colspan="2">628.4 </td><td></td></tr><tr><td colspan="3">PROVISION FOR INCOME TAXES</td><td colspan="2">143.8 </td><td></td><td colspan="3"></td><td colspan="2">30.8 </td><td></td><td colspan="3"></td><td colspan="2">14.1 </td><td></td></tr><tr><td colspan="3">LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">(42.1)</td><td></td><td colspan="3"></td><td colspan="2">(68.1)</td><td></td><td colspan="3"></td><td colspan="2">(7.6)</td><td></td></tr><tr><td colspan="3">NET INCOME INCLUDING NON-CONTROLLING INTERESTS</td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO FORTINET, INC.</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>857.3 </td><td></td><td colspan="3"></td><td>$</td><td>606.8 </td><td></td></tr><tr><td colspan="3">Net income per share attributable to Fortinet, Inc. (Note 9):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>1.47 </td><td></td><td colspan="3"></td><td>$</td><td>1.08 </td><td></td><td colspan="3"></td><td>$</td><td>0.74 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>1.46 </td><td></td><td colspan="3"></td><td>$</td><td>1.06 </td><td></td><td colspan="3"></td><td>$</td><td>0.73 </td><td></td></tr><tr><td colspan="3">Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">778.6 </td><td></td><td colspan="3"></td><td colspan="2">791.4 </td><td></td><td colspan="3"></td><td colspan="2">816.1 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">788.2 </td><td></td><td colspan="3"></td><td colspan="2">805.3 </td><td></td><td colspan="3"></td><td colspan="2">835.3 </td><td></td></tr></table>See notes to consolidated financial statements.
72
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RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>740,168 </td><td></td><td colspan="3"></td><td>$</td><td>647,535 </td><td></td><td colspan="3"></td><td>$</td><td>500,843 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,539 </td><td></td><td colspan="3"></td><td colspan="2">37,548 </td><td></td><td colspan="3"></td><td colspan="2">34,561 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">777,707 </td><td></td><td colspan="3"></td><td colspan="2">685,083 </td><td></td><td colspan="3"></td><td colspan="2">535,404 </td><td></td></tr><tr><td colspan="3">Cost of revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">202,904 </td><td></td><td colspan="3"></td><td colspan="2">182,212 </td><td></td><td colspan="3"></td><td colspan="2">140,773 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">28,837 </td><td></td><td colspan="3"></td><td colspan="2">32,137 </td><td></td><td colspan="3"></td><td colspan="2">28,175 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">231,741 </td><td></td><td colspan="3"></td><td colspan="2">214,349 </td><td></td><td colspan="3"></td><td colspan="2">168,948 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">545,966 </td><td></td><td colspan="3"></td><td colspan="2">470,734 </td><td></td><td colspan="3"></td><td colspan="2">366,456 </td><td></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">176,776 </td><td></td><td colspan="3"></td><td colspan="2">189,970 </td><td></td><td colspan="3"></td><td colspan="2">160,779 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">312,636 </td><td></td><td colspan="3"></td><td colspan="2">307,409 </td><td></td><td colspan="3"></td><td colspan="2">247,453 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">84,276 </td><td></td><td colspan="3"></td><td colspan="2">84,969 </td><td></td><td colspan="3"></td><td colspan="2">78,289 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Restructuring</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">22,227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">626,699 </td><td></td><td colspan="3"></td><td colspan="2">582,348 </td><td></td><td colspan="3"></td><td colspan="2">486,521 </td><td></td></tr><tr><td colspan="3">Loss from operations</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(80,733)</td><td></td><td colspan="3"></td><td colspan="2">(111,614)</td><td></td><td colspan="3"></td><td colspan="2">(120,065)</td><td></td></tr><tr><td colspan="3">Other income (expense), net:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">10,177 </td><td></td><td colspan="3"></td><td colspan="2">1,813 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(64,700)</td><td></td><td colspan="3"></td><td colspan="2">(10,982)</td><td></td><td colspan="3"></td><td colspan="2">(14,292)</td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(14,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,921)</td><td></td></tr><tr><td colspan="3">Loss before income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(149,778)</td><td></td><td colspan="3"></td><td colspan="2">(122,305)</td><td></td><td colspan="3"></td><td colspan="2">(135,913)</td><td></td></tr><tr><td colspan="3">(Benefit from) provision for income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(518)</td><td></td><td colspan="3"></td><td colspan="2">2,412 </td><td></td><td colspan="3"></td><td colspan="2">10,421 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Net loss per share, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(2.46)</td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>(2.65)</td><td></td></tr><tr><td colspan="3">Weighted-average common shares outstanding, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">60,756,087 </td><td></td><td colspan="3"></td><td colspan="2">58,552,065 </td><td></td><td colspan="3"></td><td colspan="2">55,270,998 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
62
|
q_com010
|
Compare the year-over-year change in liquidity ratios for Fortinet Inc. and Rapid7 Inc. from 2022 to 2023.
|
To assess the year-over-year change in liquidity ratios, we need to compare the current ratios for both companies from 2022 to 2023.For Fortinet Inc.:Current Assets (2022): $3,810.4 million,Current Liabilities (2022): $3,078.4 million, Current Ratio (2022): 3,810.4 / 3,078.4 = 1.24, Current Ratio (2023): 1.19-->Year-over-Year Change: 1.19 - 1.24 = -0.05. For Rapid7 Inc.:Current Assets (2022): $510,307 thousand,- Current Liabilities (2022): $531,267 thousand, - Current Ratio (2022): 510,307 / 531,267 = 0.96,- Current Ratio (2023): 1.11,- Year-over-Year Change: 1.11 - 0.96 = 0.15.
Fortinet Inc. experienced a slight decrease in its current ratio from 1.24 in 2022 to 1.19 in 2023, indicating a minor decline in liquidity. In contrast, Rapid7 Inc. saw an improvement in its current ratio from 0.96 in 2022 to 1.11 in 2023, indicating an enhancement in its liquidity position. This improvement for Rapid7 Inc. suggests better management of current assets and liabilities, reducing potential liquidity risks.
|
Comparison
|
71,72,73,74,75;61,62,63,64,65
|
0001262039-24-000014;0001560327-24-000021
|
ITEM 8. Financial Statements and Supplementary Data;Item 8. Financial Statements and Supplementary Data.
|
Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 72: FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
| | | | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------|:------------------------|:--------|:--------|:---|:--------|:--------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | |
| 2 | 2023 | | 2022 | 2021 | | | | | |
| 3 | REVENUE: | | | | | | | | |
| 4 | Product | $ | 1,927.3 | | $ | 1,780.5 | | $ | 1,255.0 |
| 5 | Service | 3,377.5 | | 2,636.9 | | | 2,087.2 | | |
| 6 | Total revenue | 5,304.8 | | 4,417.4 | | | 3,342.2 | | |
| 7 | COST OF REVENUE: | | | | | | | | |
| 8 | Product | 763.6 | | 691.3 | | | 487.7 | | |
| 9 | Service | 473.6 | | 393.6 | | | 295.3 | | |
| 10 | Total cost of revenue | 1,237.2 | | 1,084.9 | | | 783.0 | | |
| 11 | GROSS PROFIT: | | | | | | | | |
| 12 | Product | 1,163.7 | | 1,089.2 | | | 767.3 | | |
| 13 | Service | 2,903.9 | | 2,243.3 | | | 1,791.9 | | |
| 14 | Total gross profit | 4,067.6 | | 3,332.5 | | | 2,559.2 | | |
| 15 | OPERATING EXPENSES: | | | | | | | | |
| 16 | Research and development | 613.8 | | 512.4 | | | 424.2 | | |
| 17 | Sales and marketing | 2,006.0 | | 1,686.1 | | | 1,345.7 | | |
| 18 | General and administrative | 211.3 | | 169.0 | | | 143.5 | | |
| 19 | Gain on intellectual property matter | (4.6) | | (4.6) | | | (4.6) | | |
| 20 | Total operating expenses | 2,826.5 | | 2,362.9 | | | 1,908.8 | | |
| 21 | OPERATING INCOME | 1,241.1 | | 969.6 | | | 650.4 | | |
| 22 | INTEREST INCOME | 119.7 | | 17.4 | | | 4.5 | | |
| 23 | INTEREST EXPENSE | (21.0) | | (18.0) | | | (14.9) | | |
| 24 | OTHER EXPENSE-NET | (6.1) | | (13.5) | | | (11.6) | | |
| 25 | INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS | 1,333.7 | | 955.5 | | | 628.4 | | |
| 26 | PROVISION FOR INCOME TAXES | 143.8 | | 30.8 | | | 14.1 | | |
| 27 | LOSS FROM EQUITY METHOD INVESTMENTS | (42.1) | | (68.1) | | | (7.6) | | |
| 28 | NET INCOME INCLUDING NON-CONTROLLING INTERESTS | 1,147.8 | | 856.6 | | | 606.7 | | |
| 29 | LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX | - | | (0.7) | | | (0.1) | | |
| 30 | NET INCOME ATTRIBUTABLE TO FORTINET, INC. | $ | 1,147.8 | | $ | 857.3 | | $ | 606.8 |
| 31 | Net income per share attributable to Fortinet, Inc. (Note 9): | | | | | | | | |
| 32 | Basic | $ | 1.47 | | $ | 1.08 | | $ | 0.74 |
| 33 | Diluted | $ | 1.46 | | $ | 1.06 | | $ | 0.73 |
| 34 | Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.: | | | | | | | | |
| 35 | Basic | 778.6 | | 791.4 | | | 816.1 | | |
| 36 | Diluted | 788.2 | | 805.3 | | | 835.3 | | |
See notes to consolidated financial statements.
72
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 73: FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
| | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:-------|:-----|:------|:------|:---|:------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 4 | Other comprehensive income (loss): | | | | | | | | | |
| 5 | Change in foreign currency translation | (5.5) | | | (9.7) | | | (3.8) | | |
| 6 | Change in unrealized gains (losses) on investments | 8.8 | | | (6.2) | | | (3.5) | | |
| 7 | Less: tax provision (benefit) related to items of other comprehensive income (loss) | 2.0 | | | (1.4) | | | (0.8) | | |
| 8 | Other comprehensive income (loss) | 1.3 | | | (14.5) | | | (6.5) | | |
| 9 | Comprehensive income including non-controlling interests | 1,149.1 | | | 842.1 | | | 600.2 | | |
| 10 | Less: comprehensive income (loss) attributable to non-controlling interests | - | | | 0.2 | | | (1.1) | | |
| 11 | Comprehensive income attributable to Fortinet, Inc. | $ | 1,149.1 | | | $ | 841.9 | | $ | 601.3 |
See notes to consolidated financial statements.
73
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 74: FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
| | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------|:-------------|:-------|:-------------------------|:----|:--------------------------------------------|:--------------------|:---|:--------------------------|:-------|:-----------------------|:---|:----------|:-------|:----------|:----------|:---|:---|:---|:--------|
| 1 | | Common Stock | | AdditionalPaid-InCapital | | AccumulatedOtherComprehensive Income (Loss) | Accumulated Deficit | | Non-Controlling Interests | | Total Equity (Deficit) | | | | | | | | | |
| 2 | Shares | | Amount | | | | | | | | | | | | | | | | | |
| 3 | BALANCE-December 31, 2020 | 812.7 | | | $ | 0.8 | | $ | 1,206.6 | | | $ | 0.7 | $ | (352.1) | | $ | - | $ | 856.0 |
| 4 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 10.2 | | | - | | (141.7) | | | - | | | - | - | | (141.7) | | | | |
| 5 | Repurchase and retirement of common stock | (12.9) | | | - | | (19.2) | | | - | | | (722.6) | - | | (741.8) | | | | |
| 6 | Stock-based compensation expense | - | | | - | | 207.9 | | | - | | | - | - | | 207.9 | | | | |
| 7 | Recognition of non-controlling interests upon business combination | - | | | - | | - | | | - | | | - | 17.8 | | 17.8 | | | | |
| 8 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (2.7) | | | - | - | | (2.7) | | | | |
| 9 | Foreign currency translation adjustment | - | | | - | | - | | | (2.8) | | | - | (1.0) | | (3.8) | | | | |
| 10 | Net income | - | | | - | | - | | | - | | | 606.8 | (0.1) | | 606.7 | | | | |
| 11 | BALANCE-December 31, 2021 | 810.0 | | | 0.8 | | 1,253.6 | | | (4.8) | | | (467.9) | 16.7 | | 798.4 | | | | |
| 12 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 7.5 | | | - | | (134.7) | | | - | | | - | - | | (134.7) | | | | |
| 13 | Repurchase and retirement of common stock | (36.0) | | | - | | (55.4) | | | - | | | (1,935.8) | - | | (1,991.2) | | | | |
| 14 | Stock-based compensation expense | - | | | - | | 217.3 | | | - | | | - | - | | 217.3 | | | | |
| 15 | Acquisition of the non-controlling interests | - | | | - | | 3.4 | | | - | | | - | (16.9) | | (13.5) | | | | |
| 16 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (4.8) | | | - | - | | (4.8) | | | | |
| 17 | Foreign currency translation adjustment | - | | | - | | - | | | (10.6) | | | - | 0.9 | | (9.7) | | | | |
| 18 | Net income | - | | | - | | - | | | - | | | 857.3 | (0.7) | | 856.6 | | | | |
| 19 | BALANCE-December 31, 2022 | 781.5 | | | 0.8 | | 1,284.2 | | | (20.2) | | | (1,546.4) | - | | (281.6) | | | | |
| 20 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 6.7 | | | - | | (68.5) | | | - | | | - | - | | (68.5) | | | | |
| 21 | Repurchase and retirement of common stock | (27.2) | | | - | | (37.4) | | | - | | | (1,463.1) | - | | (1,500.5) | | | | |
| 22 | Excise tax on net stock repurchases | - | | | - | | (10.9) | | | - | | | - | - | | (10.9) | | | | |
| 23 | Stock-based compensation expense | - | | | - | | 249.0 | | | - | | | - | - | | 249.0 | | | | |
| 24 | Net unrealized gain on investments - net of tax | - | | | - | | - | | | 6.8 | | | - | - | | 6.8 | | | | |
| 25 | Foreign currency translation adjustment | - | | | - | | - | | | (5.5) | | | - | - | | (5.5) | | | | |
| 26 | Net income | - | | | - | | - | | | - | | | 1,147.8 | - | | 1,147.8 | | | | |
| 27 | BALANCE-December 31, 2023 | 761.0 | | | $ | 0.8 | | $ | 1,416.4 | | | $ | (18.9) | $ | (1,861.7) | | $ | - | $ | (463.4) |
See notes to consolidated financial statements.
74
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 75: FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:----------|:-----|:--------|:----------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| 4 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 5 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 6 | Stock-based compensation | 249.0 | | | 217.3 | | | 207.9 | | |
| 7 | Amortization of deferred contract costs | 266.3 | | | 223.3 | | | 175.9 | | |
| 8 | Depreciation and amortization | 113.4 | | | 104.3 | | | 84.4 | | |
| 9 | Amortization of investment premiums (discounts) | (27.7) | | | 4.4 | | | 6.9 | | |
| 10 | Loss from equity method investments | 42.1 | | | 68.1 | | | 7.6 | | |
| 11 | Other | 18.5 | | | 23.6 | | | 7.9 | | |
| 12 | Changes in operating assets and liabilities, net of impact of business combinations: | | | | | | | | | |
| 13 | Accounts receivable-net | (146.4) | | | (456.7) | | | (72.5) | | |
| 14 | Inventory | (253.5) | | | (109.1) | | | (19.4) | | |
| 15 | Prepaid expenses and other current assets | (27.6) | | | (7.7) | | | (17.7) | | |
| 16 | Deferred contract costs | (353.5) | | | (318.2) | | | (294.5) | | |
| 17 | Deferred tax assets | (301.9) | | | (226.4) | | | (94.0) | | |
| 18 | Other assets | 17.7 | | | (35.3) | | | (19.0) | | |
| 19 | Accounts payable | (43.1) | | | 105.2 | | | (13.1) | | |
| 20 | Accrued liabilities | 137.4 | | | 55.2 | | | 49.9 | | |
| 21 | Accrued payroll and compensation | 23.4 | | | 25.0 | | | 44.0 | | |
| 22 | Other liabilities | (21.7) | | | 23.5 | | | (0.7) | | |
| 23 | Deferred revenue | 1,095.3 | | | 1,177.5 | | | 839.4 | | |
| 24 | Net cash provided by operating activities | 1,935.5 | | | 1,730.6 | | | 1,499.7 | | |
| 25 | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
| 26 | Purchases of investments | (1,855.8) | | | (389.1) | | | (2,308.0) | | |
| 27 | Sales of investments | 4.0 | | | 3.0 | | | 85.5 | | |
| 28 | Maturities of investments | 1,414.8 | | | 1,462.0 | | | 1,470.3 | | |
| 29 | Purchases of property and equipment | (204.1) | | | (281.2) | | | (295.9) | | |
| 30 | Purchases of Investments in privately held companies | (8.5) | | | - | | | (160.0) | | |
| 31 | Payments made in connection with business combinations, net of cash acquired | - | | | (30.8) | | | (74.9) | | |
| 32 | Purchases of marketable equity securities | - | | | - | | | (42.5) | | |
| 33 | Other | 0.3 | | | - | | | 0.4 | | |
| 34 | Net cash provided by (used in) investing activities | (649.3) | | | 763.9 | | | (1,325.1) | | |
| 35 | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
| 36 | Proceeds from long-term borrowings, net of discount and underwriting fees | - | | | - | | | 989.4 | | |
| 37 | Payments for debt issuance costs | - | | | - | | | (2.4) | | |
| 38 | Payments of debt assumed in connection with business combination | - | | | - | | | (19.5) | | |
| 39 | Repurchase and retirement of common stock | (1,500.5) | | | (1,991.2) | | | (741.8) | | |
| 40 | Proceeds from issuance of common stock | 43.8 | | | 26.1 | | | 26.0 | | |
| 41 | Taxes paid related to net share settlement of equity awards | (112.5) | | | (160.4) | | | (167.9) | | |
| 42 | Other | (1.2) | | | (4.8) | | | (1.0) | | |
| 43 | Net cash provided by (used in) financing activities | (1,570.4) | | | (2,130.3) | | | 82.8 | | |
| 44 | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (0.8) | | | (0.4) | | | (0.1) | | |
| 45 | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (285.0) | | | 363.8 | | | 257.3 | | |
| 46 | CASH AND CASH EQUIVALENTS-Beginning of year | 1,682.9 | | | 1,319.1 | | | 1,061.8 | | |
| 47 | CASH AND CASH EQUIVALENTS-End of year | $ | 1,397.9 | | | $ | 1,682.9 | | $ | 1,319.1 |
| 48 | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | | | | | | |
| 49 | Cash paid for income taxes-net | $ | 426.3 | | | $ | 260.2 | | $ | 127.4 |
| 50 | Operating lease liabilities arising from obtaining right-of-use assets | $ | 19.2 | | | $ | 65.8 | | $ | 39.6 |
| 52 | NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | | | | | | |
| 53 | Transfers of evaluation units from inventory to property and equipment | $ | 31.8 | | | $ | 17.1 | | $ | 15.9 |
| 54 | Liability for purchase of property and equipment | $ | 23.6 | | | $ | 21.2 | | $ | 21.9 |
| 55 | Excise tax payable on net stock repurchases | $ | 10.9 | | | $ | - | | $ | - |
| 56 | Liability incurred in connection with business combinations | $ | - | | | $ | 0.8 | | $ | 0.9 |
See notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)| | | | | | | | | | | | |
|---:|:--------------------------------------------------------------|:------------------------|:-----------|:----------|:-----|:-----------|:-----|:----------|:-----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Revenue: | | | | | | | | | | |
| 4 | Products | | $ | 740,168 | | | $ | 647,535 | | $ | 500,843 |
| 5 | Professional services | | 37,539 | | | 37,548 | | | 34,561 | | |
| 6 | Total revenue | | 777,707 | | | 685,083 | | | 535,404 | | |
| 7 | Cost of revenue: | | | | | | | | | | |
| 8 | Products | | 202,904 | | | 182,212 | | | 140,773 | | |
| 9 | Professional services | | 28,837 | | | 32,137 | | | 28,175 | | |
| 10 | Total cost of revenue | | 231,741 | | | 214,349 | | | 168,948 | | |
| 11 | Total gross profit | | 545,966 | | | 470,734 | | | 366,456 | | |
| 12 | Operating expenses: | | | | | | | | | | |
| 13 | Research and development | | 176,776 | | | 189,970 | | | 160,779 | | |
| 14 | Sales and marketing | | 312,636 | | | 307,409 | | | 247,453 | | |
| 15 | General and administrative | | 84,276 | | | 84,969 | | | 78,289 | | |
| 16 | Impairment of long-lived assets | | 30,784 | | | - | | | - | | |
| 17 | Restructuring | | 22,227 | | | - | | | - | | |
| 18 | Total operating expenses | | 626,699 | | | 582,348 | | | 486,521 | | |
| 19 | Loss from operations | | (80,733) | | | (111,614) | | | (120,065) | | |
| 20 | Other income (expense), net: | | | | | | | | | | |
| 21 | Interest income | | 10,177 | | | 1,813 | | | 365 | | |
| 22 | Interest expense | | (64,700) | | | (10,982) | | | (14,292) | | |
| 23 | Other income (expense), net | | (14,522) | | | (1,522) | | | (1,921) | | |
| 24 | Loss before income taxes | | (149,778) | | | (122,305) | | | (135,913) | | |
| 25 | (Benefit from) provision for income taxes | | (518) | | | 2,412 | | | 10,421 | | |
| 26 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 27 | Net loss per share, basic and diluted | | $ | (2.46) | | | $ | (2.13) | | $ | (2.65) |
| 28 | Weighted-average common shares outstanding, basic and diluted | | 60,756,087 | | | 58,552,065 | | | 55,270,998 | | |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)| | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:------------------------|:------|:----------|:-----|:--------|:-----|:----------|:--------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 4 | Other comprehensive income (loss): | | | | | | | | | | |
| 5 | Change in fair value of cash flow hedges | | 797 | | | (3,874) | | | (86) | | |
| 6 | Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes | | 724 | | | 4,053 | | | - | | |
| 7 | Total change in unrealized gains (losses) on cash flow hedges | | 1,521 | | | 179 | | | (86) | | |
| 8 | Change unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,043) | | |
| 9 | Adjustment for net gains realized and included in net loss | | - | | | - | | | (137) | | |
| 10 | Total change in unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,180) | | |
| 11 | Total other comprehensive income (loss) | | 2,755 | | | (599) | | | (1,266) | | |
| 12 | Comprehensive loss | | $ | (146,505) | | | $ | (125,316) | | $ | (147,600) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------|:-------------|:---------------|:----|:--------------------------|:-------------------------------------------|:----|:-------------------|:----|:-----------------------------------|:--------|:---------|:---|:--------|:---|:----------|:--------|:----------|:---|:------------|:---|:----------|
| 1 | | Common stock | Treasury stock | | Additionalpaid-in-capital | Accumulatedothercomprehensiveincome (loss) | | Accumulateddeficit | | Totalstockholders'equity (deficit) | | | | | | | | | | | | |
| 2 | | Shares | Amount | | Shares | Amount | | | | | | | | | | | | | | | | |
| 3 | Balance, December 31, 2020 | 52,225 | | $ | 522 | | 487 | | | $ | (4,764) | | $ | 692,603 | | $ | 454 | | $ | (617,279) | $ | 71,536 |
| 4 | Stock-based compensation expense | - | | - | | - | | | - | | | 100,317 | | - | | - | | 100,317 | | | | |
| 5 | Issuance of common stock under employee stock purchase plan | 222 | | 2 | | - | | | - | | | 9,274 | | - | | - | | 9,276 | | | | |
| 6 | Vesting of restricted stock units | 1,611 | | 16 | | - | | | - | | | (16) | | - | | - | | - | | | | |
| 7 | Shares withheld for employee taxes | (157) | | (2) | | - | | | - | | | (16,042) | | - | | - | | (16,044) | | | | |
| 8 | Issuance of common stock upon exercise of stock options | 521 | | 6 | | - | | | - | | | 4,300 | | - | | - | | 4,306 | | | | |
| 9 | Purchase of capped calls related to convertible senior notes | - | | - | | - | | | - | | | (76,020) | | - | | - | | (76,020) | | | | |
| 10 | Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes | 2,897 | | 29 | | - | | | - | | | (3,094) | | - | | - | | (3,065) | | | | |
| 11 | Issuance of common stock in connection with inducement of convertible senior notes | 35 | | - | | - | | | - | | | 2,740 | | - | | - | | 2,740 | | | | |
| 12 | Issuance of common stock related to acquisition | 341 | | 4 | | - | | | - | | | (4) | | - | | - | | - | | | | |
| 13 | Cumulative-effect adjustment for the adoption of ASU 2020-06 | - | | - | | - | | | - | | | (99,026) | | - | | 27,585 | | (71,441) | | | | |
| 14 | Other comprehensive income | - | | - | | - | | | - | | | - | | (1,266) | | - | | (1,266) | | | | |
| 15 | Net loss | - | | - | | - | | | - | | | - | | - | | (146,334) | | (146,334) | | | | |
| 16 | Balance, December 31, 2021 | 57,695 | | $ | 577 | | 487 | | | $ | (4,764) | | $ | 615,032 | | $ | (812) | | $ | (736,028) | $ | (125,995) |
| 17 | Stock-based compensation expense | - | | - | | - | | | - | | | 123,441 | | - | | - | | 123,441 | | | | |
| 18 | Issuance of common stock under employee stock purchase plan | 218 | | 2 | | - | | | - | | | 11,941 | | - | | - | | 11,943 | | | | |
| 19 | Vesting of restricted stock units | 1,482 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 20 | Shares withheld for employee taxes | (105) | | (1) | | - | | | - | | | (7,461) | | - | | - | | (7,462) | | | | |
| 21 | Issuance of common stock upon exercise of stock options | 480 | | 5 | | - | | | - | | | 3,313 | | - | | - | | 3,318 | | | | |
| 22 | Issuance of common stock in connection with conversion of convertible senior notes | - | | - | | - | | | - | | | (3) | | - | | - | | (3) | | | | |
| 23 | Issuance of common stock related to acquisition | 33 | | - | | - | | | - | | | - | | - | | - | | - | | | | |
| 24 | Repurchase of common stock issued in relation to acquisition | (83) | | (1) | | | | | | 1 | | | | | - | | | | | | | |
| 25 | Other comprehensive income | - | | - | | - | | | - | | | - | | (599) | | - | | (599) | | | | |
| 26 | Net loss | - | | - | | - | | | - | | | - | | - | | (124,717) | | (124,717) | | | | |
| 27 | Balance, December 31, 2022 | 59,720 | | $ | 597 | | 487 | | | $ | (4,764) | | $ | 746,249 | | $ | (1,411) | | $ | (860,745) | $ | (120,074) |
| 28 | Stock-based compensation expense | - | | - | | - | | | - | | | 107,254 | | - | | - | | 107,254 | | | | |
| 29 | Issuance of common stock under employee stock purchase plan | 330 | | 3 | | - | | | - | | | 11,320 | | - | | - | | 11,323 | | | | |
| 30 | Vesting of restricted stock units | 1,454 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 31 | Shares withheld for employee taxes | (113) | | (1) | | - | | | - | | | (5,569) | | - | | - | | (5,570) | | | | |
| 32 | Issuance of common stock upon exercise of stock options | 216 | | 2 | | - | | | - | | | 3,051 | | - | | - | | 3,053 | | | | |
| 33 | Issuance of common stock related to acquisition | 107 | | 1 | | - | | | - | | | (1) | | - | | - | | - | | | | |
| 34 | Repurchase of common stock issued in related to acquisition | - | | - | | 83 | | | (1) | | | 1 | | - | | - | | - | | | | |
| 35 | Purchase of capped called related to convertible senior notes | - | | - | | - | | | - | | | (36,570) | | - | | - | | (36,570) | | | | |
| 36 | Reclassification of equity to derivative assets related to capped calls | - | | - | | - | | | - | | | 33,029 | | - | | - | | 33,029 | | | | |
| 37 | Repurchase and inducement of convertible senior notes | - | | - | | - | | | - | | | 35,881 | | - | | - | | 35,881 | | | | |
| 38 | Other comprehensive loss | - | | - | | - | | | - | | | - | | 2,755 | | - | | 2,755 | | | | |
| 39 | Net loss | - | | - | | - | | | - | | | - | | - | | (149,260) | | (149,260) | | | | |
| 40 | Balance, December 31, 2023 | 61,714 | | $ | 617 | | 570 | | | $ | (4,765) | | $ | 894,630 | | $ | 1,344 | | $ | (1,010,005) | $ | (118,179) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------------|:----------|:-----|:----------|:-----|:----------|:----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Cash flows from operating activities: | | | | | | | | | |
| 4 | Net loss | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 5 | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | | | |
| 6 | Depreciation and amortization | 45,939 | | | 41,038 | | | 33,501 | | |
| 7 | Amortization of debt discount and issuance costs | 4,138 | | | 4,085 | | | 3,982 | | |
| 8 | Stock-based compensation expense | 108,081 | | | 119,902 | | | 102,579 | | |
| 9 | Impairment of long-lived assets | 30,784 | | | - | | | - | | |
| 10 | Change in fair value of derivative assets | 15,511 | | | - | | | - | | |
| 11 | Deferred income taxes | (5,624) | | | (1,440) | | | 466 | | |
| 12 | Induced conversion expense | 53,889 | | | - | | | 2,740 | | |
| 13 | Other | 469 | | | (200) | | | 1,920 | | |
| 14 | Changes in assets and liabilities: | | | | | | | | | |
| 15 | Accounts receivable | (14,021) | | | (9,050) | | | (25,475) | | |
| 16 | Deferred contract acquisition and fulfillment costs | (18,534) | | | (15,910) | | | (22,526) | | |
| 17 | Prepaid expenses and other assets | (4,125) | | | (2,231) | | | (3,355) | | |
| 18 | Accounts payable | 5,449 | | | 7,977 | | | (2,077) | | |
| 19 | Accrued expenses | 2,422 | | | 3,741 | | | 19,205 | | |
| 20 | Deferred revenue | 30,472 | | | 52,516 | | | 85,562 | | |
| 21 | Other liabilities | (1,312) | | | 2,493 | | | 3,729 | | |
| 22 | Net cash provided by operating activities | 104,278 | | | 78,204 | | | 53,917 | | |
| 23 | Cash flows from investing activities: | | | | | | | | | |
| 24 | Business acquisitions, net of cash acquired | (34,841) | | | - | | | (358,420) | | |
| 25 | Purchases of property and equipment | (4,366) | | | (20,382) | | | (9,010) | | |
| 26 | Capitalization of internal-use software | (15,878) | | | (17,145) | | | (9,854) | | |
| 27 | Purchases of investments | (276,829) | | | (122,765) | | | (93,092) | | |
| 28 | Sales and maturities of investments | 150,450 | | | 121,304 | | | 147,998 | | |
| 29 | Other investments | 2,710 | | | (1,000) | | | (3,000) | | |
| 30 | Net cash used in investing activities | (178,754) | | | (39,988) | | | (325,378) | | |
| 31 | Cash flows from financing activities: | | | | | | | | | |
| 32 | Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively | 292,091 | | | - | | | 585,024 | | |
| 33 | Purchase of capped calls related to convertible senior notes | (36,570) | | | - | | | (76,020) | | |
| 34 | Payment of debt issuance costs | - | | | (71) | | | (300) | | |
| 35 | Payments for redemption, repurchase and conversion of convertible senior notes | (199,998) | | | (12) | | | (230,000) | | |
| 36 | Payments related to business acquisitions | (2,250) | | | (300) | | | (12,118) | | |
| 37 | Proceeds from capped calls settlement | 17,518 | | | - | | | - | | |
| 38 | Taxes paid related to net share settlement of equity awards | (5,570) | | | (7,462) | | | (16,044) | | |
| 39 | Proceeds from employee stock purchase plan | 11,323 | | | 11,943 | | | 9,276 | | |
| 40 | Proceeds from stock option exercises | 3,053 | | | 3,318 | | | 4,315 | | |
| 41 | Net cash provided by financing activities | 79,597 | | | 7,416 | | | 264,133 | | |
| 42 | Effect of exchange rate changes on cash ,cash equivalents and restricted cash | 1,202 | | | (2,845) | | | (1,272) | | |
| 43 | Net increase (decrease) in cash, cash equivalents and restricted cash | 6,323 | | | 42,787 | | | (8,600) | | |
| 44 | Cash, cash equivalents and restricted cash, beginning of period | 207,804 | | | 165,017 | | | 173,617 | | |
| 45 | Cash, cash equivalents and restricted cash, end of period | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
| 46 | Supplemental cash flow information: | | | | | | | | | |
| 47 | Cash paid for interest on convertible senior notes | $ | 4,605 | | | $ | 6,675 | | $ | 7,345 |
| 48 | Cash paid for income taxes, net of refunds | $ | 1,624 | | | $ | 1,571 | | $ | 3,305 |
| 49 | Reconciliation of cash, cash equivalents and restricted cash: | | | | | | | | | |
| 50 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 | | $ | 164,582 |
| 51 | Restricted cash included in prepaid expenses and other assets | 498 | | | 517 | | | 435 | | |
| 52 | Total cash, cash equivalents and restricted cash | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
See accompanying notes to consolidated financial statements.
65
|
FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
| | | | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------|:------------------------|:--------|:--------|:---|:--------|:--------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | |
| 2 | 2023 | | 2022 | 2021 | | | | | |
| 3 | REVENUE: | | | | | | | | |
| 4 | Product | $ | 1,927.3 | | $ | 1,780.5 | | $ | 1,255.0 |
| 5 | Service | 3,377.5 | | 2,636.9 | | | 2,087.2 | | |
| 6 | Total revenue | 5,304.8 | | 4,417.4 | | | 3,342.2 | | |
| 7 | COST OF REVENUE: | | | | | | | | |
| 8 | Product | 763.6 | | 691.3 | | | 487.7 | | |
| 9 | Service | 473.6 | | 393.6 | | | 295.3 | | |
| 10 | Total cost of revenue | 1,237.2 | | 1,084.9 | | | 783.0 | | |
| 11 | GROSS PROFIT: | | | | | | | | |
| 12 | Product | 1,163.7 | | 1,089.2 | | | 767.3 | | |
| 13 | Service | 2,903.9 | | 2,243.3 | | | 1,791.9 | | |
| 14 | Total gross profit | 4,067.6 | | 3,332.5 | | | 2,559.2 | | |
| 15 | OPERATING EXPENSES: | | | | | | | | |
| 16 | Research and development | 613.8 | | 512.4 | | | 424.2 | | |
| 17 | Sales and marketing | 2,006.0 | | 1,686.1 | | | 1,345.7 | | |
| 18 | General and administrative | 211.3 | | 169.0 | | | 143.5 | | |
| 19 | Gain on intellectual property matter | (4.6) | | (4.6) | | | (4.6) | | |
| 20 | Total operating expenses | 2,826.5 | | 2,362.9 | | | 1,908.8 | | |
| 21 | OPERATING INCOME | 1,241.1 | | 969.6 | | | 650.4 | | |
| 22 | INTEREST INCOME | 119.7 | | 17.4 | | | 4.5 | | |
| 23 | INTEREST EXPENSE | (21.0) | | (18.0) | | | (14.9) | | |
| 24 | OTHER EXPENSE-NET | (6.1) | | (13.5) | | | (11.6) | | |
| 25 | INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS | 1,333.7 | | 955.5 | | | 628.4 | | |
| 26 | PROVISION FOR INCOME TAXES | 143.8 | | 30.8 | | | 14.1 | | |
| 27 | LOSS FROM EQUITY METHOD INVESTMENTS | (42.1) | | (68.1) | | | (7.6) | | |
| 28 | NET INCOME INCLUDING NON-CONTROLLING INTERESTS | 1,147.8 | | 856.6 | | | 606.7 | | |
| 29 | LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX | - | | (0.7) | | | (0.1) | | |
| 30 | NET INCOME ATTRIBUTABLE TO FORTINET, INC. | $ | 1,147.8 | | $ | 857.3 | | $ | 606.8 |
| 31 | Net income per share attributable to Fortinet, Inc. (Note 9): | | | | | | | | |
| 32 | Basic | $ | 1.47 | | $ | 1.08 | | $ | 0.74 |
| 33 | Diluted | $ | 1.46 | | $ | 1.06 | | $ | 0.73 |
| 34 | Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.: | | | | | | | | |
| 35 | Basic | 778.6 | | 791.4 | | | 816.1 | | |
| 36 | Diluted | 788.2 | | 805.3 | | | 835.3 | | |
See notes to consolidated financial statements.
72
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
| | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:-------|:-----|:------|:------|:---|:------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 4 | Other comprehensive income (loss): | | | | | | | | | |
| 5 | Change in foreign currency translation | (5.5) | | | (9.7) | | | (3.8) | | |
| 6 | Change in unrealized gains (losses) on investments | 8.8 | | | (6.2) | | | (3.5) | | |
| 7 | Less: tax provision (benefit) related to items of other comprehensive income (loss) | 2.0 | | | (1.4) | | | (0.8) | | |
| 8 | Other comprehensive income (loss) | 1.3 | | | (14.5) | | | (6.5) | | |
| 9 | Comprehensive income including non-controlling interests | 1,149.1 | | | 842.1 | | | 600.2 | | |
| 10 | Less: comprehensive income (loss) attributable to non-controlling interests | - | | | 0.2 | | | (1.1) | | |
| 11 | Comprehensive income attributable to Fortinet, Inc. | $ | 1,149.1 | | | $ | 841.9 | | $ | 601.3 |
See notes to consolidated financial statements.
73
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
| | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------|:-------------|:-------|:-------------------------|:----|:--------------------------------------------|:--------------------|:---|:--------------------------|:-------|:-----------------------|:---|:----------|:-------|:----------|:----------|:---|:---|:---|:--------|
| 1 | | Common Stock | | AdditionalPaid-InCapital | | AccumulatedOtherComprehensive Income (Loss) | Accumulated Deficit | | Non-Controlling Interests | | Total Equity (Deficit) | | | | | | | | | |
| 2 | Shares | | Amount | | | | | | | | | | | | | | | | | |
| 3 | BALANCE-December 31, 2020 | 812.7 | | | $ | 0.8 | | $ | 1,206.6 | | | $ | 0.7 | $ | (352.1) | | $ | - | $ | 856.0 |
| 4 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 10.2 | | | - | | (141.7) | | | - | | | - | - | | (141.7) | | | | |
| 5 | Repurchase and retirement of common stock | (12.9) | | | - | | (19.2) | | | - | | | (722.6) | - | | (741.8) | | | | |
| 6 | Stock-based compensation expense | - | | | - | | 207.9 | | | - | | | - | - | | 207.9 | | | | |
| 7 | Recognition of non-controlling interests upon business combination | - | | | - | | - | | | - | | | - | 17.8 | | 17.8 | | | | |
| 8 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (2.7) | | | - | - | | (2.7) | | | | |
| 9 | Foreign currency translation adjustment | - | | | - | | - | | | (2.8) | | | - | (1.0) | | (3.8) | | | | |
| 10 | Net income | - | | | - | | - | | | - | | | 606.8 | (0.1) | | 606.7 | | | | |
| 11 | BALANCE-December 31, 2021 | 810.0 | | | 0.8 | | 1,253.6 | | | (4.8) | | | (467.9) | 16.7 | | 798.4 | | | | |
| 12 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 7.5 | | | - | | (134.7) | | | - | | | - | - | | (134.7) | | | | |
| 13 | Repurchase and retirement of common stock | (36.0) | | | - | | (55.4) | | | - | | | (1,935.8) | - | | (1,991.2) | | | | |
| 14 | Stock-based compensation expense | - | | | - | | 217.3 | | | - | | | - | - | | 217.3 | | | | |
| 15 | Acquisition of the non-controlling interests | - | | | - | | 3.4 | | | - | | | - | (16.9) | | (13.5) | | | | |
| 16 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (4.8) | | | - | - | | (4.8) | | | | |
| 17 | Foreign currency translation adjustment | - | | | - | | - | | | (10.6) | | | - | 0.9 | | (9.7) | | | | |
| 18 | Net income | - | | | - | | - | | | - | | | 857.3 | (0.7) | | 856.6 | | | | |
| 19 | BALANCE-December 31, 2022 | 781.5 | | | 0.8 | | 1,284.2 | | | (20.2) | | | (1,546.4) | - | | (281.6) | | | | |
| 20 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 6.7 | | | - | | (68.5) | | | - | | | - | - | | (68.5) | | | | |
| 21 | Repurchase and retirement of common stock | (27.2) | | | - | | (37.4) | | | - | | | (1,463.1) | - | | (1,500.5) | | | | |
| 22 | Excise tax on net stock repurchases | - | | | - | | (10.9) | | | - | | | - | - | | (10.9) | | | | |
| 23 | Stock-based compensation expense | - | | | - | | 249.0 | | | - | | | - | - | | 249.0 | | | | |
| 24 | Net unrealized gain on investments - net of tax | - | | | - | | - | | | 6.8 | | | - | - | | 6.8 | | | | |
| 25 | Foreign currency translation adjustment | - | | | - | | - | | | (5.5) | | | - | - | | (5.5) | | | | |
| 26 | Net income | - | | | - | | - | | | - | | | 1,147.8 | - | | 1,147.8 | | | | |
| 27 | BALANCE-December 31, 2023 | 761.0 | | | $ | 0.8 | | $ | 1,416.4 | | | $ | (18.9) | $ | (1,861.7) | | $ | - | $ | (463.4) |
See notes to consolidated financial statements.
74
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:----------|:-----|:--------|:----------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| 4 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 5 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 6 | Stock-based compensation | 249.0 | | | 217.3 | | | 207.9 | | |
| 7 | Amortization of deferred contract costs | 266.3 | | | 223.3 | | | 175.9 | | |
| 8 | Depreciation and amortization | 113.4 | | | 104.3 | | | 84.4 | | |
| 9 | Amortization of investment premiums (discounts) | (27.7) | | | 4.4 | | | 6.9 | | |
| 10 | Loss from equity method investments | 42.1 | | | 68.1 | | | 7.6 | | |
| 11 | Other | 18.5 | | | 23.6 | | | 7.9 | | |
| 12 | Changes in operating assets and liabilities, net of impact of business combinations: | | | | | | | | | |
| 13 | Accounts receivable-net | (146.4) | | | (456.7) | | | (72.5) | | |
| 14 | Inventory | (253.5) | | | (109.1) | | | (19.4) | | |
| 15 | Prepaid expenses and other current assets | (27.6) | | | (7.7) | | | (17.7) | | |
| 16 | Deferred contract costs | (353.5) | | | (318.2) | | | (294.5) | | |
| 17 | Deferred tax assets | (301.9) | | | (226.4) | | | (94.0) | | |
| 18 | Other assets | 17.7 | | | (35.3) | | | (19.0) | | |
| 19 | Accounts payable | (43.1) | | | 105.2 | | | (13.1) | | |
| 20 | Accrued liabilities | 137.4 | | | 55.2 | | | 49.9 | | |
| 21 | Accrued payroll and compensation | 23.4 | | | 25.0 | | | 44.0 | | |
| 22 | Other liabilities | (21.7) | | | 23.5 | | | (0.7) | | |
| 23 | Deferred revenue | 1,095.3 | | | 1,177.5 | | | 839.4 | | |
| 24 | Net cash provided by operating activities | 1,935.5 | | | 1,730.6 | | | 1,499.7 | | |
| 25 | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
| 26 | Purchases of investments | (1,855.8) | | | (389.1) | | | (2,308.0) | | |
| 27 | Sales of investments | 4.0 | | | 3.0 | | | 85.5 | | |
| 28 | Maturities of investments | 1,414.8 | | | 1,462.0 | | | 1,470.3 | | |
| 29 | Purchases of property and equipment | (204.1) | | | (281.2) | | | (295.9) | | |
| 30 | Purchases of Investments in privately held companies | (8.5) | | | - | | | (160.0) | | |
| 31 | Payments made in connection with business combinations, net of cash acquired | - | | | (30.8) | | | (74.9) | | |
| 32 | Purchases of marketable equity securities | - | | | - | | | (42.5) | | |
| 33 | Other | 0.3 | | | - | | | 0.4 | | |
| 34 | Net cash provided by (used in) investing activities | (649.3) | | | 763.9 | | | (1,325.1) | | |
| 35 | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
| 36 | Proceeds from long-term borrowings, net of discount and underwriting fees | - | | | - | | | 989.4 | | |
| 37 | Payments for debt issuance costs | - | | | - | | | (2.4) | | |
| 38 | Payments of debt assumed in connection with business combination | - | | | - | | | (19.5) | | |
| 39 | Repurchase and retirement of common stock | (1,500.5) | | | (1,991.2) | | | (741.8) | | |
| 40 | Proceeds from issuance of common stock | 43.8 | | | 26.1 | | | 26.0 | | |
| 41 | Taxes paid related to net share settlement of equity awards | (112.5) | | | (160.4) | | | (167.9) | | |
| 42 | Other | (1.2) | | | (4.8) | | | (1.0) | | |
| 43 | Net cash provided by (used in) financing activities | (1,570.4) | | | (2,130.3) | | | 82.8 | | |
| 44 | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (0.8) | | | (0.4) | | | (0.1) | | |
| 45 | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (285.0) | | | 363.8 | | | 257.3 | | |
| 46 | CASH AND CASH EQUIVALENTS-Beginning of year | 1,682.9 | | | 1,319.1 | | | 1,061.8 | | |
| 47 | CASH AND CASH EQUIVALENTS-End of year | $ | 1,397.9 | | | $ | 1,682.9 | | $ | 1,319.1 |
| 48 | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | | | | | | |
| 49 | Cash paid for income taxes-net | $ | 426.3 | | | $ | 260.2 | | $ | 127.4 |
| 50 | Operating lease liabilities arising from obtaining right-of-use assets | $ | 19.2 | | | $ | 65.8 | | $ | 39.6 |
| 52 | NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | | | | | | |
| 53 | Transfers of evaluation units from inventory to property and equipment | $ | 31.8 | | | $ | 17.1 | | $ | 15.9 |
| 54 | Liability for purchase of property and equipment | $ | 23.6 | | | $ | 21.2 | | $ | 21.9 |
| 55 | Excise tax payable on net stock repurchases | $ | 10.9 | | | $ | - | | $ | - |
| 56 | Liability incurred in connection with business combinations | $ | - | | | $ | 0.8 | | $ | 0.9 |
See notes to consolidated financial statements.
75
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RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
61
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)| | | | | | | | | | | | |
|---:|:--------------------------------------------------------------|:------------------------|:-----------|:----------|:-----|:-----------|:-----|:----------|:-----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Revenue: | | | | | | | | | | |
| 4 | Products | | $ | 740,168 | | | $ | 647,535 | | $ | 500,843 |
| 5 | Professional services | | 37,539 | | | 37,548 | | | 34,561 | | |
| 6 | Total revenue | | 777,707 | | | 685,083 | | | 535,404 | | |
| 7 | Cost of revenue: | | | | | | | | | | |
| 8 | Products | | 202,904 | | | 182,212 | | | 140,773 | | |
| 9 | Professional services | | 28,837 | | | 32,137 | | | 28,175 | | |
| 10 | Total cost of revenue | | 231,741 | | | 214,349 | | | 168,948 | | |
| 11 | Total gross profit | | 545,966 | | | 470,734 | | | 366,456 | | |
| 12 | Operating expenses: | | | | | | | | | | |
| 13 | Research and development | | 176,776 | | | 189,970 | | | 160,779 | | |
| 14 | Sales and marketing | | 312,636 | | | 307,409 | | | 247,453 | | |
| 15 | General and administrative | | 84,276 | | | 84,969 | | | 78,289 | | |
| 16 | Impairment of long-lived assets | | 30,784 | | | - | | | - | | |
| 17 | Restructuring | | 22,227 | | | - | | | - | | |
| 18 | Total operating expenses | | 626,699 | | | 582,348 | | | 486,521 | | |
| 19 | Loss from operations | | (80,733) | | | (111,614) | | | (120,065) | | |
| 20 | Other income (expense), net: | | | | | | | | | | |
| 21 | Interest income | | 10,177 | | | 1,813 | | | 365 | | |
| 22 | Interest expense | | (64,700) | | | (10,982) | | | (14,292) | | |
| 23 | Other income (expense), net | | (14,522) | | | (1,522) | | | (1,921) | | |
| 24 | Loss before income taxes | | (149,778) | | | (122,305) | | | (135,913) | | |
| 25 | (Benefit from) provision for income taxes | | (518) | | | 2,412 | | | 10,421 | | |
| 26 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 27 | Net loss per share, basic and diluted | | $ | (2.46) | | | $ | (2.13) | | $ | (2.65) |
| 28 | Weighted-average common shares outstanding, basic and diluted | | 60,756,087 | | | 58,552,065 | | | 55,270,998 | | |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)| | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:------------------------|:------|:----------|:-----|:--------|:-----|:----------|:--------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 4 | Other comprehensive income (loss): | | | | | | | | | | |
| 5 | Change in fair value of cash flow hedges | | 797 | | | (3,874) | | | (86) | | |
| 6 | Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes | | 724 | | | 4,053 | | | - | | |
| 7 | Total change in unrealized gains (losses) on cash flow hedges | | 1,521 | | | 179 | | | (86) | | |
| 8 | Change unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,043) | | |
| 9 | Adjustment for net gains realized and included in net loss | | - | | | - | | | (137) | | |
| 10 | Total change in unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,180) | | |
| 11 | Total other comprehensive income (loss) | | 2,755 | | | (599) | | | (1,266) | | |
| 12 | Comprehensive loss | | $ | (146,505) | | | $ | (125,316) | | $ | (147,600) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------|:-------------|:---------------|:----|:--------------------------|:-------------------------------------------|:----|:-------------------|:----|:-----------------------------------|:--------|:---------|:---|:--------|:---|:----------|:--------|:----------|:---|:------------|:---|:----------|
| 1 | | Common stock | Treasury stock | | Additionalpaid-in-capital | Accumulatedothercomprehensiveincome (loss) | | Accumulateddeficit | | Totalstockholders'equity (deficit) | | | | | | | | | | | | |
| 2 | | Shares | Amount | | Shares | Amount | | | | | | | | | | | | | | | | |
| 3 | Balance, December 31, 2020 | 52,225 | | $ | 522 | | 487 | | | $ | (4,764) | | $ | 692,603 | | $ | 454 | | $ | (617,279) | $ | 71,536 |
| 4 | Stock-based compensation expense | - | | - | | - | | | - | | | 100,317 | | - | | - | | 100,317 | | | | |
| 5 | Issuance of common stock under employee stock purchase plan | 222 | | 2 | | - | | | - | | | 9,274 | | - | | - | | 9,276 | | | | |
| 6 | Vesting of restricted stock units | 1,611 | | 16 | | - | | | - | | | (16) | | - | | - | | - | | | | |
| 7 | Shares withheld for employee taxes | (157) | | (2) | | - | | | - | | | (16,042) | | - | | - | | (16,044) | | | | |
| 8 | Issuance of common stock upon exercise of stock options | 521 | | 6 | | - | | | - | | | 4,300 | | - | | - | | 4,306 | | | | |
| 9 | Purchase of capped calls related to convertible senior notes | - | | - | | - | | | - | | | (76,020) | | - | | - | | (76,020) | | | | |
| 10 | Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes | 2,897 | | 29 | | - | | | - | | | (3,094) | | - | | - | | (3,065) | | | | |
| 11 | Issuance of common stock in connection with inducement of convertible senior notes | 35 | | - | | - | | | - | | | 2,740 | | - | | - | | 2,740 | | | | |
| 12 | Issuance of common stock related to acquisition | 341 | | 4 | | - | | | - | | | (4) | | - | | - | | - | | | | |
| 13 | Cumulative-effect adjustment for the adoption of ASU 2020-06 | - | | - | | - | | | - | | | (99,026) | | - | | 27,585 | | (71,441) | | | | |
| 14 | Other comprehensive income | - | | - | | - | | | - | | | - | | (1,266) | | - | | (1,266) | | | | |
| 15 | Net loss | - | | - | | - | | | - | | | - | | - | | (146,334) | | (146,334) | | | | |
| 16 | Balance, December 31, 2021 | 57,695 | | $ | 577 | | 487 | | | $ | (4,764) | | $ | 615,032 | | $ | (812) | | $ | (736,028) | $ | (125,995) |
| 17 | Stock-based compensation expense | - | | - | | - | | | - | | | 123,441 | | - | | - | | 123,441 | | | | |
| 18 | Issuance of common stock under employee stock purchase plan | 218 | | 2 | | - | | | - | | | 11,941 | | - | | - | | 11,943 | | | | |
| 19 | Vesting of restricted stock units | 1,482 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 20 | Shares withheld for employee taxes | (105) | | (1) | | - | | | - | | | (7,461) | | - | | - | | (7,462) | | | | |
| 21 | Issuance of common stock upon exercise of stock options | 480 | | 5 | | - | | | - | | | 3,313 | | - | | - | | 3,318 | | | | |
| 22 | Issuance of common stock in connection with conversion of convertible senior notes | - | | - | | - | | | - | | | (3) | | - | | - | | (3) | | | | |
| 23 | Issuance of common stock related to acquisition | 33 | | - | | - | | | - | | | - | | - | | - | | - | | | | |
| 24 | Repurchase of common stock issued in relation to acquisition | (83) | | (1) | | | | | | 1 | | | | | - | | | | | | | |
| 25 | Other comprehensive income | - | | - | | - | | | - | | | - | | (599) | | - | | (599) | | | | |
| 26 | Net loss | - | | - | | - | | | - | | | - | | - | | (124,717) | | (124,717) | | | | |
| 27 | Balance, December 31, 2022 | 59,720 | | $ | 597 | | 487 | | | $ | (4,764) | | $ | 746,249 | | $ | (1,411) | | $ | (860,745) | $ | (120,074) |
| 28 | Stock-based compensation expense | - | | - | | - | | | - | | | 107,254 | | - | | - | | 107,254 | | | | |
| 29 | Issuance of common stock under employee stock purchase plan | 330 | | 3 | | - | | | - | | | 11,320 | | - | | - | | 11,323 | | | | |
| 30 | Vesting of restricted stock units | 1,454 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 31 | Shares withheld for employee taxes | (113) | | (1) | | - | | | - | | | (5,569) | | - | | - | | (5,570) | | | | |
| 32 | Issuance of common stock upon exercise of stock options | 216 | | 2 | | - | | | - | | | 3,051 | | - | | - | | 3,053 | | | | |
| 33 | Issuance of common stock related to acquisition | 107 | | 1 | | - | | | - | | | (1) | | - | | - | | - | | | | |
| 34 | Repurchase of common stock issued in related to acquisition | - | | - | | 83 | | | (1) | | | 1 | | - | | - | | - | | | | |
| 35 | Purchase of capped called related to convertible senior notes | - | | - | | - | | | - | | | (36,570) | | - | | - | | (36,570) | | | | |
| 36 | Reclassification of equity to derivative assets related to capped calls | - | | - | | - | | | - | | | 33,029 | | - | | - | | 33,029 | | | | |
| 37 | Repurchase and inducement of convertible senior notes | - | | - | | - | | | - | | | 35,881 | | - | | - | | 35,881 | | | | |
| 38 | Other comprehensive loss | - | | - | | - | | | - | | | - | | 2,755 | | - | | 2,755 | | | | |
| 39 | Net loss | - | | - | | - | | | - | | | - | | - | | (149,260) | | (149,260) | | | | |
| 40 | Balance, December 31, 2023 | 61,714 | | $ | 617 | | 570 | | | $ | (4,765) | | $ | 894,630 | | $ | 1,344 | | $ | (1,010,005) | $ | (118,179) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------------|:----------|:-----|:----------|:-----|:----------|:----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Cash flows from operating activities: | | | | | | | | | |
| 4 | Net loss | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 5 | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | | | |
| 6 | Depreciation and amortization | 45,939 | | | 41,038 | | | 33,501 | | |
| 7 | Amortization of debt discount and issuance costs | 4,138 | | | 4,085 | | | 3,982 | | |
| 8 | Stock-based compensation expense | 108,081 | | | 119,902 | | | 102,579 | | |
| 9 | Impairment of long-lived assets | 30,784 | | | - | | | - | | |
| 10 | Change in fair value of derivative assets | 15,511 | | | - | | | - | | |
| 11 | Deferred income taxes | (5,624) | | | (1,440) | | | 466 | | |
| 12 | Induced conversion expense | 53,889 | | | - | | | 2,740 | | |
| 13 | Other | 469 | | | (200) | | | 1,920 | | |
| 14 | Changes in assets and liabilities: | | | | | | | | | |
| 15 | Accounts receivable | (14,021) | | | (9,050) | | | (25,475) | | |
| 16 | Deferred contract acquisition and fulfillment costs | (18,534) | | | (15,910) | | | (22,526) | | |
| 17 | Prepaid expenses and other assets | (4,125) | | | (2,231) | | | (3,355) | | |
| 18 | Accounts payable | 5,449 | | | 7,977 | | | (2,077) | | |
| 19 | Accrued expenses | 2,422 | | | 3,741 | | | 19,205 | | |
| 20 | Deferred revenue | 30,472 | | | 52,516 | | | 85,562 | | |
| 21 | Other liabilities | (1,312) | | | 2,493 | | | 3,729 | | |
| 22 | Net cash provided by operating activities | 104,278 | | | 78,204 | | | 53,917 | | |
| 23 | Cash flows from investing activities: | | | | | | | | | |
| 24 | Business acquisitions, net of cash acquired | (34,841) | | | - | | | (358,420) | | |
| 25 | Purchases of property and equipment | (4,366) | | | (20,382) | | | (9,010) | | |
| 26 | Capitalization of internal-use software | (15,878) | | | (17,145) | | | (9,854) | | |
| 27 | Purchases of investments | (276,829) | | | (122,765) | | | (93,092) | | |
| 28 | Sales and maturities of investments | 150,450 | | | 121,304 | | | 147,998 | | |
| 29 | Other investments | 2,710 | | | (1,000) | | | (3,000) | | |
| 30 | Net cash used in investing activities | (178,754) | | | (39,988) | | | (325,378) | | |
| 31 | Cash flows from financing activities: | | | | | | | | | |
| 32 | Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively | 292,091 | | | - | | | 585,024 | | |
| 33 | Purchase of capped calls related to convertible senior notes | (36,570) | | | - | | | (76,020) | | |
| 34 | Payment of debt issuance costs | - | | | (71) | | | (300) | | |
| 35 | Payments for redemption, repurchase and conversion of convertible senior notes | (199,998) | | | (12) | | | (230,000) | | |
| 36 | Payments related to business acquisitions | (2,250) | | | (300) | | | (12,118) | | |
| 37 | Proceeds from capped calls settlement | 17,518 | | | - | | | - | | |
| 38 | Taxes paid related to net share settlement of equity awards | (5,570) | | | (7,462) | | | (16,044) | | |
| 39 | Proceeds from employee stock purchase plan | 11,323 | | | 11,943 | | | 9,276 | | |
| 40 | Proceeds from stock option exercises | 3,053 | | | 3,318 | | | 4,315 | | |
| 41 | Net cash provided by financing activities | 79,597 | | | 7,416 | | | 264,133 | | |
| 42 | Effect of exchange rate changes on cash ,cash equivalents and restricted cash | 1,202 | | | (2,845) | | | (1,272) | | |
| 43 | Net increase (decrease) in cash, cash equivalents and restricted cash | 6,323 | | | 42,787 | | | (8,600) | | |
| 44 | Cash, cash equivalents and restricted cash, beginning of period | 207,804 | | | 165,017 | | | 173,617 | | |
| 45 | Cash, cash equivalents and restricted cash, end of period | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
| 46 | Supplemental cash flow information: | | | | | | | | | |
| 47 | Cash paid for interest on convertible senior notes | $ | 4,605 | | | $ | 6,675 | | $ | 7,345 |
| 48 | Cash paid for income taxes, net of refunds | $ | 1,624 | | | $ | 1,571 | | $ | 3,305 |
| 49 | Reconciliation of cash, cash equivalents and restricted cash: | | | | | | | | | |
| 50 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 | | $ | 164,582 |
| 51 | Restricted cash included in prepaid expenses and other assets | 498 | | | 517 | | | 435 | | |
| 52 | Total cash, cash equivalents and restricted cash | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
See accompanying notes to consolidated financial statements.
65
|
Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
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, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 72: FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td>$</td><td>1,927.3 </td><td></td><td colspan="3"></td><td>$</td><td>1,780.5 </td><td></td><td colspan="3"></td><td>$</td><td>1,255.0 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">3,377.5 </td><td></td><td colspan="3"></td><td colspan="2">2,636.9 </td><td></td><td colspan="3"></td><td colspan="2">2,087.2 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="2">5,304.8 </td><td></td><td colspan="3"></td><td colspan="2">4,417.4 </td><td></td><td colspan="3"></td><td colspan="2">3,342.2 </td><td></td></tr><tr><td colspan="3">COST OF REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">763.6 </td><td></td><td colspan="3"></td><td colspan="2">691.3 </td><td></td><td colspan="3"></td><td colspan="2">487.7 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">473.6 </td><td></td><td colspan="3"></td><td colspan="2">393.6 </td><td></td><td colspan="3"></td><td colspan="2">295.3 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="2">1,237.2 </td><td></td><td colspan="3"></td><td colspan="2">1,084.9 </td><td></td><td colspan="3"></td><td colspan="2">783.0 </td><td></td></tr><tr><td colspan="3">GROSS PROFIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">1,163.7 </td><td></td><td colspan="3"></td><td colspan="2">1,089.2 </td><td></td><td colspan="3"></td><td colspan="2">767.3 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">2,903.9 </td><td></td><td colspan="3"></td><td colspan="2">2,243.3 </td><td></td><td colspan="3"></td><td colspan="2">1,791.9 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="2">4,067.6 </td><td></td><td colspan="3"></td><td colspan="2">3,332.5 </td><td></td><td colspan="3"></td><td colspan="2">2,559.2 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">613.8 </td><td></td><td colspan="3"></td><td colspan="2">512.4 </td><td></td><td colspan="3"></td><td colspan="2">424.2 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="2">2,006.0 </td><td></td><td colspan="3"></td><td colspan="2">1,686.1 </td><td></td><td colspan="3"></td><td colspan="2">1,345.7 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">211.3 </td><td></td><td colspan="3"></td><td colspan="2">169.0 </td><td></td><td colspan="3"></td><td colspan="2">143.5 </td><td></td></tr><tr><td colspan="3">Gain on intellectual property matter</td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">2,826.5 </td><td></td><td colspan="3"></td><td colspan="2">2,362.9 </td><td></td><td colspan="3"></td><td colspan="2">1,908.8 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="2">1,241.1 </td><td></td><td colspan="3"></td><td colspan="2">969.6 </td><td></td><td colspan="3"></td><td colspan="2">650.4 </td><td></td></tr><tr><td colspan="3">INTEREST INCOME</td><td colspan="2">119.7 </td><td></td><td colspan="3"></td><td colspan="2">17.4 </td><td></td><td colspan="3"></td><td colspan="2">4.5 </td><td></td></tr><tr><td colspan="3">INTEREST EXPENSE</td><td colspan="2">(21.0)</td><td></td><td colspan="3"></td><td colspan="2">(18.0)</td><td></td><td colspan="3"></td><td colspan="2">(14.9)</td><td></td></tr><tr><td colspan="3">OTHER EXPENSE-NET</td><td colspan="2">(6.1)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td><td colspan="3"></td><td colspan="2">(11.6)</td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">1,333.7 </td><td></td><td colspan="3"></td><td colspan="2">955.5 </td><td></td><td colspan="3"></td><td colspan="2">628.4 </td><td></td></tr><tr><td colspan="3">PROVISION FOR INCOME TAXES</td><td colspan="2">143.8 </td><td></td><td colspan="3"></td><td colspan="2">30.8 </td><td></td><td colspan="3"></td><td colspan="2">14.1 </td><td></td></tr><tr><td colspan="3">LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">(42.1)</td><td></td><td colspan="3"></td><td colspan="2">(68.1)</td><td></td><td colspan="3"></td><td colspan="2">(7.6)</td><td></td></tr><tr><td colspan="3">NET INCOME INCLUDING NON-CONTROLLING INTERESTS</td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO FORTINET, INC.</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>857.3 </td><td></td><td colspan="3"></td><td>$</td><td>606.8 </td><td></td></tr><tr><td colspan="3">Net income per share attributable to Fortinet, Inc. (Note 9):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>1.47 </td><td></td><td colspan="3"></td><td>$</td><td>1.08 </td><td></td><td colspan="3"></td><td>$</td><td>0.74 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>1.46 </td><td></td><td colspan="3"></td><td>$</td><td>1.06 </td><td></td><td colspan="3"></td><td>$</td><td>0.73 </td><td></td></tr><tr><td colspan="3">Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">778.6 </td><td></td><td colspan="3"></td><td colspan="2">791.4 </td><td></td><td colspan="3"></td><td colspan="2">816.1 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">788.2 </td><td></td><td colspan="3"></td><td colspan="2">805.3 </td><td></td><td colspan="3"></td><td colspan="2">835.3 </td><td></td></tr></table>See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in foreign currency translation</td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Change in unrealized gains (losses) on investments</td><td colspan="2">8.8 </td><td></td><td colspan="3"></td><td colspan="2">(6.2)</td><td></td><td colspan="3"></td><td colspan="2">(3.5)</td><td></td></tr><tr><td colspan="3">Less: tax provision (benefit) related to items of other comprehensive income (loss)</td><td colspan="2">2.0 </td><td></td><td colspan="3"></td><td colspan="2">(1.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.8)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">1.3 </td><td></td><td colspan="3"></td><td colspan="2">(14.5)</td><td></td><td colspan="3"></td><td colspan="2">(6.5)</td><td></td></tr><tr><td colspan="3">Comprehensive income including non-controlling interests</td><td colspan="2">1,149.1 </td><td></td><td colspan="3"></td><td colspan="2">842.1 </td><td></td><td colspan="3"></td><td colspan="2">600.2 </td><td></td></tr><tr><td colspan="3">Less: comprehensive income (loss) attributable to non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.2 </td><td></td><td colspan="3"></td><td colspan="2">(1.1)</td><td></td></tr><tr><td colspan="3">Comprehensive income attributable to Fortinet, Inc.</td><td>$</td><td>1,149.1 </td><td></td><td colspan="3"></td><td>$</td><td>841.9 </td><td></td><td colspan="3"></td><td>$</td><td>601.3 </td><td></td></tr></table>See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="9">Common Stock</td><td colspan="3"></td><td colspan="3" rowspan="2">AdditionalPaid-InCapital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">AccumulatedOtherComprehensive Income (Loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulated Deficit</td><td colspan="3"></td><td colspan="3" rowspan="2">Non-Controlling Interests</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Total Equity (Deficit)</td></tr><tr><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">BALANCE-December 31, 2020</td><td colspan="2">812.7 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,206.6 </td><td></td><td colspan="3"></td><td>$</td><td>0.7 </td><td></td><td colspan="3"></td><td>$</td><td>(352.1)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>856.0 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">10.2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(12.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(722.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Recognition of non-controlling interests upon business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">606.8 </td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2021</td><td colspan="2">810.0 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,253.6 </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(467.9)</td><td></td><td colspan="3"></td><td colspan="2">16.7 </td><td></td><td colspan="3"></td><td colspan="2">798.4 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">7.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(36.0)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(55.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,935.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td></tr><tr><td colspan="3">Acquisition of the non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3.4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16.9)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.9 </td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">857.3 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2022</td><td colspan="2">781.5 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">6.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(27.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(37.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,463.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,500.5)</td><td></td></tr><tr><td colspan="3">Excise tax on net stock repurchases</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td></tr><tr><td colspan="3">Net unrealized gain on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2023</td><td colspan="2">761.0 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,416.4 </td><td></td><td colspan="3"></td><td>$</td><td>(18.9)</td><td></td><td colspan="3"></td><td>$</td><td>(1,861.7)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>(463.4)</td><td></td></tr></table>See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">CASH FLOWS FROM OPERATING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Amortization of deferred contract costs</td><td colspan="2">266.3 </td><td></td><td colspan="3"></td><td colspan="2">223.3 </td><td></td><td colspan="3"></td><td colspan="2">175.9 </td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">113.4 </td><td></td><td colspan="3"></td><td colspan="2">104.3 </td><td></td><td colspan="3"></td><td colspan="2">84.4 </td><td></td></tr><tr><td colspan="3">Amortization of investment premiums (discounts)</td><td colspan="2">(27.7)</td><td></td><td colspan="3"></td><td colspan="2">4.4 </td><td></td><td colspan="3"></td><td colspan="2">6.9 </td><td></td></tr><tr><td colspan="3">Loss from equity method investments</td><td colspan="2">42.1 </td><td></td><td colspan="3"></td><td colspan="2">68.1 </td><td></td><td colspan="3"></td><td colspan="2">7.6 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">18.5 </td><td></td><td colspan="3"></td><td colspan="2">23.6 </td><td></td><td colspan="3"></td><td colspan="2">7.9 </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of impact of business combinations:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable-net</td><td colspan="2">(146.4)</td><td></td><td colspan="3"></td><td colspan="2">(456.7)</td><td></td><td colspan="3"></td><td colspan="2">(72.5)</td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">(253.5)</td><td></td><td colspan="3"></td><td colspan="2">(109.1)</td><td></td><td colspan="3"></td><td colspan="2">(19.4)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">(27.6)</td><td></td><td colspan="3"></td><td colspan="2">(7.7)</td><td></td><td colspan="3"></td><td colspan="2">(17.7)</td><td></td></tr><tr><td colspan="3">Deferred contract costs</td><td colspan="2">(353.5)</td><td></td><td colspan="3"></td><td colspan="2">(318.2)</td><td></td><td colspan="3"></td><td colspan="2">(294.5)</td><td></td></tr><tr><td colspan="3">Deferred tax assets</td><td colspan="2">(301.9)</td><td></td><td colspan="3"></td><td colspan="2">(226.4)</td><td></td><td colspan="3"></td><td colspan="2">(94.0)</td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">17.7 </td><td></td><td colspan="3"></td><td colspan="2">(35.3)</td><td></td><td colspan="3"></td><td colspan="2">(19.0)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">(43.1)</td><td></td><td colspan="3"></td><td colspan="2">105.2 </td><td></td><td colspan="3"></td><td colspan="2">(13.1)</td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">137.4 </td><td></td><td colspan="3"></td><td colspan="2">55.2 </td><td></td><td colspan="3"></td><td colspan="2">49.9 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">23.4 </td><td></td><td colspan="3"></td><td colspan="2">25.0 </td><td></td><td colspan="3"></td><td colspan="2">44.0 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(21.7)</td><td></td><td colspan="3"></td><td colspan="2">23.5 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">1,095.3 </td><td></td><td colspan="3"></td><td colspan="2">1,177.5 </td><td></td><td colspan="3"></td><td colspan="2">839.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">1,935.5 </td><td></td><td colspan="3"></td><td colspan="2">1,730.6 </td><td></td><td colspan="3"></td><td colspan="2">1,499.7 </td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(1,855.8)</td><td></td><td colspan="3"></td><td colspan="2">(389.1)</td><td></td><td colspan="3"></td><td colspan="2">(2,308.0)</td><td></td></tr><tr><td colspan="3">Sales of investments</td><td colspan="2">4.0 </td><td></td><td colspan="3"></td><td colspan="2">3.0 </td><td></td><td colspan="3"></td><td colspan="2">85.5 </td><td></td></tr><tr><td colspan="3">Maturities of investments</td><td colspan="2">1,414.8 </td><td></td><td colspan="3"></td><td colspan="2">1,462.0 </td><td></td><td colspan="3"></td><td colspan="2">1,470.3 </td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(204.1)</td><td></td><td colspan="3"></td><td colspan="2">(281.2)</td><td></td><td colspan="3"></td><td colspan="2">(295.9)</td><td></td></tr><tr><td colspan="3">Purchases of Investments in privately held companies</td><td colspan="2">(8.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(160.0)</td><td></td></tr><tr><td colspan="3">Payments made in connection with business combinations, net of cash acquired</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(30.8)</td><td></td><td colspan="3"></td><td colspan="2">(74.9)</td><td></td></tr><tr><td colspan="3">Purchases of marketable equity securities</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(42.5)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">0.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) investing activities</td><td colspan="2">(649.3)</td><td></td><td colspan="3"></td><td colspan="2">763.9 </td><td></td><td colspan="3"></td><td colspan="2">(1,325.1)</td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from long-term borrowings, net of discount and underwriting fees</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">989.4 </td><td></td></tr><tr><td colspan="3">Payments for debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.4)</td><td></td></tr><tr><td colspan="3">Payments of debt assumed in connection with business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(1,500.5)</td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of common stock</td><td colspan="2">43.8 </td><td></td><td colspan="3"></td><td colspan="2">26.1 </td><td></td><td colspan="3"></td><td colspan="2">26.0 </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(112.5)</td><td></td><td colspan="3"></td><td colspan="2">(160.4)</td><td></td><td colspan="3"></td><td colspan="2">(167.9)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">(1.2)</td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="2">(1,570.4)</td><td></td><td colspan="3"></td><td colspan="2">(2,130.3)</td><td></td><td colspan="3"></td><td colspan="2">82.8 </td><td></td></tr><tr><td colspan="3">EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS</td><td colspan="2">(0.8)</td><td></td><td colspan="3"></td><td colspan="2">(0.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</td><td colspan="2">(285.0)</td><td></td><td colspan="3"></td><td colspan="2">363.8 </td><td></td><td colspan="3"></td><td colspan="2">257.3 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-Beginning of year</td><td colspan="2">1,682.9 </td><td></td><td colspan="3"></td><td colspan="2">1,319.1 </td><td></td><td colspan="3"></td><td colspan="2">1,061.8 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-End of year</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,319.1 </td><td></td></tr><tr><td colspan="3">SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for income taxes-net</td><td>$</td><td>426.3 </td><td></td><td colspan="3"></td><td>$</td><td>260.2 </td><td></td><td colspan="3"></td><td>$</td><td>127.4 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities arising from obtaining right-of-use assets</td><td>$</td><td>19.2 </td><td></td><td colspan="3"></td><td>$</td><td>65.8 </td><td></td><td colspan="3"></td><td>$</td><td>39.6 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NON-CASH INVESTING AND FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Transfers of evaluation units from inventory to property and equipment</td><td>$</td><td>31.8 </td><td></td><td colspan="3"></td><td>$</td><td>17.1 </td><td></td><td colspan="3"></td><td>$</td><td>15.9 </td><td></td></tr><tr><td colspan="3">Liability for purchase of property and equipment</td><td>$</td><td>23.6 </td><td></td><td colspan="3"></td><td>$</td><td>21.2 </td><td></td><td colspan="3"></td><td>$</td><td>21.9 </td><td></td></tr><tr><td colspan="3">Excise tax payable on net stock repurchases</td><td>$</td><td>10.9 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Liability incurred in connection with business combinations</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>0.9 </td><td></td></tr></table>See notes to consolidated financial statements.
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, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 61:
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RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>740,168 </td><td></td><td colspan="3"></td><td>$</td><td>647,535 </td><td></td><td colspan="3"></td><td>$</td><td>500,843 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,539 </td><td></td><td colspan="3"></td><td colspan="2">37,548 </td><td></td><td colspan="3"></td><td colspan="2">34,561 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">777,707 </td><td></td><td colspan="3"></td><td colspan="2">685,083 </td><td></td><td colspan="3"></td><td colspan="2">535,404 </td><td></td></tr><tr><td colspan="3">Cost of revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">202,904 </td><td></td><td colspan="3"></td><td colspan="2">182,212 </td><td></td><td colspan="3"></td><td colspan="2">140,773 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">28,837 </td><td></td><td colspan="3"></td><td colspan="2">32,137 </td><td></td><td colspan="3"></td><td colspan="2">28,175 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">231,741 </td><td></td><td colspan="3"></td><td colspan="2">214,349 </td><td></td><td colspan="3"></td><td colspan="2">168,948 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">545,966 </td><td></td><td colspan="3"></td><td colspan="2">470,734 </td><td></td><td colspan="3"></td><td colspan="2">366,456 </td><td></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">176,776 </td><td></td><td colspan="3"></td><td colspan="2">189,970 </td><td></td><td colspan="3"></td><td colspan="2">160,779 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">312,636 </td><td></td><td colspan="3"></td><td colspan="2">307,409 </td><td></td><td colspan="3"></td><td colspan="2">247,453 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">84,276 </td><td></td><td colspan="3"></td><td colspan="2">84,969 </td><td></td><td colspan="3"></td><td colspan="2">78,289 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Restructuring</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">22,227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">626,699 </td><td></td><td colspan="3"></td><td colspan="2">582,348 </td><td></td><td colspan="3"></td><td colspan="2">486,521 </td><td></td></tr><tr><td colspan="3">Loss from operations</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(80,733)</td><td></td><td colspan="3"></td><td colspan="2">(111,614)</td><td></td><td colspan="3"></td><td colspan="2">(120,065)</td><td></td></tr><tr><td colspan="3">Other income (expense), net:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">10,177 </td><td></td><td colspan="3"></td><td colspan="2">1,813 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(64,700)</td><td></td><td colspan="3"></td><td colspan="2">(10,982)</td><td></td><td colspan="3"></td><td colspan="2">(14,292)</td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(14,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,921)</td><td></td></tr><tr><td colspan="3">Loss before income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(149,778)</td><td></td><td colspan="3"></td><td colspan="2">(122,305)</td><td></td><td colspan="3"></td><td colspan="2">(135,913)</td><td></td></tr><tr><td colspan="3">(Benefit from) provision for income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(518)</td><td></td><td colspan="3"></td><td colspan="2">2,412 </td><td></td><td colspan="3"></td><td colspan="2">10,421 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Net loss per share, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(2.46)</td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>(2.65)</td><td></td></tr><tr><td colspan="3">Weighted-average common shares outstanding, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">60,756,087 </td><td></td><td colspan="3"></td><td colspan="2">58,552,065 </td><td></td><td colspan="3"></td><td colspan="2">55,270,998 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in fair value of cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">797 </td><td></td><td colspan="3"></td><td colspan="2">(3,874)</td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">4,053 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,521 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Change unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,043)</td><td></td></tr><tr><td colspan="3">Adjustment for net gains realized and included in net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(137)</td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,180)</td><td></td></tr><tr><td colspan="3">Total other comprehensive income (loss)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Comprehensive loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(146,505)</td><td></td><td colspan="3"></td><td>$</td><td>(125,316)</td><td></td><td colspan="3"></td><td>$</td><td>(147,600)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) <table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9">Common stock</td><td colspan="3"></td><td colspan="9">Treasury stock</td><td colspan="3"></td><td colspan="3" rowspan="2">Additionalpaid-in-capital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulatedothercomprehensiveincome (loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulateddeficit</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Totalstockholders'equity (deficit)</td></tr><tr><td colspan="3"> </td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td></tr><tr><td colspan="3">Balance, December 31, 2020</td><td colspan="2">52,225 </td><td></td><td colspan="3"></td><td>$</td><td>522 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>692,603 </td><td></td><td colspan="3"></td><td>$</td><td>454 </td><td></td><td colspan="3"></td><td>$</td><td>(617,279)</td><td></td><td colspan="3"></td><td>$</td><td>71,536 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">222 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,274 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,611 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(157)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,042)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">521 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,300 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">2,897 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,094)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,065)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with inducement of convertible senior notes</td><td colspan="2">35 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">341 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Cumulative-effect adjustment for the adoption of ASU 2020-06</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(99,026)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">27,585 </td><td></td><td colspan="3"></td><td colspan="2">(71,441)</td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2021</td><td colspan="2">57,695 </td><td></td><td colspan="3"></td><td>$</td><td>577 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>615,032 </td><td></td><td colspan="3"></td><td>$</td><td>(812)</td><td></td><td colspan="3"></td><td>$</td><td>(736,028)</td><td></td><td colspan="3"></td><td>$</td><td>(125,995)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">218 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,941 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,482 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,461)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">480 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,313 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with conversion of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in relation to acquisition</td><td colspan="2">(83)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2022</td><td colspan="2">59,720 </td><td></td><td colspan="3"></td><td>$</td><td>597 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>746,249 </td><td></td><td colspan="3"></td><td>$</td><td>(1,411)</td><td></td><td colspan="3"></td><td>$</td><td>(860,745)</td><td></td><td colspan="3"></td><td>$</td><td>(120,074)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">330 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,320 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,323 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,454 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(113)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,569)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,570)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">216 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,051 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,053 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">107 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in related to acquisition</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Purchase of capped called related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td></tr><tr><td colspan="3">Reclassification of equity to derivative assets related to capped calls</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td></tr><tr><td colspan="3">Repurchase and inducement of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2023</td><td colspan="2">61,714 </td><td></td><td colspan="3"></td><td>$</td><td>617 </td><td></td><td colspan="3"></td><td colspan="2">570 </td><td></td><td colspan="3"></td><td>$</td><td>(4,765)</td><td></td><td colspan="3"></td><td>$</td><td>894,630 </td><td></td><td colspan="3"></td><td>$</td><td>1,344 </td><td></td><td colspan="3"></td><td>$</td><td>(1,010,005)</td><td></td><td colspan="3"></td><td>$</td><td>(118,179)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 65:
Table of Contents
RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net loss</td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net loss to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">45,939 </td><td></td><td colspan="3"></td><td colspan="2">41,038 </td><td></td><td colspan="3"></td><td colspan="2">33,501 </td><td></td></tr><tr><td colspan="3">Amortization of debt discount and issuance costs</td><td colspan="2">4,138 </td><td></td><td colspan="3"></td><td colspan="2">4,085 </td><td></td><td colspan="3"></td><td colspan="2">3,982 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">108,081 </td><td></td><td colspan="3"></td><td colspan="2">119,902 </td><td></td><td colspan="3"></td><td colspan="2">102,579 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Change in fair value of derivative assets</td><td colspan="2">15,511 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Deferred income taxes</td><td colspan="2">(5,624)</td><td></td><td colspan="3"></td><td colspan="2">(1,440)</td><td></td><td colspan="3"></td><td colspan="2">466 </td><td></td></tr><tr><td colspan="3">Induced conversion expense</td><td colspan="2">53,889 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">469 </td><td></td><td colspan="3"></td><td colspan="2">(200)</td><td></td><td colspan="3"></td><td colspan="2">1,920 </td><td></td></tr><tr><td colspan="3">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable</td><td colspan="2">(14,021)</td><td></td><td colspan="3"></td><td colspan="2">(9,050)</td><td></td><td colspan="3"></td><td colspan="2">(25,475)</td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs</td><td colspan="2">(18,534)</td><td></td><td colspan="3"></td><td colspan="2">(15,910)</td><td></td><td colspan="3"></td><td colspan="2">(22,526)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other assets</td><td colspan="2">(4,125)</td><td></td><td colspan="3"></td><td colspan="2">(2,231)</td><td></td><td colspan="3"></td><td colspan="2">(3,355)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">5,449 </td><td></td><td colspan="3"></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td><td colspan="2">(2,077)</td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">2,422 </td><td></td><td colspan="3"></td><td colspan="2">3,741 </td><td></td><td colspan="3"></td><td colspan="2">19,205 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">30,472 </td><td></td><td colspan="3"></td><td colspan="2">52,516 </td><td></td><td colspan="3"></td><td colspan="2">85,562 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(1,312)</td><td></td><td colspan="3"></td><td colspan="2">2,493 </td><td></td><td colspan="3"></td><td colspan="2">3,729 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">104,278 </td><td></td><td colspan="3"></td><td colspan="2">78,204 </td><td></td><td colspan="3"></td><td colspan="2">53,917 </td><td></td></tr><tr><td colspan="3">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Business acquisitions, net of cash acquired</td><td colspan="2">(34,841)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(358,420)</td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(4,366)</td><td></td><td colspan="3"></td><td colspan="2">(20,382)</td><td></td><td colspan="3"></td><td colspan="2">(9,010)</td><td></td></tr><tr><td colspan="3">Capitalization of internal-use software</td><td colspan="2">(15,878)</td><td></td><td colspan="3"></td><td colspan="2">(17,145)</td><td></td><td colspan="3"></td><td colspan="2">(9,854)</td><td></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(276,829)</td><td></td><td colspan="3"></td><td colspan="2">(122,765)</td><td></td><td colspan="3"></td><td colspan="2">(93,092)</td><td></td></tr><tr><td colspan="3">Sales and maturities of investments</td><td colspan="2">150,450 </td><td></td><td colspan="3"></td><td colspan="2">121,304 </td><td></td><td colspan="3"></td><td colspan="2">147,998 </td><td></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">2,710 </td><td></td><td colspan="3"></td><td colspan="2">(1,000)</td><td></td><td colspan="3"></td><td colspan="2">(3,000)</td><td></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="2">(178,754)</td><td></td><td colspan="3"></td><td colspan="2">(39,988)</td><td></td><td colspan="3"></td><td colspan="2">(325,378)</td><td></td></tr><tr><td colspan="3">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively</td><td colspan="2">292,091 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">585,024 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Payment of debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(71)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td></tr><tr><td colspan="3">Payments for redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">(199,998)</td><td></td><td colspan="3"></td><td colspan="2">(12)</td><td></td><td colspan="3"></td><td colspan="2">(230,000)</td><td></td></tr><tr><td colspan="3">Payments related to business acquisitions</td><td colspan="2">(2,250)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td><td colspan="3"></td><td colspan="2">(12,118)</td><td></td></tr><tr><td colspan="3">Proceeds from capped calls settlement</td><td colspan="2">17,518 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(5,570)</td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Proceeds from employee stock purchase plan</td><td colspan="2">11,323 </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Proceeds from stock option exercises</td><td colspan="2">3,053 </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td><td colspan="3"></td><td colspan="2">4,315 </td><td></td></tr><tr><td colspan="3">Net cash provided by financing activities</td><td colspan="2">79,597 </td><td></td><td colspan="3"></td><td colspan="2">7,416 </td><td></td><td colspan="3"></td><td colspan="2">264,133 </td><td></td></tr><tr><td colspan="3">Effect of exchange rate changes on cash ,cash equivalents and restricted cash</td><td colspan="2">1,202 </td><td></td><td colspan="3"></td><td colspan="2">(2,845)</td><td></td><td colspan="3"></td><td colspan="2">(1,272)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash, cash equivalents and restricted cash</td><td colspan="2">6,323 </td><td></td><td colspan="3"></td><td colspan="2">42,787 </td><td></td><td colspan="3"></td><td colspan="2">(8,600)</td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, beginning of period</td><td colspan="2">207,804 </td><td></td><td colspan="3"></td><td colspan="2">165,017 </td><td></td><td colspan="3"></td><td colspan="2">173,617 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, end of period</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr><tr><td colspan="3">Supplemental cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for interest on convertible senior notes</td><td>$</td><td>4,605 </td><td></td><td colspan="3"></td><td>$</td><td>6,675 </td><td></td><td colspan="3"></td><td>$</td><td>7,345 </td><td></td></tr><tr><td colspan="3">Cash paid for income taxes, net of refunds</td><td>$</td><td>1,624 </td><td></td><td colspan="3"></td><td>$</td><td>1,571 </td><td></td><td colspan="3"></td><td>$</td><td>3,305 </td><td></td></tr><tr><td colspan="3">Reconciliation of cash, cash equivalents and restricted cash:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td><td colspan="3"></td><td>$</td><td>164,582 </td><td></td></tr><tr><td colspan="3">Restricted cash included in prepaid expenses and other assets</td><td colspan="2">498 </td><td></td><td colspan="3"></td><td colspan="2">517 </td><td></td><td colspan="3"></td><td colspan="2">435 </td><td></td></tr><tr><td colspan="3">Total cash, cash equivalents and restricted cash</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
65
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FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
71
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td>$</td><td>1,927.3 </td><td></td><td colspan="3"></td><td>$</td><td>1,780.5 </td><td></td><td colspan="3"></td><td>$</td><td>1,255.0 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">3,377.5 </td><td></td><td colspan="3"></td><td colspan="2">2,636.9 </td><td></td><td colspan="3"></td><td colspan="2">2,087.2 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="2">5,304.8 </td><td></td><td colspan="3"></td><td colspan="2">4,417.4 </td><td></td><td colspan="3"></td><td colspan="2">3,342.2 </td><td></td></tr><tr><td colspan="3">COST OF REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">763.6 </td><td></td><td colspan="3"></td><td colspan="2">691.3 </td><td></td><td colspan="3"></td><td colspan="2">487.7 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">473.6 </td><td></td><td colspan="3"></td><td colspan="2">393.6 </td><td></td><td colspan="3"></td><td colspan="2">295.3 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="2">1,237.2 </td><td></td><td colspan="3"></td><td colspan="2">1,084.9 </td><td></td><td colspan="3"></td><td colspan="2">783.0 </td><td></td></tr><tr><td colspan="3">GROSS PROFIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">1,163.7 </td><td></td><td colspan="3"></td><td colspan="2">1,089.2 </td><td></td><td colspan="3"></td><td colspan="2">767.3 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">2,903.9 </td><td></td><td colspan="3"></td><td colspan="2">2,243.3 </td><td></td><td colspan="3"></td><td colspan="2">1,791.9 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="2">4,067.6 </td><td></td><td colspan="3"></td><td colspan="2">3,332.5 </td><td></td><td colspan="3"></td><td colspan="2">2,559.2 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">613.8 </td><td></td><td colspan="3"></td><td colspan="2">512.4 </td><td></td><td colspan="3"></td><td colspan="2">424.2 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="2">2,006.0 </td><td></td><td colspan="3"></td><td colspan="2">1,686.1 </td><td></td><td colspan="3"></td><td colspan="2">1,345.7 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">211.3 </td><td></td><td colspan="3"></td><td colspan="2">169.0 </td><td></td><td colspan="3"></td><td colspan="2">143.5 </td><td></td></tr><tr><td colspan="3">Gain on intellectual property matter</td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">2,826.5 </td><td></td><td colspan="3"></td><td colspan="2">2,362.9 </td><td></td><td colspan="3"></td><td colspan="2">1,908.8 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="2">1,241.1 </td><td></td><td colspan="3"></td><td colspan="2">969.6 </td><td></td><td colspan="3"></td><td colspan="2">650.4 </td><td></td></tr><tr><td colspan="3">INTEREST INCOME</td><td colspan="2">119.7 </td><td></td><td colspan="3"></td><td colspan="2">17.4 </td><td></td><td colspan="3"></td><td colspan="2">4.5 </td><td></td></tr><tr><td colspan="3">INTEREST EXPENSE</td><td colspan="2">(21.0)</td><td></td><td colspan="3"></td><td colspan="2">(18.0)</td><td></td><td colspan="3"></td><td colspan="2">(14.9)</td><td></td></tr><tr><td colspan="3">OTHER EXPENSE-NET</td><td colspan="2">(6.1)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td><td colspan="3"></td><td colspan="2">(11.6)</td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">1,333.7 </td><td></td><td colspan="3"></td><td colspan="2">955.5 </td><td></td><td colspan="3"></td><td colspan="2">628.4 </td><td></td></tr><tr><td colspan="3">PROVISION FOR INCOME TAXES</td><td colspan="2">143.8 </td><td></td><td colspan="3"></td><td colspan="2">30.8 </td><td></td><td colspan="3"></td><td colspan="2">14.1 </td><td></td></tr><tr><td colspan="3">LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">(42.1)</td><td></td><td colspan="3"></td><td colspan="2">(68.1)</td><td></td><td colspan="3"></td><td colspan="2">(7.6)</td><td></td></tr><tr><td colspan="3">NET INCOME INCLUDING NON-CONTROLLING INTERESTS</td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO FORTINET, INC.</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>857.3 </td><td></td><td colspan="3"></td><td>$</td><td>606.8 </td><td></td></tr><tr><td colspan="3">Net income per share attributable to Fortinet, Inc. (Note 9):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>1.47 </td><td></td><td colspan="3"></td><td>$</td><td>1.08 </td><td></td><td colspan="3"></td><td>$</td><td>0.74 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>1.46 </td><td></td><td colspan="3"></td><td>$</td><td>1.06 </td><td></td><td colspan="3"></td><td>$</td><td>0.73 </td><td></td></tr><tr><td colspan="3">Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">778.6 </td><td></td><td colspan="3"></td><td colspan="2">791.4 </td><td></td><td colspan="3"></td><td colspan="2">816.1 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">788.2 </td><td></td><td colspan="3"></td><td colspan="2">805.3 </td><td></td><td colspan="3"></td><td colspan="2">835.3 </td><td></td></tr></table>See notes to consolidated financial statements.
72
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in foreign currency translation</td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Change in unrealized gains (losses) on investments</td><td colspan="2">8.8 </td><td></td><td colspan="3"></td><td colspan="2">(6.2)</td><td></td><td colspan="3"></td><td colspan="2">(3.5)</td><td></td></tr><tr><td colspan="3">Less: tax provision (benefit) related to items of other comprehensive income (loss)</td><td colspan="2">2.0 </td><td></td><td colspan="3"></td><td colspan="2">(1.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.8)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">1.3 </td><td></td><td colspan="3"></td><td colspan="2">(14.5)</td><td></td><td colspan="3"></td><td colspan="2">(6.5)</td><td></td></tr><tr><td colspan="3">Comprehensive income including non-controlling interests</td><td colspan="2">1,149.1 </td><td></td><td colspan="3"></td><td colspan="2">842.1 </td><td></td><td colspan="3"></td><td colspan="2">600.2 </td><td></td></tr><tr><td colspan="3">Less: comprehensive income (loss) attributable to non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.2 </td><td></td><td colspan="3"></td><td colspan="2">(1.1)</td><td></td></tr><tr><td colspan="3">Comprehensive income attributable to Fortinet, Inc.</td><td>$</td><td>1,149.1 </td><td></td><td colspan="3"></td><td>$</td><td>841.9 </td><td></td><td colspan="3"></td><td>$</td><td>601.3 </td><td></td></tr></table>See notes to consolidated financial statements.
73
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="9">Common Stock</td><td colspan="3"></td><td colspan="3" rowspan="2">AdditionalPaid-InCapital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">AccumulatedOtherComprehensive Income (Loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulated Deficit</td><td colspan="3"></td><td colspan="3" rowspan="2">Non-Controlling Interests</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Total Equity (Deficit)</td></tr><tr><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">BALANCE-December 31, 2020</td><td colspan="2">812.7 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,206.6 </td><td></td><td colspan="3"></td><td>$</td><td>0.7 </td><td></td><td colspan="3"></td><td>$</td><td>(352.1)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>856.0 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">10.2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(12.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(722.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Recognition of non-controlling interests upon business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">606.8 </td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2021</td><td colspan="2">810.0 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,253.6 </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(467.9)</td><td></td><td colspan="3"></td><td colspan="2">16.7 </td><td></td><td colspan="3"></td><td colspan="2">798.4 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">7.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(36.0)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(55.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,935.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td></tr><tr><td colspan="3">Acquisition of the non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3.4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16.9)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.9 </td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">857.3 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2022</td><td colspan="2">781.5 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">6.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(27.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(37.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,463.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,500.5)</td><td></td></tr><tr><td colspan="3">Excise tax on net stock repurchases</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td></tr><tr><td colspan="3">Net unrealized gain on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2023</td><td colspan="2">761.0 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,416.4 </td><td></td><td colspan="3"></td><td>$</td><td>(18.9)</td><td></td><td colspan="3"></td><td>$</td><td>(1,861.7)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>(463.4)</td><td></td></tr></table>See notes to consolidated financial statements.
74
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">CASH FLOWS FROM OPERATING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Amortization of deferred contract costs</td><td colspan="2">266.3 </td><td></td><td colspan="3"></td><td colspan="2">223.3 </td><td></td><td colspan="3"></td><td colspan="2">175.9 </td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">113.4 </td><td></td><td colspan="3"></td><td colspan="2">104.3 </td><td></td><td colspan="3"></td><td colspan="2">84.4 </td><td></td></tr><tr><td colspan="3">Amortization of investment premiums (discounts)</td><td colspan="2">(27.7)</td><td></td><td colspan="3"></td><td colspan="2">4.4 </td><td></td><td colspan="3"></td><td colspan="2">6.9 </td><td></td></tr><tr><td colspan="3">Loss from equity method investments</td><td colspan="2">42.1 </td><td></td><td colspan="3"></td><td colspan="2">68.1 </td><td></td><td colspan="3"></td><td colspan="2">7.6 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">18.5 </td><td></td><td colspan="3"></td><td colspan="2">23.6 </td><td></td><td colspan="3"></td><td colspan="2">7.9 </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of impact of business combinations:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable-net</td><td colspan="2">(146.4)</td><td></td><td colspan="3"></td><td colspan="2">(456.7)</td><td></td><td colspan="3"></td><td colspan="2">(72.5)</td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">(253.5)</td><td></td><td colspan="3"></td><td colspan="2">(109.1)</td><td></td><td colspan="3"></td><td colspan="2">(19.4)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">(27.6)</td><td></td><td colspan="3"></td><td colspan="2">(7.7)</td><td></td><td colspan="3"></td><td colspan="2">(17.7)</td><td></td></tr><tr><td colspan="3">Deferred contract costs</td><td colspan="2">(353.5)</td><td></td><td colspan="3"></td><td colspan="2">(318.2)</td><td></td><td colspan="3"></td><td colspan="2">(294.5)</td><td></td></tr><tr><td colspan="3">Deferred tax assets</td><td colspan="2">(301.9)</td><td></td><td colspan="3"></td><td colspan="2">(226.4)</td><td></td><td colspan="3"></td><td colspan="2">(94.0)</td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">17.7 </td><td></td><td colspan="3"></td><td colspan="2">(35.3)</td><td></td><td colspan="3"></td><td colspan="2">(19.0)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">(43.1)</td><td></td><td colspan="3"></td><td colspan="2">105.2 </td><td></td><td colspan="3"></td><td colspan="2">(13.1)</td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">137.4 </td><td></td><td colspan="3"></td><td colspan="2">55.2 </td><td></td><td colspan="3"></td><td colspan="2">49.9 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">23.4 </td><td></td><td colspan="3"></td><td colspan="2">25.0 </td><td></td><td colspan="3"></td><td colspan="2">44.0 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(21.7)</td><td></td><td colspan="3"></td><td colspan="2">23.5 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">1,095.3 </td><td></td><td colspan="3"></td><td colspan="2">1,177.5 </td><td></td><td colspan="3"></td><td colspan="2">839.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">1,935.5 </td><td></td><td colspan="3"></td><td colspan="2">1,730.6 </td><td></td><td colspan="3"></td><td colspan="2">1,499.7 </td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(1,855.8)</td><td></td><td colspan="3"></td><td colspan="2">(389.1)</td><td></td><td colspan="3"></td><td colspan="2">(2,308.0)</td><td></td></tr><tr><td colspan="3">Sales of investments</td><td colspan="2">4.0 </td><td></td><td colspan="3"></td><td colspan="2">3.0 </td><td></td><td colspan="3"></td><td colspan="2">85.5 </td><td></td></tr><tr><td colspan="3">Maturities of investments</td><td colspan="2">1,414.8 </td><td></td><td colspan="3"></td><td colspan="2">1,462.0 </td><td></td><td colspan="3"></td><td colspan="2">1,470.3 </td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(204.1)</td><td></td><td colspan="3"></td><td colspan="2">(281.2)</td><td></td><td colspan="3"></td><td colspan="2">(295.9)</td><td></td></tr><tr><td colspan="3">Purchases of Investments in privately held companies</td><td colspan="2">(8.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(160.0)</td><td></td></tr><tr><td colspan="3">Payments made in connection with business combinations, net of cash acquired</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(30.8)</td><td></td><td colspan="3"></td><td colspan="2">(74.9)</td><td></td></tr><tr><td colspan="3">Purchases of marketable equity securities</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(42.5)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">0.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) investing activities</td><td colspan="2">(649.3)</td><td></td><td colspan="3"></td><td colspan="2">763.9 </td><td></td><td colspan="3"></td><td colspan="2">(1,325.1)</td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from long-term borrowings, net of discount and underwriting fees</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">989.4 </td><td></td></tr><tr><td colspan="3">Payments for debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.4)</td><td></td></tr><tr><td colspan="3">Payments of debt assumed in connection with business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(1,500.5)</td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of common stock</td><td colspan="2">43.8 </td><td></td><td colspan="3"></td><td colspan="2">26.1 </td><td></td><td colspan="3"></td><td colspan="2">26.0 </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(112.5)</td><td></td><td colspan="3"></td><td colspan="2">(160.4)</td><td></td><td colspan="3"></td><td colspan="2">(167.9)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">(1.2)</td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="2">(1,570.4)</td><td></td><td colspan="3"></td><td colspan="2">(2,130.3)</td><td></td><td colspan="3"></td><td colspan="2">82.8 </td><td></td></tr><tr><td colspan="3">EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS</td><td colspan="2">(0.8)</td><td></td><td colspan="3"></td><td colspan="2">(0.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</td><td colspan="2">(285.0)</td><td></td><td colspan="3"></td><td colspan="2">363.8 </td><td></td><td colspan="3"></td><td colspan="2">257.3 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-Beginning of year</td><td colspan="2">1,682.9 </td><td></td><td colspan="3"></td><td colspan="2">1,319.1 </td><td></td><td colspan="3"></td><td colspan="2">1,061.8 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-End of year</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,319.1 </td><td></td></tr><tr><td colspan="3">SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for income taxes-net</td><td>$</td><td>426.3 </td><td></td><td colspan="3"></td><td>$</td><td>260.2 </td><td></td><td colspan="3"></td><td>$</td><td>127.4 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities arising from obtaining right-of-use assets</td><td>$</td><td>19.2 </td><td></td><td colspan="3"></td><td>$</td><td>65.8 </td><td></td><td colspan="3"></td><td>$</td><td>39.6 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NON-CASH INVESTING AND FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Transfers of evaluation units from inventory to property and equipment</td><td>$</td><td>31.8 </td><td></td><td colspan="3"></td><td>$</td><td>17.1 </td><td></td><td colspan="3"></td><td>$</td><td>15.9 </td><td></td></tr><tr><td colspan="3">Liability for purchase of property and equipment</td><td>$</td><td>23.6 </td><td></td><td colspan="3"></td><td>$</td><td>21.2 </td><td></td><td colspan="3"></td><td>$</td><td>21.9 </td><td></td></tr><tr><td colspan="3">Excise tax payable on net stock repurchases</td><td>$</td><td>10.9 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Liability incurred in connection with business combinations</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>0.9 </td><td></td></tr></table>See notes to consolidated financial statements.
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CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>740,168 </td><td></td><td colspan="3"></td><td>$</td><td>647,535 </td><td></td><td colspan="3"></td><td>$</td><td>500,843 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,539 </td><td></td><td colspan="3"></td><td colspan="2">37,548 </td><td></td><td colspan="3"></td><td colspan="2">34,561 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">777,707 </td><td></td><td colspan="3"></td><td colspan="2">685,083 </td><td></td><td colspan="3"></td><td colspan="2">535,404 </td><td></td></tr><tr><td colspan="3">Cost of revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">202,904 </td><td></td><td colspan="3"></td><td colspan="2">182,212 </td><td></td><td colspan="3"></td><td colspan="2">140,773 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">28,837 </td><td></td><td colspan="3"></td><td colspan="2">32,137 </td><td></td><td colspan="3"></td><td colspan="2">28,175 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">231,741 </td><td></td><td colspan="3"></td><td colspan="2">214,349 </td><td></td><td colspan="3"></td><td colspan="2">168,948 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">545,966 </td><td></td><td colspan="3"></td><td colspan="2">470,734 </td><td></td><td colspan="3"></td><td colspan="2">366,456 </td><td></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">176,776 </td><td></td><td colspan="3"></td><td colspan="2">189,970 </td><td></td><td colspan="3"></td><td colspan="2">160,779 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">312,636 </td><td></td><td colspan="3"></td><td colspan="2">307,409 </td><td></td><td colspan="3"></td><td colspan="2">247,453 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">84,276 </td><td></td><td colspan="3"></td><td colspan="2">84,969 </td><td></td><td colspan="3"></td><td colspan="2">78,289 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Restructuring</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">22,227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">626,699 </td><td></td><td colspan="3"></td><td colspan="2">582,348 </td><td></td><td colspan="3"></td><td colspan="2">486,521 </td><td></td></tr><tr><td colspan="3">Loss from operations</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(80,733)</td><td></td><td colspan="3"></td><td colspan="2">(111,614)</td><td></td><td colspan="3"></td><td colspan="2">(120,065)</td><td></td></tr><tr><td colspan="3">Other income (expense), net:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">10,177 </td><td></td><td colspan="3"></td><td colspan="2">1,813 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(64,700)</td><td></td><td colspan="3"></td><td colspan="2">(10,982)</td><td></td><td colspan="3"></td><td colspan="2">(14,292)</td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(14,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,921)</td><td></td></tr><tr><td colspan="3">Loss before income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(149,778)</td><td></td><td colspan="3"></td><td colspan="2">(122,305)</td><td></td><td colspan="3"></td><td colspan="2">(135,913)</td><td></td></tr><tr><td colspan="3">(Benefit from) provision for income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(518)</td><td></td><td colspan="3"></td><td colspan="2">2,412 </td><td></td><td colspan="3"></td><td colspan="2">10,421 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Net loss per share, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(2.46)</td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>(2.65)</td><td></td></tr><tr><td colspan="3">Weighted-average common shares outstanding, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">60,756,087 </td><td></td><td colspan="3"></td><td colspan="2">58,552,065 </td><td></td><td colspan="3"></td><td colspan="2">55,270,998 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in fair value of cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">797 </td><td></td><td colspan="3"></td><td colspan="2">(3,874)</td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">4,053 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,521 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Change unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,043)</td><td></td></tr><tr><td colspan="3">Adjustment for net gains realized and included in net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(137)</td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,180)</td><td></td></tr><tr><td colspan="3">Total other comprehensive income (loss)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Comprehensive loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(146,505)</td><td></td><td colspan="3"></td><td>$</td><td>(125,316)</td><td></td><td colspan="3"></td><td>$</td><td>(147,600)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) <table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9">Common stock</td><td colspan="3"></td><td colspan="9">Treasury stock</td><td colspan="3"></td><td colspan="3" rowspan="2">Additionalpaid-in-capital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulatedothercomprehensiveincome (loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulateddeficit</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Totalstockholders'equity (deficit)</td></tr><tr><td colspan="3"> </td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td></tr><tr><td colspan="3">Balance, December 31, 2020</td><td colspan="2">52,225 </td><td></td><td colspan="3"></td><td>$</td><td>522 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>692,603 </td><td></td><td colspan="3"></td><td>$</td><td>454 </td><td></td><td colspan="3"></td><td>$</td><td>(617,279)</td><td></td><td colspan="3"></td><td>$</td><td>71,536 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">222 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,274 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,611 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(157)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,042)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">521 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,300 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">2,897 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,094)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,065)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with inducement of convertible senior notes</td><td colspan="2">35 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">341 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Cumulative-effect adjustment for the adoption of ASU 2020-06</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(99,026)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">27,585 </td><td></td><td colspan="3"></td><td colspan="2">(71,441)</td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2021</td><td colspan="2">57,695 </td><td></td><td colspan="3"></td><td>$</td><td>577 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>615,032 </td><td></td><td colspan="3"></td><td>$</td><td>(812)</td><td></td><td colspan="3"></td><td>$</td><td>(736,028)</td><td></td><td colspan="3"></td><td>$</td><td>(125,995)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">218 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,941 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,482 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,461)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">480 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,313 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with conversion of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in relation to acquisition</td><td colspan="2">(83)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2022</td><td colspan="2">59,720 </td><td></td><td colspan="3"></td><td>$</td><td>597 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>746,249 </td><td></td><td colspan="3"></td><td>$</td><td>(1,411)</td><td></td><td colspan="3"></td><td>$</td><td>(860,745)</td><td></td><td colspan="3"></td><td>$</td><td>(120,074)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">330 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,320 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,323 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,454 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(113)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,569)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,570)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">216 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,051 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,053 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">107 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in related to acquisition</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Purchase of capped called related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td></tr><tr><td colspan="3">Reclassification of equity to derivative assets related to capped calls</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td></tr><tr><td colspan="3">Repurchase and inducement of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2023</td><td colspan="2">61,714 </td><td></td><td colspan="3"></td><td>$</td><td>617 </td><td></td><td colspan="3"></td><td colspan="2">570 </td><td></td><td colspan="3"></td><td>$</td><td>(4,765)</td><td></td><td colspan="3"></td><td>$</td><td>894,630 </td><td></td><td colspan="3"></td><td>$</td><td>1,344 </td><td></td><td colspan="3"></td><td>$</td><td>(1,010,005)</td><td></td><td colspan="3"></td><td>$</td><td>(118,179)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
64
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Table of Contents
RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net loss</td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net loss to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">45,939 </td><td></td><td colspan="3"></td><td colspan="2">41,038 </td><td></td><td colspan="3"></td><td colspan="2">33,501 </td><td></td></tr><tr><td colspan="3">Amortization of debt discount and issuance costs</td><td colspan="2">4,138 </td><td></td><td colspan="3"></td><td colspan="2">4,085 </td><td></td><td colspan="3"></td><td colspan="2">3,982 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">108,081 </td><td></td><td colspan="3"></td><td colspan="2">119,902 </td><td></td><td colspan="3"></td><td colspan="2">102,579 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Change in fair value of derivative assets</td><td colspan="2">15,511 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Deferred income taxes</td><td colspan="2">(5,624)</td><td></td><td colspan="3"></td><td colspan="2">(1,440)</td><td></td><td colspan="3"></td><td colspan="2">466 </td><td></td></tr><tr><td colspan="3">Induced conversion expense</td><td colspan="2">53,889 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">469 </td><td></td><td colspan="3"></td><td colspan="2">(200)</td><td></td><td colspan="3"></td><td colspan="2">1,920 </td><td></td></tr><tr><td colspan="3">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable</td><td colspan="2">(14,021)</td><td></td><td colspan="3"></td><td colspan="2">(9,050)</td><td></td><td colspan="3"></td><td colspan="2">(25,475)</td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs</td><td colspan="2">(18,534)</td><td></td><td colspan="3"></td><td colspan="2">(15,910)</td><td></td><td colspan="3"></td><td colspan="2">(22,526)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other assets</td><td colspan="2">(4,125)</td><td></td><td colspan="3"></td><td colspan="2">(2,231)</td><td></td><td colspan="3"></td><td colspan="2">(3,355)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">5,449 </td><td></td><td colspan="3"></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td><td colspan="2">(2,077)</td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">2,422 </td><td></td><td colspan="3"></td><td colspan="2">3,741 </td><td></td><td colspan="3"></td><td colspan="2">19,205 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">30,472 </td><td></td><td colspan="3"></td><td colspan="2">52,516 </td><td></td><td colspan="3"></td><td colspan="2">85,562 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(1,312)</td><td></td><td colspan="3"></td><td colspan="2">2,493 </td><td></td><td colspan="3"></td><td colspan="2">3,729 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">104,278 </td><td></td><td colspan="3"></td><td colspan="2">78,204 </td><td></td><td colspan="3"></td><td colspan="2">53,917 </td><td></td></tr><tr><td colspan="3">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Business acquisitions, net of cash acquired</td><td colspan="2">(34,841)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(358,420)</td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(4,366)</td><td></td><td colspan="3"></td><td colspan="2">(20,382)</td><td></td><td colspan="3"></td><td colspan="2">(9,010)</td><td></td></tr><tr><td colspan="3">Capitalization of internal-use software</td><td colspan="2">(15,878)</td><td></td><td colspan="3"></td><td colspan="2">(17,145)</td><td></td><td colspan="3"></td><td colspan="2">(9,854)</td><td></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(276,829)</td><td></td><td colspan="3"></td><td colspan="2">(122,765)</td><td></td><td colspan="3"></td><td colspan="2">(93,092)</td><td></td></tr><tr><td colspan="3">Sales and maturities of investments</td><td colspan="2">150,450 </td><td></td><td colspan="3"></td><td colspan="2">121,304 </td><td></td><td colspan="3"></td><td colspan="2">147,998 </td><td></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">2,710 </td><td></td><td colspan="3"></td><td colspan="2">(1,000)</td><td></td><td colspan="3"></td><td colspan="2">(3,000)</td><td></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="2">(178,754)</td><td></td><td colspan="3"></td><td colspan="2">(39,988)</td><td></td><td colspan="3"></td><td colspan="2">(325,378)</td><td></td></tr><tr><td colspan="3">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively</td><td colspan="2">292,091 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">585,024 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Payment of debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(71)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td></tr><tr><td colspan="3">Payments for redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">(199,998)</td><td></td><td colspan="3"></td><td colspan="2">(12)</td><td></td><td colspan="3"></td><td colspan="2">(230,000)</td><td></td></tr><tr><td colspan="3">Payments related to business acquisitions</td><td colspan="2">(2,250)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td><td colspan="3"></td><td colspan="2">(12,118)</td><td></td></tr><tr><td colspan="3">Proceeds from capped calls settlement</td><td colspan="2">17,518 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(5,570)</td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Proceeds from employee stock purchase plan</td><td colspan="2">11,323 </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Proceeds from stock option exercises</td><td colspan="2">3,053 </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td><td colspan="3"></td><td colspan="2">4,315 </td><td></td></tr><tr><td colspan="3">Net cash provided by financing activities</td><td colspan="2">79,597 </td><td></td><td colspan="3"></td><td colspan="2">7,416 </td><td></td><td colspan="3"></td><td colspan="2">264,133 </td><td></td></tr><tr><td colspan="3">Effect of exchange rate changes on cash ,cash equivalents and restricted cash</td><td colspan="2">1,202 </td><td></td><td colspan="3"></td><td colspan="2">(2,845)</td><td></td><td colspan="3"></td><td colspan="2">(1,272)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash, cash equivalents and restricted cash</td><td colspan="2">6,323 </td><td></td><td colspan="3"></td><td colspan="2">42,787 </td><td></td><td colspan="3"></td><td colspan="2">(8,600)</td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, beginning of period</td><td colspan="2">207,804 </td><td></td><td colspan="3"></td><td colspan="2">165,017 </td><td></td><td colspan="3"></td><td colspan="2">173,617 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, end of period</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr><tr><td colspan="3">Supplemental cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for interest on convertible senior notes</td><td>$</td><td>4,605 </td><td></td><td colspan="3"></td><td>$</td><td>6,675 </td><td></td><td colspan="3"></td><td>$</td><td>7,345 </td><td></td></tr><tr><td colspan="3">Cash paid for income taxes, net of refunds</td><td>$</td><td>1,624 </td><td></td><td colspan="3"></td><td>$</td><td>1,571 </td><td></td><td colspan="3"></td><td>$</td><td>3,305 </td><td></td></tr><tr><td colspan="3">Reconciliation of cash, cash equivalents and restricted cash:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td><td colspan="3"></td><td>$</td><td>164,582 </td><td></td></tr><tr><td colspan="3">Restricted cash included in prepaid expenses and other assets</td><td colspan="2">498 </td><td></td><td colspan="3"></td><td colspan="2">517 </td><td></td><td colspan="3"></td><td colspan="2">435 </td><td></td></tr><tr><td colspan="3">Total cash, cash equivalents and restricted cash</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
65
|
q_com011
|
Compare the impact of changes in liquidity ratios on the overall profitability of Fortinet Inc. and Rapid7 Inc. for the year 2023.
|
Liquidity ratios, such as the current ratio, provide insights into a company's ability to meet short-term obligations, which can impact overall profitability.For Fortinet Inc.:- Current Ratio (2023): 1.19,- Net Income (2023): $1,147.8 million. For Rapid7 Inc.:- Current Ratio (2023): 1.11,- Net Loss (2023): -$149,260 thousand. Fortinet Inc. maintained a relatively stable current ratio of 1.19 in 2023, indicating a healthy liquidity position. This stability in liquidity likely contributed to its strong net income of $1,147.8 million, as the company was able to efficiently manage its short-term obligations without significant financial strain.
In contrast, Rapid7 Inc. improved its current ratio from 0.96 in 2022 to 1.11 in 2023, indicating an enhancement in liquidity. However, despite this improvement, the company still reported a net loss of -$149,260 thousand. This suggests that while liquidity improved, other factors such as high operating expenses and interest expenses negatively impacted overall profitability.
In summary, Fortinet Inc.'s stable liquidity position positively impacted its profitability, while Rapid7 Inc.'s improved liquidity did not translate into profitability due to other financial challenges.
|
Comparison
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71,72,73,74,75;61,62,63,64,65
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0001262039-24-000014;0001560327-24-000021
|
ITEM 8. Financial Statements and Supplementary Data;Item 8. Financial Statements and Supplementary Data.
|
Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 72: FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
| | | | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------|:------------------------|:--------|:--------|:---|:--------|:--------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | |
| 2 | 2023 | | 2022 | 2021 | | | | | |
| 3 | REVENUE: | | | | | | | | |
| 4 | Product | $ | 1,927.3 | | $ | 1,780.5 | | $ | 1,255.0 |
| 5 | Service | 3,377.5 | | 2,636.9 | | | 2,087.2 | | |
| 6 | Total revenue | 5,304.8 | | 4,417.4 | | | 3,342.2 | | |
| 7 | COST OF REVENUE: | | | | | | | | |
| 8 | Product | 763.6 | | 691.3 | | | 487.7 | | |
| 9 | Service | 473.6 | | 393.6 | | | 295.3 | | |
| 10 | Total cost of revenue | 1,237.2 | | 1,084.9 | | | 783.0 | | |
| 11 | GROSS PROFIT: | | | | | | | | |
| 12 | Product | 1,163.7 | | 1,089.2 | | | 767.3 | | |
| 13 | Service | 2,903.9 | | 2,243.3 | | | 1,791.9 | | |
| 14 | Total gross profit | 4,067.6 | | 3,332.5 | | | 2,559.2 | | |
| 15 | OPERATING EXPENSES: | | | | | | | | |
| 16 | Research and development | 613.8 | | 512.4 | | | 424.2 | | |
| 17 | Sales and marketing | 2,006.0 | | 1,686.1 | | | 1,345.7 | | |
| 18 | General and administrative | 211.3 | | 169.0 | | | 143.5 | | |
| 19 | Gain on intellectual property matter | (4.6) | | (4.6) | | | (4.6) | | |
| 20 | Total operating expenses | 2,826.5 | | 2,362.9 | | | 1,908.8 | | |
| 21 | OPERATING INCOME | 1,241.1 | | 969.6 | | | 650.4 | | |
| 22 | INTEREST INCOME | 119.7 | | 17.4 | | | 4.5 | | |
| 23 | INTEREST EXPENSE | (21.0) | | (18.0) | | | (14.9) | | |
| 24 | OTHER EXPENSE-NET | (6.1) | | (13.5) | | | (11.6) | | |
| 25 | INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS | 1,333.7 | | 955.5 | | | 628.4 | | |
| 26 | PROVISION FOR INCOME TAXES | 143.8 | | 30.8 | | | 14.1 | | |
| 27 | LOSS FROM EQUITY METHOD INVESTMENTS | (42.1) | | (68.1) | | | (7.6) | | |
| 28 | NET INCOME INCLUDING NON-CONTROLLING INTERESTS | 1,147.8 | | 856.6 | | | 606.7 | | |
| 29 | LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX | - | | (0.7) | | | (0.1) | | |
| 30 | NET INCOME ATTRIBUTABLE TO FORTINET, INC. | $ | 1,147.8 | | $ | 857.3 | | $ | 606.8 |
| 31 | Net income per share attributable to Fortinet, Inc. (Note 9): | | | | | | | | |
| 32 | Basic | $ | 1.47 | | $ | 1.08 | | $ | 0.74 |
| 33 | Diluted | $ | 1.46 | | $ | 1.06 | | $ | 0.73 |
| 34 | Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.: | | | | | | | | |
| 35 | Basic | 778.6 | | 791.4 | | | 816.1 | | |
| 36 | Diluted | 788.2 | | 805.3 | | | 835.3 | | |
See notes to consolidated financial statements.
72
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 73: FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
| | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:-------|:-----|:------|:------|:---|:------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 4 | Other comprehensive income (loss): | | | | | | | | | |
| 5 | Change in foreign currency translation | (5.5) | | | (9.7) | | | (3.8) | | |
| 6 | Change in unrealized gains (losses) on investments | 8.8 | | | (6.2) | | | (3.5) | | |
| 7 | Less: tax provision (benefit) related to items of other comprehensive income (loss) | 2.0 | | | (1.4) | | | (0.8) | | |
| 8 | Other comprehensive income (loss) | 1.3 | | | (14.5) | | | (6.5) | | |
| 9 | Comprehensive income including non-controlling interests | 1,149.1 | | | 842.1 | | | 600.2 | | |
| 10 | Less: comprehensive income (loss) attributable to non-controlling interests | - | | | 0.2 | | | (1.1) | | |
| 11 | Comprehensive income attributable to Fortinet, Inc. | $ | 1,149.1 | | | $ | 841.9 | | $ | 601.3 |
See notes to consolidated financial statements.
73
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 74: FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
| | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------|:-------------|:-------|:-------------------------|:----|:--------------------------------------------|:--------------------|:---|:--------------------------|:-------|:-----------------------|:---|:----------|:-------|:----------|:----------|:---|:---|:---|:--------|
| 1 | | Common Stock | | AdditionalPaid-InCapital | | AccumulatedOtherComprehensive Income (Loss) | Accumulated Deficit | | Non-Controlling Interests | | Total Equity (Deficit) | | | | | | | | | |
| 2 | Shares | | Amount | | | | | | | | | | | | | | | | | |
| 3 | BALANCE-December 31, 2020 | 812.7 | | | $ | 0.8 | | $ | 1,206.6 | | | $ | 0.7 | $ | (352.1) | | $ | - | $ | 856.0 |
| 4 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 10.2 | | | - | | (141.7) | | | - | | | - | - | | (141.7) | | | | |
| 5 | Repurchase and retirement of common stock | (12.9) | | | - | | (19.2) | | | - | | | (722.6) | - | | (741.8) | | | | |
| 6 | Stock-based compensation expense | - | | | - | | 207.9 | | | - | | | - | - | | 207.9 | | | | |
| 7 | Recognition of non-controlling interests upon business combination | - | | | - | | - | | | - | | | - | 17.8 | | 17.8 | | | | |
| 8 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (2.7) | | | - | - | | (2.7) | | | | |
| 9 | Foreign currency translation adjustment | - | | | - | | - | | | (2.8) | | | - | (1.0) | | (3.8) | | | | |
| 10 | Net income | - | | | - | | - | | | - | | | 606.8 | (0.1) | | 606.7 | | | | |
| 11 | BALANCE-December 31, 2021 | 810.0 | | | 0.8 | | 1,253.6 | | | (4.8) | | | (467.9) | 16.7 | | 798.4 | | | | |
| 12 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 7.5 | | | - | | (134.7) | | | - | | | - | - | | (134.7) | | | | |
| 13 | Repurchase and retirement of common stock | (36.0) | | | - | | (55.4) | | | - | | | (1,935.8) | - | | (1,991.2) | | | | |
| 14 | Stock-based compensation expense | - | | | - | | 217.3 | | | - | | | - | - | | 217.3 | | | | |
| 15 | Acquisition of the non-controlling interests | - | | | - | | 3.4 | | | - | | | - | (16.9) | | (13.5) | | | | |
| 16 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (4.8) | | | - | - | | (4.8) | | | | |
| 17 | Foreign currency translation adjustment | - | | | - | | - | | | (10.6) | | | - | 0.9 | | (9.7) | | | | |
| 18 | Net income | - | | | - | | - | | | - | | | 857.3 | (0.7) | | 856.6 | | | | |
| 19 | BALANCE-December 31, 2022 | 781.5 | | | 0.8 | | 1,284.2 | | | (20.2) | | | (1,546.4) | - | | (281.6) | | | | |
| 20 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 6.7 | | | - | | (68.5) | | | - | | | - | - | | (68.5) | | | | |
| 21 | Repurchase and retirement of common stock | (27.2) | | | - | | (37.4) | | | - | | | (1,463.1) | - | | (1,500.5) | | | | |
| 22 | Excise tax on net stock repurchases | - | | | - | | (10.9) | | | - | | | - | - | | (10.9) | | | | |
| 23 | Stock-based compensation expense | - | | | - | | 249.0 | | | - | | | - | - | | 249.0 | | | | |
| 24 | Net unrealized gain on investments - net of tax | - | | | - | | - | | | 6.8 | | | - | - | | 6.8 | | | | |
| 25 | Foreign currency translation adjustment | - | | | - | | - | | | (5.5) | | | - | - | | (5.5) | | | | |
| 26 | Net income | - | | | - | | - | | | - | | | 1,147.8 | - | | 1,147.8 | | | | |
| 27 | BALANCE-December 31, 2023 | 761.0 | | | $ | 0.8 | | $ | 1,416.4 | | | $ | (18.9) | $ | (1,861.7) | | $ | - | $ | (463.4) |
See notes to consolidated financial statements.
74
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:----------|:-----|:--------|:----------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| 4 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 5 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 6 | Stock-based compensation | 249.0 | | | 217.3 | | | 207.9 | | |
| 7 | Amortization of deferred contract costs | 266.3 | | | 223.3 | | | 175.9 | | |
| 8 | Depreciation and amortization | 113.4 | | | 104.3 | | | 84.4 | | |
| 9 | Amortization of investment premiums (discounts) | (27.7) | | | 4.4 | | | 6.9 | | |
| 10 | Loss from equity method investments | 42.1 | | | 68.1 | | | 7.6 | | |
| 11 | Other | 18.5 | | | 23.6 | | | 7.9 | | |
| 12 | Changes in operating assets and liabilities, net of impact of business combinations: | | | | | | | | | |
| 13 | Accounts receivable-net | (146.4) | | | (456.7) | | | (72.5) | | |
| 14 | Inventory | (253.5) | | | (109.1) | | | (19.4) | | |
| 15 | Prepaid expenses and other current assets | (27.6) | | | (7.7) | | | (17.7) | | |
| 16 | Deferred contract costs | (353.5) | | | (318.2) | | | (294.5) | | |
| 17 | Deferred tax assets | (301.9) | | | (226.4) | | | (94.0) | | |
| 18 | Other assets | 17.7 | | | (35.3) | | | (19.0) | | |
| 19 | Accounts payable | (43.1) | | | 105.2 | | | (13.1) | | |
| 20 | Accrued liabilities | 137.4 | | | 55.2 | | | 49.9 | | |
| 21 | Accrued payroll and compensation | 23.4 | | | 25.0 | | | 44.0 | | |
| 22 | Other liabilities | (21.7) | | | 23.5 | | | (0.7) | | |
| 23 | Deferred revenue | 1,095.3 | | | 1,177.5 | | | 839.4 | | |
| 24 | Net cash provided by operating activities | 1,935.5 | | | 1,730.6 | | | 1,499.7 | | |
| 25 | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
| 26 | Purchases of investments | (1,855.8) | | | (389.1) | | | (2,308.0) | | |
| 27 | Sales of investments | 4.0 | | | 3.0 | | | 85.5 | | |
| 28 | Maturities of investments | 1,414.8 | | | 1,462.0 | | | 1,470.3 | | |
| 29 | Purchases of property and equipment | (204.1) | | | (281.2) | | | (295.9) | | |
| 30 | Purchases of Investments in privately held companies | (8.5) | | | - | | | (160.0) | | |
| 31 | Payments made in connection with business combinations, net of cash acquired | - | | | (30.8) | | | (74.9) | | |
| 32 | Purchases of marketable equity securities | - | | | - | | | (42.5) | | |
| 33 | Other | 0.3 | | | - | | | 0.4 | | |
| 34 | Net cash provided by (used in) investing activities | (649.3) | | | 763.9 | | | (1,325.1) | | |
| 35 | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
| 36 | Proceeds from long-term borrowings, net of discount and underwriting fees | - | | | - | | | 989.4 | | |
| 37 | Payments for debt issuance costs | - | | | - | | | (2.4) | | |
| 38 | Payments of debt assumed in connection with business combination | - | | | - | | | (19.5) | | |
| 39 | Repurchase and retirement of common stock | (1,500.5) | | | (1,991.2) | | | (741.8) | | |
| 40 | Proceeds from issuance of common stock | 43.8 | | | 26.1 | | | 26.0 | | |
| 41 | Taxes paid related to net share settlement of equity awards | (112.5) | | | (160.4) | | | (167.9) | | |
| 42 | Other | (1.2) | | | (4.8) | | | (1.0) | | |
| 43 | Net cash provided by (used in) financing activities | (1,570.4) | | | (2,130.3) | | | 82.8 | | |
| 44 | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (0.8) | | | (0.4) | | | (0.1) | | |
| 45 | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (285.0) | | | 363.8 | | | 257.3 | | |
| 46 | CASH AND CASH EQUIVALENTS-Beginning of year | 1,682.9 | | | 1,319.1 | | | 1,061.8 | | |
| 47 | CASH AND CASH EQUIVALENTS-End of year | $ | 1,397.9 | | | $ | 1,682.9 | | $ | 1,319.1 |
| 48 | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | | | | | | |
| 49 | Cash paid for income taxes-net | $ | 426.3 | | | $ | 260.2 | | $ | 127.4 |
| 50 | Operating lease liabilities arising from obtaining right-of-use assets | $ | 19.2 | | | $ | 65.8 | | $ | 39.6 |
| 52 | NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | | | | | | |
| 53 | Transfers of evaluation units from inventory to property and equipment | $ | 31.8 | | | $ | 17.1 | | $ | 15.9 |
| 54 | Liability for purchase of property and equipment | $ | 23.6 | | | $ | 21.2 | | $ | 21.9 |
| 55 | Excise tax payable on net stock repurchases | $ | 10.9 | | | $ | - | | $ | - |
| 56 | Liability incurred in connection with business combinations | $ | - | | | $ | 0.8 | | $ | 0.9 |
See notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)| | | | | | | | | | | | |
|---:|:--------------------------------------------------------------|:------------------------|:-----------|:----------|:-----|:-----------|:-----|:----------|:-----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Revenue: | | | | | | | | | | |
| 4 | Products | | $ | 740,168 | | | $ | 647,535 | | $ | 500,843 |
| 5 | Professional services | | 37,539 | | | 37,548 | | | 34,561 | | |
| 6 | Total revenue | | 777,707 | | | 685,083 | | | 535,404 | | |
| 7 | Cost of revenue: | | | | | | | | | | |
| 8 | Products | | 202,904 | | | 182,212 | | | 140,773 | | |
| 9 | Professional services | | 28,837 | | | 32,137 | | | 28,175 | | |
| 10 | Total cost of revenue | | 231,741 | | | 214,349 | | | 168,948 | | |
| 11 | Total gross profit | | 545,966 | | | 470,734 | | | 366,456 | | |
| 12 | Operating expenses: | | | | | | | | | | |
| 13 | Research and development | | 176,776 | | | 189,970 | | | 160,779 | | |
| 14 | Sales and marketing | | 312,636 | | | 307,409 | | | 247,453 | | |
| 15 | General and administrative | | 84,276 | | | 84,969 | | | 78,289 | | |
| 16 | Impairment of long-lived assets | | 30,784 | | | - | | | - | | |
| 17 | Restructuring | | 22,227 | | | - | | | - | | |
| 18 | Total operating expenses | | 626,699 | | | 582,348 | | | 486,521 | | |
| 19 | Loss from operations | | (80,733) | | | (111,614) | | | (120,065) | | |
| 20 | Other income (expense), net: | | | | | | | | | | |
| 21 | Interest income | | 10,177 | | | 1,813 | | | 365 | | |
| 22 | Interest expense | | (64,700) | | | (10,982) | | | (14,292) | | |
| 23 | Other income (expense), net | | (14,522) | | | (1,522) | | | (1,921) | | |
| 24 | Loss before income taxes | | (149,778) | | | (122,305) | | | (135,913) | | |
| 25 | (Benefit from) provision for income taxes | | (518) | | | 2,412 | | | 10,421 | | |
| 26 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 27 | Net loss per share, basic and diluted | | $ | (2.46) | | | $ | (2.13) | | $ | (2.65) |
| 28 | Weighted-average common shares outstanding, basic and diluted | | 60,756,087 | | | 58,552,065 | | | 55,270,998 | | |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)| | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:------------------------|:------|:----------|:-----|:--------|:-----|:----------|:--------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 4 | Other comprehensive income (loss): | | | | | | | | | | |
| 5 | Change in fair value of cash flow hedges | | 797 | | | (3,874) | | | (86) | | |
| 6 | Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes | | 724 | | | 4,053 | | | - | | |
| 7 | Total change in unrealized gains (losses) on cash flow hedges | | 1,521 | | | 179 | | | (86) | | |
| 8 | Change unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,043) | | |
| 9 | Adjustment for net gains realized and included in net loss | | - | | | - | | | (137) | | |
| 10 | Total change in unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,180) | | |
| 11 | Total other comprehensive income (loss) | | 2,755 | | | (599) | | | (1,266) | | |
| 12 | Comprehensive loss | | $ | (146,505) | | | $ | (125,316) | | $ | (147,600) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------|:-------------|:---------------|:----|:--------------------------|:-------------------------------------------|:----|:-------------------|:----|:-----------------------------------|:--------|:---------|:---|:--------|:---|:----------|:--------|:----------|:---|:------------|:---|:----------|
| 1 | | Common stock | Treasury stock | | Additionalpaid-in-capital | Accumulatedothercomprehensiveincome (loss) | | Accumulateddeficit | | Totalstockholders'equity (deficit) | | | | | | | | | | | | |
| 2 | | Shares | Amount | | Shares | Amount | | | | | | | | | | | | | | | | |
| 3 | Balance, December 31, 2020 | 52,225 | | $ | 522 | | 487 | | | $ | (4,764) | | $ | 692,603 | | $ | 454 | | $ | (617,279) | $ | 71,536 |
| 4 | Stock-based compensation expense | - | | - | | - | | | - | | | 100,317 | | - | | - | | 100,317 | | | | |
| 5 | Issuance of common stock under employee stock purchase plan | 222 | | 2 | | - | | | - | | | 9,274 | | - | | - | | 9,276 | | | | |
| 6 | Vesting of restricted stock units | 1,611 | | 16 | | - | | | - | | | (16) | | - | | - | | - | | | | |
| 7 | Shares withheld for employee taxes | (157) | | (2) | | - | | | - | | | (16,042) | | - | | - | | (16,044) | | | | |
| 8 | Issuance of common stock upon exercise of stock options | 521 | | 6 | | - | | | - | | | 4,300 | | - | | - | | 4,306 | | | | |
| 9 | Purchase of capped calls related to convertible senior notes | - | | - | | - | | | - | | | (76,020) | | - | | - | | (76,020) | | | | |
| 10 | Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes | 2,897 | | 29 | | - | | | - | | | (3,094) | | - | | - | | (3,065) | | | | |
| 11 | Issuance of common stock in connection with inducement of convertible senior notes | 35 | | - | | - | | | - | | | 2,740 | | - | | - | | 2,740 | | | | |
| 12 | Issuance of common stock related to acquisition | 341 | | 4 | | - | | | - | | | (4) | | - | | - | | - | | | | |
| 13 | Cumulative-effect adjustment for the adoption of ASU 2020-06 | - | | - | | - | | | - | | | (99,026) | | - | | 27,585 | | (71,441) | | | | |
| 14 | Other comprehensive income | - | | - | | - | | | - | | | - | | (1,266) | | - | | (1,266) | | | | |
| 15 | Net loss | - | | - | | - | | | - | | | - | | - | | (146,334) | | (146,334) | | | | |
| 16 | Balance, December 31, 2021 | 57,695 | | $ | 577 | | 487 | | | $ | (4,764) | | $ | 615,032 | | $ | (812) | | $ | (736,028) | $ | (125,995) |
| 17 | Stock-based compensation expense | - | | - | | - | | | - | | | 123,441 | | - | | - | | 123,441 | | | | |
| 18 | Issuance of common stock under employee stock purchase plan | 218 | | 2 | | - | | | - | | | 11,941 | | - | | - | | 11,943 | | | | |
| 19 | Vesting of restricted stock units | 1,482 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 20 | Shares withheld for employee taxes | (105) | | (1) | | - | | | - | | | (7,461) | | - | | - | | (7,462) | | | | |
| 21 | Issuance of common stock upon exercise of stock options | 480 | | 5 | | - | | | - | | | 3,313 | | - | | - | | 3,318 | | | | |
| 22 | Issuance of common stock in connection with conversion of convertible senior notes | - | | - | | - | | | - | | | (3) | | - | | - | | (3) | | | | |
| 23 | Issuance of common stock related to acquisition | 33 | | - | | - | | | - | | | - | | - | | - | | - | | | | |
| 24 | Repurchase of common stock issued in relation to acquisition | (83) | | (1) | | | | | | 1 | | | | | - | | | | | | | |
| 25 | Other comprehensive income | - | | - | | - | | | - | | | - | | (599) | | - | | (599) | | | | |
| 26 | Net loss | - | | - | | - | | | - | | | - | | - | | (124,717) | | (124,717) | | | | |
| 27 | Balance, December 31, 2022 | 59,720 | | $ | 597 | | 487 | | | $ | (4,764) | | $ | 746,249 | | $ | (1,411) | | $ | (860,745) | $ | (120,074) |
| 28 | Stock-based compensation expense | - | | - | | - | | | - | | | 107,254 | | - | | - | | 107,254 | | | | |
| 29 | Issuance of common stock under employee stock purchase plan | 330 | | 3 | | - | | | - | | | 11,320 | | - | | - | | 11,323 | | | | |
| 30 | Vesting of restricted stock units | 1,454 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 31 | Shares withheld for employee taxes | (113) | | (1) | | - | | | - | | | (5,569) | | - | | - | | (5,570) | | | | |
| 32 | Issuance of common stock upon exercise of stock options | 216 | | 2 | | - | | | - | | | 3,051 | | - | | - | | 3,053 | | | | |
| 33 | Issuance of common stock related to acquisition | 107 | | 1 | | - | | | - | | | (1) | | - | | - | | - | | | | |
| 34 | Repurchase of common stock issued in related to acquisition | - | | - | | 83 | | | (1) | | | 1 | | - | | - | | - | | | | |
| 35 | Purchase of capped called related to convertible senior notes | - | | - | | - | | | - | | | (36,570) | | - | | - | | (36,570) | | | | |
| 36 | Reclassification of equity to derivative assets related to capped calls | - | | - | | - | | | - | | | 33,029 | | - | | - | | 33,029 | | | | |
| 37 | Repurchase and inducement of convertible senior notes | - | | - | | - | | | - | | | 35,881 | | - | | - | | 35,881 | | | | |
| 38 | Other comprehensive loss | - | | - | | - | | | - | | | - | | 2,755 | | - | | 2,755 | | | | |
| 39 | Net loss | - | | - | | - | | | - | | | - | | - | | (149,260) | | (149,260) | | | | |
| 40 | Balance, December 31, 2023 | 61,714 | | $ | 617 | | 570 | | | $ | (4,765) | | $ | 894,630 | | $ | 1,344 | | $ | (1,010,005) | $ | (118,179) |
See accompanying notes to consolidated financial statements.
64
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------------|:----------|:-----|:----------|:-----|:----------|:----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Cash flows from operating activities: | | | | | | | | | |
| 4 | Net loss | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 5 | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | | | |
| 6 | Depreciation and amortization | 45,939 | | | 41,038 | | | 33,501 | | |
| 7 | Amortization of debt discount and issuance costs | 4,138 | | | 4,085 | | | 3,982 | | |
| 8 | Stock-based compensation expense | 108,081 | | | 119,902 | | | 102,579 | | |
| 9 | Impairment of long-lived assets | 30,784 | | | - | | | - | | |
| 10 | Change in fair value of derivative assets | 15,511 | | | - | | | - | | |
| 11 | Deferred income taxes | (5,624) | | | (1,440) | | | 466 | | |
| 12 | Induced conversion expense | 53,889 | | | - | | | 2,740 | | |
| 13 | Other | 469 | | | (200) | | | 1,920 | | |
| 14 | Changes in assets and liabilities: | | | | | | | | | |
| 15 | Accounts receivable | (14,021) | | | (9,050) | | | (25,475) | | |
| 16 | Deferred contract acquisition and fulfillment costs | (18,534) | | | (15,910) | | | (22,526) | | |
| 17 | Prepaid expenses and other assets | (4,125) | | | (2,231) | | | (3,355) | | |
| 18 | Accounts payable | 5,449 | | | 7,977 | | | (2,077) | | |
| 19 | Accrued expenses | 2,422 | | | 3,741 | | | 19,205 | | |
| 20 | Deferred revenue | 30,472 | | | 52,516 | | | 85,562 | | |
| 21 | Other liabilities | (1,312) | | | 2,493 | | | 3,729 | | |
| 22 | Net cash provided by operating activities | 104,278 | | | 78,204 | | | 53,917 | | |
| 23 | Cash flows from investing activities: | | | | | | | | | |
| 24 | Business acquisitions, net of cash acquired | (34,841) | | | - | | | (358,420) | | |
| 25 | Purchases of property and equipment | (4,366) | | | (20,382) | | | (9,010) | | |
| 26 | Capitalization of internal-use software | (15,878) | | | (17,145) | | | (9,854) | | |
| 27 | Purchases of investments | (276,829) | | | (122,765) | | | (93,092) | | |
| 28 | Sales and maturities of investments | 150,450 | | | 121,304 | | | 147,998 | | |
| 29 | Other investments | 2,710 | | | (1,000) | | | (3,000) | | |
| 30 | Net cash used in investing activities | (178,754) | | | (39,988) | | | (325,378) | | |
| 31 | Cash flows from financing activities: | | | | | | | | | |
| 32 | Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively | 292,091 | | | - | | | 585,024 | | |
| 33 | Purchase of capped calls related to convertible senior notes | (36,570) | | | - | | | (76,020) | | |
| 34 | Payment of debt issuance costs | - | | | (71) | | | (300) | | |
| 35 | Payments for redemption, repurchase and conversion of convertible senior notes | (199,998) | | | (12) | | | (230,000) | | |
| 36 | Payments related to business acquisitions | (2,250) | | | (300) | | | (12,118) | | |
| 37 | Proceeds from capped calls settlement | 17,518 | | | - | | | - | | |
| 38 | Taxes paid related to net share settlement of equity awards | (5,570) | | | (7,462) | | | (16,044) | | |
| 39 | Proceeds from employee stock purchase plan | 11,323 | | | 11,943 | | | 9,276 | | |
| 40 | Proceeds from stock option exercises | 3,053 | | | 3,318 | | | 4,315 | | |
| 41 | Net cash provided by financing activities | 79,597 | | | 7,416 | | | 264,133 | | |
| 42 | Effect of exchange rate changes on cash ,cash equivalents and restricted cash | 1,202 | | | (2,845) | | | (1,272) | | |
| 43 | Net increase (decrease) in cash, cash equivalents and restricted cash | 6,323 | | | 42,787 | | | (8,600) | | |
| 44 | Cash, cash equivalents and restricted cash, beginning of period | 207,804 | | | 165,017 | | | 173,617 | | |
| 45 | Cash, cash equivalents and restricted cash, end of period | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
| 46 | Supplemental cash flow information: | | | | | | | | | |
| 47 | Cash paid for interest on convertible senior notes | $ | 4,605 | | | $ | 6,675 | | $ | 7,345 |
| 48 | Cash paid for income taxes, net of refunds | $ | 1,624 | | | $ | 1,571 | | $ | 3,305 |
| 49 | Reconciliation of cash, cash equivalents and restricted cash: | | | | | | | | | |
| 50 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 | | $ | 164,582 |
| 51 | Restricted cash included in prepaid expenses and other assets | 498 | | | 517 | | | 435 | | |
| 52 | Total cash, cash equivalents and restricted cash | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
See accompanying notes to consolidated financial statements.
65
|
FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
| | | | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------|:------------------------|:--------|:--------|:---|:--------|:--------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | |
| 2 | 2023 | | 2022 | 2021 | | | | | |
| 3 | REVENUE: | | | | | | | | |
| 4 | Product | $ | 1,927.3 | | $ | 1,780.5 | | $ | 1,255.0 |
| 5 | Service | 3,377.5 | | 2,636.9 | | | 2,087.2 | | |
| 6 | Total revenue | 5,304.8 | | 4,417.4 | | | 3,342.2 | | |
| 7 | COST OF REVENUE: | | | | | | | | |
| 8 | Product | 763.6 | | 691.3 | | | 487.7 | | |
| 9 | Service | 473.6 | | 393.6 | | | 295.3 | | |
| 10 | Total cost of revenue | 1,237.2 | | 1,084.9 | | | 783.0 | | |
| 11 | GROSS PROFIT: | | | | | | | | |
| 12 | Product | 1,163.7 | | 1,089.2 | | | 767.3 | | |
| 13 | Service | 2,903.9 | | 2,243.3 | | | 1,791.9 | | |
| 14 | Total gross profit | 4,067.6 | | 3,332.5 | | | 2,559.2 | | |
| 15 | OPERATING EXPENSES: | | | | | | | | |
| 16 | Research and development | 613.8 | | 512.4 | | | 424.2 | | |
| 17 | Sales and marketing | 2,006.0 | | 1,686.1 | | | 1,345.7 | | |
| 18 | General and administrative | 211.3 | | 169.0 | | | 143.5 | | |
| 19 | Gain on intellectual property matter | (4.6) | | (4.6) | | | (4.6) | | |
| 20 | Total operating expenses | 2,826.5 | | 2,362.9 | | | 1,908.8 | | |
| 21 | OPERATING INCOME | 1,241.1 | | 969.6 | | | 650.4 | | |
| 22 | INTEREST INCOME | 119.7 | | 17.4 | | | 4.5 | | |
| 23 | INTEREST EXPENSE | (21.0) | | (18.0) | | | (14.9) | | |
| 24 | OTHER EXPENSE-NET | (6.1) | | (13.5) | | | (11.6) | | |
| 25 | INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS | 1,333.7 | | 955.5 | | | 628.4 | | |
| 26 | PROVISION FOR INCOME TAXES | 143.8 | | 30.8 | | | 14.1 | | |
| 27 | LOSS FROM EQUITY METHOD INVESTMENTS | (42.1) | | (68.1) | | | (7.6) | | |
| 28 | NET INCOME INCLUDING NON-CONTROLLING INTERESTS | 1,147.8 | | 856.6 | | | 606.7 | | |
| 29 | LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX | - | | (0.7) | | | (0.1) | | |
| 30 | NET INCOME ATTRIBUTABLE TO FORTINET, INC. | $ | 1,147.8 | | $ | 857.3 | | $ | 606.8 |
| 31 | Net income per share attributable to Fortinet, Inc. (Note 9): | | | | | | | | |
| 32 | Basic | $ | 1.47 | | $ | 1.08 | | $ | 0.74 |
| 33 | Diluted | $ | 1.46 | | $ | 1.06 | | $ | 0.73 |
| 34 | Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.: | | | | | | | | |
| 35 | Basic | 778.6 | | 791.4 | | | 816.1 | | |
| 36 | Diluted | 788.2 | | 805.3 | | | 835.3 | | |
See notes to consolidated financial statements.
72
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
| | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:-------|:-----|:------|:------|:---|:------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 4 | Other comprehensive income (loss): | | | | | | | | | |
| 5 | Change in foreign currency translation | (5.5) | | | (9.7) | | | (3.8) | | |
| 6 | Change in unrealized gains (losses) on investments | 8.8 | | | (6.2) | | | (3.5) | | |
| 7 | Less: tax provision (benefit) related to items of other comprehensive income (loss) | 2.0 | | | (1.4) | | | (0.8) | | |
| 8 | Other comprehensive income (loss) | 1.3 | | | (14.5) | | | (6.5) | | |
| 9 | Comprehensive income including non-controlling interests | 1,149.1 | | | 842.1 | | | 600.2 | | |
| 10 | Less: comprehensive income (loss) attributable to non-controlling interests | - | | | 0.2 | | | (1.1) | | |
| 11 | Comprehensive income attributable to Fortinet, Inc. | $ | 1,149.1 | | | $ | 841.9 | | $ | 601.3 |
See notes to consolidated financial statements.
73
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
| | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------|:-------------|:-------|:-------------------------|:----|:--------------------------------------------|:--------------------|:---|:--------------------------|:-------|:-----------------------|:---|:----------|:-------|:----------|:----------|:---|:---|:---|:--------|
| 1 | | Common Stock | | AdditionalPaid-InCapital | | AccumulatedOtherComprehensive Income (Loss) | Accumulated Deficit | | Non-Controlling Interests | | Total Equity (Deficit) | | | | | | | | | |
| 2 | Shares | | Amount | | | | | | | | | | | | | | | | | |
| 3 | BALANCE-December 31, 2020 | 812.7 | | | $ | 0.8 | | $ | 1,206.6 | | | $ | 0.7 | $ | (352.1) | | $ | - | $ | 856.0 |
| 4 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 10.2 | | | - | | (141.7) | | | - | | | - | - | | (141.7) | | | | |
| 5 | Repurchase and retirement of common stock | (12.9) | | | - | | (19.2) | | | - | | | (722.6) | - | | (741.8) | | | | |
| 6 | Stock-based compensation expense | - | | | - | | 207.9 | | | - | | | - | - | | 207.9 | | | | |
| 7 | Recognition of non-controlling interests upon business combination | - | | | - | | - | | | - | | | - | 17.8 | | 17.8 | | | | |
| 8 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (2.7) | | | - | - | | (2.7) | | | | |
| 9 | Foreign currency translation adjustment | - | | | - | | - | | | (2.8) | | | - | (1.0) | | (3.8) | | | | |
| 10 | Net income | - | | | - | | - | | | - | | | 606.8 | (0.1) | | 606.7 | | | | |
| 11 | BALANCE-December 31, 2021 | 810.0 | | | 0.8 | | 1,253.6 | | | (4.8) | | | (467.9) | 16.7 | | 798.4 | | | | |
| 12 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 7.5 | | | - | | (134.7) | | | - | | | - | - | | (134.7) | | | | |
| 13 | Repurchase and retirement of common stock | (36.0) | | | - | | (55.4) | | | - | | | (1,935.8) | - | | (1,991.2) | | | | |
| 14 | Stock-based compensation expense | - | | | - | | 217.3 | | | - | | | - | - | | 217.3 | | | | |
| 15 | Acquisition of the non-controlling interests | - | | | - | | 3.4 | | | - | | | - | (16.9) | | (13.5) | | | | |
| 16 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (4.8) | | | - | - | | (4.8) | | | | |
| 17 | Foreign currency translation adjustment | - | | | - | | - | | | (10.6) | | | - | 0.9 | | (9.7) | | | | |
| 18 | Net income | - | | | - | | - | | | - | | | 857.3 | (0.7) | | 856.6 | | | | |
| 19 | BALANCE-December 31, 2022 | 781.5 | | | 0.8 | | 1,284.2 | | | (20.2) | | | (1,546.4) | - | | (281.6) | | | | |
| 20 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 6.7 | | | - | | (68.5) | | | - | | | - | - | | (68.5) | | | | |
| 21 | Repurchase and retirement of common stock | (27.2) | | | - | | (37.4) | | | - | | | (1,463.1) | - | | (1,500.5) | | | | |
| 22 | Excise tax on net stock repurchases | - | | | - | | (10.9) | | | - | | | - | - | | (10.9) | | | | |
| 23 | Stock-based compensation expense | - | | | - | | 249.0 | | | - | | | - | - | | 249.0 | | | | |
| 24 | Net unrealized gain on investments - net of tax | - | | | - | | - | | | 6.8 | | | - | - | | 6.8 | | | | |
| 25 | Foreign currency translation adjustment | - | | | - | | - | | | (5.5) | | | - | - | | (5.5) | | | | |
| 26 | Net income | - | | | - | | - | | | - | | | 1,147.8 | - | | 1,147.8 | | | | |
| 27 | BALANCE-December 31, 2023 | 761.0 | | | $ | 0.8 | | $ | 1,416.4 | | | $ | (18.9) | $ | (1,861.7) | | $ | - | $ | (463.4) |
See notes to consolidated financial statements.
74
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:----------|:-----|:--------|:----------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| 4 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 5 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 6 | Stock-based compensation | 249.0 | | | 217.3 | | | 207.9 | | |
| 7 | Amortization of deferred contract costs | 266.3 | | | 223.3 | | | 175.9 | | |
| 8 | Depreciation and amortization | 113.4 | | | 104.3 | | | 84.4 | | |
| 9 | Amortization of investment premiums (discounts) | (27.7) | | | 4.4 | | | 6.9 | | |
| 10 | Loss from equity method investments | 42.1 | | | 68.1 | | | 7.6 | | |
| 11 | Other | 18.5 | | | 23.6 | | | 7.9 | | |
| 12 | Changes in operating assets and liabilities, net of impact of business combinations: | | | | | | | | | |
| 13 | Accounts receivable-net | (146.4) | | | (456.7) | | | (72.5) | | |
| 14 | Inventory | (253.5) | | | (109.1) | | | (19.4) | | |
| 15 | Prepaid expenses and other current assets | (27.6) | | | (7.7) | | | (17.7) | | |
| 16 | Deferred contract costs | (353.5) | | | (318.2) | | | (294.5) | | |
| 17 | Deferred tax assets | (301.9) | | | (226.4) | | | (94.0) | | |
| 18 | Other assets | 17.7 | | | (35.3) | | | (19.0) | | |
| 19 | Accounts payable | (43.1) | | | 105.2 | | | (13.1) | | |
| 20 | Accrued liabilities | 137.4 | | | 55.2 | | | 49.9 | | |
| 21 | Accrued payroll and compensation | 23.4 | | | 25.0 | | | 44.0 | | |
| 22 | Other liabilities | (21.7) | | | 23.5 | | | (0.7) | | |
| 23 | Deferred revenue | 1,095.3 | | | 1,177.5 | | | 839.4 | | |
| 24 | Net cash provided by operating activities | 1,935.5 | | | 1,730.6 | | | 1,499.7 | | |
| 25 | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
| 26 | Purchases of investments | (1,855.8) | | | (389.1) | | | (2,308.0) | | |
| 27 | Sales of investments | 4.0 | | | 3.0 | | | 85.5 | | |
| 28 | Maturities of investments | 1,414.8 | | | 1,462.0 | | | 1,470.3 | | |
| 29 | Purchases of property and equipment | (204.1) | | | (281.2) | | | (295.9) | | |
| 30 | Purchases of Investments in privately held companies | (8.5) | | | - | | | (160.0) | | |
| 31 | Payments made in connection with business combinations, net of cash acquired | - | | | (30.8) | | | (74.9) | | |
| 32 | Purchases of marketable equity securities | - | | | - | | | (42.5) | | |
| 33 | Other | 0.3 | | | - | | | 0.4 | | |
| 34 | Net cash provided by (used in) investing activities | (649.3) | | | 763.9 | | | (1,325.1) | | |
| 35 | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
| 36 | Proceeds from long-term borrowings, net of discount and underwriting fees | - | | | - | | | 989.4 | | |
| 37 | Payments for debt issuance costs | - | | | - | | | (2.4) | | |
| 38 | Payments of debt assumed in connection with business combination | - | | | - | | | (19.5) | | |
| 39 | Repurchase and retirement of common stock | (1,500.5) | | | (1,991.2) | | | (741.8) | | |
| 40 | Proceeds from issuance of common stock | 43.8 | | | 26.1 | | | 26.0 | | |
| 41 | Taxes paid related to net share settlement of equity awards | (112.5) | | | (160.4) | | | (167.9) | | |
| 42 | Other | (1.2) | | | (4.8) | | | (1.0) | | |
| 43 | Net cash provided by (used in) financing activities | (1,570.4) | | | (2,130.3) | | | 82.8 | | |
| 44 | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (0.8) | | | (0.4) | | | (0.1) | | |
| 45 | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (285.0) | | | 363.8 | | | 257.3 | | |
| 46 | CASH AND CASH EQUIVALENTS-Beginning of year | 1,682.9 | | | 1,319.1 | | | 1,061.8 | | |
| 47 | CASH AND CASH EQUIVALENTS-End of year | $ | 1,397.9 | | | $ | 1,682.9 | | $ | 1,319.1 |
| 48 | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | | | | | | |
| 49 | Cash paid for income taxes-net | $ | 426.3 | | | $ | 260.2 | | $ | 127.4 |
| 50 | Operating lease liabilities arising from obtaining right-of-use assets | $ | 19.2 | | | $ | 65.8 | | $ | 39.6 |
| 52 | NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | | | | | | |
| 53 | Transfers of evaluation units from inventory to property and equipment | $ | 31.8 | | | $ | 17.1 | | $ | 15.9 |
| 54 | Liability for purchase of property and equipment | $ | 23.6 | | | $ | 21.2 | | $ | 21.9 |
| 55 | Excise tax payable on net stock repurchases | $ | 10.9 | | | $ | - | | $ | - |
| 56 | Liability incurred in connection with business combinations | $ | - | | | $ | 0.8 | | $ | 0.9 |
See notes to consolidated financial statements.
75
,
Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)| | | | | | | | | | | | |
|---:|:--------------------------------------------------------------|:------------------------|:-----------|:----------|:-----|:-----------|:-----|:----------|:-----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Revenue: | | | | | | | | | | |
| 4 | Products | | $ | 740,168 | | | $ | 647,535 | | $ | 500,843 |
| 5 | Professional services | | 37,539 | | | 37,548 | | | 34,561 | | |
| 6 | Total revenue | | 777,707 | | | 685,083 | | | 535,404 | | |
| 7 | Cost of revenue: | | | | | | | | | | |
| 8 | Products | | 202,904 | | | 182,212 | | | 140,773 | | |
| 9 | Professional services | | 28,837 | | | 32,137 | | | 28,175 | | |
| 10 | Total cost of revenue | | 231,741 | | | 214,349 | | | 168,948 | | |
| 11 | Total gross profit | | 545,966 | | | 470,734 | | | 366,456 | | |
| 12 | Operating expenses: | | | | | | | | | | |
| 13 | Research and development | | 176,776 | | | 189,970 | | | 160,779 | | |
| 14 | Sales and marketing | | 312,636 | | | 307,409 | | | 247,453 | | |
| 15 | General and administrative | | 84,276 | | | 84,969 | | | 78,289 | | |
| 16 | Impairment of long-lived assets | | 30,784 | | | - | | | - | | |
| 17 | Restructuring | | 22,227 | | | - | | | - | | |
| 18 | Total operating expenses | | 626,699 | | | 582,348 | | | 486,521 | | |
| 19 | Loss from operations | | (80,733) | | | (111,614) | | | (120,065) | | |
| 20 | Other income (expense), net: | | | | | | | | | | |
| 21 | Interest income | | 10,177 | | | 1,813 | | | 365 | | |
| 22 | Interest expense | | (64,700) | | | (10,982) | | | (14,292) | | |
| 23 | Other income (expense), net | | (14,522) | | | (1,522) | | | (1,921) | | |
| 24 | Loss before income taxes | | (149,778) | | | (122,305) | | | (135,913) | | |
| 25 | (Benefit from) provision for income taxes | | (518) | | | 2,412 | | | 10,421 | | |
| 26 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 27 | Net loss per share, basic and diluted | | $ | (2.46) | | | $ | (2.13) | | $ | (2.65) |
| 28 | Weighted-average common shares outstanding, basic and diluted | | 60,756,087 | | | 58,552,065 | | | 55,270,998 | | |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)| | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:------------------------|:------|:----------|:-----|:--------|:-----|:----------|:--------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 4 | Other comprehensive income (loss): | | | | | | | | | | |
| 5 | Change in fair value of cash flow hedges | | 797 | | | (3,874) | | | (86) | | |
| 6 | Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes | | 724 | | | 4,053 | | | - | | |
| 7 | Total change in unrealized gains (losses) on cash flow hedges | | 1,521 | | | 179 | | | (86) | | |
| 8 | Change unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,043) | | |
| 9 | Adjustment for net gains realized and included in net loss | | - | | | - | | | (137) | | |
| 10 | Total change in unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,180) | | |
| 11 | Total other comprehensive income (loss) | | 2,755 | | | (599) | | | (1,266) | | |
| 12 | Comprehensive loss | | $ | (146,505) | | | $ | (125,316) | | $ | (147,600) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------|:-------------|:---------------|:----|:--------------------------|:-------------------------------------------|:----|:-------------------|:----|:-----------------------------------|:--------|:---------|:---|:--------|:---|:----------|:--------|:----------|:---|:------------|:---|:----------|
| 1 | | Common stock | Treasury stock | | Additionalpaid-in-capital | Accumulatedothercomprehensiveincome (loss) | | Accumulateddeficit | | Totalstockholders'equity (deficit) | | | | | | | | | | | | |
| 2 | | Shares | Amount | | Shares | Amount | | | | | | | | | | | | | | | | |
| 3 | Balance, December 31, 2020 | 52,225 | | $ | 522 | | 487 | | | $ | (4,764) | | $ | 692,603 | | $ | 454 | | $ | (617,279) | $ | 71,536 |
| 4 | Stock-based compensation expense | - | | - | | - | | | - | | | 100,317 | | - | | - | | 100,317 | | | | |
| 5 | Issuance of common stock under employee stock purchase plan | 222 | | 2 | | - | | | - | | | 9,274 | | - | | - | | 9,276 | | | | |
| 6 | Vesting of restricted stock units | 1,611 | | 16 | | - | | | - | | | (16) | | - | | - | | - | | | | |
| 7 | Shares withheld for employee taxes | (157) | | (2) | | - | | | - | | | (16,042) | | - | | - | | (16,044) | | | | |
| 8 | Issuance of common stock upon exercise of stock options | 521 | | 6 | | - | | | - | | | 4,300 | | - | | - | | 4,306 | | | | |
| 9 | Purchase of capped calls related to convertible senior notes | - | | - | | - | | | - | | | (76,020) | | - | | - | | (76,020) | | | | |
| 10 | Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes | 2,897 | | 29 | | - | | | - | | | (3,094) | | - | | - | | (3,065) | | | | |
| 11 | Issuance of common stock in connection with inducement of convertible senior notes | 35 | | - | | - | | | - | | | 2,740 | | - | | - | | 2,740 | | | | |
| 12 | Issuance of common stock related to acquisition | 341 | | 4 | | - | | | - | | | (4) | | - | | - | | - | | | | |
| 13 | Cumulative-effect adjustment for the adoption of ASU 2020-06 | - | | - | | - | | | - | | | (99,026) | | - | | 27,585 | | (71,441) | | | | |
| 14 | Other comprehensive income | - | | - | | - | | | - | | | - | | (1,266) | | - | | (1,266) | | | | |
| 15 | Net loss | - | | - | | - | | | - | | | - | | - | | (146,334) | | (146,334) | | | | |
| 16 | Balance, December 31, 2021 | 57,695 | | $ | 577 | | 487 | | | $ | (4,764) | | $ | 615,032 | | $ | (812) | | $ | (736,028) | $ | (125,995) |
| 17 | Stock-based compensation expense | - | | - | | - | | | - | | | 123,441 | | - | | - | | 123,441 | | | | |
| 18 | Issuance of common stock under employee stock purchase plan | 218 | | 2 | | - | | | - | | | 11,941 | | - | | - | | 11,943 | | | | |
| 19 | Vesting of restricted stock units | 1,482 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 20 | Shares withheld for employee taxes | (105) | | (1) | | - | | | - | | | (7,461) | | - | | - | | (7,462) | | | | |
| 21 | Issuance of common stock upon exercise of stock options | 480 | | 5 | | - | | | - | | | 3,313 | | - | | - | | 3,318 | | | | |
| 22 | Issuance of common stock in connection with conversion of convertible senior notes | - | | - | | - | | | - | | | (3) | | - | | - | | (3) | | | | |
| 23 | Issuance of common stock related to acquisition | 33 | | - | | - | | | - | | | - | | - | | - | | - | | | | |
| 24 | Repurchase of common stock issued in relation to acquisition | (83) | | (1) | | | | | | 1 | | | | | - | | | | | | | |
| 25 | Other comprehensive income | - | | - | | - | | | - | | | - | | (599) | | - | | (599) | | | | |
| 26 | Net loss | - | | - | | - | | | - | | | - | | - | | (124,717) | | (124,717) | | | | |
| 27 | Balance, December 31, 2022 | 59,720 | | $ | 597 | | 487 | | | $ | (4,764) | | $ | 746,249 | | $ | (1,411) | | $ | (860,745) | $ | (120,074) |
| 28 | Stock-based compensation expense | - | | - | | - | | | - | | | 107,254 | | - | | - | | 107,254 | | | | |
| 29 | Issuance of common stock under employee stock purchase plan | 330 | | 3 | | - | | | - | | | 11,320 | | - | | - | | 11,323 | | | | |
| 30 | Vesting of restricted stock units | 1,454 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 31 | Shares withheld for employee taxes | (113) | | (1) | | - | | | - | | | (5,569) | | - | | - | | (5,570) | | | | |
| 32 | Issuance of common stock upon exercise of stock options | 216 | | 2 | | - | | | - | | | 3,051 | | - | | - | | 3,053 | | | | |
| 33 | Issuance of common stock related to acquisition | 107 | | 1 | | - | | | - | | | (1) | | - | | - | | - | | | | |
| 34 | Repurchase of common stock issued in related to acquisition | - | | - | | 83 | | | (1) | | | 1 | | - | | - | | - | | | | |
| 35 | Purchase of capped called related to convertible senior notes | - | | - | | - | | | - | | | (36,570) | | - | | - | | (36,570) | | | | |
| 36 | Reclassification of equity to derivative assets related to capped calls | - | | - | | - | | | - | | | 33,029 | | - | | - | | 33,029 | | | | |
| 37 | Repurchase and inducement of convertible senior notes | - | | - | | - | | | - | | | 35,881 | | - | | - | | 35,881 | | | | |
| 38 | Other comprehensive loss | - | | - | | - | | | - | | | - | | 2,755 | | - | | 2,755 | | | | |
| 39 | Net loss | - | | - | | - | | | - | | | - | | - | | (149,260) | | (149,260) | | | | |
| 40 | Balance, December 31, 2023 | 61,714 | | $ | 617 | | 570 | | | $ | (4,765) | | $ | 894,630 | | $ | 1,344 | | $ | (1,010,005) | $ | (118,179) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------------|:----------|:-----|:----------|:-----|:----------|:----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Cash flows from operating activities: | | | | | | | | | |
| 4 | Net loss | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 5 | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | | | |
| 6 | Depreciation and amortization | 45,939 | | | 41,038 | | | 33,501 | | |
| 7 | Amortization of debt discount and issuance costs | 4,138 | | | 4,085 | | | 3,982 | | |
| 8 | Stock-based compensation expense | 108,081 | | | 119,902 | | | 102,579 | | |
| 9 | Impairment of long-lived assets | 30,784 | | | - | | | - | | |
| 10 | Change in fair value of derivative assets | 15,511 | | | - | | | - | | |
| 11 | Deferred income taxes | (5,624) | | | (1,440) | | | 466 | | |
| 12 | Induced conversion expense | 53,889 | | | - | | | 2,740 | | |
| 13 | Other | 469 | | | (200) | | | 1,920 | | |
| 14 | Changes in assets and liabilities: | | | | | | | | | |
| 15 | Accounts receivable | (14,021) | | | (9,050) | | | (25,475) | | |
| 16 | Deferred contract acquisition and fulfillment costs | (18,534) | | | (15,910) | | | (22,526) | | |
| 17 | Prepaid expenses and other assets | (4,125) | | | (2,231) | | | (3,355) | | |
| 18 | Accounts payable | 5,449 | | | 7,977 | | | (2,077) | | |
| 19 | Accrued expenses | 2,422 | | | 3,741 | | | 19,205 | | |
| 20 | Deferred revenue | 30,472 | | | 52,516 | | | 85,562 | | |
| 21 | Other liabilities | (1,312) | | | 2,493 | | | 3,729 | | |
| 22 | Net cash provided by operating activities | 104,278 | | | 78,204 | | | 53,917 | | |
| 23 | Cash flows from investing activities: | | | | | | | | | |
| 24 | Business acquisitions, net of cash acquired | (34,841) | | | - | | | (358,420) | | |
| 25 | Purchases of property and equipment | (4,366) | | | (20,382) | | | (9,010) | | |
| 26 | Capitalization of internal-use software | (15,878) | | | (17,145) | | | (9,854) | | |
| 27 | Purchases of investments | (276,829) | | | (122,765) | | | (93,092) | | |
| 28 | Sales and maturities of investments | 150,450 | | | 121,304 | | | 147,998 | | |
| 29 | Other investments | 2,710 | | | (1,000) | | | (3,000) | | |
| 30 | Net cash used in investing activities | (178,754) | | | (39,988) | | | (325,378) | | |
| 31 | Cash flows from financing activities: | | | | | | | | | |
| 32 | Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively | 292,091 | | | - | | | 585,024 | | |
| 33 | Purchase of capped calls related to convertible senior notes | (36,570) | | | - | | | (76,020) | | |
| 34 | Payment of debt issuance costs | - | | | (71) | | | (300) | | |
| 35 | Payments for redemption, repurchase and conversion of convertible senior notes | (199,998) | | | (12) | | | (230,000) | | |
| 36 | Payments related to business acquisitions | (2,250) | | | (300) | | | (12,118) | | |
| 37 | Proceeds from capped calls settlement | 17,518 | | | - | | | - | | |
| 38 | Taxes paid related to net share settlement of equity awards | (5,570) | | | (7,462) | | | (16,044) | | |
| 39 | Proceeds from employee stock purchase plan | 11,323 | | | 11,943 | | | 9,276 | | |
| 40 | Proceeds from stock option exercises | 3,053 | | | 3,318 | | | 4,315 | | |
| 41 | Net cash provided by financing activities | 79,597 | | | 7,416 | | | 264,133 | | |
| 42 | Effect of exchange rate changes on cash ,cash equivalents and restricted cash | 1,202 | | | (2,845) | | | (1,272) | | |
| 43 | Net increase (decrease) in cash, cash equivalents and restricted cash | 6,323 | | | 42,787 | | | (8,600) | | |
| 44 | Cash, cash equivalents and restricted cash, beginning of period | 207,804 | | | 165,017 | | | 173,617 | | |
| 45 | Cash, cash equivalents and restricted cash, end of period | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
| 46 | Supplemental cash flow information: | | | | | | | | | |
| 47 | Cash paid for interest on convertible senior notes | $ | 4,605 | | | $ | 6,675 | | $ | 7,345 |
| 48 | Cash paid for income taxes, net of refunds | $ | 1,624 | | | $ | 1,571 | | $ | 3,305 |
| 49 | Reconciliation of cash, cash equivalents and restricted cash: | | | | | | | | | |
| 50 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 | | $ | 164,582 |
| 51 | Restricted cash included in prepaid expenses and other assets | 498 | | | 517 | | | 435 | | |
| 52 | Total cash, cash equivalents and restricted cash | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
See accompanying notes to consolidated financial statements.
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|
Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
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, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 72: FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td>$</td><td>1,927.3 </td><td></td><td colspan="3"></td><td>$</td><td>1,780.5 </td><td></td><td colspan="3"></td><td>$</td><td>1,255.0 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">3,377.5 </td><td></td><td colspan="3"></td><td colspan="2">2,636.9 </td><td></td><td colspan="3"></td><td colspan="2">2,087.2 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="2">5,304.8 </td><td></td><td colspan="3"></td><td colspan="2">4,417.4 </td><td></td><td colspan="3"></td><td colspan="2">3,342.2 </td><td></td></tr><tr><td colspan="3">COST OF REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">763.6 </td><td></td><td colspan="3"></td><td colspan="2">691.3 </td><td></td><td colspan="3"></td><td colspan="2">487.7 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">473.6 </td><td></td><td colspan="3"></td><td colspan="2">393.6 </td><td></td><td colspan="3"></td><td colspan="2">295.3 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="2">1,237.2 </td><td></td><td colspan="3"></td><td colspan="2">1,084.9 </td><td></td><td colspan="3"></td><td colspan="2">783.0 </td><td></td></tr><tr><td colspan="3">GROSS PROFIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">1,163.7 </td><td></td><td colspan="3"></td><td colspan="2">1,089.2 </td><td></td><td colspan="3"></td><td colspan="2">767.3 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">2,903.9 </td><td></td><td colspan="3"></td><td colspan="2">2,243.3 </td><td></td><td colspan="3"></td><td colspan="2">1,791.9 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="2">4,067.6 </td><td></td><td colspan="3"></td><td colspan="2">3,332.5 </td><td></td><td colspan="3"></td><td colspan="2">2,559.2 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">613.8 </td><td></td><td colspan="3"></td><td colspan="2">512.4 </td><td></td><td colspan="3"></td><td colspan="2">424.2 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="2">2,006.0 </td><td></td><td colspan="3"></td><td colspan="2">1,686.1 </td><td></td><td colspan="3"></td><td colspan="2">1,345.7 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">211.3 </td><td></td><td colspan="3"></td><td colspan="2">169.0 </td><td></td><td colspan="3"></td><td colspan="2">143.5 </td><td></td></tr><tr><td colspan="3">Gain on intellectual property matter</td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">2,826.5 </td><td></td><td colspan="3"></td><td colspan="2">2,362.9 </td><td></td><td colspan="3"></td><td colspan="2">1,908.8 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="2">1,241.1 </td><td></td><td colspan="3"></td><td colspan="2">969.6 </td><td></td><td colspan="3"></td><td colspan="2">650.4 </td><td></td></tr><tr><td colspan="3">INTEREST INCOME</td><td colspan="2">119.7 </td><td></td><td colspan="3"></td><td colspan="2">17.4 </td><td></td><td colspan="3"></td><td colspan="2">4.5 </td><td></td></tr><tr><td colspan="3">INTEREST EXPENSE</td><td colspan="2">(21.0)</td><td></td><td colspan="3"></td><td colspan="2">(18.0)</td><td></td><td colspan="3"></td><td colspan="2">(14.9)</td><td></td></tr><tr><td colspan="3">OTHER EXPENSE-NET</td><td colspan="2">(6.1)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td><td colspan="3"></td><td colspan="2">(11.6)</td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">1,333.7 </td><td></td><td colspan="3"></td><td colspan="2">955.5 </td><td></td><td colspan="3"></td><td colspan="2">628.4 </td><td></td></tr><tr><td colspan="3">PROVISION FOR INCOME TAXES</td><td colspan="2">143.8 </td><td></td><td colspan="3"></td><td colspan="2">30.8 </td><td></td><td colspan="3"></td><td colspan="2">14.1 </td><td></td></tr><tr><td colspan="3">LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">(42.1)</td><td></td><td colspan="3"></td><td colspan="2">(68.1)</td><td></td><td colspan="3"></td><td colspan="2">(7.6)</td><td></td></tr><tr><td colspan="3">NET INCOME INCLUDING NON-CONTROLLING INTERESTS</td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO FORTINET, INC.</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>857.3 </td><td></td><td colspan="3"></td><td>$</td><td>606.8 </td><td></td></tr><tr><td colspan="3">Net income per share attributable to Fortinet, Inc. (Note 9):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>1.47 </td><td></td><td colspan="3"></td><td>$</td><td>1.08 </td><td></td><td colspan="3"></td><td>$</td><td>0.74 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>1.46 </td><td></td><td colspan="3"></td><td>$</td><td>1.06 </td><td></td><td colspan="3"></td><td>$</td><td>0.73 </td><td></td></tr><tr><td colspan="3">Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">778.6 </td><td></td><td colspan="3"></td><td colspan="2">791.4 </td><td></td><td colspan="3"></td><td colspan="2">816.1 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">788.2 </td><td></td><td colspan="3"></td><td colspan="2">805.3 </td><td></td><td colspan="3"></td><td colspan="2">835.3 </td><td></td></tr></table>See notes to consolidated financial statements.
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, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 73: FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in foreign currency translation</td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Change in unrealized gains (losses) on investments</td><td colspan="2">8.8 </td><td></td><td colspan="3"></td><td colspan="2">(6.2)</td><td></td><td colspan="3"></td><td colspan="2">(3.5)</td><td></td></tr><tr><td colspan="3">Less: tax provision (benefit) related to items of other comprehensive income (loss)</td><td colspan="2">2.0 </td><td></td><td colspan="3"></td><td colspan="2">(1.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.8)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">1.3 </td><td></td><td colspan="3"></td><td colspan="2">(14.5)</td><td></td><td colspan="3"></td><td colspan="2">(6.5)</td><td></td></tr><tr><td colspan="3">Comprehensive income including non-controlling interests</td><td colspan="2">1,149.1 </td><td></td><td colspan="3"></td><td colspan="2">842.1 </td><td></td><td colspan="3"></td><td colspan="2">600.2 </td><td></td></tr><tr><td colspan="3">Less: comprehensive income (loss) attributable to non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.2 </td><td></td><td colspan="3"></td><td colspan="2">(1.1)</td><td></td></tr><tr><td colspan="3">Comprehensive income attributable to Fortinet, Inc.</td><td>$</td><td>1,149.1 </td><td></td><td colspan="3"></td><td>$</td><td>841.9 </td><td></td><td colspan="3"></td><td>$</td><td>601.3 </td><td></td></tr></table>See notes to consolidated financial statements.
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, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 74: FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="9">Common Stock</td><td colspan="3"></td><td colspan="3" rowspan="2">AdditionalPaid-InCapital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">AccumulatedOtherComprehensive Income (Loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulated Deficit</td><td colspan="3"></td><td colspan="3" rowspan="2">Non-Controlling Interests</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Total Equity (Deficit)</td></tr><tr><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">BALANCE-December 31, 2020</td><td colspan="2">812.7 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,206.6 </td><td></td><td colspan="3"></td><td>$</td><td>0.7 </td><td></td><td colspan="3"></td><td>$</td><td>(352.1)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>856.0 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">10.2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(12.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(722.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Recognition of non-controlling interests upon business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">606.8 </td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2021</td><td colspan="2">810.0 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,253.6 </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(467.9)</td><td></td><td colspan="3"></td><td colspan="2">16.7 </td><td></td><td colspan="3"></td><td colspan="2">798.4 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">7.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(36.0)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(55.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,935.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td></tr><tr><td colspan="3">Acquisition of the non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3.4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16.9)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.9 </td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">857.3 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2022</td><td colspan="2">781.5 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">6.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(27.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(37.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,463.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,500.5)</td><td></td></tr><tr><td colspan="3">Excise tax on net stock repurchases</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td></tr><tr><td colspan="3">Net unrealized gain on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2023</td><td colspan="2">761.0 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,416.4 </td><td></td><td colspan="3"></td><td>$</td><td>(18.9)</td><td></td><td colspan="3"></td><td>$</td><td>(1,861.7)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>(463.4)</td><td></td></tr></table>See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">CASH FLOWS FROM OPERATING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Amortization of deferred contract costs</td><td colspan="2">266.3 </td><td></td><td colspan="3"></td><td colspan="2">223.3 </td><td></td><td colspan="3"></td><td colspan="2">175.9 </td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">113.4 </td><td></td><td colspan="3"></td><td colspan="2">104.3 </td><td></td><td colspan="3"></td><td colspan="2">84.4 </td><td></td></tr><tr><td colspan="3">Amortization of investment premiums (discounts)</td><td colspan="2">(27.7)</td><td></td><td colspan="3"></td><td colspan="2">4.4 </td><td></td><td colspan="3"></td><td colspan="2">6.9 </td><td></td></tr><tr><td colspan="3">Loss from equity method investments</td><td colspan="2">42.1 </td><td></td><td colspan="3"></td><td colspan="2">68.1 </td><td></td><td colspan="3"></td><td colspan="2">7.6 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">18.5 </td><td></td><td colspan="3"></td><td colspan="2">23.6 </td><td></td><td colspan="3"></td><td colspan="2">7.9 </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of impact of business combinations:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable-net</td><td colspan="2">(146.4)</td><td></td><td colspan="3"></td><td colspan="2">(456.7)</td><td></td><td colspan="3"></td><td colspan="2">(72.5)</td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">(253.5)</td><td></td><td colspan="3"></td><td colspan="2">(109.1)</td><td></td><td colspan="3"></td><td colspan="2">(19.4)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">(27.6)</td><td></td><td colspan="3"></td><td colspan="2">(7.7)</td><td></td><td colspan="3"></td><td colspan="2">(17.7)</td><td></td></tr><tr><td colspan="3">Deferred contract costs</td><td colspan="2">(353.5)</td><td></td><td colspan="3"></td><td colspan="2">(318.2)</td><td></td><td colspan="3"></td><td colspan="2">(294.5)</td><td></td></tr><tr><td colspan="3">Deferred tax assets</td><td colspan="2">(301.9)</td><td></td><td colspan="3"></td><td colspan="2">(226.4)</td><td></td><td colspan="3"></td><td colspan="2">(94.0)</td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">17.7 </td><td></td><td colspan="3"></td><td colspan="2">(35.3)</td><td></td><td colspan="3"></td><td colspan="2">(19.0)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">(43.1)</td><td></td><td colspan="3"></td><td colspan="2">105.2 </td><td></td><td colspan="3"></td><td colspan="2">(13.1)</td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">137.4 </td><td></td><td colspan="3"></td><td colspan="2">55.2 </td><td></td><td colspan="3"></td><td colspan="2">49.9 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">23.4 </td><td></td><td colspan="3"></td><td colspan="2">25.0 </td><td></td><td colspan="3"></td><td colspan="2">44.0 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(21.7)</td><td></td><td colspan="3"></td><td colspan="2">23.5 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">1,095.3 </td><td></td><td colspan="3"></td><td colspan="2">1,177.5 </td><td></td><td colspan="3"></td><td colspan="2">839.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">1,935.5 </td><td></td><td colspan="3"></td><td colspan="2">1,730.6 </td><td></td><td colspan="3"></td><td colspan="2">1,499.7 </td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(1,855.8)</td><td></td><td colspan="3"></td><td colspan="2">(389.1)</td><td></td><td colspan="3"></td><td colspan="2">(2,308.0)</td><td></td></tr><tr><td colspan="3">Sales of investments</td><td colspan="2">4.0 </td><td></td><td colspan="3"></td><td colspan="2">3.0 </td><td></td><td colspan="3"></td><td colspan="2">85.5 </td><td></td></tr><tr><td colspan="3">Maturities of investments</td><td colspan="2">1,414.8 </td><td></td><td colspan="3"></td><td colspan="2">1,462.0 </td><td></td><td colspan="3"></td><td colspan="2">1,470.3 </td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(204.1)</td><td></td><td colspan="3"></td><td colspan="2">(281.2)</td><td></td><td colspan="3"></td><td colspan="2">(295.9)</td><td></td></tr><tr><td colspan="3">Purchases of Investments in privately held companies</td><td colspan="2">(8.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(160.0)</td><td></td></tr><tr><td colspan="3">Payments made in connection with business combinations, net of cash acquired</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(30.8)</td><td></td><td colspan="3"></td><td colspan="2">(74.9)</td><td></td></tr><tr><td colspan="3">Purchases of marketable equity securities</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(42.5)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">0.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) investing activities</td><td colspan="2">(649.3)</td><td></td><td colspan="3"></td><td colspan="2">763.9 </td><td></td><td colspan="3"></td><td colspan="2">(1,325.1)</td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from long-term borrowings, net of discount and underwriting fees</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">989.4 </td><td></td></tr><tr><td colspan="3">Payments for debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.4)</td><td></td></tr><tr><td colspan="3">Payments of debt assumed in connection with business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(1,500.5)</td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of common stock</td><td colspan="2">43.8 </td><td></td><td colspan="3"></td><td colspan="2">26.1 </td><td></td><td colspan="3"></td><td colspan="2">26.0 </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(112.5)</td><td></td><td colspan="3"></td><td colspan="2">(160.4)</td><td></td><td colspan="3"></td><td colspan="2">(167.9)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">(1.2)</td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="2">(1,570.4)</td><td></td><td colspan="3"></td><td colspan="2">(2,130.3)</td><td></td><td colspan="3"></td><td colspan="2">82.8 </td><td></td></tr><tr><td colspan="3">EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS</td><td colspan="2">(0.8)</td><td></td><td colspan="3"></td><td colspan="2">(0.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</td><td colspan="2">(285.0)</td><td></td><td colspan="3"></td><td colspan="2">363.8 </td><td></td><td colspan="3"></td><td colspan="2">257.3 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-Beginning of year</td><td colspan="2">1,682.9 </td><td></td><td colspan="3"></td><td colspan="2">1,319.1 </td><td></td><td colspan="3"></td><td colspan="2">1,061.8 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-End of year</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,319.1 </td><td></td></tr><tr><td colspan="3">SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for income taxes-net</td><td>$</td><td>426.3 </td><td></td><td colspan="3"></td><td>$</td><td>260.2 </td><td></td><td colspan="3"></td><td>$</td><td>127.4 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities arising from obtaining right-of-use assets</td><td>$</td><td>19.2 </td><td></td><td colspan="3"></td><td>$</td><td>65.8 </td><td></td><td colspan="3"></td><td>$</td><td>39.6 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NON-CASH INVESTING AND FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Transfers of evaluation units from inventory to property and equipment</td><td>$</td><td>31.8 </td><td></td><td colspan="3"></td><td>$</td><td>17.1 </td><td></td><td colspan="3"></td><td>$</td><td>15.9 </td><td></td></tr><tr><td colspan="3">Liability for purchase of property and equipment</td><td>$</td><td>23.6 </td><td></td><td colspan="3"></td><td>$</td><td>21.2 </td><td></td><td colspan="3"></td><td>$</td><td>21.9 </td><td></td></tr><tr><td colspan="3">Excise tax payable on net stock repurchases</td><td>$</td><td>10.9 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Liability incurred in connection with business combinations</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>0.9 </td><td></td></tr></table>See notes to consolidated financial statements.
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, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 61:
Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>740,168 </td><td></td><td colspan="3"></td><td>$</td><td>647,535 </td><td></td><td colspan="3"></td><td>$</td><td>500,843 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,539 </td><td></td><td colspan="3"></td><td colspan="2">37,548 </td><td></td><td colspan="3"></td><td colspan="2">34,561 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">777,707 </td><td></td><td colspan="3"></td><td colspan="2">685,083 </td><td></td><td colspan="3"></td><td colspan="2">535,404 </td><td></td></tr><tr><td colspan="3">Cost of revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">202,904 </td><td></td><td colspan="3"></td><td colspan="2">182,212 </td><td></td><td colspan="3"></td><td colspan="2">140,773 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">28,837 </td><td></td><td colspan="3"></td><td colspan="2">32,137 </td><td></td><td colspan="3"></td><td colspan="2">28,175 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">231,741 </td><td></td><td colspan="3"></td><td colspan="2">214,349 </td><td></td><td colspan="3"></td><td colspan="2">168,948 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">545,966 </td><td></td><td colspan="3"></td><td colspan="2">470,734 </td><td></td><td colspan="3"></td><td colspan="2">366,456 </td><td></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">176,776 </td><td></td><td colspan="3"></td><td colspan="2">189,970 </td><td></td><td colspan="3"></td><td colspan="2">160,779 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">312,636 </td><td></td><td colspan="3"></td><td colspan="2">307,409 </td><td></td><td colspan="3"></td><td colspan="2">247,453 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">84,276 </td><td></td><td colspan="3"></td><td colspan="2">84,969 </td><td></td><td colspan="3"></td><td colspan="2">78,289 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Restructuring</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">22,227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">626,699 </td><td></td><td colspan="3"></td><td colspan="2">582,348 </td><td></td><td colspan="3"></td><td colspan="2">486,521 </td><td></td></tr><tr><td colspan="3">Loss from operations</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(80,733)</td><td></td><td colspan="3"></td><td colspan="2">(111,614)</td><td></td><td colspan="3"></td><td colspan="2">(120,065)</td><td></td></tr><tr><td colspan="3">Other income (expense), net:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">10,177 </td><td></td><td colspan="3"></td><td colspan="2">1,813 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(64,700)</td><td></td><td colspan="3"></td><td colspan="2">(10,982)</td><td></td><td colspan="3"></td><td colspan="2">(14,292)</td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(14,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,921)</td><td></td></tr><tr><td colspan="3">Loss before income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(149,778)</td><td></td><td colspan="3"></td><td colspan="2">(122,305)</td><td></td><td colspan="3"></td><td colspan="2">(135,913)</td><td></td></tr><tr><td colspan="3">(Benefit from) provision for income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(518)</td><td></td><td colspan="3"></td><td colspan="2">2,412 </td><td></td><td colspan="3"></td><td colspan="2">10,421 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Net loss per share, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(2.46)</td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>(2.65)</td><td></td></tr><tr><td colspan="3">Weighted-average common shares outstanding, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">60,756,087 </td><td></td><td colspan="3"></td><td colspan="2">58,552,065 </td><td></td><td colspan="3"></td><td colspan="2">55,270,998 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in fair value of cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">797 </td><td></td><td colspan="3"></td><td colspan="2">(3,874)</td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">4,053 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,521 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Change unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,043)</td><td></td></tr><tr><td colspan="3">Adjustment for net gains realized and included in net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(137)</td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,180)</td><td></td></tr><tr><td colspan="3">Total other comprehensive income (loss)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Comprehensive loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(146,505)</td><td></td><td colspan="3"></td><td>$</td><td>(125,316)</td><td></td><td colspan="3"></td><td>$</td><td>(147,600)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) <table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9">Common stock</td><td colspan="3"></td><td colspan="9">Treasury stock</td><td colspan="3"></td><td colspan="3" rowspan="2">Additionalpaid-in-capital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulatedothercomprehensiveincome (loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulateddeficit</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Totalstockholders'equity (deficit)</td></tr><tr><td colspan="3"> </td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td></tr><tr><td colspan="3">Balance, December 31, 2020</td><td colspan="2">52,225 </td><td></td><td colspan="3"></td><td>$</td><td>522 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>692,603 </td><td></td><td colspan="3"></td><td>$</td><td>454 </td><td></td><td colspan="3"></td><td>$</td><td>(617,279)</td><td></td><td colspan="3"></td><td>$</td><td>71,536 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">222 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,274 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,611 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(157)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,042)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">521 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,300 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">2,897 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,094)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,065)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with inducement of convertible senior notes</td><td colspan="2">35 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">341 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Cumulative-effect adjustment for the adoption of ASU 2020-06</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(99,026)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">27,585 </td><td></td><td colspan="3"></td><td colspan="2">(71,441)</td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2021</td><td colspan="2">57,695 </td><td></td><td colspan="3"></td><td>$</td><td>577 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>615,032 </td><td></td><td colspan="3"></td><td>$</td><td>(812)</td><td></td><td colspan="3"></td><td>$</td><td>(736,028)</td><td></td><td colspan="3"></td><td>$</td><td>(125,995)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">218 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,941 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,482 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,461)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">480 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,313 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with conversion of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in relation to acquisition</td><td colspan="2">(83)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2022</td><td colspan="2">59,720 </td><td></td><td colspan="3"></td><td>$</td><td>597 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>746,249 </td><td></td><td colspan="3"></td><td>$</td><td>(1,411)</td><td></td><td colspan="3"></td><td>$</td><td>(860,745)</td><td></td><td colspan="3"></td><td>$</td><td>(120,074)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">330 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,320 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,323 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,454 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(113)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,569)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,570)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">216 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,051 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,053 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">107 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in related to acquisition</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Purchase of capped called related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td></tr><tr><td colspan="3">Reclassification of equity to derivative assets related to capped calls</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td></tr><tr><td colspan="3">Repurchase and inducement of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2023</td><td colspan="2">61,714 </td><td></td><td colspan="3"></td><td>$</td><td>617 </td><td></td><td colspan="3"></td><td colspan="2">570 </td><td></td><td colspan="3"></td><td>$</td><td>(4,765)</td><td></td><td colspan="3"></td><td>$</td><td>894,630 </td><td></td><td colspan="3"></td><td>$</td><td>1,344 </td><td></td><td colspan="3"></td><td>$</td><td>(1,010,005)</td><td></td><td colspan="3"></td><td>$</td><td>(118,179)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
64
, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 65:
Table of Contents
RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net loss</td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net loss to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">45,939 </td><td></td><td colspan="3"></td><td colspan="2">41,038 </td><td></td><td colspan="3"></td><td colspan="2">33,501 </td><td></td></tr><tr><td colspan="3">Amortization of debt discount and issuance costs</td><td colspan="2">4,138 </td><td></td><td colspan="3"></td><td colspan="2">4,085 </td><td></td><td colspan="3"></td><td colspan="2">3,982 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">108,081 </td><td></td><td colspan="3"></td><td colspan="2">119,902 </td><td></td><td colspan="3"></td><td colspan="2">102,579 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Change in fair value of derivative assets</td><td colspan="2">15,511 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Deferred income taxes</td><td colspan="2">(5,624)</td><td></td><td colspan="3"></td><td colspan="2">(1,440)</td><td></td><td colspan="3"></td><td colspan="2">466 </td><td></td></tr><tr><td colspan="3">Induced conversion expense</td><td colspan="2">53,889 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">469 </td><td></td><td colspan="3"></td><td colspan="2">(200)</td><td></td><td colspan="3"></td><td colspan="2">1,920 </td><td></td></tr><tr><td colspan="3">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable</td><td colspan="2">(14,021)</td><td></td><td colspan="3"></td><td colspan="2">(9,050)</td><td></td><td colspan="3"></td><td colspan="2">(25,475)</td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs</td><td colspan="2">(18,534)</td><td></td><td colspan="3"></td><td colspan="2">(15,910)</td><td></td><td colspan="3"></td><td colspan="2">(22,526)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other assets</td><td colspan="2">(4,125)</td><td></td><td colspan="3"></td><td colspan="2">(2,231)</td><td></td><td colspan="3"></td><td colspan="2">(3,355)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">5,449 </td><td></td><td colspan="3"></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td><td colspan="2">(2,077)</td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">2,422 </td><td></td><td colspan="3"></td><td colspan="2">3,741 </td><td></td><td colspan="3"></td><td colspan="2">19,205 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">30,472 </td><td></td><td colspan="3"></td><td colspan="2">52,516 </td><td></td><td colspan="3"></td><td colspan="2">85,562 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(1,312)</td><td></td><td colspan="3"></td><td colspan="2">2,493 </td><td></td><td colspan="3"></td><td colspan="2">3,729 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">104,278 </td><td></td><td colspan="3"></td><td colspan="2">78,204 </td><td></td><td colspan="3"></td><td colspan="2">53,917 </td><td></td></tr><tr><td colspan="3">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Business acquisitions, net of cash acquired</td><td colspan="2">(34,841)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(358,420)</td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(4,366)</td><td></td><td colspan="3"></td><td colspan="2">(20,382)</td><td></td><td colspan="3"></td><td colspan="2">(9,010)</td><td></td></tr><tr><td colspan="3">Capitalization of internal-use software</td><td colspan="2">(15,878)</td><td></td><td colspan="3"></td><td colspan="2">(17,145)</td><td></td><td colspan="3"></td><td colspan="2">(9,854)</td><td></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(276,829)</td><td></td><td colspan="3"></td><td colspan="2">(122,765)</td><td></td><td colspan="3"></td><td colspan="2">(93,092)</td><td></td></tr><tr><td colspan="3">Sales and maturities of investments</td><td colspan="2">150,450 </td><td></td><td colspan="3"></td><td colspan="2">121,304 </td><td></td><td colspan="3"></td><td colspan="2">147,998 </td><td></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">2,710 </td><td></td><td colspan="3"></td><td colspan="2">(1,000)</td><td></td><td colspan="3"></td><td colspan="2">(3,000)</td><td></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="2">(178,754)</td><td></td><td colspan="3"></td><td colspan="2">(39,988)</td><td></td><td colspan="3"></td><td colspan="2">(325,378)</td><td></td></tr><tr><td colspan="3">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively</td><td colspan="2">292,091 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">585,024 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Payment of debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(71)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td></tr><tr><td colspan="3">Payments for redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">(199,998)</td><td></td><td colspan="3"></td><td colspan="2">(12)</td><td></td><td colspan="3"></td><td colspan="2">(230,000)</td><td></td></tr><tr><td colspan="3">Payments related to business acquisitions</td><td colspan="2">(2,250)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td><td colspan="3"></td><td colspan="2">(12,118)</td><td></td></tr><tr><td colspan="3">Proceeds from capped calls settlement</td><td colspan="2">17,518 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(5,570)</td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Proceeds from employee stock purchase plan</td><td colspan="2">11,323 </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Proceeds from stock option exercises</td><td colspan="2">3,053 </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td><td colspan="3"></td><td colspan="2">4,315 </td><td></td></tr><tr><td colspan="3">Net cash provided by financing activities</td><td colspan="2">79,597 </td><td></td><td colspan="3"></td><td colspan="2">7,416 </td><td></td><td colspan="3"></td><td colspan="2">264,133 </td><td></td></tr><tr><td colspan="3">Effect of exchange rate changes on cash ,cash equivalents and restricted cash</td><td colspan="2">1,202 </td><td></td><td colspan="3"></td><td colspan="2">(2,845)</td><td></td><td colspan="3"></td><td colspan="2">(1,272)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash, cash equivalents and restricted cash</td><td colspan="2">6,323 </td><td></td><td colspan="3"></td><td colspan="2">42,787 </td><td></td><td colspan="3"></td><td colspan="2">(8,600)</td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, beginning of period</td><td colspan="2">207,804 </td><td></td><td colspan="3"></td><td colspan="2">165,017 </td><td></td><td colspan="3"></td><td colspan="2">173,617 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, end of period</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr><tr><td colspan="3">Supplemental cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for interest on convertible senior notes</td><td>$</td><td>4,605 </td><td></td><td colspan="3"></td><td>$</td><td>6,675 </td><td></td><td colspan="3"></td><td>$</td><td>7,345 </td><td></td></tr><tr><td colspan="3">Cash paid for income taxes, net of refunds</td><td>$</td><td>1,624 </td><td></td><td colspan="3"></td><td>$</td><td>1,571 </td><td></td><td colspan="3"></td><td>$</td><td>3,305 </td><td></td></tr><tr><td colspan="3">Reconciliation of cash, cash equivalents and restricted cash:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td><td colspan="3"></td><td>$</td><td>164,582 </td><td></td></tr><tr><td colspan="3">Restricted cash included in prepaid expenses and other assets</td><td colspan="2">498 </td><td></td><td colspan="3"></td><td colspan="2">517 </td><td></td><td colspan="3"></td><td colspan="2">435 </td><td></td></tr><tr><td colspan="3">Total cash, cash equivalents and restricted cash</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
65
|
FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
71
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td>$</td><td>1,927.3 </td><td></td><td colspan="3"></td><td>$</td><td>1,780.5 </td><td></td><td colspan="3"></td><td>$</td><td>1,255.0 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">3,377.5 </td><td></td><td colspan="3"></td><td colspan="2">2,636.9 </td><td></td><td colspan="3"></td><td colspan="2">2,087.2 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="2">5,304.8 </td><td></td><td colspan="3"></td><td colspan="2">4,417.4 </td><td></td><td colspan="3"></td><td colspan="2">3,342.2 </td><td></td></tr><tr><td colspan="3">COST OF REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">763.6 </td><td></td><td colspan="3"></td><td colspan="2">691.3 </td><td></td><td colspan="3"></td><td colspan="2">487.7 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">473.6 </td><td></td><td colspan="3"></td><td colspan="2">393.6 </td><td></td><td colspan="3"></td><td colspan="2">295.3 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="2">1,237.2 </td><td></td><td colspan="3"></td><td colspan="2">1,084.9 </td><td></td><td colspan="3"></td><td colspan="2">783.0 </td><td></td></tr><tr><td colspan="3">GROSS PROFIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">1,163.7 </td><td></td><td colspan="3"></td><td colspan="2">1,089.2 </td><td></td><td colspan="3"></td><td colspan="2">767.3 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">2,903.9 </td><td></td><td colspan="3"></td><td colspan="2">2,243.3 </td><td></td><td colspan="3"></td><td colspan="2">1,791.9 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="2">4,067.6 </td><td></td><td colspan="3"></td><td colspan="2">3,332.5 </td><td></td><td colspan="3"></td><td colspan="2">2,559.2 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">613.8 </td><td></td><td colspan="3"></td><td colspan="2">512.4 </td><td></td><td colspan="3"></td><td colspan="2">424.2 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="2">2,006.0 </td><td></td><td colspan="3"></td><td colspan="2">1,686.1 </td><td></td><td colspan="3"></td><td colspan="2">1,345.7 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">211.3 </td><td></td><td colspan="3"></td><td colspan="2">169.0 </td><td></td><td colspan="3"></td><td colspan="2">143.5 </td><td></td></tr><tr><td colspan="3">Gain on intellectual property matter</td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">2,826.5 </td><td></td><td colspan="3"></td><td colspan="2">2,362.9 </td><td></td><td colspan="3"></td><td colspan="2">1,908.8 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="2">1,241.1 </td><td></td><td colspan="3"></td><td colspan="2">969.6 </td><td></td><td colspan="3"></td><td colspan="2">650.4 </td><td></td></tr><tr><td colspan="3">INTEREST INCOME</td><td colspan="2">119.7 </td><td></td><td colspan="3"></td><td colspan="2">17.4 </td><td></td><td colspan="3"></td><td colspan="2">4.5 </td><td></td></tr><tr><td colspan="3">INTEREST EXPENSE</td><td colspan="2">(21.0)</td><td></td><td colspan="3"></td><td colspan="2">(18.0)</td><td></td><td colspan="3"></td><td colspan="2">(14.9)</td><td></td></tr><tr><td colspan="3">OTHER EXPENSE-NET</td><td colspan="2">(6.1)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td><td colspan="3"></td><td colspan="2">(11.6)</td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">1,333.7 </td><td></td><td colspan="3"></td><td colspan="2">955.5 </td><td></td><td colspan="3"></td><td colspan="2">628.4 </td><td></td></tr><tr><td colspan="3">PROVISION FOR INCOME TAXES</td><td colspan="2">143.8 </td><td></td><td colspan="3"></td><td colspan="2">30.8 </td><td></td><td colspan="3"></td><td colspan="2">14.1 </td><td></td></tr><tr><td colspan="3">LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">(42.1)</td><td></td><td colspan="3"></td><td colspan="2">(68.1)</td><td></td><td colspan="3"></td><td colspan="2">(7.6)</td><td></td></tr><tr><td colspan="3">NET INCOME INCLUDING NON-CONTROLLING INTERESTS</td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO FORTINET, INC.</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>857.3 </td><td></td><td colspan="3"></td><td>$</td><td>606.8 </td><td></td></tr><tr><td colspan="3">Net income per share attributable to Fortinet, Inc. (Note 9):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>1.47 </td><td></td><td colspan="3"></td><td>$</td><td>1.08 </td><td></td><td colspan="3"></td><td>$</td><td>0.74 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>1.46 </td><td></td><td colspan="3"></td><td>$</td><td>1.06 </td><td></td><td colspan="3"></td><td>$</td><td>0.73 </td><td></td></tr><tr><td colspan="3">Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">778.6 </td><td></td><td colspan="3"></td><td colspan="2">791.4 </td><td></td><td colspan="3"></td><td colspan="2">816.1 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">788.2 </td><td></td><td colspan="3"></td><td colspan="2">805.3 </td><td></td><td colspan="3"></td><td colspan="2">835.3 </td><td></td></tr></table>See notes to consolidated financial statements.
72
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in foreign currency translation</td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Change in unrealized gains (losses) on investments</td><td colspan="2">8.8 </td><td></td><td colspan="3"></td><td colspan="2">(6.2)</td><td></td><td colspan="3"></td><td colspan="2">(3.5)</td><td></td></tr><tr><td colspan="3">Less: tax provision (benefit) related to items of other comprehensive income (loss)</td><td colspan="2">2.0 </td><td></td><td colspan="3"></td><td colspan="2">(1.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.8)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">1.3 </td><td></td><td colspan="3"></td><td colspan="2">(14.5)</td><td></td><td colspan="3"></td><td colspan="2">(6.5)</td><td></td></tr><tr><td colspan="3">Comprehensive income including non-controlling interests</td><td colspan="2">1,149.1 </td><td></td><td colspan="3"></td><td colspan="2">842.1 </td><td></td><td colspan="3"></td><td colspan="2">600.2 </td><td></td></tr><tr><td colspan="3">Less: comprehensive income (loss) attributable to non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.2 </td><td></td><td colspan="3"></td><td colspan="2">(1.1)</td><td></td></tr><tr><td colspan="3">Comprehensive income attributable to Fortinet, Inc.</td><td>$</td><td>1,149.1 </td><td></td><td colspan="3"></td><td>$</td><td>841.9 </td><td></td><td colspan="3"></td><td>$</td><td>601.3 </td><td></td></tr></table>See notes to consolidated financial statements.
73
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="9">Common Stock</td><td colspan="3"></td><td colspan="3" rowspan="2">AdditionalPaid-InCapital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">AccumulatedOtherComprehensive Income (Loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulated Deficit</td><td colspan="3"></td><td colspan="3" rowspan="2">Non-Controlling Interests</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Total Equity (Deficit)</td></tr><tr><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">BALANCE-December 31, 2020</td><td colspan="2">812.7 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,206.6 </td><td></td><td colspan="3"></td><td>$</td><td>0.7 </td><td></td><td colspan="3"></td><td>$</td><td>(352.1)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>856.0 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">10.2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(12.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(722.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Recognition of non-controlling interests upon business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">606.8 </td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2021</td><td colspan="2">810.0 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,253.6 </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(467.9)</td><td></td><td colspan="3"></td><td colspan="2">16.7 </td><td></td><td colspan="3"></td><td colspan="2">798.4 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">7.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(36.0)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(55.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,935.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td></tr><tr><td colspan="3">Acquisition of the non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3.4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16.9)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.9 </td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">857.3 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2022</td><td colspan="2">781.5 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">6.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(27.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(37.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,463.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,500.5)</td><td></td></tr><tr><td colspan="3">Excise tax on net stock repurchases</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td></tr><tr><td colspan="3">Net unrealized gain on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2023</td><td colspan="2">761.0 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,416.4 </td><td></td><td colspan="3"></td><td>$</td><td>(18.9)</td><td></td><td colspan="3"></td><td>$</td><td>(1,861.7)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>(463.4)</td><td></td></tr></table>See notes to consolidated financial statements.
74
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">CASH FLOWS FROM OPERATING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Amortization of deferred contract costs</td><td colspan="2">266.3 </td><td></td><td colspan="3"></td><td colspan="2">223.3 </td><td></td><td colspan="3"></td><td colspan="2">175.9 </td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">113.4 </td><td></td><td colspan="3"></td><td colspan="2">104.3 </td><td></td><td colspan="3"></td><td colspan="2">84.4 </td><td></td></tr><tr><td colspan="3">Amortization of investment premiums (discounts)</td><td colspan="2">(27.7)</td><td></td><td colspan="3"></td><td colspan="2">4.4 </td><td></td><td colspan="3"></td><td colspan="2">6.9 </td><td></td></tr><tr><td colspan="3">Loss from equity method investments</td><td colspan="2">42.1 </td><td></td><td colspan="3"></td><td colspan="2">68.1 </td><td></td><td colspan="3"></td><td colspan="2">7.6 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">18.5 </td><td></td><td colspan="3"></td><td colspan="2">23.6 </td><td></td><td colspan="3"></td><td colspan="2">7.9 </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of impact of business combinations:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable-net</td><td colspan="2">(146.4)</td><td></td><td colspan="3"></td><td colspan="2">(456.7)</td><td></td><td colspan="3"></td><td colspan="2">(72.5)</td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">(253.5)</td><td></td><td colspan="3"></td><td colspan="2">(109.1)</td><td></td><td colspan="3"></td><td colspan="2">(19.4)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">(27.6)</td><td></td><td colspan="3"></td><td colspan="2">(7.7)</td><td></td><td colspan="3"></td><td colspan="2">(17.7)</td><td></td></tr><tr><td colspan="3">Deferred contract costs</td><td colspan="2">(353.5)</td><td></td><td colspan="3"></td><td colspan="2">(318.2)</td><td></td><td colspan="3"></td><td colspan="2">(294.5)</td><td></td></tr><tr><td colspan="3">Deferred tax assets</td><td colspan="2">(301.9)</td><td></td><td colspan="3"></td><td colspan="2">(226.4)</td><td></td><td colspan="3"></td><td colspan="2">(94.0)</td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">17.7 </td><td></td><td colspan="3"></td><td colspan="2">(35.3)</td><td></td><td colspan="3"></td><td colspan="2">(19.0)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">(43.1)</td><td></td><td colspan="3"></td><td colspan="2">105.2 </td><td></td><td colspan="3"></td><td colspan="2">(13.1)</td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">137.4 </td><td></td><td colspan="3"></td><td colspan="2">55.2 </td><td></td><td colspan="3"></td><td colspan="2">49.9 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">23.4 </td><td></td><td colspan="3"></td><td colspan="2">25.0 </td><td></td><td colspan="3"></td><td colspan="2">44.0 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(21.7)</td><td></td><td colspan="3"></td><td colspan="2">23.5 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">1,095.3 </td><td></td><td colspan="3"></td><td colspan="2">1,177.5 </td><td></td><td colspan="3"></td><td colspan="2">839.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">1,935.5 </td><td></td><td colspan="3"></td><td colspan="2">1,730.6 </td><td></td><td colspan="3"></td><td colspan="2">1,499.7 </td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(1,855.8)</td><td></td><td colspan="3"></td><td colspan="2">(389.1)</td><td></td><td colspan="3"></td><td colspan="2">(2,308.0)</td><td></td></tr><tr><td colspan="3">Sales of investments</td><td colspan="2">4.0 </td><td></td><td colspan="3"></td><td colspan="2">3.0 </td><td></td><td colspan="3"></td><td colspan="2">85.5 </td><td></td></tr><tr><td colspan="3">Maturities of investments</td><td colspan="2">1,414.8 </td><td></td><td colspan="3"></td><td colspan="2">1,462.0 </td><td></td><td colspan="3"></td><td colspan="2">1,470.3 </td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(204.1)</td><td></td><td colspan="3"></td><td colspan="2">(281.2)</td><td></td><td colspan="3"></td><td colspan="2">(295.9)</td><td></td></tr><tr><td colspan="3">Purchases of Investments in privately held companies</td><td colspan="2">(8.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(160.0)</td><td></td></tr><tr><td colspan="3">Payments made in connection with business combinations, net of cash acquired</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(30.8)</td><td></td><td colspan="3"></td><td colspan="2">(74.9)</td><td></td></tr><tr><td colspan="3">Purchases of marketable equity securities</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(42.5)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">0.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) investing activities</td><td colspan="2">(649.3)</td><td></td><td colspan="3"></td><td colspan="2">763.9 </td><td></td><td colspan="3"></td><td colspan="2">(1,325.1)</td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from long-term borrowings, net of discount and underwriting fees</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">989.4 </td><td></td></tr><tr><td colspan="3">Payments for debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.4)</td><td></td></tr><tr><td colspan="3">Payments of debt assumed in connection with business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(1,500.5)</td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of common stock</td><td colspan="2">43.8 </td><td></td><td colspan="3"></td><td colspan="2">26.1 </td><td></td><td colspan="3"></td><td colspan="2">26.0 </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(112.5)</td><td></td><td colspan="3"></td><td colspan="2">(160.4)</td><td></td><td colspan="3"></td><td colspan="2">(167.9)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">(1.2)</td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="2">(1,570.4)</td><td></td><td colspan="3"></td><td colspan="2">(2,130.3)</td><td></td><td colspan="3"></td><td colspan="2">82.8 </td><td></td></tr><tr><td colspan="3">EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS</td><td colspan="2">(0.8)</td><td></td><td colspan="3"></td><td colspan="2">(0.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</td><td colspan="2">(285.0)</td><td></td><td colspan="3"></td><td colspan="2">363.8 </td><td></td><td colspan="3"></td><td colspan="2">257.3 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-Beginning of year</td><td colspan="2">1,682.9 </td><td></td><td colspan="3"></td><td colspan="2">1,319.1 </td><td></td><td colspan="3"></td><td colspan="2">1,061.8 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-End of year</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,319.1 </td><td></td></tr><tr><td colspan="3">SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for income taxes-net</td><td>$</td><td>426.3 </td><td></td><td colspan="3"></td><td>$</td><td>260.2 </td><td></td><td colspan="3"></td><td>$</td><td>127.4 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities arising from obtaining right-of-use assets</td><td>$</td><td>19.2 </td><td></td><td colspan="3"></td><td>$</td><td>65.8 </td><td></td><td colspan="3"></td><td>$</td><td>39.6 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NON-CASH INVESTING AND FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Transfers of evaluation units from inventory to property and equipment</td><td>$</td><td>31.8 </td><td></td><td colspan="3"></td><td>$</td><td>17.1 </td><td></td><td colspan="3"></td><td>$</td><td>15.9 </td><td></td></tr><tr><td colspan="3">Liability for purchase of property and equipment</td><td>$</td><td>23.6 </td><td></td><td colspan="3"></td><td>$</td><td>21.2 </td><td></td><td colspan="3"></td><td>$</td><td>21.9 </td><td></td></tr><tr><td colspan="3">Excise tax payable on net stock repurchases</td><td>$</td><td>10.9 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Liability incurred in connection with business combinations</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>0.9 </td><td></td></tr></table>See notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>740,168 </td><td></td><td colspan="3"></td><td>$</td><td>647,535 </td><td></td><td colspan="3"></td><td>$</td><td>500,843 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,539 </td><td></td><td colspan="3"></td><td colspan="2">37,548 </td><td></td><td colspan="3"></td><td colspan="2">34,561 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">777,707 </td><td></td><td colspan="3"></td><td colspan="2">685,083 </td><td></td><td colspan="3"></td><td colspan="2">535,404 </td><td></td></tr><tr><td colspan="3">Cost of revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">202,904 </td><td></td><td colspan="3"></td><td colspan="2">182,212 </td><td></td><td colspan="3"></td><td colspan="2">140,773 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">28,837 </td><td></td><td colspan="3"></td><td colspan="2">32,137 </td><td></td><td colspan="3"></td><td colspan="2">28,175 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">231,741 </td><td></td><td colspan="3"></td><td colspan="2">214,349 </td><td></td><td colspan="3"></td><td colspan="2">168,948 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">545,966 </td><td></td><td colspan="3"></td><td colspan="2">470,734 </td><td></td><td colspan="3"></td><td colspan="2">366,456 </td><td></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">176,776 </td><td></td><td colspan="3"></td><td colspan="2">189,970 </td><td></td><td colspan="3"></td><td colspan="2">160,779 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">312,636 </td><td></td><td colspan="3"></td><td colspan="2">307,409 </td><td></td><td colspan="3"></td><td colspan="2">247,453 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">84,276 </td><td></td><td colspan="3"></td><td colspan="2">84,969 </td><td></td><td colspan="3"></td><td colspan="2">78,289 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Restructuring</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">22,227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">626,699 </td><td></td><td colspan="3"></td><td colspan="2">582,348 </td><td></td><td colspan="3"></td><td colspan="2">486,521 </td><td></td></tr><tr><td colspan="3">Loss from operations</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(80,733)</td><td></td><td colspan="3"></td><td colspan="2">(111,614)</td><td></td><td colspan="3"></td><td colspan="2">(120,065)</td><td></td></tr><tr><td colspan="3">Other income (expense), net:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">10,177 </td><td></td><td colspan="3"></td><td colspan="2">1,813 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(64,700)</td><td></td><td colspan="3"></td><td colspan="2">(10,982)</td><td></td><td colspan="3"></td><td colspan="2">(14,292)</td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(14,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,921)</td><td></td></tr><tr><td colspan="3">Loss before income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(149,778)</td><td></td><td colspan="3"></td><td colspan="2">(122,305)</td><td></td><td colspan="3"></td><td colspan="2">(135,913)</td><td></td></tr><tr><td colspan="3">(Benefit from) provision for income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(518)</td><td></td><td colspan="3"></td><td colspan="2">2,412 </td><td></td><td colspan="3"></td><td colspan="2">10,421 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Net loss per share, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(2.46)</td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>(2.65)</td><td></td></tr><tr><td colspan="3">Weighted-average common shares outstanding, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">60,756,087 </td><td></td><td colspan="3"></td><td colspan="2">58,552,065 </td><td></td><td colspan="3"></td><td colspan="2">55,270,998 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in fair value of cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">797 </td><td></td><td colspan="3"></td><td colspan="2">(3,874)</td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">4,053 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,521 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Change unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,043)</td><td></td></tr><tr><td colspan="3">Adjustment for net gains realized and included in net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(137)</td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,180)</td><td></td></tr><tr><td colspan="3">Total other comprehensive income (loss)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Comprehensive loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(146,505)</td><td></td><td colspan="3"></td><td>$</td><td>(125,316)</td><td></td><td colspan="3"></td><td>$</td><td>(147,600)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) <table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9">Common stock</td><td colspan="3"></td><td colspan="9">Treasury stock</td><td colspan="3"></td><td colspan="3" rowspan="2">Additionalpaid-in-capital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulatedothercomprehensiveincome (loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulateddeficit</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Totalstockholders'equity (deficit)</td></tr><tr><td colspan="3"> </td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td></tr><tr><td colspan="3">Balance, December 31, 2020</td><td colspan="2">52,225 </td><td></td><td colspan="3"></td><td>$</td><td>522 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>692,603 </td><td></td><td colspan="3"></td><td>$</td><td>454 </td><td></td><td colspan="3"></td><td>$</td><td>(617,279)</td><td></td><td colspan="3"></td><td>$</td><td>71,536 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">222 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,274 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,611 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(157)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,042)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">521 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,300 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">2,897 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,094)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,065)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with inducement of convertible senior notes</td><td colspan="2">35 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">341 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Cumulative-effect adjustment for the adoption of ASU 2020-06</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(99,026)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">27,585 </td><td></td><td colspan="3"></td><td colspan="2">(71,441)</td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2021</td><td colspan="2">57,695 </td><td></td><td colspan="3"></td><td>$</td><td>577 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>615,032 </td><td></td><td colspan="3"></td><td>$</td><td>(812)</td><td></td><td colspan="3"></td><td>$</td><td>(736,028)</td><td></td><td colspan="3"></td><td>$</td><td>(125,995)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">218 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,941 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,482 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,461)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">480 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,313 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with conversion of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in relation to acquisition</td><td colspan="2">(83)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2022</td><td colspan="2">59,720 </td><td></td><td colspan="3"></td><td>$</td><td>597 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>746,249 </td><td></td><td colspan="3"></td><td>$</td><td>(1,411)</td><td></td><td colspan="3"></td><td>$</td><td>(860,745)</td><td></td><td colspan="3"></td><td>$</td><td>(120,074)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">330 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,320 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,323 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,454 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(113)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,569)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,570)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">216 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,051 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,053 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">107 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in related to acquisition</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Purchase of capped called related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td></tr><tr><td colspan="3">Reclassification of equity to derivative assets related to capped calls</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td></tr><tr><td colspan="3">Repurchase and inducement of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2023</td><td colspan="2">61,714 </td><td></td><td colspan="3"></td><td>$</td><td>617 </td><td></td><td colspan="3"></td><td colspan="2">570 </td><td></td><td colspan="3"></td><td>$</td><td>(4,765)</td><td></td><td colspan="3"></td><td>$</td><td>894,630 </td><td></td><td colspan="3"></td><td>$</td><td>1,344 </td><td></td><td colspan="3"></td><td>$</td><td>(1,010,005)</td><td></td><td colspan="3"></td><td>$</td><td>(118,179)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net loss</td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net loss to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">45,939 </td><td></td><td colspan="3"></td><td colspan="2">41,038 </td><td></td><td colspan="3"></td><td colspan="2">33,501 </td><td></td></tr><tr><td colspan="3">Amortization of debt discount and issuance costs</td><td colspan="2">4,138 </td><td></td><td colspan="3"></td><td colspan="2">4,085 </td><td></td><td colspan="3"></td><td colspan="2">3,982 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">108,081 </td><td></td><td colspan="3"></td><td colspan="2">119,902 </td><td></td><td colspan="3"></td><td colspan="2">102,579 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Change in fair value of derivative assets</td><td colspan="2">15,511 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Deferred income taxes</td><td colspan="2">(5,624)</td><td></td><td colspan="3"></td><td colspan="2">(1,440)</td><td></td><td colspan="3"></td><td colspan="2">466 </td><td></td></tr><tr><td colspan="3">Induced conversion expense</td><td colspan="2">53,889 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">469 </td><td></td><td colspan="3"></td><td colspan="2">(200)</td><td></td><td colspan="3"></td><td colspan="2">1,920 </td><td></td></tr><tr><td colspan="3">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable</td><td colspan="2">(14,021)</td><td></td><td colspan="3"></td><td colspan="2">(9,050)</td><td></td><td colspan="3"></td><td colspan="2">(25,475)</td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs</td><td colspan="2">(18,534)</td><td></td><td colspan="3"></td><td colspan="2">(15,910)</td><td></td><td colspan="3"></td><td colspan="2">(22,526)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other assets</td><td colspan="2">(4,125)</td><td></td><td colspan="3"></td><td colspan="2">(2,231)</td><td></td><td colspan="3"></td><td colspan="2">(3,355)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">5,449 </td><td></td><td colspan="3"></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td><td colspan="2">(2,077)</td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">2,422 </td><td></td><td colspan="3"></td><td colspan="2">3,741 </td><td></td><td colspan="3"></td><td colspan="2">19,205 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">30,472 </td><td></td><td colspan="3"></td><td colspan="2">52,516 </td><td></td><td colspan="3"></td><td colspan="2">85,562 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(1,312)</td><td></td><td colspan="3"></td><td colspan="2">2,493 </td><td></td><td colspan="3"></td><td colspan="2">3,729 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">104,278 </td><td></td><td colspan="3"></td><td colspan="2">78,204 </td><td></td><td colspan="3"></td><td colspan="2">53,917 </td><td></td></tr><tr><td colspan="3">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Business acquisitions, net of cash acquired</td><td colspan="2">(34,841)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(358,420)</td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(4,366)</td><td></td><td colspan="3"></td><td colspan="2">(20,382)</td><td></td><td colspan="3"></td><td colspan="2">(9,010)</td><td></td></tr><tr><td colspan="3">Capitalization of internal-use software</td><td colspan="2">(15,878)</td><td></td><td colspan="3"></td><td colspan="2">(17,145)</td><td></td><td colspan="3"></td><td colspan="2">(9,854)</td><td></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(276,829)</td><td></td><td colspan="3"></td><td colspan="2">(122,765)</td><td></td><td colspan="3"></td><td colspan="2">(93,092)</td><td></td></tr><tr><td colspan="3">Sales and maturities of investments</td><td colspan="2">150,450 </td><td></td><td colspan="3"></td><td colspan="2">121,304 </td><td></td><td colspan="3"></td><td colspan="2">147,998 </td><td></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">2,710 </td><td></td><td colspan="3"></td><td colspan="2">(1,000)</td><td></td><td colspan="3"></td><td colspan="2">(3,000)</td><td></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="2">(178,754)</td><td></td><td colspan="3"></td><td colspan="2">(39,988)</td><td></td><td colspan="3"></td><td colspan="2">(325,378)</td><td></td></tr><tr><td colspan="3">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively</td><td colspan="2">292,091 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">585,024 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Payment of debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(71)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td></tr><tr><td colspan="3">Payments for redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">(199,998)</td><td></td><td colspan="3"></td><td colspan="2">(12)</td><td></td><td colspan="3"></td><td colspan="2">(230,000)</td><td></td></tr><tr><td colspan="3">Payments related to business acquisitions</td><td colspan="2">(2,250)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td><td colspan="3"></td><td colspan="2">(12,118)</td><td></td></tr><tr><td colspan="3">Proceeds from capped calls settlement</td><td colspan="2">17,518 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(5,570)</td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Proceeds from employee stock purchase plan</td><td colspan="2">11,323 </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Proceeds from stock option exercises</td><td colspan="2">3,053 </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td><td colspan="3"></td><td colspan="2">4,315 </td><td></td></tr><tr><td colspan="3">Net cash provided by financing activities</td><td colspan="2">79,597 </td><td></td><td colspan="3"></td><td colspan="2">7,416 </td><td></td><td colspan="3"></td><td colspan="2">264,133 </td><td></td></tr><tr><td colspan="3">Effect of exchange rate changes on cash ,cash equivalents and restricted cash</td><td colspan="2">1,202 </td><td></td><td colspan="3"></td><td colspan="2">(2,845)</td><td></td><td colspan="3"></td><td colspan="2">(1,272)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash, cash equivalents and restricted cash</td><td colspan="2">6,323 </td><td></td><td colspan="3"></td><td colspan="2">42,787 </td><td></td><td colspan="3"></td><td colspan="2">(8,600)</td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, beginning of period</td><td colspan="2">207,804 </td><td></td><td colspan="3"></td><td colspan="2">165,017 </td><td></td><td colspan="3"></td><td colspan="2">173,617 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, end of period</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr><tr><td colspan="3">Supplemental cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for interest on convertible senior notes</td><td>$</td><td>4,605 </td><td></td><td colspan="3"></td><td>$</td><td>6,675 </td><td></td><td colspan="3"></td><td>$</td><td>7,345 </td><td></td></tr><tr><td colspan="3">Cash paid for income taxes, net of refunds</td><td>$</td><td>1,624 </td><td></td><td colspan="3"></td><td>$</td><td>1,571 </td><td></td><td colspan="3"></td><td>$</td><td>3,305 </td><td></td></tr><tr><td colspan="3">Reconciliation of cash, cash equivalents and restricted cash:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td><td colspan="3"></td><td>$</td><td>164,582 </td><td></td></tr><tr><td colspan="3">Restricted cash included in prepaid expenses and other assets</td><td colspan="2">498 </td><td></td><td colspan="3"></td><td colspan="2">517 </td><td></td><td colspan="3"></td><td colspan="2">435 </td><td></td></tr><tr><td colspan="3">Total cash, cash equivalents and restricted cash</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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q_com012
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Compare the potential risks to future profitability for Fortinet Inc. and Rapid7 Inc. based on their 2023 financial metrics.
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Potential risks to future profitability can be assessed by examining liquidity, solvency, and efficiency ratios, as well as overall financial performance.For Fortinet Inc.:- Current Ratio (2023): 1.19,- Debt-to-Equity Ratio (2023): -16.66, - Asset Turnover Ratio (2023): 0.73, - Net Income (2023): $1,147.8 million. Risks - 1. High Leverage: Despite an improvement, Fortinet Inc. still has a high negative debt-to-equity ratio, indicating significant leverage. This could pose a risk if the company faces economic downturns or increased interest rates. 2. Stockholders' Deficit: The company has a stockholders' deficit, which could limit its ability to raise additional equity financing. 3. Inventory Management: A significant increase in inventory from $264.6 million in 2022 to $484.8 million in 2023 could indicate potential issues with inventory management or demand forecasting.
For Rapid7 Inc.:
- Current Ratio (2023): 1.11, - Debt-to-Equity Ratio (2023): -13.74, - Asset Turnover Ratio (2023): 0.52, - Net Loss (2023): -$149,260 thousand
Risks - 1. Continued Losses: Rapid7 Inc. has reported net losses for multiple years, indicating ongoing challenges in achieving profitability. 2. High Leverage: The company has a high negative debt-to-equity ratio, indicating significant leverage and potential solvency risks. 3. Operating Expenses: High operating expenses, including research and development and sales and marketing, continue to impact profitability.
In summary, both companies face risks related to high leverage and stockholders' deficits. Fortinet Inc. has a stronger profitability position but faces risks related to inventory management and leverage. Rapid7 Inc. faces significant challenges in achieving profitability and managing high operating expenses and leverage.
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Comparison
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71,72,73,74,75;61,62,63,64,65
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0001262039-24-000014;0001560327-24-000021
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ITEM 8. Financial Statements and Supplementary Data;Item 8. Financial Statements and Supplementary Data.
|
Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 72: FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
| | | | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------|:------------------------|:--------|:--------|:---|:--------|:--------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | |
| 2 | 2023 | | 2022 | 2021 | | | | | |
| 3 | REVENUE: | | | | | | | | |
| 4 | Product | $ | 1,927.3 | | $ | 1,780.5 | | $ | 1,255.0 |
| 5 | Service | 3,377.5 | | 2,636.9 | | | 2,087.2 | | |
| 6 | Total revenue | 5,304.8 | | 4,417.4 | | | 3,342.2 | | |
| 7 | COST OF REVENUE: | | | | | | | | |
| 8 | Product | 763.6 | | 691.3 | | | 487.7 | | |
| 9 | Service | 473.6 | | 393.6 | | | 295.3 | | |
| 10 | Total cost of revenue | 1,237.2 | | 1,084.9 | | | 783.0 | | |
| 11 | GROSS PROFIT: | | | | | | | | |
| 12 | Product | 1,163.7 | | 1,089.2 | | | 767.3 | | |
| 13 | Service | 2,903.9 | | 2,243.3 | | | 1,791.9 | | |
| 14 | Total gross profit | 4,067.6 | | 3,332.5 | | | 2,559.2 | | |
| 15 | OPERATING EXPENSES: | | | | | | | | |
| 16 | Research and development | 613.8 | | 512.4 | | | 424.2 | | |
| 17 | Sales and marketing | 2,006.0 | | 1,686.1 | | | 1,345.7 | | |
| 18 | General and administrative | 211.3 | | 169.0 | | | 143.5 | | |
| 19 | Gain on intellectual property matter | (4.6) | | (4.6) | | | (4.6) | | |
| 20 | Total operating expenses | 2,826.5 | | 2,362.9 | | | 1,908.8 | | |
| 21 | OPERATING INCOME | 1,241.1 | | 969.6 | | | 650.4 | | |
| 22 | INTEREST INCOME | 119.7 | | 17.4 | | | 4.5 | | |
| 23 | INTEREST EXPENSE | (21.0) | | (18.0) | | | (14.9) | | |
| 24 | OTHER EXPENSE-NET | (6.1) | | (13.5) | | | (11.6) | | |
| 25 | INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS | 1,333.7 | | 955.5 | | | 628.4 | | |
| 26 | PROVISION FOR INCOME TAXES | 143.8 | | 30.8 | | | 14.1 | | |
| 27 | LOSS FROM EQUITY METHOD INVESTMENTS | (42.1) | | (68.1) | | | (7.6) | | |
| 28 | NET INCOME INCLUDING NON-CONTROLLING INTERESTS | 1,147.8 | | 856.6 | | | 606.7 | | |
| 29 | LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX | - | | (0.7) | | | (0.1) | | |
| 30 | NET INCOME ATTRIBUTABLE TO FORTINET, INC. | $ | 1,147.8 | | $ | 857.3 | | $ | 606.8 |
| 31 | Net income per share attributable to Fortinet, Inc. (Note 9): | | | | | | | | |
| 32 | Basic | $ | 1.47 | | $ | 1.08 | | $ | 0.74 |
| 33 | Diluted | $ | 1.46 | | $ | 1.06 | | $ | 0.73 |
| 34 | Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.: | | | | | | | | |
| 35 | Basic | 778.6 | | 791.4 | | | 816.1 | | |
| 36 | Diluted | 788.2 | | 805.3 | | | 835.3 | | |
See notes to consolidated financial statements.
72
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 73: FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
| | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:-------|:-----|:------|:------|:---|:------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 4 | Other comprehensive income (loss): | | | | | | | | | |
| 5 | Change in foreign currency translation | (5.5) | | | (9.7) | | | (3.8) | | |
| 6 | Change in unrealized gains (losses) on investments | 8.8 | | | (6.2) | | | (3.5) | | |
| 7 | Less: tax provision (benefit) related to items of other comprehensive income (loss) | 2.0 | | | (1.4) | | | (0.8) | | |
| 8 | Other comprehensive income (loss) | 1.3 | | | (14.5) | | | (6.5) | | |
| 9 | Comprehensive income including non-controlling interests | 1,149.1 | | | 842.1 | | | 600.2 | | |
| 10 | Less: comprehensive income (loss) attributable to non-controlling interests | - | | | 0.2 | | | (1.1) | | |
| 11 | Comprehensive income attributable to Fortinet, Inc. | $ | 1,149.1 | | | $ | 841.9 | | $ | 601.3 |
See notes to consolidated financial statements.
73
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 74: FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
| | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------|:-------------|:-------|:-------------------------|:----|:--------------------------------------------|:--------------------|:---|:--------------------------|:-------|:-----------------------|:---|:----------|:-------|:----------|:----------|:---|:---|:---|:--------|
| 1 | | Common Stock | | AdditionalPaid-InCapital | | AccumulatedOtherComprehensive Income (Loss) | Accumulated Deficit | | Non-Controlling Interests | | Total Equity (Deficit) | | | | | | | | | |
| 2 | Shares | | Amount | | | | | | | | | | | | | | | | | |
| 3 | BALANCE-December 31, 2020 | 812.7 | | | $ | 0.8 | | $ | 1,206.6 | | | $ | 0.7 | $ | (352.1) | | $ | - | $ | 856.0 |
| 4 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 10.2 | | | - | | (141.7) | | | - | | | - | - | | (141.7) | | | | |
| 5 | Repurchase and retirement of common stock | (12.9) | | | - | | (19.2) | | | - | | | (722.6) | - | | (741.8) | | | | |
| 6 | Stock-based compensation expense | - | | | - | | 207.9 | | | - | | | - | - | | 207.9 | | | | |
| 7 | Recognition of non-controlling interests upon business combination | - | | | - | | - | | | - | | | - | 17.8 | | 17.8 | | | | |
| 8 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (2.7) | | | - | - | | (2.7) | | | | |
| 9 | Foreign currency translation adjustment | - | | | - | | - | | | (2.8) | | | - | (1.0) | | (3.8) | | | | |
| 10 | Net income | - | | | - | | - | | | - | | | 606.8 | (0.1) | | 606.7 | | | | |
| 11 | BALANCE-December 31, 2021 | 810.0 | | | 0.8 | | 1,253.6 | | | (4.8) | | | (467.9) | 16.7 | | 798.4 | | | | |
| 12 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 7.5 | | | - | | (134.7) | | | - | | | - | - | | (134.7) | | | | |
| 13 | Repurchase and retirement of common stock | (36.0) | | | - | | (55.4) | | | - | | | (1,935.8) | - | | (1,991.2) | | | | |
| 14 | Stock-based compensation expense | - | | | - | | 217.3 | | | - | | | - | - | | 217.3 | | | | |
| 15 | Acquisition of the non-controlling interests | - | | | - | | 3.4 | | | - | | | - | (16.9) | | (13.5) | | | | |
| 16 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (4.8) | | | - | - | | (4.8) | | | | |
| 17 | Foreign currency translation adjustment | - | | | - | | - | | | (10.6) | | | - | 0.9 | | (9.7) | | | | |
| 18 | Net income | - | | | - | | - | | | - | | | 857.3 | (0.7) | | 856.6 | | | | |
| 19 | BALANCE-December 31, 2022 | 781.5 | | | 0.8 | | 1,284.2 | | | (20.2) | | | (1,546.4) | - | | (281.6) | | | | |
| 20 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 6.7 | | | - | | (68.5) | | | - | | | - | - | | (68.5) | | | | |
| 21 | Repurchase and retirement of common stock | (27.2) | | | - | | (37.4) | | | - | | | (1,463.1) | - | | (1,500.5) | | | | |
| 22 | Excise tax on net stock repurchases | - | | | - | | (10.9) | | | - | | | - | - | | (10.9) | | | | |
| 23 | Stock-based compensation expense | - | | | - | | 249.0 | | | - | | | - | - | | 249.0 | | | | |
| 24 | Net unrealized gain on investments - net of tax | - | | | - | | - | | | 6.8 | | | - | - | | 6.8 | | | | |
| 25 | Foreign currency translation adjustment | - | | | - | | - | | | (5.5) | | | - | - | | (5.5) | | | | |
| 26 | Net income | - | | | - | | - | | | - | | | 1,147.8 | - | | 1,147.8 | | | | |
| 27 | BALANCE-December 31, 2023 | 761.0 | | | $ | 0.8 | | $ | 1,416.4 | | | $ | (18.9) | $ | (1,861.7) | | $ | - | $ | (463.4) |
See notes to consolidated financial statements.
74
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 75: FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:----------|:-----|:--------|:----------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| 4 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 5 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 6 | Stock-based compensation | 249.0 | | | 217.3 | | | 207.9 | | |
| 7 | Amortization of deferred contract costs | 266.3 | | | 223.3 | | | 175.9 | | |
| 8 | Depreciation and amortization | 113.4 | | | 104.3 | | | 84.4 | | |
| 9 | Amortization of investment premiums (discounts) | (27.7) | | | 4.4 | | | 6.9 | | |
| 10 | Loss from equity method investments | 42.1 | | | 68.1 | | | 7.6 | | |
| 11 | Other | 18.5 | | | 23.6 | | | 7.9 | | |
| 12 | Changes in operating assets and liabilities, net of impact of business combinations: | | | | | | | | | |
| 13 | Accounts receivable-net | (146.4) | | | (456.7) | | | (72.5) | | |
| 14 | Inventory | (253.5) | | | (109.1) | | | (19.4) | | |
| 15 | Prepaid expenses and other current assets | (27.6) | | | (7.7) | | | (17.7) | | |
| 16 | Deferred contract costs | (353.5) | | | (318.2) | | | (294.5) | | |
| 17 | Deferred tax assets | (301.9) | | | (226.4) | | | (94.0) | | |
| 18 | Other assets | 17.7 | | | (35.3) | | | (19.0) | | |
| 19 | Accounts payable | (43.1) | | | 105.2 | | | (13.1) | | |
| 20 | Accrued liabilities | 137.4 | | | 55.2 | | | 49.9 | | |
| 21 | Accrued payroll and compensation | 23.4 | | | 25.0 | | | 44.0 | | |
| 22 | Other liabilities | (21.7) | | | 23.5 | | | (0.7) | | |
| 23 | Deferred revenue | 1,095.3 | | | 1,177.5 | | | 839.4 | | |
| 24 | Net cash provided by operating activities | 1,935.5 | | | 1,730.6 | | | 1,499.7 | | |
| 25 | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
| 26 | Purchases of investments | (1,855.8) | | | (389.1) | | | (2,308.0) | | |
| 27 | Sales of investments | 4.0 | | | 3.0 | | | 85.5 | | |
| 28 | Maturities of investments | 1,414.8 | | | 1,462.0 | | | 1,470.3 | | |
| 29 | Purchases of property and equipment | (204.1) | | | (281.2) | | | (295.9) | | |
| 30 | Purchases of Investments in privately held companies | (8.5) | | | - | | | (160.0) | | |
| 31 | Payments made in connection with business combinations, net of cash acquired | - | | | (30.8) | | | (74.9) | | |
| 32 | Purchases of marketable equity securities | - | | | - | | | (42.5) | | |
| 33 | Other | 0.3 | | | - | | | 0.4 | | |
| 34 | Net cash provided by (used in) investing activities | (649.3) | | | 763.9 | | | (1,325.1) | | |
| 35 | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
| 36 | Proceeds from long-term borrowings, net of discount and underwriting fees | - | | | - | | | 989.4 | | |
| 37 | Payments for debt issuance costs | - | | | - | | | (2.4) | | |
| 38 | Payments of debt assumed in connection with business combination | - | | | - | | | (19.5) | | |
| 39 | Repurchase and retirement of common stock | (1,500.5) | | | (1,991.2) | | | (741.8) | | |
| 40 | Proceeds from issuance of common stock | 43.8 | | | 26.1 | | | 26.0 | | |
| 41 | Taxes paid related to net share settlement of equity awards | (112.5) | | | (160.4) | | | (167.9) | | |
| 42 | Other | (1.2) | | | (4.8) | | | (1.0) | | |
| 43 | Net cash provided by (used in) financing activities | (1,570.4) | | | (2,130.3) | | | 82.8 | | |
| 44 | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (0.8) | | | (0.4) | | | (0.1) | | |
| 45 | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (285.0) | | | 363.8 | | | 257.3 | | |
| 46 | CASH AND CASH EQUIVALENTS-Beginning of year | 1,682.9 | | | 1,319.1 | | | 1,061.8 | | |
| 47 | CASH AND CASH EQUIVALENTS-End of year | $ | 1,397.9 | | | $ | 1,682.9 | | $ | 1,319.1 |
| 48 | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | | | | | | |
| 49 | Cash paid for income taxes-net | $ | 426.3 | | | $ | 260.2 | | $ | 127.4 |
| 50 | Operating lease liabilities arising from obtaining right-of-use assets | $ | 19.2 | | | $ | 65.8 | | $ | 39.6 |
| 52 | NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | | | | | | |
| 53 | Transfers of evaluation units from inventory to property and equipment | $ | 31.8 | | | $ | 17.1 | | $ | 15.9 |
| 54 | Liability for purchase of property and equipment | $ | 23.6 | | | $ | 21.2 | | $ | 21.9 |
| 55 | Excise tax payable on net stock repurchases | $ | 10.9 | | | $ | - | | $ | - |
| 56 | Liability incurred in connection with business combinations | $ | - | | | $ | 0.8 | | $ | 0.9 |
See notes to consolidated financial statements.
75
, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 61:
Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
61
, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 62:
Table of Contents
RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)| | | | | | | | | | | | |
|---:|:--------------------------------------------------------------|:------------------------|:-----------|:----------|:-----|:-----------|:-----|:----------|:-----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Revenue: | | | | | | | | | | |
| 4 | Products | | $ | 740,168 | | | $ | 647,535 | | $ | 500,843 |
| 5 | Professional services | | 37,539 | | | 37,548 | | | 34,561 | | |
| 6 | Total revenue | | 777,707 | | | 685,083 | | | 535,404 | | |
| 7 | Cost of revenue: | | | | | | | | | | |
| 8 | Products | | 202,904 | | | 182,212 | | | 140,773 | | |
| 9 | Professional services | | 28,837 | | | 32,137 | | | 28,175 | | |
| 10 | Total cost of revenue | | 231,741 | | | 214,349 | | | 168,948 | | |
| 11 | Total gross profit | | 545,966 | | | 470,734 | | | 366,456 | | |
| 12 | Operating expenses: | | | | | | | | | | |
| 13 | Research and development | | 176,776 | | | 189,970 | | | 160,779 | | |
| 14 | Sales and marketing | | 312,636 | | | 307,409 | | | 247,453 | | |
| 15 | General and administrative | | 84,276 | | | 84,969 | | | 78,289 | | |
| 16 | Impairment of long-lived assets | | 30,784 | | | - | | | - | | |
| 17 | Restructuring | | 22,227 | | | - | | | - | | |
| 18 | Total operating expenses | | 626,699 | | | 582,348 | | | 486,521 | | |
| 19 | Loss from operations | | (80,733) | | | (111,614) | | | (120,065) | | |
| 20 | Other income (expense), net: | | | | | | | | | | |
| 21 | Interest income | | 10,177 | | | 1,813 | | | 365 | | |
| 22 | Interest expense | | (64,700) | | | (10,982) | | | (14,292) | | |
| 23 | Other income (expense), net | | (14,522) | | | (1,522) | | | (1,921) | | |
| 24 | Loss before income taxes | | (149,778) | | | (122,305) | | | (135,913) | | |
| 25 | (Benefit from) provision for income taxes | | (518) | | | 2,412 | | | 10,421 | | |
| 26 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 27 | Net loss per share, basic and diluted | | $ | (2.46) | | | $ | (2.13) | | $ | (2.65) |
| 28 | Weighted-average common shares outstanding, basic and diluted | | 60,756,087 | | | 58,552,065 | | | 55,270,998 | | |
See accompanying notes to consolidated financial statements.
62
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Table of Contents
RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)| | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:------------------------|:------|:----------|:-----|:--------|:-----|:----------|:--------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 4 | Other comprehensive income (loss): | | | | | | | | | | |
| 5 | Change in fair value of cash flow hedges | | 797 | | | (3,874) | | | (86) | | |
| 6 | Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes | | 724 | | | 4,053 | | | - | | |
| 7 | Total change in unrealized gains (losses) on cash flow hedges | | 1,521 | | | 179 | | | (86) | | |
| 8 | Change unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,043) | | |
| 9 | Adjustment for net gains realized and included in net loss | | - | | | - | | | (137) | | |
| 10 | Total change in unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,180) | | |
| 11 | Total other comprehensive income (loss) | | 2,755 | | | (599) | | | (1,266) | | |
| 12 | Comprehensive loss | | $ | (146,505) | | | $ | (125,316) | | $ | (147,600) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------|:-------------|:---------------|:----|:--------------------------|:-------------------------------------------|:----|:-------------------|:----|:-----------------------------------|:--------|:---------|:---|:--------|:---|:----------|:--------|:----------|:---|:------------|:---|:----------|
| 1 | | Common stock | Treasury stock | | Additionalpaid-in-capital | Accumulatedothercomprehensiveincome (loss) | | Accumulateddeficit | | Totalstockholders'equity (deficit) | | | | | | | | | | | | |
| 2 | | Shares | Amount | | Shares | Amount | | | | | | | | | | | | | | | | |
| 3 | Balance, December 31, 2020 | 52,225 | | $ | 522 | | 487 | | | $ | (4,764) | | $ | 692,603 | | $ | 454 | | $ | (617,279) | $ | 71,536 |
| 4 | Stock-based compensation expense | - | | - | | - | | | - | | | 100,317 | | - | | - | | 100,317 | | | | |
| 5 | Issuance of common stock under employee stock purchase plan | 222 | | 2 | | - | | | - | | | 9,274 | | - | | - | | 9,276 | | | | |
| 6 | Vesting of restricted stock units | 1,611 | | 16 | | - | | | - | | | (16) | | - | | - | | - | | | | |
| 7 | Shares withheld for employee taxes | (157) | | (2) | | - | | | - | | | (16,042) | | - | | - | | (16,044) | | | | |
| 8 | Issuance of common stock upon exercise of stock options | 521 | | 6 | | - | | | - | | | 4,300 | | - | | - | | 4,306 | | | | |
| 9 | Purchase of capped calls related to convertible senior notes | - | | - | | - | | | - | | | (76,020) | | - | | - | | (76,020) | | | | |
| 10 | Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes | 2,897 | | 29 | | - | | | - | | | (3,094) | | - | | - | | (3,065) | | | | |
| 11 | Issuance of common stock in connection with inducement of convertible senior notes | 35 | | - | | - | | | - | | | 2,740 | | - | | - | | 2,740 | | | | |
| 12 | Issuance of common stock related to acquisition | 341 | | 4 | | - | | | - | | | (4) | | - | | - | | - | | | | |
| 13 | Cumulative-effect adjustment for the adoption of ASU 2020-06 | - | | - | | - | | | - | | | (99,026) | | - | | 27,585 | | (71,441) | | | | |
| 14 | Other comprehensive income | - | | - | | - | | | - | | | - | | (1,266) | | - | | (1,266) | | | | |
| 15 | Net loss | - | | - | | - | | | - | | | - | | - | | (146,334) | | (146,334) | | | | |
| 16 | Balance, December 31, 2021 | 57,695 | | $ | 577 | | 487 | | | $ | (4,764) | | $ | 615,032 | | $ | (812) | | $ | (736,028) | $ | (125,995) |
| 17 | Stock-based compensation expense | - | | - | | - | | | - | | | 123,441 | | - | | - | | 123,441 | | | | |
| 18 | Issuance of common stock under employee stock purchase plan | 218 | | 2 | | - | | | - | | | 11,941 | | - | | - | | 11,943 | | | | |
| 19 | Vesting of restricted stock units | 1,482 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 20 | Shares withheld for employee taxes | (105) | | (1) | | - | | | - | | | (7,461) | | - | | - | | (7,462) | | | | |
| 21 | Issuance of common stock upon exercise of stock options | 480 | | 5 | | - | | | - | | | 3,313 | | - | | - | | 3,318 | | | | |
| 22 | Issuance of common stock in connection with conversion of convertible senior notes | - | | - | | - | | | - | | | (3) | | - | | - | | (3) | | | | |
| 23 | Issuance of common stock related to acquisition | 33 | | - | | - | | | - | | | - | | - | | - | | - | | | | |
| 24 | Repurchase of common stock issued in relation to acquisition | (83) | | (1) | | | | | | 1 | | | | | - | | | | | | | |
| 25 | Other comprehensive income | - | | - | | - | | | - | | | - | | (599) | | - | | (599) | | | | |
| 26 | Net loss | - | | - | | - | | | - | | | - | | - | | (124,717) | | (124,717) | | | | |
| 27 | Balance, December 31, 2022 | 59,720 | | $ | 597 | | 487 | | | $ | (4,764) | | $ | 746,249 | | $ | (1,411) | | $ | (860,745) | $ | (120,074) |
| 28 | Stock-based compensation expense | - | | - | | - | | | - | | | 107,254 | | - | | - | | 107,254 | | | | |
| 29 | Issuance of common stock under employee stock purchase plan | 330 | | 3 | | - | | | - | | | 11,320 | | - | | - | | 11,323 | | | | |
| 30 | Vesting of restricted stock units | 1,454 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 31 | Shares withheld for employee taxes | (113) | | (1) | | - | | | - | | | (5,569) | | - | | - | | (5,570) | | | | |
| 32 | Issuance of common stock upon exercise of stock options | 216 | | 2 | | - | | | - | | | 3,051 | | - | | - | | 3,053 | | | | |
| 33 | Issuance of common stock related to acquisition | 107 | | 1 | | - | | | - | | | (1) | | - | | - | | - | | | | |
| 34 | Repurchase of common stock issued in related to acquisition | - | | - | | 83 | | | (1) | | | 1 | | - | | - | | - | | | | |
| 35 | Purchase of capped called related to convertible senior notes | - | | - | | - | | | - | | | (36,570) | | - | | - | | (36,570) | | | | |
| 36 | Reclassification of equity to derivative assets related to capped calls | - | | - | | - | | | - | | | 33,029 | | - | | - | | 33,029 | | | | |
| 37 | Repurchase and inducement of convertible senior notes | - | | - | | - | | | - | | | 35,881 | | - | | - | | 35,881 | | | | |
| 38 | Other comprehensive loss | - | | - | | - | | | - | | | - | | 2,755 | | - | | 2,755 | | | | |
| 39 | Net loss | - | | - | | - | | | - | | | - | | - | | (149,260) | | (149,260) | | | | |
| 40 | Balance, December 31, 2023 | 61,714 | | $ | 617 | | 570 | | | $ | (4,765) | | $ | 894,630 | | $ | 1,344 | | $ | (1,010,005) | $ | (118,179) |
See accompanying notes to consolidated financial statements.
64
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------------|:----------|:-----|:----------|:-----|:----------|:----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Cash flows from operating activities: | | | | | | | | | |
| 4 | Net loss | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 5 | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | | | |
| 6 | Depreciation and amortization | 45,939 | | | 41,038 | | | 33,501 | | |
| 7 | Amortization of debt discount and issuance costs | 4,138 | | | 4,085 | | | 3,982 | | |
| 8 | Stock-based compensation expense | 108,081 | | | 119,902 | | | 102,579 | | |
| 9 | Impairment of long-lived assets | 30,784 | | | - | | | - | | |
| 10 | Change in fair value of derivative assets | 15,511 | | | - | | | - | | |
| 11 | Deferred income taxes | (5,624) | | | (1,440) | | | 466 | | |
| 12 | Induced conversion expense | 53,889 | | | - | | | 2,740 | | |
| 13 | Other | 469 | | | (200) | | | 1,920 | | |
| 14 | Changes in assets and liabilities: | | | | | | | | | |
| 15 | Accounts receivable | (14,021) | | | (9,050) | | | (25,475) | | |
| 16 | Deferred contract acquisition and fulfillment costs | (18,534) | | | (15,910) | | | (22,526) | | |
| 17 | Prepaid expenses and other assets | (4,125) | | | (2,231) | | | (3,355) | | |
| 18 | Accounts payable | 5,449 | | | 7,977 | | | (2,077) | | |
| 19 | Accrued expenses | 2,422 | | | 3,741 | | | 19,205 | | |
| 20 | Deferred revenue | 30,472 | | | 52,516 | | | 85,562 | | |
| 21 | Other liabilities | (1,312) | | | 2,493 | | | 3,729 | | |
| 22 | Net cash provided by operating activities | 104,278 | | | 78,204 | | | 53,917 | | |
| 23 | Cash flows from investing activities: | | | | | | | | | |
| 24 | Business acquisitions, net of cash acquired | (34,841) | | | - | | | (358,420) | | |
| 25 | Purchases of property and equipment | (4,366) | | | (20,382) | | | (9,010) | | |
| 26 | Capitalization of internal-use software | (15,878) | | | (17,145) | | | (9,854) | | |
| 27 | Purchases of investments | (276,829) | | | (122,765) | | | (93,092) | | |
| 28 | Sales and maturities of investments | 150,450 | | | 121,304 | | | 147,998 | | |
| 29 | Other investments | 2,710 | | | (1,000) | | | (3,000) | | |
| 30 | Net cash used in investing activities | (178,754) | | | (39,988) | | | (325,378) | | |
| 31 | Cash flows from financing activities: | | | | | | | | | |
| 32 | Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively | 292,091 | | | - | | | 585,024 | | |
| 33 | Purchase of capped calls related to convertible senior notes | (36,570) | | | - | | | (76,020) | | |
| 34 | Payment of debt issuance costs | - | | | (71) | | | (300) | | |
| 35 | Payments for redemption, repurchase and conversion of convertible senior notes | (199,998) | | | (12) | | | (230,000) | | |
| 36 | Payments related to business acquisitions | (2,250) | | | (300) | | | (12,118) | | |
| 37 | Proceeds from capped calls settlement | 17,518 | | | - | | | - | | |
| 38 | Taxes paid related to net share settlement of equity awards | (5,570) | | | (7,462) | | | (16,044) | | |
| 39 | Proceeds from employee stock purchase plan | 11,323 | | | 11,943 | | | 9,276 | | |
| 40 | Proceeds from stock option exercises | 3,053 | | | 3,318 | | | 4,315 | | |
| 41 | Net cash provided by financing activities | 79,597 | | | 7,416 | | | 264,133 | | |
| 42 | Effect of exchange rate changes on cash ,cash equivalents and restricted cash | 1,202 | | | (2,845) | | | (1,272) | | |
| 43 | Net increase (decrease) in cash, cash equivalents and restricted cash | 6,323 | | | 42,787 | | | (8,600) | | |
| 44 | Cash, cash equivalents and restricted cash, beginning of period | 207,804 | | | 165,017 | | | 173,617 | | |
| 45 | Cash, cash equivalents and restricted cash, end of period | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
| 46 | Supplemental cash flow information: | | | | | | | | | |
| 47 | Cash paid for interest on convertible senior notes | $ | 4,605 | | | $ | 6,675 | | $ | 7,345 |
| 48 | Cash paid for income taxes, net of refunds | $ | 1,624 | | | $ | 1,571 | | $ | 3,305 |
| 49 | Reconciliation of cash, cash equivalents and restricted cash: | | | | | | | | | |
| 50 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 | | $ | 164,582 |
| 51 | Restricted cash included in prepaid expenses and other assets | 498 | | | 517 | | | 435 | | |
| 52 | Total cash, cash equivalents and restricted cash | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
See accompanying notes to consolidated financial statements.
65
|
FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:-----------------|:----------|:---|:--------|
| 1 | | December 31,2023 | | December 31,2022 | | | |
| 2 | ASSETS | | | | | | |
| 3 | CURRENT ASSETS: | | | | | | |
| 4 | Cash and cash equivalents | $ | 1,397.9 | | | $ | 1,682.9 |
| 5 | Short-term investments | 1,021.5 | | | 502.6 | | |
| 6 | Marketable equity securities | 21.0 | | | 25.5 | | |
| 7 | Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively | 1,402.0 | | | 1,261.7 | | |
| 8 | Inventory | 484.8 | | | 264.6 | | |
| 9 | Prepaid expenses and other current assets | 101.1 | | | 73.1 | | |
| 10 | Total current assets | 4,428.3 | | | 3,810.4 | | |
| 11 | LONG-TERM INVESTMENTS | - | | | 45.5 | | |
| 12 | PROPERTY AND EQUIPMENT-NET | 1,044.4 | | | 898.5 | | |
| 13 | DEFERRED CONTRACT COSTS | 605.6 | | | 518.2 | | |
| 14 | DEFERRED TAX ASSETS | 868.8 | | | 569.4 | | |
| 15 | GOODWILL | 126.5 | | | 128.0 | | |
| 16 | OTHER INTANGIBLE ASSETS-NET | 35.3 | | | 56.0 | | |
| 17 | OTHER ASSETS | 150.0 | | | 202.0 | | |
| 18 | TOTAL ASSETS | $ | 7,258.9 | | | $ | 6,228.0 |
| 20 | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | |
| 21 | CURRENT LIABILITIES: | | | | | | |
| 22 | Accounts payable | $ | 204.3 | | | $ | 243.4 |
| 23 | Accrued liabilities | 423.7 | | | 266.3 | | |
| 24 | Accrued payroll and compensation | 242.3 | | | 219.4 | | |
| 25 | Deferred revenue | 2,848.7 | | | 2,349.3 | | |
| 26 | Total current liabilities | 3,719.0 | | | 3,078.4 | | |
| 27 | DEFERRED REVENUE | 2,886.3 | | | 2,291.0 | | |
| 28 | LONG-TERM DEBT | 992.3 | | | 990.4 | | |
| 29 | OTHER LIABILITIES | 124.7 | | | 149.8 | | |
| 30 | Total liabilities | 7,722.3 | | | 6,509.6 | | |
| 31 | COMMITMENTS AND CONTINGENCIES (Note 12) | | | | | | |
| 32 | STOCKHOLDERS' DEFICIT: | | | | | | |
| 33 | Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively | 0.8 | | | 0.8 | | |
| 34 | Additional paid-in capital | 1,416.4 | | | 1,284.2 | | |
| 35 | Accumulated other comprehensive loss | (18.9) | | | (20.2) | | |
| 36 | Accumulated deficit | (1,861.7) | | | (1,546.4) | | |
| 37 | Total stockholders' deficit | (463.4) | | | (281.6) | | |
| 40 | TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,258.9 | | | $ | 6,228.0 |
See notes to consolidated financial statements.
71
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
| | | | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------|:------------------------|:--------|:--------|:---|:--------|:--------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | |
| 2 | 2023 | | 2022 | 2021 | | | | | |
| 3 | REVENUE: | | | | | | | | |
| 4 | Product | $ | 1,927.3 | | $ | 1,780.5 | | $ | 1,255.0 |
| 5 | Service | 3,377.5 | | 2,636.9 | | | 2,087.2 | | |
| 6 | Total revenue | 5,304.8 | | 4,417.4 | | | 3,342.2 | | |
| 7 | COST OF REVENUE: | | | | | | | | |
| 8 | Product | 763.6 | | 691.3 | | | 487.7 | | |
| 9 | Service | 473.6 | | 393.6 | | | 295.3 | | |
| 10 | Total cost of revenue | 1,237.2 | | 1,084.9 | | | 783.0 | | |
| 11 | GROSS PROFIT: | | | | | | | | |
| 12 | Product | 1,163.7 | | 1,089.2 | | | 767.3 | | |
| 13 | Service | 2,903.9 | | 2,243.3 | | | 1,791.9 | | |
| 14 | Total gross profit | 4,067.6 | | 3,332.5 | | | 2,559.2 | | |
| 15 | OPERATING EXPENSES: | | | | | | | | |
| 16 | Research and development | 613.8 | | 512.4 | | | 424.2 | | |
| 17 | Sales and marketing | 2,006.0 | | 1,686.1 | | | 1,345.7 | | |
| 18 | General and administrative | 211.3 | | 169.0 | | | 143.5 | | |
| 19 | Gain on intellectual property matter | (4.6) | | (4.6) | | | (4.6) | | |
| 20 | Total operating expenses | 2,826.5 | | 2,362.9 | | | 1,908.8 | | |
| 21 | OPERATING INCOME | 1,241.1 | | 969.6 | | | 650.4 | | |
| 22 | INTEREST INCOME | 119.7 | | 17.4 | | | 4.5 | | |
| 23 | INTEREST EXPENSE | (21.0) | | (18.0) | | | (14.9) | | |
| 24 | OTHER EXPENSE-NET | (6.1) | | (13.5) | | | (11.6) | | |
| 25 | INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS | 1,333.7 | | 955.5 | | | 628.4 | | |
| 26 | PROVISION FOR INCOME TAXES | 143.8 | | 30.8 | | | 14.1 | | |
| 27 | LOSS FROM EQUITY METHOD INVESTMENTS | (42.1) | | (68.1) | | | (7.6) | | |
| 28 | NET INCOME INCLUDING NON-CONTROLLING INTERESTS | 1,147.8 | | 856.6 | | | 606.7 | | |
| 29 | LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX | - | | (0.7) | | | (0.1) | | |
| 30 | NET INCOME ATTRIBUTABLE TO FORTINET, INC. | $ | 1,147.8 | | $ | 857.3 | | $ | 606.8 |
| 31 | Net income per share attributable to Fortinet, Inc. (Note 9): | | | | | | | | |
| 32 | Basic | $ | 1.47 | | $ | 1.08 | | $ | 0.74 |
| 33 | Diluted | $ | 1.46 | | $ | 1.06 | | $ | 0.73 |
| 34 | Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.: | | | | | | | | |
| 35 | Basic | 778.6 | | 791.4 | | | 816.1 | | |
| 36 | Diluted | 788.2 | | 805.3 | | | 835.3 | | |
See notes to consolidated financial statements.
72
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
| | | | | | | | | | | |
|---:|:------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:-------|:-----|:------|:------|:---|:------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 4 | Other comprehensive income (loss): | | | | | | | | | |
| 5 | Change in foreign currency translation | (5.5) | | | (9.7) | | | (3.8) | | |
| 6 | Change in unrealized gains (losses) on investments | 8.8 | | | (6.2) | | | (3.5) | | |
| 7 | Less: tax provision (benefit) related to items of other comprehensive income (loss) | 2.0 | | | (1.4) | | | (0.8) | | |
| 8 | Other comprehensive income (loss) | 1.3 | | | (14.5) | | | (6.5) | | |
| 9 | Comprehensive income including non-controlling interests | 1,149.1 | | | 842.1 | | | 600.2 | | |
| 10 | Less: comprehensive income (loss) attributable to non-controlling interests | - | | | 0.2 | | | (1.1) | | |
| 11 | Comprehensive income attributable to Fortinet, Inc. | $ | 1,149.1 | | | $ | 841.9 | | $ | 601.3 |
See notes to consolidated financial statements.
73
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
| | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------|:-------------|:-------|:-------------------------|:----|:--------------------------------------------|:--------------------|:---|:--------------------------|:-------|:-----------------------|:---|:----------|:-------|:----------|:----------|:---|:---|:---|:--------|
| 1 | | Common Stock | | AdditionalPaid-InCapital | | AccumulatedOtherComprehensive Income (Loss) | Accumulated Deficit | | Non-Controlling Interests | | Total Equity (Deficit) | | | | | | | | | |
| 2 | Shares | | Amount | | | | | | | | | | | | | | | | | |
| 3 | BALANCE-December 31, 2020 | 812.7 | | | $ | 0.8 | | $ | 1,206.6 | | | $ | 0.7 | $ | (352.1) | | $ | - | $ | 856.0 |
| 4 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 10.2 | | | - | | (141.7) | | | - | | | - | - | | (141.7) | | | | |
| 5 | Repurchase and retirement of common stock | (12.9) | | | - | | (19.2) | | | - | | | (722.6) | - | | (741.8) | | | | |
| 6 | Stock-based compensation expense | - | | | - | | 207.9 | | | - | | | - | - | | 207.9 | | | | |
| 7 | Recognition of non-controlling interests upon business combination | - | | | - | | - | | | - | | | - | 17.8 | | 17.8 | | | | |
| 8 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (2.7) | | | - | - | | (2.7) | | | | |
| 9 | Foreign currency translation adjustment | - | | | - | | - | | | (2.8) | | | - | (1.0) | | (3.8) | | | | |
| 10 | Net income | - | | | - | | - | | | - | | | 606.8 | (0.1) | | 606.7 | | | | |
| 11 | BALANCE-December 31, 2021 | 810.0 | | | 0.8 | | 1,253.6 | | | (4.8) | | | (467.9) | 16.7 | | 798.4 | | | | |
| 12 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 7.5 | | | - | | (134.7) | | | - | | | - | - | | (134.7) | | | | |
| 13 | Repurchase and retirement of common stock | (36.0) | | | - | | (55.4) | | | - | | | (1,935.8) | - | | (1,991.2) | | | | |
| 14 | Stock-based compensation expense | - | | | - | | 217.3 | | | - | | | - | - | | 217.3 | | | | |
| 15 | Acquisition of the non-controlling interests | - | | | - | | 3.4 | | | - | | | - | (16.9) | | (13.5) | | | | |
| 16 | Net unrealized loss on investments - net of tax | - | | | - | | - | | | (4.8) | | | - | - | | (4.8) | | | | |
| 17 | Foreign currency translation adjustment | - | | | - | | - | | | (10.6) | | | - | 0.9 | | (9.7) | | | | |
| 18 | Net income | - | | | - | | - | | | - | | | 857.3 | (0.7) | | 856.6 | | | | |
| 19 | BALANCE-December 31, 2022 | 781.5 | | | 0.8 | | 1,284.2 | | | (20.2) | | | (1,546.4) | - | | (281.6) | | | | |
| 20 | Issuance of common stock in connection with equity incentive plans - net of tax withholding | 6.7 | | | - | | (68.5) | | | - | | | - | - | | (68.5) | | | | |
| 21 | Repurchase and retirement of common stock | (27.2) | | | - | | (37.4) | | | - | | | (1,463.1) | - | | (1,500.5) | | | | |
| 22 | Excise tax on net stock repurchases | - | | | - | | (10.9) | | | - | | | - | - | | (10.9) | | | | |
| 23 | Stock-based compensation expense | - | | | - | | 249.0 | | | - | | | - | - | | 249.0 | | | | |
| 24 | Net unrealized gain on investments - net of tax | - | | | - | | - | | | 6.8 | | | - | - | | 6.8 | | | | |
| 25 | Foreign currency translation adjustment | - | | | - | | - | | | (5.5) | | | - | - | | (5.5) | | | | |
| 26 | Net income | - | | | - | | - | | | - | | | 1,147.8 | - | | 1,147.8 | | | | |
| 27 | BALANCE-December 31, 2023 | 761.0 | | | $ | 0.8 | | $ | 1,416.4 | | | $ | (18.9) | $ | (1,861.7) | | $ | - | $ | (463.4) |
See notes to consolidated financial statements.
74
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------|:------------------------|:--------|:-----|:----------|:-----|:--------|:----------|:---|:--------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| 4 | Net income including non-controlling interests | $ | 1,147.8 | | | $ | 856.6 | | $ | 606.7 |
| 5 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 6 | Stock-based compensation | 249.0 | | | 217.3 | | | 207.9 | | |
| 7 | Amortization of deferred contract costs | 266.3 | | | 223.3 | | | 175.9 | | |
| 8 | Depreciation and amortization | 113.4 | | | 104.3 | | | 84.4 | | |
| 9 | Amortization of investment premiums (discounts) | (27.7) | | | 4.4 | | | 6.9 | | |
| 10 | Loss from equity method investments | 42.1 | | | 68.1 | | | 7.6 | | |
| 11 | Other | 18.5 | | | 23.6 | | | 7.9 | | |
| 12 | Changes in operating assets and liabilities, net of impact of business combinations: | | | | | | | | | |
| 13 | Accounts receivable-net | (146.4) | | | (456.7) | | | (72.5) | | |
| 14 | Inventory | (253.5) | | | (109.1) | | | (19.4) | | |
| 15 | Prepaid expenses and other current assets | (27.6) | | | (7.7) | | | (17.7) | | |
| 16 | Deferred contract costs | (353.5) | | | (318.2) | | | (294.5) | | |
| 17 | Deferred tax assets | (301.9) | | | (226.4) | | | (94.0) | | |
| 18 | Other assets | 17.7 | | | (35.3) | | | (19.0) | | |
| 19 | Accounts payable | (43.1) | | | 105.2 | | | (13.1) | | |
| 20 | Accrued liabilities | 137.4 | | | 55.2 | | | 49.9 | | |
| 21 | Accrued payroll and compensation | 23.4 | | | 25.0 | | | 44.0 | | |
| 22 | Other liabilities | (21.7) | | | 23.5 | | | (0.7) | | |
| 23 | Deferred revenue | 1,095.3 | | | 1,177.5 | | | 839.4 | | |
| 24 | Net cash provided by operating activities | 1,935.5 | | | 1,730.6 | | | 1,499.7 | | |
| 25 | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
| 26 | Purchases of investments | (1,855.8) | | | (389.1) | | | (2,308.0) | | |
| 27 | Sales of investments | 4.0 | | | 3.0 | | | 85.5 | | |
| 28 | Maturities of investments | 1,414.8 | | | 1,462.0 | | | 1,470.3 | | |
| 29 | Purchases of property and equipment | (204.1) | | | (281.2) | | | (295.9) | | |
| 30 | Purchases of Investments in privately held companies | (8.5) | | | - | | | (160.0) | | |
| 31 | Payments made in connection with business combinations, net of cash acquired | - | | | (30.8) | | | (74.9) | | |
| 32 | Purchases of marketable equity securities | - | | | - | | | (42.5) | | |
| 33 | Other | 0.3 | | | - | | | 0.4 | | |
| 34 | Net cash provided by (used in) investing activities | (649.3) | | | 763.9 | | | (1,325.1) | | |
| 35 | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
| 36 | Proceeds from long-term borrowings, net of discount and underwriting fees | - | | | - | | | 989.4 | | |
| 37 | Payments for debt issuance costs | - | | | - | | | (2.4) | | |
| 38 | Payments of debt assumed in connection with business combination | - | | | - | | | (19.5) | | |
| 39 | Repurchase and retirement of common stock | (1,500.5) | | | (1,991.2) | | | (741.8) | | |
| 40 | Proceeds from issuance of common stock | 43.8 | | | 26.1 | | | 26.0 | | |
| 41 | Taxes paid related to net share settlement of equity awards | (112.5) | | | (160.4) | | | (167.9) | | |
| 42 | Other | (1.2) | | | (4.8) | | | (1.0) | | |
| 43 | Net cash provided by (used in) financing activities | (1,570.4) | | | (2,130.3) | | | 82.8 | | |
| 44 | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (0.8) | | | (0.4) | | | (0.1) | | |
| 45 | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (285.0) | | | 363.8 | | | 257.3 | | |
| 46 | CASH AND CASH EQUIVALENTS-Beginning of year | 1,682.9 | | | 1,319.1 | | | 1,061.8 | | |
| 47 | CASH AND CASH EQUIVALENTS-End of year | $ | 1,397.9 | | | $ | 1,682.9 | | $ | 1,319.1 |
| 48 | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | | | | | | |
| 49 | Cash paid for income taxes-net | $ | 426.3 | | | $ | 260.2 | | $ | 127.4 |
| 50 | Operating lease liabilities arising from obtaining right-of-use assets | $ | 19.2 | | | $ | 65.8 | | $ | 39.6 |
| 52 | NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | | | | | | |
| 53 | Transfers of evaluation units from inventory to property and equipment | $ | 31.8 | | | $ | 17.1 | | $ | 15.9 |
| 54 | Liability for purchase of property and equipment | $ | 23.6 | | | $ | 21.2 | | $ | 21.9 |
| 55 | Excise tax payable on net stock repurchases | $ | 10.9 | | | $ | - | | $ | - |
| 56 | Liability incurred in connection with business combinations | $ | - | | | $ | 0.8 | | $ | 0.9 |
See notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------|:----------|:------------------|:----------|:---|:----------|
| 1 | | December 31, 2023 | | December 31, 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Current assets: | | | | | | |
| 4 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 |
| 5 | Short-term investments | 169,544 | | | 84,162 | | |
| 6 | Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively | 164,862 | | | 152,045 | | |
| 7 | Deferred contract acquisition and fulfillment costs, current portion | 45,008 | | | 34,906 | | |
| 8 | Prepaid expenses and other current assets | 41,407 | | | 31,907 | | |
| 9 | Total current assets | 634,450 | | | 510,307 | | |
| 10 | Long-term investments | 56,171 | | | 9,756 | | |
| 11 | Property and equipment, net | 39,642 | | | 57,891 | | |
| 12 | Operating lease right-of-use assets | 54,693 | | | 79,342 | | |
| 13 | Deferred contract acquisition and fulfillment costs, non-current portion | 76,601 | | | 68,169 | | |
| 14 | Goodwill | 536,351 | | | 515,631 | | |
| 15 | Intangible assets, net | 94,546 | | | 101,269 | | |
| 16 | Other assets | 12,894 | | | 16,626 | | |
| 17 | Total assets | $ | 1,505,348 | | | $ | 1,358,991 |
| 18 | Liabilities and Stockholders' Equity (Deficit) | | | | | | |
| 19 | Current liabilities: | | | | | | |
| 20 | Accounts payable | $ | 15,812 | | | $ | 10,255 |
| 21 | Accrued expenses | 84,489 | | | 80,306 | | |
| 22 | Operating lease liabilities, current portion | 13,452 | | | 12,444 | | |
| 23 | Deferred revenue, current portion | 455,503 | | | 426,599 | | |
| 24 | Other current liabilities | 536 | | | 1,663 | | |
| 25 | Total current liabilities | 569,792 | | | 531,267 | | |
| 26 | Convertible senior notes, net | 929,996 | | | 815,948 | | |
| 27 | Operating lease liabilities, non-current portion | 81,130 | | | 85,946 | | |
| 28 | Deferred revenue, non-current portion | 32,577 | | | 31,040 | | |
| 29 | Other long-term liabilities | 10,032 | | | 14,864 | | |
| 30 | Total liabilities | $ | 1,623,527 | | | $ | 1,479,065 |
| 31 | Stockholders' deficit: | | | | | | |
| 32 | Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022 | $ | - | | | $ | - |
| 33 | Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively | 617 | | | 597 | | |
| 34 | Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively | (4,765) | | | (4,764) | | |
| 35 | Additional paid-in-capital | 894,630 | | | 746,249 | | |
| 36 | Accumulated other comprehensive (loss) income | 1,344 | | | (1,411) | | |
| 37 | Accumulated deficit | (1,010,005) | | | (860,745) | | |
| 38 | Total stockholders' deficit | (118,179) | | | (120,074) | | |
| 39 | Total liabilities and stockholders' deficit | $ | 1,505,348 | | | $ | 1,358,991 |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)| | | | | | | | | | | | |
|---:|:--------------------------------------------------------------|:------------------------|:-----------|:----------|:-----|:-----------|:-----|:----------|:-----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Revenue: | | | | | | | | | | |
| 4 | Products | | $ | 740,168 | | | $ | 647,535 | | $ | 500,843 |
| 5 | Professional services | | 37,539 | | | 37,548 | | | 34,561 | | |
| 6 | Total revenue | | 777,707 | | | 685,083 | | | 535,404 | | |
| 7 | Cost of revenue: | | | | | | | | | | |
| 8 | Products | | 202,904 | | | 182,212 | | | 140,773 | | |
| 9 | Professional services | | 28,837 | | | 32,137 | | | 28,175 | | |
| 10 | Total cost of revenue | | 231,741 | | | 214,349 | | | 168,948 | | |
| 11 | Total gross profit | | 545,966 | | | 470,734 | | | 366,456 | | |
| 12 | Operating expenses: | | | | | | | | | | |
| 13 | Research and development | | 176,776 | | | 189,970 | | | 160,779 | | |
| 14 | Sales and marketing | | 312,636 | | | 307,409 | | | 247,453 | | |
| 15 | General and administrative | | 84,276 | | | 84,969 | | | 78,289 | | |
| 16 | Impairment of long-lived assets | | 30,784 | | | - | | | - | | |
| 17 | Restructuring | | 22,227 | | | - | | | - | | |
| 18 | Total operating expenses | | 626,699 | | | 582,348 | | | 486,521 | | |
| 19 | Loss from operations | | (80,733) | | | (111,614) | | | (120,065) | | |
| 20 | Other income (expense), net: | | | | | | | | | | |
| 21 | Interest income | | 10,177 | | | 1,813 | | | 365 | | |
| 22 | Interest expense | | (64,700) | | | (10,982) | | | (14,292) | | |
| 23 | Other income (expense), net | | (14,522) | | | (1,522) | | | (1,921) | | |
| 24 | Loss before income taxes | | (149,778) | | | (122,305) | | | (135,913) | | |
| 25 | (Benefit from) provision for income taxes | | (518) | | | 2,412 | | | 10,421 | | |
| 26 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 27 | Net loss per share, basic and diluted | | $ | (2.46) | | | $ | (2.13) | | $ | (2.65) |
| 28 | Weighted-average common shares outstanding, basic and diluted | | 60,756,087 | | | 58,552,065 | | | 55,270,998 | | |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)| | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:------------------------|:------|:----------|:-----|:--------|:-----|:----------|:--------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | | |
| 2 | | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net loss | | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 4 | Other comprehensive income (loss): | | | | | | | | | | |
| 5 | Change in fair value of cash flow hedges | | 797 | | | (3,874) | | | (86) | | |
| 6 | Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes | | 724 | | | 4,053 | | | - | | |
| 7 | Total change in unrealized gains (losses) on cash flow hedges | | 1,521 | | | 179 | | | (86) | | |
| 8 | Change unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,043) | | |
| 9 | Adjustment for net gains realized and included in net loss | | - | | | - | | | (137) | | |
| 10 | Total change in unrealized gains (losses) on investments | | 1,234 | | | (778) | | | (1,180) | | |
| 11 | Total other comprehensive income (loss) | | 2,755 | | | (599) | | | (1,266) | | |
| 12 | Comprehensive loss | | $ | (146,505) | | | $ | (125,316) | | $ | (147,600) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------|:-------------|:---------------|:----|:--------------------------|:-------------------------------------------|:----|:-------------------|:----|:-----------------------------------|:--------|:---------|:---|:--------|:---|:----------|:--------|:----------|:---|:------------|:---|:----------|
| 1 | | Common stock | Treasury stock | | Additionalpaid-in-capital | Accumulatedothercomprehensiveincome (loss) | | Accumulateddeficit | | Totalstockholders'equity (deficit) | | | | | | | | | | | | |
| 2 | | Shares | Amount | | Shares | Amount | | | | | | | | | | | | | | | | |
| 3 | Balance, December 31, 2020 | 52,225 | | $ | 522 | | 487 | | | $ | (4,764) | | $ | 692,603 | | $ | 454 | | $ | (617,279) | $ | 71,536 |
| 4 | Stock-based compensation expense | - | | - | | - | | | - | | | 100,317 | | - | | - | | 100,317 | | | | |
| 5 | Issuance of common stock under employee stock purchase plan | 222 | | 2 | | - | | | - | | | 9,274 | | - | | - | | 9,276 | | | | |
| 6 | Vesting of restricted stock units | 1,611 | | 16 | | - | | | - | | | (16) | | - | | - | | - | | | | |
| 7 | Shares withheld for employee taxes | (157) | | (2) | | - | | | - | | | (16,042) | | - | | - | | (16,044) | | | | |
| 8 | Issuance of common stock upon exercise of stock options | 521 | | 6 | | - | | | - | | | 4,300 | | - | | - | | 4,306 | | | | |
| 9 | Purchase of capped calls related to convertible senior notes | - | | - | | - | | | - | | | (76,020) | | - | | - | | (76,020) | | | | |
| 10 | Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes | 2,897 | | 29 | | - | | | - | | | (3,094) | | - | | - | | (3,065) | | | | |
| 11 | Issuance of common stock in connection with inducement of convertible senior notes | 35 | | - | | - | | | - | | | 2,740 | | - | | - | | 2,740 | | | | |
| 12 | Issuance of common stock related to acquisition | 341 | | 4 | | - | | | - | | | (4) | | - | | - | | - | | | | |
| 13 | Cumulative-effect adjustment for the adoption of ASU 2020-06 | - | | - | | - | | | - | | | (99,026) | | - | | 27,585 | | (71,441) | | | | |
| 14 | Other comprehensive income | - | | - | | - | | | - | | | - | | (1,266) | | - | | (1,266) | | | | |
| 15 | Net loss | - | | - | | - | | | - | | | - | | - | | (146,334) | | (146,334) | | | | |
| 16 | Balance, December 31, 2021 | 57,695 | | $ | 577 | | 487 | | | $ | (4,764) | | $ | 615,032 | | $ | (812) | | $ | (736,028) | $ | (125,995) |
| 17 | Stock-based compensation expense | - | | - | | - | | | - | | | 123,441 | | - | | - | | 123,441 | | | | |
| 18 | Issuance of common stock under employee stock purchase plan | 218 | | 2 | | - | | | - | | | 11,941 | | - | | - | | 11,943 | | | | |
| 19 | Vesting of restricted stock units | 1,482 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 20 | Shares withheld for employee taxes | (105) | | (1) | | - | | | - | | | (7,461) | | - | | - | | (7,462) | | | | |
| 21 | Issuance of common stock upon exercise of stock options | 480 | | 5 | | - | | | - | | | 3,313 | | - | | - | | 3,318 | | | | |
| 22 | Issuance of common stock in connection with conversion of convertible senior notes | - | | - | | - | | | - | | | (3) | | - | | - | | (3) | | | | |
| 23 | Issuance of common stock related to acquisition | 33 | | - | | - | | | - | | | - | | - | | - | | - | | | | |
| 24 | Repurchase of common stock issued in relation to acquisition | (83) | | (1) | | | | | | 1 | | | | | - | | | | | | | |
| 25 | Other comprehensive income | - | | - | | - | | | - | | | - | | (599) | | - | | (599) | | | | |
| 26 | Net loss | - | | - | | - | | | - | | | - | | - | | (124,717) | | (124,717) | | | | |
| 27 | Balance, December 31, 2022 | 59,720 | | $ | 597 | | 487 | | | $ | (4,764) | | $ | 746,249 | | $ | (1,411) | | $ | (860,745) | $ | (120,074) |
| 28 | Stock-based compensation expense | - | | - | | - | | | - | | | 107,254 | | - | | - | | 107,254 | | | | |
| 29 | Issuance of common stock under employee stock purchase plan | 330 | | 3 | | - | | | - | | | 11,320 | | - | | - | | 11,323 | | | | |
| 30 | Vesting of restricted stock units | 1,454 | | 15 | | - | | | - | | | (15) | | - | | - | | - | | | | |
| 31 | Shares withheld for employee taxes | (113) | | (1) | | - | | | - | | | (5,569) | | - | | - | | (5,570) | | | | |
| 32 | Issuance of common stock upon exercise of stock options | 216 | | 2 | | - | | | - | | | 3,051 | | - | | - | | 3,053 | | | | |
| 33 | Issuance of common stock related to acquisition | 107 | | 1 | | - | | | - | | | (1) | | - | | - | | - | | | | |
| 34 | Repurchase of common stock issued in related to acquisition | - | | - | | 83 | | | (1) | | | 1 | | - | | - | | - | | | | |
| 35 | Purchase of capped called related to convertible senior notes | - | | - | | - | | | - | | | (36,570) | | - | | - | | (36,570) | | | | |
| 36 | Reclassification of equity to derivative assets related to capped calls | - | | - | | - | | | - | | | 33,029 | | - | | - | | 33,029 | | | | |
| 37 | Repurchase and inducement of convertible senior notes | - | | - | | - | | | - | | | 35,881 | | - | | - | | 35,881 | | | | |
| 38 | Other comprehensive loss | - | | - | | - | | | - | | | - | | 2,755 | | - | | 2,755 | | | | |
| 39 | Net loss | - | | - | | - | | | - | | | - | | - | | (149,260) | | (149,260) | | | | |
| 40 | Balance, December 31, 2023 | 61,714 | | $ | 617 | | 570 | | | $ | (4,765) | | $ | 894,630 | | $ | 1,344 | | $ | (1,010,005) | $ | (118,179) |
See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|:------------------------|:----------|:-----|:----------|:-----|:----------|:----------|:---|:----------|
| 1 | | Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Cash flows from operating activities: | | | | | | | | | |
| 4 | Net loss | $ | (149,260) | | | $ | (124,717) | | $ | (146,334) |
| 5 | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | | | | |
| 6 | Depreciation and amortization | 45,939 | | | 41,038 | | | 33,501 | | |
| 7 | Amortization of debt discount and issuance costs | 4,138 | | | 4,085 | | | 3,982 | | |
| 8 | Stock-based compensation expense | 108,081 | | | 119,902 | | | 102,579 | | |
| 9 | Impairment of long-lived assets | 30,784 | | | - | | | - | | |
| 10 | Change in fair value of derivative assets | 15,511 | | | - | | | - | | |
| 11 | Deferred income taxes | (5,624) | | | (1,440) | | | 466 | | |
| 12 | Induced conversion expense | 53,889 | | | - | | | 2,740 | | |
| 13 | Other | 469 | | | (200) | | | 1,920 | | |
| 14 | Changes in assets and liabilities: | | | | | | | | | |
| 15 | Accounts receivable | (14,021) | | | (9,050) | | | (25,475) | | |
| 16 | Deferred contract acquisition and fulfillment costs | (18,534) | | | (15,910) | | | (22,526) | | |
| 17 | Prepaid expenses and other assets | (4,125) | | | (2,231) | | | (3,355) | | |
| 18 | Accounts payable | 5,449 | | | 7,977 | | | (2,077) | | |
| 19 | Accrued expenses | 2,422 | | | 3,741 | | | 19,205 | | |
| 20 | Deferred revenue | 30,472 | | | 52,516 | | | 85,562 | | |
| 21 | Other liabilities | (1,312) | | | 2,493 | | | 3,729 | | |
| 22 | Net cash provided by operating activities | 104,278 | | | 78,204 | | | 53,917 | | |
| 23 | Cash flows from investing activities: | | | | | | | | | |
| 24 | Business acquisitions, net of cash acquired | (34,841) | | | - | | | (358,420) | | |
| 25 | Purchases of property and equipment | (4,366) | | | (20,382) | | | (9,010) | | |
| 26 | Capitalization of internal-use software | (15,878) | | | (17,145) | | | (9,854) | | |
| 27 | Purchases of investments | (276,829) | | | (122,765) | | | (93,092) | | |
| 28 | Sales and maturities of investments | 150,450 | | | 121,304 | | | 147,998 | | |
| 29 | Other investments | 2,710 | | | (1,000) | | | (3,000) | | |
| 30 | Net cash used in investing activities | (178,754) | | | (39,988) | | | (325,378) | | |
| 31 | Cash flows from financing activities: | | | | | | | | | |
| 32 | Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively | 292,091 | | | - | | | 585,024 | | |
| 33 | Purchase of capped calls related to convertible senior notes | (36,570) | | | - | | | (76,020) | | |
| 34 | Payment of debt issuance costs | - | | | (71) | | | (300) | | |
| 35 | Payments for redemption, repurchase and conversion of convertible senior notes | (199,998) | | | (12) | | | (230,000) | | |
| 36 | Payments related to business acquisitions | (2,250) | | | (300) | | | (12,118) | | |
| 37 | Proceeds from capped calls settlement | 17,518 | | | - | | | - | | |
| 38 | Taxes paid related to net share settlement of equity awards | (5,570) | | | (7,462) | | | (16,044) | | |
| 39 | Proceeds from employee stock purchase plan | 11,323 | | | 11,943 | | | 9,276 | | |
| 40 | Proceeds from stock option exercises | 3,053 | | | 3,318 | | | 4,315 | | |
| 41 | Net cash provided by financing activities | 79,597 | | | 7,416 | | | 264,133 | | |
| 42 | Effect of exchange rate changes on cash ,cash equivalents and restricted cash | 1,202 | | | (2,845) | | | (1,272) | | |
| 43 | Net increase (decrease) in cash, cash equivalents and restricted cash | 6,323 | | | 42,787 | | | (8,600) | | |
| 44 | Cash, cash equivalents and restricted cash, beginning of period | 207,804 | | | 165,017 | | | 173,617 | | |
| 45 | Cash, cash equivalents and restricted cash, end of period | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
| 46 | Supplemental cash flow information: | | | | | | | | | |
| 47 | Cash paid for interest on convertible senior notes | $ | 4,605 | | | $ | 6,675 | | $ | 7,345 |
| 48 | Cash paid for income taxes, net of refunds | $ | 1,624 | | | $ | 1,571 | | $ | 3,305 |
| 49 | Reconciliation of cash, cash equivalents and restricted cash: | | | | | | | | | |
| 50 | Cash and cash equivalents | $ | 213,629 | | | $ | 207,287 | | $ | 164,582 |
| 51 | Restricted cash included in prepaid expenses and other assets | 498 | | | 517 | | | 435 | | |
| 52 | Total cash, cash equivalents and restricted cash | $ | 214,127 | | | $ | 207,804 | | $ | 165,017 |
See accompanying notes to consolidated financial statements.
65
|
Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 71: FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
71
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 72: FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td>$</td><td>1,927.3 </td><td></td><td colspan="3"></td><td>$</td><td>1,780.5 </td><td></td><td colspan="3"></td><td>$</td><td>1,255.0 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">3,377.5 </td><td></td><td colspan="3"></td><td colspan="2">2,636.9 </td><td></td><td colspan="3"></td><td colspan="2">2,087.2 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="2">5,304.8 </td><td></td><td colspan="3"></td><td colspan="2">4,417.4 </td><td></td><td colspan="3"></td><td colspan="2">3,342.2 </td><td></td></tr><tr><td colspan="3">COST OF REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">763.6 </td><td></td><td colspan="3"></td><td colspan="2">691.3 </td><td></td><td colspan="3"></td><td colspan="2">487.7 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">473.6 </td><td></td><td colspan="3"></td><td colspan="2">393.6 </td><td></td><td colspan="3"></td><td colspan="2">295.3 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="2">1,237.2 </td><td></td><td colspan="3"></td><td colspan="2">1,084.9 </td><td></td><td colspan="3"></td><td colspan="2">783.0 </td><td></td></tr><tr><td colspan="3">GROSS PROFIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">1,163.7 </td><td></td><td colspan="3"></td><td colspan="2">1,089.2 </td><td></td><td colspan="3"></td><td colspan="2">767.3 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">2,903.9 </td><td></td><td colspan="3"></td><td colspan="2">2,243.3 </td><td></td><td colspan="3"></td><td colspan="2">1,791.9 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="2">4,067.6 </td><td></td><td colspan="3"></td><td colspan="2">3,332.5 </td><td></td><td colspan="3"></td><td colspan="2">2,559.2 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">613.8 </td><td></td><td colspan="3"></td><td colspan="2">512.4 </td><td></td><td colspan="3"></td><td colspan="2">424.2 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="2">2,006.0 </td><td></td><td colspan="3"></td><td colspan="2">1,686.1 </td><td></td><td colspan="3"></td><td colspan="2">1,345.7 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">211.3 </td><td></td><td colspan="3"></td><td colspan="2">169.0 </td><td></td><td colspan="3"></td><td colspan="2">143.5 </td><td></td></tr><tr><td colspan="3">Gain on intellectual property matter</td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">2,826.5 </td><td></td><td colspan="3"></td><td colspan="2">2,362.9 </td><td></td><td colspan="3"></td><td colspan="2">1,908.8 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="2">1,241.1 </td><td></td><td colspan="3"></td><td colspan="2">969.6 </td><td></td><td colspan="3"></td><td colspan="2">650.4 </td><td></td></tr><tr><td colspan="3">INTEREST INCOME</td><td colspan="2">119.7 </td><td></td><td colspan="3"></td><td colspan="2">17.4 </td><td></td><td colspan="3"></td><td colspan="2">4.5 </td><td></td></tr><tr><td colspan="3">INTEREST EXPENSE</td><td colspan="2">(21.0)</td><td></td><td colspan="3"></td><td colspan="2">(18.0)</td><td></td><td colspan="3"></td><td colspan="2">(14.9)</td><td></td></tr><tr><td colspan="3">OTHER EXPENSE-NET</td><td colspan="2">(6.1)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td><td colspan="3"></td><td colspan="2">(11.6)</td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">1,333.7 </td><td></td><td colspan="3"></td><td colspan="2">955.5 </td><td></td><td colspan="3"></td><td colspan="2">628.4 </td><td></td></tr><tr><td colspan="3">PROVISION FOR INCOME TAXES</td><td colspan="2">143.8 </td><td></td><td colspan="3"></td><td colspan="2">30.8 </td><td></td><td colspan="3"></td><td colspan="2">14.1 </td><td></td></tr><tr><td colspan="3">LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">(42.1)</td><td></td><td colspan="3"></td><td colspan="2">(68.1)</td><td></td><td colspan="3"></td><td colspan="2">(7.6)</td><td></td></tr><tr><td colspan="3">NET INCOME INCLUDING NON-CONTROLLING INTERESTS</td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO FORTINET, INC.</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>857.3 </td><td></td><td colspan="3"></td><td>$</td><td>606.8 </td><td></td></tr><tr><td colspan="3">Net income per share attributable to Fortinet, Inc. (Note 9):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>1.47 </td><td></td><td colspan="3"></td><td>$</td><td>1.08 </td><td></td><td colspan="3"></td><td>$</td><td>0.74 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>1.46 </td><td></td><td colspan="3"></td><td>$</td><td>1.06 </td><td></td><td colspan="3"></td><td>$</td><td>0.73 </td><td></td></tr><tr><td colspan="3">Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">778.6 </td><td></td><td colspan="3"></td><td colspan="2">791.4 </td><td></td><td colspan="3"></td><td colspan="2">816.1 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">788.2 </td><td></td><td colspan="3"></td><td colspan="2">805.3 </td><td></td><td colspan="3"></td><td colspan="2">835.3 </td><td></td></tr></table>See notes to consolidated financial statements.
72
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 73: FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in foreign currency translation</td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Change in unrealized gains (losses) on investments</td><td colspan="2">8.8 </td><td></td><td colspan="3"></td><td colspan="2">(6.2)</td><td></td><td colspan="3"></td><td colspan="2">(3.5)</td><td></td></tr><tr><td colspan="3">Less: tax provision (benefit) related to items of other comprehensive income (loss)</td><td colspan="2">2.0 </td><td></td><td colspan="3"></td><td colspan="2">(1.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.8)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">1.3 </td><td></td><td colspan="3"></td><td colspan="2">(14.5)</td><td></td><td colspan="3"></td><td colspan="2">(6.5)</td><td></td></tr><tr><td colspan="3">Comprehensive income including non-controlling interests</td><td colspan="2">1,149.1 </td><td></td><td colspan="3"></td><td colspan="2">842.1 </td><td></td><td colspan="3"></td><td colspan="2">600.2 </td><td></td></tr><tr><td colspan="3">Less: comprehensive income (loss) attributable to non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.2 </td><td></td><td colspan="3"></td><td colspan="2">(1.1)</td><td></td></tr><tr><td colspan="3">Comprehensive income attributable to Fortinet, Inc.</td><td>$</td><td>1,149.1 </td><td></td><td colspan="3"></td><td>$</td><td>841.9 </td><td></td><td colspan="3"></td><td>$</td><td>601.3 </td><td></td></tr></table>See notes to consolidated financial statements.
73
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 74: FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="9">Common Stock</td><td colspan="3"></td><td colspan="3" rowspan="2">AdditionalPaid-InCapital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">AccumulatedOtherComprehensive Income (Loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulated Deficit</td><td colspan="3"></td><td colspan="3" rowspan="2">Non-Controlling Interests</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Total Equity (Deficit)</td></tr><tr><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">BALANCE-December 31, 2020</td><td colspan="2">812.7 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,206.6 </td><td></td><td colspan="3"></td><td>$</td><td>0.7 </td><td></td><td colspan="3"></td><td>$</td><td>(352.1)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>856.0 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">10.2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(12.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(722.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Recognition of non-controlling interests upon business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">606.8 </td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2021</td><td colspan="2">810.0 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,253.6 </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(467.9)</td><td></td><td colspan="3"></td><td colspan="2">16.7 </td><td></td><td colspan="3"></td><td colspan="2">798.4 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">7.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(36.0)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(55.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,935.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td></tr><tr><td colspan="3">Acquisition of the non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3.4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16.9)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.9 </td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">857.3 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2022</td><td colspan="2">781.5 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">6.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(27.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(37.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,463.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,500.5)</td><td></td></tr><tr><td colspan="3">Excise tax on net stock repurchases</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td></tr><tr><td colspan="3">Net unrealized gain on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2023</td><td colspan="2">761.0 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,416.4 </td><td></td><td colspan="3"></td><td>$</td><td>(18.9)</td><td></td><td colspan="3"></td><td>$</td><td>(1,861.7)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>(463.4)</td><td></td></tr></table>See notes to consolidated financial statements.
74
, Fortinet, Inc. 10-K form for the fiscal year ended 2023-12-31, page 75: FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">CASH FLOWS FROM OPERATING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Amortization of deferred contract costs</td><td colspan="2">266.3 </td><td></td><td colspan="3"></td><td colspan="2">223.3 </td><td></td><td colspan="3"></td><td colspan="2">175.9 </td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">113.4 </td><td></td><td colspan="3"></td><td colspan="2">104.3 </td><td></td><td colspan="3"></td><td colspan="2">84.4 </td><td></td></tr><tr><td colspan="3">Amortization of investment premiums (discounts)</td><td colspan="2">(27.7)</td><td></td><td colspan="3"></td><td colspan="2">4.4 </td><td></td><td colspan="3"></td><td colspan="2">6.9 </td><td></td></tr><tr><td colspan="3">Loss from equity method investments</td><td colspan="2">42.1 </td><td></td><td colspan="3"></td><td colspan="2">68.1 </td><td></td><td colspan="3"></td><td colspan="2">7.6 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">18.5 </td><td></td><td colspan="3"></td><td colspan="2">23.6 </td><td></td><td colspan="3"></td><td colspan="2">7.9 </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of impact of business combinations:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable-net</td><td colspan="2">(146.4)</td><td></td><td colspan="3"></td><td colspan="2">(456.7)</td><td></td><td colspan="3"></td><td colspan="2">(72.5)</td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">(253.5)</td><td></td><td colspan="3"></td><td colspan="2">(109.1)</td><td></td><td colspan="3"></td><td colspan="2">(19.4)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">(27.6)</td><td></td><td colspan="3"></td><td colspan="2">(7.7)</td><td></td><td colspan="3"></td><td colspan="2">(17.7)</td><td></td></tr><tr><td colspan="3">Deferred contract costs</td><td colspan="2">(353.5)</td><td></td><td colspan="3"></td><td colspan="2">(318.2)</td><td></td><td colspan="3"></td><td colspan="2">(294.5)</td><td></td></tr><tr><td colspan="3">Deferred tax assets</td><td colspan="2">(301.9)</td><td></td><td colspan="3"></td><td colspan="2">(226.4)</td><td></td><td colspan="3"></td><td colspan="2">(94.0)</td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">17.7 </td><td></td><td colspan="3"></td><td colspan="2">(35.3)</td><td></td><td colspan="3"></td><td colspan="2">(19.0)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">(43.1)</td><td></td><td colspan="3"></td><td colspan="2">105.2 </td><td></td><td colspan="3"></td><td colspan="2">(13.1)</td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">137.4 </td><td></td><td colspan="3"></td><td colspan="2">55.2 </td><td></td><td colspan="3"></td><td colspan="2">49.9 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">23.4 </td><td></td><td colspan="3"></td><td colspan="2">25.0 </td><td></td><td colspan="3"></td><td colspan="2">44.0 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(21.7)</td><td></td><td colspan="3"></td><td colspan="2">23.5 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">1,095.3 </td><td></td><td colspan="3"></td><td colspan="2">1,177.5 </td><td></td><td colspan="3"></td><td colspan="2">839.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">1,935.5 </td><td></td><td colspan="3"></td><td colspan="2">1,730.6 </td><td></td><td colspan="3"></td><td colspan="2">1,499.7 </td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(1,855.8)</td><td></td><td colspan="3"></td><td colspan="2">(389.1)</td><td></td><td colspan="3"></td><td colspan="2">(2,308.0)</td><td></td></tr><tr><td colspan="3">Sales of investments</td><td colspan="2">4.0 </td><td></td><td colspan="3"></td><td colspan="2">3.0 </td><td></td><td colspan="3"></td><td colspan="2">85.5 </td><td></td></tr><tr><td colspan="3">Maturities of investments</td><td colspan="2">1,414.8 </td><td></td><td colspan="3"></td><td colspan="2">1,462.0 </td><td></td><td colspan="3"></td><td colspan="2">1,470.3 </td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(204.1)</td><td></td><td colspan="3"></td><td colspan="2">(281.2)</td><td></td><td colspan="3"></td><td colspan="2">(295.9)</td><td></td></tr><tr><td colspan="3">Purchases of Investments in privately held companies</td><td colspan="2">(8.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(160.0)</td><td></td></tr><tr><td colspan="3">Payments made in connection with business combinations, net of cash acquired</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(30.8)</td><td></td><td colspan="3"></td><td colspan="2">(74.9)</td><td></td></tr><tr><td colspan="3">Purchases of marketable equity securities</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(42.5)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">0.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) investing activities</td><td colspan="2">(649.3)</td><td></td><td colspan="3"></td><td colspan="2">763.9 </td><td></td><td colspan="3"></td><td colspan="2">(1,325.1)</td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from long-term borrowings, net of discount and underwriting fees</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">989.4 </td><td></td></tr><tr><td colspan="3">Payments for debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.4)</td><td></td></tr><tr><td colspan="3">Payments of debt assumed in connection with business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(1,500.5)</td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of common stock</td><td colspan="2">43.8 </td><td></td><td colspan="3"></td><td colspan="2">26.1 </td><td></td><td colspan="3"></td><td colspan="2">26.0 </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(112.5)</td><td></td><td colspan="3"></td><td colspan="2">(160.4)</td><td></td><td colspan="3"></td><td colspan="2">(167.9)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">(1.2)</td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="2">(1,570.4)</td><td></td><td colspan="3"></td><td colspan="2">(2,130.3)</td><td></td><td colspan="3"></td><td colspan="2">82.8 </td><td></td></tr><tr><td colspan="3">EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS</td><td colspan="2">(0.8)</td><td></td><td colspan="3"></td><td colspan="2">(0.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</td><td colspan="2">(285.0)</td><td></td><td colspan="3"></td><td colspan="2">363.8 </td><td></td><td colspan="3"></td><td colspan="2">257.3 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-Beginning of year</td><td colspan="2">1,682.9 </td><td></td><td colspan="3"></td><td colspan="2">1,319.1 </td><td></td><td colspan="3"></td><td colspan="2">1,061.8 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-End of year</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,319.1 </td><td></td></tr><tr><td colspan="3">SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for income taxes-net</td><td>$</td><td>426.3 </td><td></td><td colspan="3"></td><td>$</td><td>260.2 </td><td></td><td colspan="3"></td><td>$</td><td>127.4 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities arising from obtaining right-of-use assets</td><td>$</td><td>19.2 </td><td></td><td colspan="3"></td><td>$</td><td>65.8 </td><td></td><td colspan="3"></td><td>$</td><td>39.6 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NON-CASH INVESTING AND FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Transfers of evaluation units from inventory to property and equipment</td><td>$</td><td>31.8 </td><td></td><td colspan="3"></td><td>$</td><td>17.1 </td><td></td><td colspan="3"></td><td>$</td><td>15.9 </td><td></td></tr><tr><td colspan="3">Liability for purchase of property and equipment</td><td>$</td><td>23.6 </td><td></td><td colspan="3"></td><td>$</td><td>21.2 </td><td></td><td colspan="3"></td><td>$</td><td>21.9 </td><td></td></tr><tr><td colspan="3">Excise tax payable on net stock repurchases</td><td>$</td><td>10.9 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Liability incurred in connection with business combinations</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>0.9 </td><td></td></tr></table>See notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>740,168 </td><td></td><td colspan="3"></td><td>$</td><td>647,535 </td><td></td><td colspan="3"></td><td>$</td><td>500,843 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,539 </td><td></td><td colspan="3"></td><td colspan="2">37,548 </td><td></td><td colspan="3"></td><td colspan="2">34,561 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">777,707 </td><td></td><td colspan="3"></td><td colspan="2">685,083 </td><td></td><td colspan="3"></td><td colspan="2">535,404 </td><td></td></tr><tr><td colspan="3">Cost of revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">202,904 </td><td></td><td colspan="3"></td><td colspan="2">182,212 </td><td></td><td colspan="3"></td><td colspan="2">140,773 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">28,837 </td><td></td><td colspan="3"></td><td colspan="2">32,137 </td><td></td><td colspan="3"></td><td colspan="2">28,175 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">231,741 </td><td></td><td colspan="3"></td><td colspan="2">214,349 </td><td></td><td colspan="3"></td><td colspan="2">168,948 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">545,966 </td><td></td><td colspan="3"></td><td colspan="2">470,734 </td><td></td><td colspan="3"></td><td colspan="2">366,456 </td><td></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">176,776 </td><td></td><td colspan="3"></td><td colspan="2">189,970 </td><td></td><td colspan="3"></td><td colspan="2">160,779 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">312,636 </td><td></td><td colspan="3"></td><td colspan="2">307,409 </td><td></td><td colspan="3"></td><td colspan="2">247,453 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">84,276 </td><td></td><td colspan="3"></td><td colspan="2">84,969 </td><td></td><td colspan="3"></td><td colspan="2">78,289 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Restructuring</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">22,227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">626,699 </td><td></td><td colspan="3"></td><td colspan="2">582,348 </td><td></td><td colspan="3"></td><td colspan="2">486,521 </td><td></td></tr><tr><td colspan="3">Loss from operations</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(80,733)</td><td></td><td colspan="3"></td><td colspan="2">(111,614)</td><td></td><td colspan="3"></td><td colspan="2">(120,065)</td><td></td></tr><tr><td colspan="3">Other income (expense), net:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">10,177 </td><td></td><td colspan="3"></td><td colspan="2">1,813 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(64,700)</td><td></td><td colspan="3"></td><td colspan="2">(10,982)</td><td></td><td colspan="3"></td><td colspan="2">(14,292)</td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(14,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,921)</td><td></td></tr><tr><td colspan="3">Loss before income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(149,778)</td><td></td><td colspan="3"></td><td colspan="2">(122,305)</td><td></td><td colspan="3"></td><td colspan="2">(135,913)</td><td></td></tr><tr><td colspan="3">(Benefit from) provision for income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(518)</td><td></td><td colspan="3"></td><td colspan="2">2,412 </td><td></td><td colspan="3"></td><td colspan="2">10,421 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Net loss per share, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(2.46)</td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>(2.65)</td><td></td></tr><tr><td colspan="3">Weighted-average common shares outstanding, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">60,756,087 </td><td></td><td colspan="3"></td><td colspan="2">58,552,065 </td><td></td><td colspan="3"></td><td colspan="2">55,270,998 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in fair value of cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">797 </td><td></td><td colspan="3"></td><td colspan="2">(3,874)</td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">4,053 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,521 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Change unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,043)</td><td></td></tr><tr><td colspan="3">Adjustment for net gains realized and included in net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(137)</td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,180)</td><td></td></tr><tr><td colspan="3">Total other comprehensive income (loss)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Comprehensive loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(146,505)</td><td></td><td colspan="3"></td><td>$</td><td>(125,316)</td><td></td><td colspan="3"></td><td>$</td><td>(147,600)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 64:
Table of Contents
RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) <table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9">Common stock</td><td colspan="3"></td><td colspan="9">Treasury stock</td><td colspan="3"></td><td colspan="3" rowspan="2">Additionalpaid-in-capital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulatedothercomprehensiveincome (loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulateddeficit</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Totalstockholders'equity (deficit)</td></tr><tr><td colspan="3"> </td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td></tr><tr><td colspan="3">Balance, December 31, 2020</td><td colspan="2">52,225 </td><td></td><td colspan="3"></td><td>$</td><td>522 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>692,603 </td><td></td><td colspan="3"></td><td>$</td><td>454 </td><td></td><td colspan="3"></td><td>$</td><td>(617,279)</td><td></td><td colspan="3"></td><td>$</td><td>71,536 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">222 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,274 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,611 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(157)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,042)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">521 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,300 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">2,897 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,094)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,065)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with inducement of convertible senior notes</td><td colspan="2">35 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">341 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Cumulative-effect adjustment for the adoption of ASU 2020-06</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(99,026)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">27,585 </td><td></td><td colspan="3"></td><td colspan="2">(71,441)</td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2021</td><td colspan="2">57,695 </td><td></td><td colspan="3"></td><td>$</td><td>577 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>615,032 </td><td></td><td colspan="3"></td><td>$</td><td>(812)</td><td></td><td colspan="3"></td><td>$</td><td>(736,028)</td><td></td><td colspan="3"></td><td>$</td><td>(125,995)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">218 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,941 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,482 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,461)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">480 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,313 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with conversion of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in relation to acquisition</td><td colspan="2">(83)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2022</td><td colspan="2">59,720 </td><td></td><td colspan="3"></td><td>$</td><td>597 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>746,249 </td><td></td><td colspan="3"></td><td>$</td><td>(1,411)</td><td></td><td colspan="3"></td><td>$</td><td>(860,745)</td><td></td><td colspan="3"></td><td>$</td><td>(120,074)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">330 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,320 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,323 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,454 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(113)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,569)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,570)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">216 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,051 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,053 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">107 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in related to acquisition</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Purchase of capped called related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td></tr><tr><td colspan="3">Reclassification of equity to derivative assets related to capped calls</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td></tr><tr><td colspan="3">Repurchase and inducement of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2023</td><td colspan="2">61,714 </td><td></td><td colspan="3"></td><td>$</td><td>617 </td><td></td><td colspan="3"></td><td colspan="2">570 </td><td></td><td colspan="3"></td><td>$</td><td>(4,765)</td><td></td><td colspan="3"></td><td>$</td><td>894,630 </td><td></td><td colspan="3"></td><td>$</td><td>1,344 </td><td></td><td colspan="3"></td><td>$</td><td>(1,010,005)</td><td></td><td colspan="3"></td><td>$</td><td>(118,179)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
64
, Rapid7, Inc. 10-K form for the fiscal year ended 2023-12-31, page 65:
Table of Contents
RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net loss</td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net loss to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">45,939 </td><td></td><td colspan="3"></td><td colspan="2">41,038 </td><td></td><td colspan="3"></td><td colspan="2">33,501 </td><td></td></tr><tr><td colspan="3">Amortization of debt discount and issuance costs</td><td colspan="2">4,138 </td><td></td><td colspan="3"></td><td colspan="2">4,085 </td><td></td><td colspan="3"></td><td colspan="2">3,982 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">108,081 </td><td></td><td colspan="3"></td><td colspan="2">119,902 </td><td></td><td colspan="3"></td><td colspan="2">102,579 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Change in fair value of derivative assets</td><td colspan="2">15,511 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Deferred income taxes</td><td colspan="2">(5,624)</td><td></td><td colspan="3"></td><td colspan="2">(1,440)</td><td></td><td colspan="3"></td><td colspan="2">466 </td><td></td></tr><tr><td colspan="3">Induced conversion expense</td><td colspan="2">53,889 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">469 </td><td></td><td colspan="3"></td><td colspan="2">(200)</td><td></td><td colspan="3"></td><td colspan="2">1,920 </td><td></td></tr><tr><td colspan="3">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable</td><td colspan="2">(14,021)</td><td></td><td colspan="3"></td><td colspan="2">(9,050)</td><td></td><td colspan="3"></td><td colspan="2">(25,475)</td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs</td><td colspan="2">(18,534)</td><td></td><td colspan="3"></td><td colspan="2">(15,910)</td><td></td><td colspan="3"></td><td colspan="2">(22,526)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other assets</td><td colspan="2">(4,125)</td><td></td><td colspan="3"></td><td colspan="2">(2,231)</td><td></td><td colspan="3"></td><td colspan="2">(3,355)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">5,449 </td><td></td><td colspan="3"></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td><td colspan="2">(2,077)</td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">2,422 </td><td></td><td colspan="3"></td><td colspan="2">3,741 </td><td></td><td colspan="3"></td><td colspan="2">19,205 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">30,472 </td><td></td><td colspan="3"></td><td colspan="2">52,516 </td><td></td><td colspan="3"></td><td colspan="2">85,562 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(1,312)</td><td></td><td colspan="3"></td><td colspan="2">2,493 </td><td></td><td colspan="3"></td><td colspan="2">3,729 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">104,278 </td><td></td><td colspan="3"></td><td colspan="2">78,204 </td><td></td><td colspan="3"></td><td colspan="2">53,917 </td><td></td></tr><tr><td colspan="3">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Business acquisitions, net of cash acquired</td><td colspan="2">(34,841)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(358,420)</td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(4,366)</td><td></td><td colspan="3"></td><td colspan="2">(20,382)</td><td></td><td colspan="3"></td><td colspan="2">(9,010)</td><td></td></tr><tr><td colspan="3">Capitalization of internal-use software</td><td colspan="2">(15,878)</td><td></td><td colspan="3"></td><td colspan="2">(17,145)</td><td></td><td colspan="3"></td><td colspan="2">(9,854)</td><td></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(276,829)</td><td></td><td colspan="3"></td><td colspan="2">(122,765)</td><td></td><td colspan="3"></td><td colspan="2">(93,092)</td><td></td></tr><tr><td colspan="3">Sales and maturities of investments</td><td colspan="2">150,450 </td><td></td><td colspan="3"></td><td colspan="2">121,304 </td><td></td><td colspan="3"></td><td colspan="2">147,998 </td><td></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">2,710 </td><td></td><td colspan="3"></td><td colspan="2">(1,000)</td><td></td><td colspan="3"></td><td colspan="2">(3,000)</td><td></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="2">(178,754)</td><td></td><td colspan="3"></td><td colspan="2">(39,988)</td><td></td><td colspan="3"></td><td colspan="2">(325,378)</td><td></td></tr><tr><td colspan="3">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively</td><td colspan="2">292,091 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">585,024 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Payment of debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(71)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td></tr><tr><td colspan="3">Payments for redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">(199,998)</td><td></td><td colspan="3"></td><td colspan="2">(12)</td><td></td><td colspan="3"></td><td colspan="2">(230,000)</td><td></td></tr><tr><td colspan="3">Payments related to business acquisitions</td><td colspan="2">(2,250)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td><td colspan="3"></td><td colspan="2">(12,118)</td><td></td></tr><tr><td colspan="3">Proceeds from capped calls settlement</td><td colspan="2">17,518 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(5,570)</td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Proceeds from employee stock purchase plan</td><td colspan="2">11,323 </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Proceeds from stock option exercises</td><td colspan="2">3,053 </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td><td colspan="3"></td><td colspan="2">4,315 </td><td></td></tr><tr><td colspan="3">Net cash provided by financing activities</td><td colspan="2">79,597 </td><td></td><td colspan="3"></td><td colspan="2">7,416 </td><td></td><td colspan="3"></td><td colspan="2">264,133 </td><td></td></tr><tr><td colspan="3">Effect of exchange rate changes on cash ,cash equivalents and restricted cash</td><td colspan="2">1,202 </td><td></td><td colspan="3"></td><td colspan="2">(2,845)</td><td></td><td colspan="3"></td><td colspan="2">(1,272)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash, cash equivalents and restricted cash</td><td colspan="2">6,323 </td><td></td><td colspan="3"></td><td colspan="2">42,787 </td><td></td><td colspan="3"></td><td colspan="2">(8,600)</td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, beginning of period</td><td colspan="2">207,804 </td><td></td><td colspan="3"></td><td colspan="2">165,017 </td><td></td><td colspan="3"></td><td colspan="2">173,617 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, end of period</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr><tr><td colspan="3">Supplemental cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for interest on convertible senior notes</td><td>$</td><td>4,605 </td><td></td><td colspan="3"></td><td>$</td><td>6,675 </td><td></td><td colspan="3"></td><td>$</td><td>7,345 </td><td></td></tr><tr><td colspan="3">Cash paid for income taxes, net of refunds</td><td>$</td><td>1,624 </td><td></td><td colspan="3"></td><td>$</td><td>1,571 </td><td></td><td colspan="3"></td><td>$</td><td>3,305 </td><td></td></tr><tr><td colspan="3">Reconciliation of cash, cash equivalents and restricted cash:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td><td colspan="3"></td><td>$</td><td>164,582 </td><td></td></tr><tr><td colspan="3">Restricted cash included in prepaid expenses and other assets</td><td colspan="2">498 </td><td></td><td colspan="3"></td><td colspan="2">517 </td><td></td><td colspan="3"></td><td colspan="2">435 </td><td></td></tr><tr><td colspan="3">Total cash, cash equivalents and restricted cash</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
65
|
FORTINET, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3">December 31,2023</td><td colspan="3"></td><td colspan="3">December 31,2022</td></tr><tr><td colspan="3">ASSETS</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT ASSETS:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">1,021.5 </td><td></td><td colspan="3"></td><td colspan="2">502.6 </td><td></td></tr><tr><td colspan="3">Marketable equity securities</td><td colspan="2">21.0 </td><td></td><td colspan="3"></td><td colspan="2">25.5 </td><td></td></tr><tr><td colspan="3">Accounts receivable-Net of allowance for credit losses of $8.2 million and $3.6 million at December 31, 2023 and 2022, respectively</td><td colspan="2">1,402.0 </td><td></td><td colspan="3"></td><td colspan="2">1,261.7 </td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">484.8 </td><td></td><td colspan="3"></td><td colspan="2">264.6 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">101.1 </td><td></td><td colspan="3"></td><td colspan="2">73.1 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">4,428.3 </td><td></td><td colspan="3"></td><td colspan="2">3,810.4 </td><td></td></tr><tr><td colspan="3">LONG-TERM INVESTMENTS</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">45.5 </td><td></td></tr><tr><td colspan="3">PROPERTY AND EQUIPMENT-NET</td><td colspan="2">1,044.4 </td><td></td><td colspan="3"></td><td colspan="2">898.5 </td><td></td></tr><tr><td colspan="3">DEFERRED CONTRACT COSTS</td><td colspan="2">605.6 </td><td></td><td colspan="3"></td><td colspan="2">518.2 </td><td></td></tr><tr><td colspan="3">DEFERRED TAX ASSETS</td><td colspan="2">868.8 </td><td></td><td colspan="3"></td><td colspan="2">569.4 </td><td></td></tr><tr><td colspan="3">GOODWILL</td><td colspan="2">126.5 </td><td></td><td colspan="3"></td><td colspan="2">128.0 </td><td></td></tr><tr><td colspan="3">OTHER INTANGIBLE ASSETS-NET</td><td colspan="2">35.3 </td><td></td><td colspan="3"></td><td colspan="2">56.0 </td><td></td></tr><tr><td colspan="3">OTHER ASSETS</td><td colspan="2">150.0 </td><td></td><td colspan="3"></td><td colspan="2">202.0 </td><td></td></tr><tr><td colspan="3">TOTAL ASSETS</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">CURRENT LIABILITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>204.3 </td><td></td><td colspan="3"></td><td>$</td><td>243.4 </td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">423.7 </td><td></td><td colspan="3"></td><td colspan="2">266.3 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">242.3 </td><td></td><td colspan="3"></td><td colspan="2">219.4 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">2,848.7 </td><td></td><td colspan="3"></td><td colspan="2">2,349.3 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">3,719.0 </td><td></td><td colspan="3"></td><td colspan="2">3,078.4 </td><td></td></tr><tr><td colspan="3">DEFERRED REVENUE</td><td colspan="2">2,886.3 </td><td></td><td colspan="3"></td><td colspan="2">2,291.0 </td><td></td></tr><tr><td colspan="3">LONG-TERM DEBT</td><td colspan="2">992.3 </td><td></td><td colspan="3"></td><td colspan="2">990.4 </td><td></td></tr><tr><td colspan="3">OTHER LIABILITIES</td><td colspan="2">124.7 </td><td></td><td colspan="3"></td><td colspan="2">149.8 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">7,722.3 </td><td></td><td colspan="3"></td><td colspan="2">6,509.6 </td><td></td></tr><tr><td colspan="3">COMMITMENTS AND CONTINGENCIES (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">STOCKHOLDERS' DEFICIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, $0.001 par value-1,500.0 shares authorized; 761.0 shares and 781.5 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">1,416.4 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(18.9)</td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,861.7)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(463.4)</td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</td><td>$</td><td>7,258.9 </td><td></td><td colspan="3"></td><td>$</td><td>6,228.0 </td><td></td></tr></table>See notes to consolidated financial statements.
71
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td>$</td><td>1,927.3 </td><td></td><td colspan="3"></td><td>$</td><td>1,780.5 </td><td></td><td colspan="3"></td><td>$</td><td>1,255.0 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">3,377.5 </td><td></td><td colspan="3"></td><td colspan="2">2,636.9 </td><td></td><td colspan="3"></td><td colspan="2">2,087.2 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="2">5,304.8 </td><td></td><td colspan="3"></td><td colspan="2">4,417.4 </td><td></td><td colspan="3"></td><td colspan="2">3,342.2 </td><td></td></tr><tr><td colspan="3">COST OF REVENUE:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">763.6 </td><td></td><td colspan="3"></td><td colspan="2">691.3 </td><td></td><td colspan="3"></td><td colspan="2">487.7 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">473.6 </td><td></td><td colspan="3"></td><td colspan="2">393.6 </td><td></td><td colspan="3"></td><td colspan="2">295.3 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="2">1,237.2 </td><td></td><td colspan="3"></td><td colspan="2">1,084.9 </td><td></td><td colspan="3"></td><td colspan="2">783.0 </td><td></td></tr><tr><td colspan="3">GROSS PROFIT:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Product</td><td colspan="2">1,163.7 </td><td></td><td colspan="3"></td><td colspan="2">1,089.2 </td><td></td><td colspan="3"></td><td colspan="2">767.3 </td><td></td></tr><tr><td colspan="3">Service </td><td colspan="2">2,903.9 </td><td></td><td colspan="3"></td><td colspan="2">2,243.3 </td><td></td><td colspan="3"></td><td colspan="2">1,791.9 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="2">4,067.6 </td><td></td><td colspan="3"></td><td colspan="2">3,332.5 </td><td></td><td colspan="3"></td><td colspan="2">2,559.2 </td><td></td></tr><tr><td colspan="3">OPERATING EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="2">613.8 </td><td></td><td colspan="3"></td><td colspan="2">512.4 </td><td></td><td colspan="3"></td><td colspan="2">424.2 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="2">2,006.0 </td><td></td><td colspan="3"></td><td colspan="2">1,686.1 </td><td></td><td colspan="3"></td><td colspan="2">1,345.7 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">211.3 </td><td></td><td colspan="3"></td><td colspan="2">169.0 </td><td></td><td colspan="3"></td><td colspan="2">143.5 </td><td></td></tr><tr><td colspan="3">Gain on intellectual property matter</td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td><td colspan="3"></td><td colspan="2">(4.6)</td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="2">2,826.5 </td><td></td><td colspan="3"></td><td colspan="2">2,362.9 </td><td></td><td colspan="3"></td><td colspan="2">1,908.8 </td><td></td></tr><tr><td colspan="3">OPERATING INCOME</td><td colspan="2">1,241.1 </td><td></td><td colspan="3"></td><td colspan="2">969.6 </td><td></td><td colspan="3"></td><td colspan="2">650.4 </td><td></td></tr><tr><td colspan="3">INTEREST INCOME</td><td colspan="2">119.7 </td><td></td><td colspan="3"></td><td colspan="2">17.4 </td><td></td><td colspan="3"></td><td colspan="2">4.5 </td><td></td></tr><tr><td colspan="3">INTEREST EXPENSE</td><td colspan="2">(21.0)</td><td></td><td colspan="3"></td><td colspan="2">(18.0)</td><td></td><td colspan="3"></td><td colspan="2">(14.9)</td><td></td></tr><tr><td colspan="3">OTHER EXPENSE-NET</td><td colspan="2">(6.1)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td><td colspan="3"></td><td colspan="2">(11.6)</td><td></td></tr><tr><td colspan="3">INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">1,333.7 </td><td></td><td colspan="3"></td><td colspan="2">955.5 </td><td></td><td colspan="3"></td><td colspan="2">628.4 </td><td></td></tr><tr><td colspan="3">PROVISION FOR INCOME TAXES</td><td colspan="2">143.8 </td><td></td><td colspan="3"></td><td colspan="2">30.8 </td><td></td><td colspan="3"></td><td colspan="2">14.1 </td><td></td></tr><tr><td colspan="3">LOSS FROM EQUITY METHOD INVESTMENTS</td><td colspan="2">(42.1)</td><td></td><td colspan="3"></td><td colspan="2">(68.1)</td><td></td><td colspan="3"></td><td colspan="2">(7.6)</td><td></td></tr><tr><td colspan="3">NET INCOME INCLUDING NON-CONTROLLING INTERESTS</td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCOME ATTRIBUTABLE TO FORTINET, INC.</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>857.3 </td><td></td><td colspan="3"></td><td>$</td><td>606.8 </td><td></td></tr><tr><td colspan="3">Net income per share attributable to Fortinet, Inc. (Note 9):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td>$</td><td>1.47 </td><td></td><td colspan="3"></td><td>$</td><td>1.08 </td><td></td><td colspan="3"></td><td>$</td><td>0.74 </td><td></td></tr><tr><td colspan="3">Diluted</td><td>$</td><td>1.46 </td><td></td><td colspan="3"></td><td>$</td><td>1.06 </td><td></td><td colspan="3"></td><td>$</td><td>0.73 </td><td></td></tr><tr><td colspan="3">Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="2">778.6 </td><td></td><td colspan="3"></td><td colspan="2">791.4 </td><td></td><td colspan="3"></td><td colspan="2">816.1 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="2">788.2 </td><td></td><td colspan="3"></td><td colspan="2">805.3 </td><td></td><td colspan="3"></td><td colspan="2">835.3 </td><td></td></tr></table>See notes to consolidated financial statements.
72
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in foreign currency translation</td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Change in unrealized gains (losses) on investments</td><td colspan="2">8.8 </td><td></td><td colspan="3"></td><td colspan="2">(6.2)</td><td></td><td colspan="3"></td><td colspan="2">(3.5)</td><td></td></tr><tr><td colspan="3">Less: tax provision (benefit) related to items of other comprehensive income (loss)</td><td colspan="2">2.0 </td><td></td><td colspan="3"></td><td colspan="2">(1.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.8)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">1.3 </td><td></td><td colspan="3"></td><td colspan="2">(14.5)</td><td></td><td colspan="3"></td><td colspan="2">(6.5)</td><td></td></tr><tr><td colspan="3">Comprehensive income including non-controlling interests</td><td colspan="2">1,149.1 </td><td></td><td colspan="3"></td><td colspan="2">842.1 </td><td></td><td colspan="3"></td><td colspan="2">600.2 </td><td></td></tr><tr><td colspan="3">Less: comprehensive income (loss) attributable to non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.2 </td><td></td><td colspan="3"></td><td colspan="2">(1.1)</td><td></td></tr><tr><td colspan="3">Comprehensive income attributable to Fortinet, Inc.</td><td>$</td><td>1,149.1 </td><td></td><td colspan="3"></td><td>$</td><td>841.9 </td><td></td><td colspan="3"></td><td>$</td><td>601.3 </td><td></td></tr></table>See notes to consolidated financial statements.
73
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3" rowspan="2"> </td><td colspan="9">Common Stock</td><td colspan="3"></td><td colspan="3" rowspan="2">AdditionalPaid-InCapital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">AccumulatedOtherComprehensive Income (Loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulated Deficit</td><td colspan="3"></td><td colspan="3" rowspan="2">Non-Controlling Interests</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Total Equity (Deficit)</td></tr><tr><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">BALANCE-December 31, 2020</td><td colspan="2">812.7 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,206.6 </td><td></td><td colspan="3"></td><td>$</td><td>0.7 </td><td></td><td colspan="3"></td><td>$</td><td>(352.1)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>856.0 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">10.2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(141.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(12.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(722.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Recognition of non-controlling interests upon business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td><td colspan="3"></td><td colspan="2">17.8 </td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.7)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td><td colspan="3"></td><td colspan="2">(3.8)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">606.8 </td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td><td colspan="3"></td><td colspan="2">606.7 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2021</td><td colspan="2">810.0 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,253.6 </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(467.9)</td><td></td><td colspan="3"></td><td colspan="2">16.7 </td><td></td><td colspan="3"></td><td colspan="2">798.4 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">7.5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(134.7)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(36.0)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(55.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,935.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td></tr><tr><td colspan="3">Acquisition of the non-controlling interests</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3.4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16.9)</td><td></td><td colspan="3"></td><td colspan="2">(13.5)</td><td></td></tr><tr><td colspan="3">Net unrealized loss on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.6)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.9 </td><td></td><td colspan="3"></td><td colspan="2">(9.7)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">857.3 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td><td colspan="3"></td><td colspan="2">856.6 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2022</td><td colspan="2">781.5 </td><td></td><td colspan="3"></td><td colspan="2">0.8 </td><td></td><td colspan="3"></td><td colspan="2">1,284.2 </td><td></td><td colspan="3"></td><td colspan="2">(20.2)</td><td></td><td colspan="3"></td><td colspan="2">(1,546.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(281.6)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with equity incentive plans - net of tax withholding</td><td colspan="2">6.7 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(27.2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(37.4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,463.1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,500.5)</td><td></td></tr><tr><td colspan="3">Excise tax on net stock repurchases</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(10.9)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">249.0 </td><td></td></tr><tr><td colspan="3">Net unrealized gain on investments - net of tax</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">6.8 </td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5.5)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,147.8 </td><td></td></tr><tr><td colspan="3">BALANCE-December 31, 2023</td><td colspan="2">761.0 </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>1,416.4 </td><td></td><td colspan="3"></td><td>$</td><td>(18.9)</td><td></td><td colspan="3"></td><td>$</td><td>(1,861.7)</td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>(463.4)</td><td></td></tr></table>See notes to consolidated financial statements.
74
, FORTINET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">CASH FLOWS FROM OPERATING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income including non-controlling interests</td><td>$</td><td>1,147.8 </td><td></td><td colspan="3"></td><td>$</td><td>856.6 </td><td></td><td colspan="3"></td><td>$</td><td>606.7 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="2">249.0 </td><td></td><td colspan="3"></td><td colspan="2">217.3 </td><td></td><td colspan="3"></td><td colspan="2">207.9 </td><td></td></tr><tr><td colspan="3">Amortization of deferred contract costs</td><td colspan="2">266.3 </td><td></td><td colspan="3"></td><td colspan="2">223.3 </td><td></td><td colspan="3"></td><td colspan="2">175.9 </td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">113.4 </td><td></td><td colspan="3"></td><td colspan="2">104.3 </td><td></td><td colspan="3"></td><td colspan="2">84.4 </td><td></td></tr><tr><td colspan="3">Amortization of investment premiums (discounts)</td><td colspan="2">(27.7)</td><td></td><td colspan="3"></td><td colspan="2">4.4 </td><td></td><td colspan="3"></td><td colspan="2">6.9 </td><td></td></tr><tr><td colspan="3">Loss from equity method investments</td><td colspan="2">42.1 </td><td></td><td colspan="3"></td><td colspan="2">68.1 </td><td></td><td colspan="3"></td><td colspan="2">7.6 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">18.5 </td><td></td><td colspan="3"></td><td colspan="2">23.6 </td><td></td><td colspan="3"></td><td colspan="2">7.9 </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of impact of business combinations:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable-net</td><td colspan="2">(146.4)</td><td></td><td colspan="3"></td><td colspan="2">(456.7)</td><td></td><td colspan="3"></td><td colspan="2">(72.5)</td><td></td></tr><tr><td colspan="3">Inventory</td><td colspan="2">(253.5)</td><td></td><td colspan="3"></td><td colspan="2">(109.1)</td><td></td><td colspan="3"></td><td colspan="2">(19.4)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">(27.6)</td><td></td><td colspan="3"></td><td colspan="2">(7.7)</td><td></td><td colspan="3"></td><td colspan="2">(17.7)</td><td></td></tr><tr><td colspan="3">Deferred contract costs</td><td colspan="2">(353.5)</td><td></td><td colspan="3"></td><td colspan="2">(318.2)</td><td></td><td colspan="3"></td><td colspan="2">(294.5)</td><td></td></tr><tr><td colspan="3">Deferred tax assets</td><td colspan="2">(301.9)</td><td></td><td colspan="3"></td><td colspan="2">(226.4)</td><td></td><td colspan="3"></td><td colspan="2">(94.0)</td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">17.7 </td><td></td><td colspan="3"></td><td colspan="2">(35.3)</td><td></td><td colspan="3"></td><td colspan="2">(19.0)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">(43.1)</td><td></td><td colspan="3"></td><td colspan="2">105.2 </td><td></td><td colspan="3"></td><td colspan="2">(13.1)</td><td></td></tr><tr><td colspan="3">Accrued liabilities</td><td colspan="2">137.4 </td><td></td><td colspan="3"></td><td colspan="2">55.2 </td><td></td><td colspan="3"></td><td colspan="2">49.9 </td><td></td></tr><tr><td colspan="3">Accrued payroll and compensation</td><td colspan="2">23.4 </td><td></td><td colspan="3"></td><td colspan="2">25.0 </td><td></td><td colspan="3"></td><td colspan="2">44.0 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(21.7)</td><td></td><td colspan="3"></td><td colspan="2">23.5 </td><td></td><td colspan="3"></td><td colspan="2">(0.7)</td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">1,095.3 </td><td></td><td colspan="3"></td><td colspan="2">1,177.5 </td><td></td><td colspan="3"></td><td colspan="2">839.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">1,935.5 </td><td></td><td colspan="3"></td><td colspan="2">1,730.6 </td><td></td><td colspan="3"></td><td colspan="2">1,499.7 </td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(1,855.8)</td><td></td><td colspan="3"></td><td colspan="2">(389.1)</td><td></td><td colspan="3"></td><td colspan="2">(2,308.0)</td><td></td></tr><tr><td colspan="3">Sales of investments</td><td colspan="2">4.0 </td><td></td><td colspan="3"></td><td colspan="2">3.0 </td><td></td><td colspan="3"></td><td colspan="2">85.5 </td><td></td></tr><tr><td colspan="3">Maturities of investments</td><td colspan="2">1,414.8 </td><td></td><td colspan="3"></td><td colspan="2">1,462.0 </td><td></td><td colspan="3"></td><td colspan="2">1,470.3 </td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(204.1)</td><td></td><td colspan="3"></td><td colspan="2">(281.2)</td><td></td><td colspan="3"></td><td colspan="2">(295.9)</td><td></td></tr><tr><td colspan="3">Purchases of Investments in privately held companies</td><td colspan="2">(8.5)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(160.0)</td><td></td></tr><tr><td colspan="3">Payments made in connection with business combinations, net of cash acquired</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(30.8)</td><td></td><td colspan="3"></td><td colspan="2">(74.9)</td><td></td></tr><tr><td colspan="3">Purchases of marketable equity securities</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(42.5)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">0.3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">0.4 </td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) investing activities</td><td colspan="2">(649.3)</td><td></td><td colspan="3"></td><td colspan="2">763.9 </td><td></td><td colspan="3"></td><td colspan="2">(1,325.1)</td><td></td></tr><tr><td colspan="3">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from long-term borrowings, net of discount and underwriting fees</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">989.4 </td><td></td></tr><tr><td colspan="3">Payments for debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2.4)</td><td></td></tr><tr><td colspan="3">Payments of debt assumed in connection with business combination</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19.5)</td><td></td></tr><tr><td colspan="3">Repurchase and retirement of common stock</td><td colspan="2">(1,500.5)</td><td></td><td colspan="3"></td><td colspan="2">(1,991.2)</td><td></td><td colspan="3"></td><td colspan="2">(741.8)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of common stock</td><td colspan="2">43.8 </td><td></td><td colspan="3"></td><td colspan="2">26.1 </td><td></td><td colspan="3"></td><td colspan="2">26.0 </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(112.5)</td><td></td><td colspan="3"></td><td colspan="2">(160.4)</td><td></td><td colspan="3"></td><td colspan="2">(167.9)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">(1.2)</td><td></td><td colspan="3"></td><td colspan="2">(4.8)</td><td></td><td colspan="3"></td><td colspan="2">(1.0)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="2">(1,570.4)</td><td></td><td colspan="3"></td><td colspan="2">(2,130.3)</td><td></td><td colspan="3"></td><td colspan="2">82.8 </td><td></td></tr><tr><td colspan="3">EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS</td><td colspan="2">(0.8)</td><td></td><td colspan="3"></td><td colspan="2">(0.4)</td><td></td><td colspan="3"></td><td colspan="2">(0.1)</td><td></td></tr><tr><td colspan="3">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</td><td colspan="2">(285.0)</td><td></td><td colspan="3"></td><td colspan="2">363.8 </td><td></td><td colspan="3"></td><td colspan="2">257.3 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-Beginning of year</td><td colspan="2">1,682.9 </td><td></td><td colspan="3"></td><td colspan="2">1,319.1 </td><td></td><td colspan="3"></td><td colspan="2">1,061.8 </td><td></td></tr><tr><td colspan="3">CASH AND CASH EQUIVALENTS-End of year</td><td>$</td><td>1,397.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,682.9 </td><td></td><td colspan="3"></td><td>$</td><td>1,319.1 </td><td></td></tr><tr><td colspan="3">SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for income taxes-net</td><td>$</td><td>426.3 </td><td></td><td colspan="3"></td><td>$</td><td>260.2 </td><td></td><td colspan="3"></td><td>$</td><td>127.4 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities arising from obtaining right-of-use assets</td><td>$</td><td>19.2 </td><td></td><td colspan="3"></td><td>$</td><td>65.8 </td><td></td><td colspan="3"></td><td>$</td><td>39.6 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NON-CASH INVESTING AND FINANCING ACTIVITIES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Transfers of evaluation units from inventory to property and equipment</td><td>$</td><td>31.8 </td><td></td><td colspan="3"></td><td>$</td><td>17.1 </td><td></td><td colspan="3"></td><td>$</td><td>15.9 </td><td></td></tr><tr><td colspan="3">Liability for purchase of property and equipment</td><td>$</td><td>23.6 </td><td></td><td colspan="3"></td><td>$</td><td>21.2 </td><td></td><td colspan="3"></td><td>$</td><td>21.9 </td><td></td></tr><tr><td colspan="3">Excise tax payable on net stock repurchases</td><td>$</td><td>10.9 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Liability incurred in connection with business combinations</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>0.8 </td><td></td><td colspan="3"></td><td>$</td><td>0.9 </td><td></td></tr></table>See notes to consolidated financial statements.
75
,
Table of Contents
RAPID7, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">December 31, 2023</td><td colspan="3"></td><td colspan="3">December 31, 2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current assets:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td></tr><tr><td colspan="3">Short-term investments</td><td colspan="2">169,544 </td><td></td><td colspan="3"></td><td colspan="2">84,162 </td><td></td></tr><tr><td colspan="3">Accounts receivable, net of allowance for credit losses of $951 and $2,299 at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">164,862 </td><td></td><td colspan="3"></td><td colspan="2">152,045 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, current portion</td><td colspan="2">45,008 </td><td></td><td colspan="3"></td><td colspan="2">34,906 </td><td></td></tr><tr><td colspan="3">Prepaid expenses and other current assets</td><td colspan="2">41,407 </td><td></td><td colspan="3"></td><td colspan="2">31,907 </td><td></td></tr><tr><td colspan="3">Total current assets</td><td colspan="2">634,450 </td><td></td><td colspan="3"></td><td colspan="2">510,307 </td><td></td></tr><tr><td colspan="3">Long-term investments</td><td colspan="2">56,171 </td><td></td><td colspan="3"></td><td colspan="2">9,756 </td><td></td></tr><tr><td colspan="3">Property and equipment, net</td><td colspan="2">39,642 </td><td></td><td colspan="3"></td><td colspan="2">57,891 </td><td></td></tr><tr><td colspan="3">Operating lease right-of-use assets</td><td colspan="2">54,693 </td><td></td><td colspan="3"></td><td colspan="2">79,342 </td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs, non-current portion</td><td colspan="2">76,601 </td><td></td><td colspan="3"></td><td colspan="2">68,169 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">536,351 </td><td></td><td colspan="3"></td><td colspan="2">515,631 </td><td></td></tr><tr><td colspan="3">Intangible assets, net</td><td colspan="2">94,546 </td><td></td><td colspan="3"></td><td colspan="2">101,269 </td><td></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">12,894 </td><td></td><td colspan="3"></td><td colspan="2">16,626 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity (Deficit)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Current liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts payable</td><td>$</td><td>15,812 </td><td></td><td colspan="3"></td><td>$</td><td>10,255 </td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">84,489 </td><td></td><td colspan="3"></td><td colspan="2">80,306 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, current portion</td><td colspan="2">13,452 </td><td></td><td colspan="3"></td><td colspan="2">12,444 </td><td></td></tr><tr><td colspan="3">Deferred revenue, current portion</td><td colspan="2">455,503 </td><td></td><td colspan="3"></td><td colspan="2">426,599 </td><td></td></tr><tr><td colspan="3">Other current liabilities</td><td colspan="2">536 </td><td></td><td colspan="3"></td><td colspan="2">1,663 </td><td></td></tr><tr><td colspan="3">Total current liabilities</td><td colspan="2">569,792 </td><td></td><td colspan="3"></td><td colspan="2">531,267 </td><td></td></tr><tr><td colspan="3">Convertible senior notes, net</td><td colspan="2">929,996 </td><td></td><td colspan="3"></td><td colspan="2">815,948 </td><td></td></tr><tr><td colspan="3">Operating lease liabilities, non-current portion</td><td colspan="2">81,130 </td><td></td><td colspan="3"></td><td colspan="2">85,946 </td><td></td></tr><tr><td colspan="3">Deferred revenue, non-current portion</td><td colspan="2">32,577 </td><td></td><td colspan="3"></td><td colspan="2">31,040 </td><td></td></tr><tr><td colspan="3">Other long-term liabilities</td><td colspan="2">10,032 </td><td></td><td colspan="3"></td><td colspan="2">14,864 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td>$</td><td>1,623,527 </td><td></td><td colspan="3"></td><td>$</td><td>1,479,065 </td><td></td></tr><tr><td colspan="3">Stockholders' deficit:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2023 and 2022; 0 shares issued and outstanding at December 31, 2023 and 2022</td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3">Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2023 and 2022; 62,283,630 and 60,206,277 shares issued at December 31, 2023 and 2022, respectively; 61,714,051 and 59,719,469 shares outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">617 </td><td></td><td colspan="3"></td><td colspan="2">597 </td><td></td></tr><tr><td colspan="3">Treasury stock, at cost, 569,579 and 486,808 shares at December 31, 2023 and December 31, 2022, respectively</td><td colspan="2">(4,765)</td><td></td><td colspan="3"></td><td colspan="2">(4,764)</td><td></td></tr><tr><td colspan="3">Additional paid-in-capital</td><td colspan="2">894,630 </td><td></td><td colspan="3"></td><td colspan="2">746,249 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive (loss) income</td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">(1,411)</td><td></td></tr><tr><td colspan="3">Accumulated deficit</td><td colspan="2">(1,010,005)</td><td></td><td colspan="3"></td><td colspan="2">(860,745)</td><td></td></tr><tr><td colspan="3">Total stockholders' deficit</td><td colspan="2">(118,179)</td><td></td><td colspan="3"></td><td colspan="2">(120,074)</td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' deficit</td><td>$</td><td>1,505,348 </td><td></td><td colspan="3"></td><td>$</td><td>1,358,991 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>740,168 </td><td></td><td colspan="3"></td><td>$</td><td>647,535 </td><td></td><td colspan="3"></td><td>$</td><td>500,843 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,539 </td><td></td><td colspan="3"></td><td colspan="2">37,548 </td><td></td><td colspan="3"></td><td colspan="2">34,561 </td><td></td></tr><tr><td colspan="3">Total revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">777,707 </td><td></td><td colspan="3"></td><td colspan="2">685,083 </td><td></td><td colspan="3"></td><td colspan="2">535,404 </td><td></td></tr><tr><td colspan="3">Cost of revenue:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Products</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">202,904 </td><td></td><td colspan="3"></td><td colspan="2">182,212 </td><td></td><td colspan="3"></td><td colspan="2">140,773 </td><td></td></tr><tr><td colspan="3">Professional services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">28,837 </td><td></td><td colspan="3"></td><td colspan="2">32,137 </td><td></td><td colspan="3"></td><td colspan="2">28,175 </td><td></td></tr><tr><td colspan="3">Total cost of revenue</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">231,741 </td><td></td><td colspan="3"></td><td colspan="2">214,349 </td><td></td><td colspan="3"></td><td colspan="2">168,948 </td><td></td></tr><tr><td colspan="3">Total gross profit</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">545,966 </td><td></td><td colspan="3"></td><td colspan="2">470,734 </td><td></td><td colspan="3"></td><td colspan="2">366,456 </td><td></td></tr><tr><td colspan="3">Operating expenses:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Research and development</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">176,776 </td><td></td><td colspan="3"></td><td colspan="2">189,970 </td><td></td><td colspan="3"></td><td colspan="2">160,779 </td><td></td></tr><tr><td colspan="3">Sales and marketing</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">312,636 </td><td></td><td colspan="3"></td><td colspan="2">307,409 </td><td></td><td colspan="3"></td><td colspan="2">247,453 </td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">84,276 </td><td></td><td colspan="3"></td><td colspan="2">84,969 </td><td></td><td colspan="3"></td><td colspan="2">78,289 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Restructuring</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">22,227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total operating expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">626,699 </td><td></td><td colspan="3"></td><td colspan="2">582,348 </td><td></td><td colspan="3"></td><td colspan="2">486,521 </td><td></td></tr><tr><td colspan="3">Loss from operations</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(80,733)</td><td></td><td colspan="3"></td><td colspan="2">(111,614)</td><td></td><td colspan="3"></td><td colspan="2">(120,065)</td><td></td></tr><tr><td colspan="3">Other income (expense), net:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">10,177 </td><td></td><td colspan="3"></td><td colspan="2">1,813 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(64,700)</td><td></td><td colspan="3"></td><td colspan="2">(10,982)</td><td></td><td colspan="3"></td><td colspan="2">(14,292)</td><td></td></tr><tr><td colspan="3">Other income (expense), net</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(14,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,522)</td><td></td><td colspan="3"></td><td colspan="2">(1,921)</td><td></td></tr><tr><td colspan="3">Loss before income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(149,778)</td><td></td><td colspan="3"></td><td colspan="2">(122,305)</td><td></td><td colspan="3"></td><td colspan="2">(135,913)</td><td></td></tr><tr><td colspan="3">(Benefit from) provision for income taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">(518)</td><td></td><td colspan="3"></td><td colspan="2">2,412 </td><td></td><td colspan="3"></td><td colspan="2">10,421 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Net loss per share, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(2.46)</td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>(2.65)</td><td></td></tr><tr><td colspan="3">Weighted-average common shares outstanding, basic and diluted</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">60,756,087 </td><td></td><td colspan="3"></td><td colspan="2">58,552,065 </td><td></td><td colspan="3"></td><td colspan="2">55,270,998 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)<table><tr><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in fair value of cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">797 </td><td></td><td colspan="3"></td><td colspan="2">(3,874)</td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Adjustment for net losses realized on cash flow hedges and included in net loss, net of taxes</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">4,053 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on cash flow hedges</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,521 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">(86)</td><td></td></tr><tr><td colspan="3">Change unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,043)</td><td></td></tr><tr><td colspan="3">Adjustment for net gains realized and included in net loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(137)</td><td></td></tr><tr><td colspan="3">Total change in unrealized gains (losses) on investments</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,234 </td><td></td><td colspan="3"></td><td colspan="2">(778)</td><td></td><td colspan="3"></td><td colspan="2">(1,180)</td><td></td></tr><tr><td colspan="3">Total other comprehensive income (loss)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Comprehensive loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>(146,505)</td><td></td><td colspan="3"></td><td>$</td><td>(125,316)</td><td></td><td colspan="3"></td><td>$</td><td>(147,600)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
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RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) <table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9">Common stock</td><td colspan="3"></td><td colspan="9">Treasury stock</td><td colspan="3"></td><td colspan="3" rowspan="2">Additionalpaid-in-capital</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulatedothercomprehensiveincome (loss)</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Accumulateddeficit</td><td colspan="3" rowspan="2"></td><td colspan="3" rowspan="2">Totalstockholders'equity (deficit)</td></tr><tr><td colspan="3"> </td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td></tr><tr><td colspan="3">Balance, December 31, 2020</td><td colspan="2">52,225 </td><td></td><td colspan="3"></td><td>$</td><td>522 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>692,603 </td><td></td><td colspan="3"></td><td>$</td><td>454 </td><td></td><td colspan="3"></td><td>$</td><td>(617,279)</td><td></td><td colspan="3"></td><td>$</td><td>71,536 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">100,317 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">222 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,274 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,611 </td><td></td><td colspan="3"></td><td colspan="2">16 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(157)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,042)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">521 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,300 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,306 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">2,897 </td><td></td><td colspan="3"></td><td colspan="2">29 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,094)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,065)</td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with inducement of convertible senior notes</td><td colspan="2">35 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">341 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Cumulative-effect adjustment for the adoption of ASU 2020-06</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(99,026)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">27,585 </td><td></td><td colspan="3"></td><td colspan="2">(71,441)</td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,266)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td><td colspan="3"></td><td colspan="2">(146,334)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2021</td><td colspan="2">57,695 </td><td></td><td colspan="3"></td><td>$</td><td>577 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>615,032 </td><td></td><td colspan="3"></td><td>$</td><td>(812)</td><td></td><td colspan="3"></td><td>$</td><td>(736,028)</td><td></td><td colspan="3"></td><td>$</td><td>(125,995)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">123,441 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">218 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,941 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,482 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,461)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">480 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,313 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td></tr><tr><td colspan="3">Issuance of common stock in connection with conversion of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3)</td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in relation to acquisition</td><td colspan="2">(83)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(599)</td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td><td colspan="3"></td><td colspan="2">(124,717)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2022</td><td colspan="2">59,720 </td><td></td><td colspan="3"></td><td>$</td><td>597 </td><td></td><td colspan="3"></td><td colspan="2">487 </td><td></td><td colspan="3"></td><td>$</td><td>(4,764)</td><td></td><td colspan="3"></td><td>$</td><td>746,249 </td><td></td><td colspan="3"></td><td>$</td><td>(1,411)</td><td></td><td colspan="3"></td><td>$</td><td>(860,745)</td><td></td><td colspan="3"></td><td>$</td><td>(120,074)</td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107,254 </td><td></td></tr><tr><td colspan="3">Issuance of common stock under employee stock purchase plan</td><td colspan="2">330 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,320 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11,323 </td><td></td></tr><tr><td colspan="3">Vesting of restricted stock units</td><td colspan="2">1,454 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Shares withheld for employee taxes</td><td colspan="2">(113)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,569)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(5,570)</td><td></td></tr><tr><td colspan="3">Issuance of common stock upon exercise of stock options</td><td colspan="2">216 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,051 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">3,053 </td><td></td></tr><tr><td colspan="3">Issuance of common stock related to acquisition</td><td colspan="2">107 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Repurchase of common stock issued in related to acquisition</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Purchase of capped called related to convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(36,570)</td><td></td></tr><tr><td colspan="3">Reclassification of equity to derivative assets related to capped calls</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">33,029 </td><td></td></tr><tr><td colspan="3">Repurchase and inducement of convertible senior notes</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">35,881 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,755 </td><td></td></tr><tr><td colspan="3">Net loss</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td><td colspan="3"></td><td colspan="2">(149,260)</td><td></td></tr><tr><td colspan="3">Balance, December 31, 2023</td><td colspan="2">61,714 </td><td></td><td colspan="3"></td><td>$</td><td>617 </td><td></td><td colspan="3"></td><td colspan="2">570 </td><td></td><td colspan="3"></td><td>$</td><td>(4,765)</td><td></td><td colspan="3"></td><td>$</td><td>894,630 </td><td></td><td colspan="3"></td><td>$</td><td>1,344 </td><td></td><td colspan="3"></td><td>$</td><td>(1,010,005)</td><td></td><td colspan="3"></td><td>$</td><td>(118,179)</td><td></td></tr></table>See accompanying notes to consolidated financial statements.
64
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Table of Contents
RAPID7, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash flows from operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net loss</td><td>$</td><td>(149,260)</td><td></td><td colspan="3"></td><td>$</td><td>(124,717)</td><td></td><td colspan="3"></td><td>$</td><td>(146,334)</td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net loss to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">45,939 </td><td></td><td colspan="3"></td><td colspan="2">41,038 </td><td></td><td colspan="3"></td><td colspan="2">33,501 </td><td></td></tr><tr><td colspan="3">Amortization of debt discount and issuance costs</td><td colspan="2">4,138 </td><td></td><td colspan="3"></td><td colspan="2">4,085 </td><td></td><td colspan="3"></td><td colspan="2">3,982 </td><td></td></tr><tr><td colspan="3">Stock-based compensation expense</td><td colspan="2">108,081 </td><td></td><td colspan="3"></td><td colspan="2">119,902 </td><td></td><td colspan="3"></td><td colspan="2">102,579 </td><td></td></tr><tr><td colspan="3">Impairment of long-lived assets</td><td colspan="2">30,784 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Change in fair value of derivative assets</td><td colspan="2">15,511 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Deferred income taxes</td><td colspan="2">(5,624)</td><td></td><td colspan="3"></td><td colspan="2">(1,440)</td><td></td><td colspan="3"></td><td colspan="2">466 </td><td></td></tr><tr><td colspan="3">Induced conversion expense</td><td colspan="2">53,889 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,740 </td><td></td></tr><tr><td colspan="3">Other</td><td colspan="2">469 </td><td></td><td colspan="3"></td><td colspan="2">(200)</td><td></td><td colspan="3"></td><td colspan="2">1,920 </td><td></td></tr><tr><td colspan="3">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Accounts receivable</td><td colspan="2">(14,021)</td><td></td><td colspan="3"></td><td colspan="2">(9,050)</td><td></td><td colspan="3"></td><td colspan="2">(25,475)</td><td></td></tr><tr><td colspan="3">Deferred contract acquisition and fulfillment costs</td><td colspan="2">(18,534)</td><td></td><td colspan="3"></td><td colspan="2">(15,910)</td><td></td><td colspan="3"></td><td colspan="2">(22,526)</td><td></td></tr><tr><td colspan="3">Prepaid expenses and other assets</td><td colspan="2">(4,125)</td><td></td><td colspan="3"></td><td colspan="2">(2,231)</td><td></td><td colspan="3"></td><td colspan="2">(3,355)</td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="2">5,449 </td><td></td><td colspan="3"></td><td colspan="2">7,977 </td><td></td><td colspan="3"></td><td colspan="2">(2,077)</td><td></td></tr><tr><td colspan="3">Accrued expenses</td><td colspan="2">2,422 </td><td></td><td colspan="3"></td><td colspan="2">3,741 </td><td></td><td colspan="3"></td><td colspan="2">19,205 </td><td></td></tr><tr><td colspan="3">Deferred revenue</td><td colspan="2">30,472 </td><td></td><td colspan="3"></td><td colspan="2">52,516 </td><td></td><td colspan="3"></td><td colspan="2">85,562 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="2">(1,312)</td><td></td><td colspan="3"></td><td colspan="2">2,493 </td><td></td><td colspan="3"></td><td colspan="2">3,729 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">104,278 </td><td></td><td colspan="3"></td><td colspan="2">78,204 </td><td></td><td colspan="3"></td><td colspan="2">53,917 </td><td></td></tr><tr><td colspan="3">Cash flows from investing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Business acquisitions, net of cash acquired</td><td colspan="2">(34,841)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(358,420)</td><td></td></tr><tr><td colspan="3">Purchases of property and equipment</td><td colspan="2">(4,366)</td><td></td><td colspan="3"></td><td colspan="2">(20,382)</td><td></td><td colspan="3"></td><td colspan="2">(9,010)</td><td></td></tr><tr><td colspan="3">Capitalization of internal-use software</td><td colspan="2">(15,878)</td><td></td><td colspan="3"></td><td colspan="2">(17,145)</td><td></td><td colspan="3"></td><td colspan="2">(9,854)</td><td></td></tr><tr><td colspan="3">Purchases of investments</td><td colspan="2">(276,829)</td><td></td><td colspan="3"></td><td colspan="2">(122,765)</td><td></td><td colspan="3"></td><td colspan="2">(93,092)</td><td></td></tr><tr><td colspan="3">Sales and maturities of investments</td><td colspan="2">150,450 </td><td></td><td colspan="3"></td><td colspan="2">121,304 </td><td></td><td colspan="3"></td><td colspan="2">147,998 </td><td></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">2,710 </td><td></td><td colspan="3"></td><td colspan="2">(1,000)</td><td></td><td colspan="3"></td><td colspan="2">(3,000)</td><td></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="2">(178,754)</td><td></td><td colspan="3"></td><td colspan="2">(39,988)</td><td></td><td colspan="3"></td><td colspan="2">(325,378)</td><td></td></tr><tr><td colspan="3">Cash flows from financing activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Proceeds from issuance of convertible senior notes, net of issuance costs of $7,909 and $14,976 for the years ended December 31, 2023 and 2021, respectively</td><td colspan="2">292,091 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">585,024 </td><td></td></tr><tr><td colspan="3">Purchase of capped calls related to convertible senior notes</td><td colspan="2">(36,570)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(76,020)</td><td></td></tr><tr><td colspan="3">Payment of debt issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(71)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td></tr><tr><td colspan="3">Payments for redemption, repurchase and conversion of convertible senior notes</td><td colspan="2">(199,998)</td><td></td><td colspan="3"></td><td colspan="2">(12)</td><td></td><td colspan="3"></td><td colspan="2">(230,000)</td><td></td></tr><tr><td colspan="3">Payments related to business acquisitions</td><td colspan="2">(2,250)</td><td></td><td colspan="3"></td><td colspan="2">(300)</td><td></td><td colspan="3"></td><td colspan="2">(12,118)</td><td></td></tr><tr><td colspan="3">Proceeds from capped calls settlement</td><td colspan="2">17,518 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Taxes paid related to net share settlement of equity awards</td><td colspan="2">(5,570)</td><td></td><td colspan="3"></td><td colspan="2">(7,462)</td><td></td><td colspan="3"></td><td colspan="2">(16,044)</td><td></td></tr><tr><td colspan="3">Proceeds from employee stock purchase plan</td><td colspan="2">11,323 </td><td></td><td colspan="3"></td><td colspan="2">11,943 </td><td></td><td colspan="3"></td><td colspan="2">9,276 </td><td></td></tr><tr><td colspan="3">Proceeds from stock option exercises</td><td colspan="2">3,053 </td><td></td><td colspan="3"></td><td colspan="2">3,318 </td><td></td><td colspan="3"></td><td colspan="2">4,315 </td><td></td></tr><tr><td colspan="3">Net cash provided by financing activities</td><td colspan="2">79,597 </td><td></td><td colspan="3"></td><td colspan="2">7,416 </td><td></td><td colspan="3"></td><td colspan="2">264,133 </td><td></td></tr><tr><td colspan="3">Effect of exchange rate changes on cash ,cash equivalents and restricted cash</td><td colspan="2">1,202 </td><td></td><td colspan="3"></td><td colspan="2">(2,845)</td><td></td><td colspan="3"></td><td colspan="2">(1,272)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash, cash equivalents and restricted cash</td><td colspan="2">6,323 </td><td></td><td colspan="3"></td><td colspan="2">42,787 </td><td></td><td colspan="3"></td><td colspan="2">(8,600)</td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, beginning of period</td><td colspan="2">207,804 </td><td></td><td colspan="3"></td><td colspan="2">165,017 </td><td></td><td colspan="3"></td><td colspan="2">173,617 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, end of period</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr><tr><td colspan="3">Supplemental cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid for interest on convertible senior notes</td><td>$</td><td>4,605 </td><td></td><td colspan="3"></td><td>$</td><td>6,675 </td><td></td><td colspan="3"></td><td>$</td><td>7,345 </td><td></td></tr><tr><td colspan="3">Cash paid for income taxes, net of refunds</td><td>$</td><td>1,624 </td><td></td><td colspan="3"></td><td>$</td><td>1,571 </td><td></td><td colspan="3"></td><td>$</td><td>3,305 </td><td></td></tr><tr><td colspan="3">Reconciliation of cash, cash equivalents and restricted cash:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>213,629 </td><td></td><td colspan="3"></td><td>$</td><td>207,287 </td><td></td><td colspan="3"></td><td>$</td><td>164,582 </td><td></td></tr><tr><td colspan="3">Restricted cash included in prepaid expenses and other assets</td><td colspan="2">498 </td><td></td><td colspan="3"></td><td colspan="2">517 </td><td></td><td colspan="3"></td><td colspan="2">435 </td><td></td></tr><tr><td colspan="3">Total cash, cash equivalents and restricted cash</td><td>$</td><td>214,127 </td><td></td><td colspan="3"></td><td>$</td><td>207,804 </td><td></td><td colspan="3"></td><td>$</td><td>165,017 </td><td></td></tr></table>See accompanying notes to consolidated financial statements.
65
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q_com013
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Compare the primary business segments of Simon Property Group and Vornado Realty Trust in terms of their contribution to total revenue for the year 2023.
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Simon Property Group's primary business segments include U.S. Malls and Premium Outlets, The Mills, and U.S. TRG. For the year 2023, the U.S. Malls and Premium Outlets segment had an ending occupancy of 95.8% and an average base minimum rent per square foot of $56.82. The Mills segment had an ending occupancy of 97.8% and an average base minimum rent per square foot of $36.38. The U.S. TRG segment had an ending occupancy of 95.7% and an average base minimum rent per square foot of $65.01.
Vornado Realty Trust's primary business segments include New York Office, New York Retail, Residential, and Alexander's. For the year 2023, the New York Office segment contributed $727 million to NOI at share, the New York Retail segment contributed $188.56 million, the Residential segment contributed $21.91 million, and Alexander's contributed $40.1 million. The total NOI at share for Vornado was $1,143.21 million.
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Comparison
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62;44
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0001558370-24-001532;0000899689-24-000005
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations;ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 62: The following table sets forth these key operating statistics for the combined U.S. Malls and Premium Outlets:
| | | |
|---:|:---|:---------------------------------------------------------------------------|
| 0 | ● | properties that are consolidated in our consolidated financial statements, |
| | | |
|---:|:---|:---------------------------------------------------------------------------------------|
| 0 | ● | properties we account for under the equity method of accounting as joint ventures, and |
| | | |
|---:|:---|:-----------------------------------------------------------------------|
| 0 | ● | the foregoing two categories of properties on a total portfolio basis. |
| | | | | | | | | | | | | | | | |
|---:|:------------------------------------------|:---|:-----|:------|:-----------|:--------------|:-----|:---|:-----------|:---|:--------------|:---|:---|:------|:---|
| 0 | | | | | | | | | | | | | | | |
| 1 | | | | | | %/Basis Point | | | | | %/Basis Point | | | | |
| 2 | | | 2023 | | Change (1) | | 2022 | | Change (1) | | 2021 | | | | |
| 3 | U.S. Malls and Premium Outlets: | | | | | | | | | | | | | | |
| 4 | Ending Occupancy | | | | | | | | | | | | | | |
| 5 | Consolidated | | | 95.7% | | 80 bps | | | 94.9% | | 140 bps | | | 93.5% | |
| 6 | Unconsolidated | | | 96.1% | | 120 bps | | | 94.9% | | 180 bps | | | 93.1% | |
| 7 | Total Portfolio | | | 95.8% | | 90 bps | | | 94.9% | | 150 bps | | | 93.4% | |
| 8 | Average Base Minimum Rent per Square Foot | | | | | | | | | | | | | | |
| 9 | Consolidated | | $ | 55.47 | | 2.8% | | $ | 53.95 | | 2.6% | | $ | 52.59 | |
| 10 | Unconsolidated | | $ | 60.59 | | 3.8% | | $ | 58.36 | | 1.4% | | $ | 57.55 | |
| 11 | Total Portfolio | | $ | 56.82 | | 3.1% | | $ | 55.13 | | 2.3% | | $ | 53.91 | |
| 12 | U.S. TRG: | | | | | | | | | | | | | | |
| 13 | Ending Occupancy | | | 95.7% | | 120 bps | | | 94.5% | | 330 bps | | | 91.2% | |
| 14 | Average Base Minimum Rent per Square Foot | | $ | 65.01 | | 5.3% | | $ | 61.76 | | 5.2% | | $ | 58.69 | |
| 15 | The Mills: | | | | | | | | | | | | | | |
| 16 | Ending Occupancy | | | 97.8% | | -40 bps | | | 98.2% | | 60 bps | | | 97.6% | |
| 17 | Average Base Minimum Rent per Square Foot | | $ | 36.38 | | 4.3% | | $ | 34.89 | | 3.2% | | $ | 33.80 | |
| | | |
|---:|:----|:-------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | (1) | Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period. |
Ending Occupancy Levels and Average Base Minimum Rent per Square Foot.
Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation. Base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.
Current Leasing Activities
During the twelve months ended December 31, 2023, we signed 1,185 new leases and 1,841 renewal leases (excluding mall anchors and majors, new development, redevelopment and leases with terms of one year or less) with a fixed minimum rent across our U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, of which 8.3 million square feet related to consolidated properties. During 2022, we signed 1,262 new leases and 1,517 renewal leases with a fixed minimum rent, comprising approximately 9.1 million square feet, of which 7.0 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was $66.39 per square foot in 2023 and $55.41 per square foot in 2022 with an average tenant allowance on new leases of $64.31 per square foot and $53.01 per square foot, respectively.
Japan Data
The following are selected key operating statistics for our Premium Outlets in Japan. The information used to prepare these statistics has been supplied by the managing venture partner.
| | | | | | | | | | | | | | | |
|---:|:------------------------------------------|:---|:-------------|:------|:--------------|:--------|:-------------|:---|:--------------|:---|:-------------|:---|:---|:------|
| 0 | | | | | | | | | | | | | | |
| 1 | | | December 31, | | %/basis point | | December 31, | | %/basis point | | December 31, | | | |
| 2 | | | 2023 | | Change | | 2022 | | Change | | 2021 | | | |
| 3 | Ending Occupancy | | | 99.7% | | -10 bps | | | 99.8% | | 0 bps | | | 99.8% |
| 4 | Average Base Minimum Rent per Square Foot | | ¥ | 5,494 | | -4.93% | | ¥ | 5,779 | | 4.90% | | ¥ | 5,509 |
62
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 44:
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
| | | | | | | | |
|---:|:-------------------------|:--------------------------------|:----------|:-----|:--------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | New York: | | | | | | |
| 4 | Office | $ | 727,000 | | | $ | 718,686 |
| 5 | Retail | 188,561 | | | 205,753 | | |
| 6 | Residential | 21,910 | | | 19,600 | | |
| 7 | Alexander's | 40,098 | | | 37,469 | | |
| 8 | Total New York | 977,569 | | | 981,508 | | |
| 10 | Other: | | | | | | |
| 11 | THE MART(1) | 61,519 | | | 96,906 | | |
| 12 | 555 California Street(2) | 82,965 | | | 65,692 | | |
| 13 | Other investments | 21,160 | | | 17,942 | | |
| 14 | Total Other | 165,644 | | | 180,540 | | |
| 16 | NOI at share | $ | 1,143,213 | | | $ | 1,162,048 |
________________________________________
See notes below.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are summarized below.
| | | | | | | | |
|---:|:--------------------------|:--------------------------------|:----------|:-----|:--------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | New York: | | | | | | |
| 4 | Office | $ | 726,914 | | | $ | 715,407 |
| 5 | Retail | 180,932 | | | 188,846 | | |
| 6 | Residential | 20,588 | | | 18,214 | | |
| 7 | Alexander's | 41,435 | | | 40,532 | | |
| 8 | Total New York | 969,869 | | | 962,999 | | |
| 10 | Other: | | | | | | |
| 11 | THE MART(1) | 62,579 | | | 101,912 | | |
| 12 | 555 California Street(2) | 85,819 | | | 67,813 | | |
| 13 | Other investments | 21,569 | | | 18,344 | | |
| 14 | Total Other | 169,967 | | | 188,069 | | |
| 16 | NOI at share - cash basis | $ | 1,139,836 | | | $ | 1,151,068 |
________________________________________
(1)2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(2)2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
44
|
The following table sets forth these key operating statistics for the combined U.S. Malls and Premium Outlets:
| | | |
|---:|:---|:---------------------------------------------------------------------------|
| 0 | ● | properties that are consolidated in our consolidated financial statements, |
| | | |
|---:|:---|:---------------------------------------------------------------------------------------|
| 0 | ● | properties we account for under the equity method of accounting as joint ventures, and |
| | | |
|---:|:---|:-----------------------------------------------------------------------|
| 0 | ● | the foregoing two categories of properties on a total portfolio basis. |
| | | | | | | | | | | | | | | | |
|---:|:------------------------------------------|:---|:-----|:------|:-----------|:--------------|:-----|:---|:-----------|:---|:--------------|:---|:---|:------|:---|
| 0 | | | | | | | | | | | | | | | |
| 1 | | | | | | %/Basis Point | | | | | %/Basis Point | | | | |
| 2 | | | 2023 | | Change (1) | | 2022 | | Change (1) | | 2021 | | | | |
| 3 | U.S. Malls and Premium Outlets: | | | | | | | | | | | | | | |
| 4 | Ending Occupancy | | | | | | | | | | | | | | |
| 5 | Consolidated | | | 95.7% | | 80 bps | | | 94.9% | | 140 bps | | | 93.5% | |
| 6 | Unconsolidated | | | 96.1% | | 120 bps | | | 94.9% | | 180 bps | | | 93.1% | |
| 7 | Total Portfolio | | | 95.8% | | 90 bps | | | 94.9% | | 150 bps | | | 93.4% | |
| 8 | Average Base Minimum Rent per Square Foot | | | | | | | | | | | | | | |
| 9 | Consolidated | | $ | 55.47 | | 2.8% | | $ | 53.95 | | 2.6% | | $ | 52.59 | |
| 10 | Unconsolidated | | $ | 60.59 | | 3.8% | | $ | 58.36 | | 1.4% | | $ | 57.55 | |
| 11 | Total Portfolio | | $ | 56.82 | | 3.1% | | $ | 55.13 | | 2.3% | | $ | 53.91 | |
| 12 | U.S. TRG: | | | | | | | | | | | | | | |
| 13 | Ending Occupancy | | | 95.7% | | 120 bps | | | 94.5% | | 330 bps | | | 91.2% | |
| 14 | Average Base Minimum Rent per Square Foot | | $ | 65.01 | | 5.3% | | $ | 61.76 | | 5.2% | | $ | 58.69 | |
| 15 | The Mills: | | | | | | | | | | | | | | |
| 16 | Ending Occupancy | | | 97.8% | | -40 bps | | | 98.2% | | 60 bps | | | 97.6% | |
| 17 | Average Base Minimum Rent per Square Foot | | $ | 36.38 | | 4.3% | | $ | 34.89 | | 3.2% | | $ | 33.80 | |
| | | |
|---:|:----|:-------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | (1) | Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period. |
Ending Occupancy Levels and Average Base Minimum Rent per Square Foot.
Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation. Base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.
Current Leasing Activities
During the twelve months ended December 31, 2023, we signed 1,185 new leases and 1,841 renewal leases (excluding mall anchors and majors, new development, redevelopment and leases with terms of one year or less) with a fixed minimum rent across our U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, of which 8.3 million square feet related to consolidated properties. During 2022, we signed 1,262 new leases and 1,517 renewal leases with a fixed minimum rent, comprising approximately 9.1 million square feet, of which 7.0 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was $66.39 per square foot in 2023 and $55.41 per square foot in 2022 with an average tenant allowance on new leases of $64.31 per square foot and $53.01 per square foot, respectively.
Japan Data
The following are selected key operating statistics for our Premium Outlets in Japan. The information used to prepare these statistics has been supplied by the managing venture partner.
| | | | | | | | | | | | | | | |
|---:|:------------------------------------------|:---|:-------------|:------|:--------------|:--------|:-------------|:---|:--------------|:---|:-------------|:---|:---|:------|
| 0 | | | | | | | | | | | | | | |
| 1 | | | December 31, | | %/basis point | | December 31, | | %/basis point | | December 31, | | | |
| 2 | | | 2023 | | Change | | 2022 | | Change | | 2021 | | | |
| 3 | Ending Occupancy | | | 99.7% | | -10 bps | | | 99.8% | | 0 bps | | | 99.8% |
| 4 | Average Base Minimum Rent per Square Foot | | ¥ | 5,494 | | -4.93% | | ¥ | 5,779 | | 4.90% | | ¥ | 5,509 |
62
,
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
| | | | | | | | |
|---:|:-------------------------|:--------------------------------|:----------|:-----|:--------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | New York: | | | | | | |
| 4 | Office | $ | 727,000 | | | $ | 718,686 |
| 5 | Retail | 188,561 | | | 205,753 | | |
| 6 | Residential | 21,910 | | | 19,600 | | |
| 7 | Alexander's | 40,098 | | | 37,469 | | |
| 8 | Total New York | 977,569 | | | 981,508 | | |
| 10 | Other: | | | | | | |
| 11 | THE MART(1) | 61,519 | | | 96,906 | | |
| 12 | 555 California Street(2) | 82,965 | | | 65,692 | | |
| 13 | Other investments | 21,160 | | | 17,942 | | |
| 14 | Total Other | 165,644 | | | 180,540 | | |
| 16 | NOI at share | $ | 1,143,213 | | | $ | 1,162,048 |
________________________________________
See notes below.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are summarized below.
| | | | | | | | |
|---:|:--------------------------|:--------------------------------|:----------|:-----|:--------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | New York: | | | | | | |
| 4 | Office | $ | 726,914 | | | $ | 715,407 |
| 5 | Retail | 180,932 | | | 188,846 | | |
| 6 | Residential | 20,588 | | | 18,214 | | |
| 7 | Alexander's | 41,435 | | | 40,532 | | |
| 8 | Total New York | 969,869 | | | 962,999 | | |
| 10 | Other: | | | | | | |
| 11 | THE MART(1) | 62,579 | | | 101,912 | | |
| 12 | 555 California Street(2) | 85,819 | | | 67,813 | | |
| 13 | Other investments | 21,569 | | | 18,344 | | |
| 14 | Total Other | 169,967 | | | 188,069 | | |
| 16 | NOI at share - cash basis | $ | 1,139,836 | | | $ | 1,151,068 |
________________________________________
(1)2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(2)2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
44
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SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 62: The following table sets forth these key operating statistics for the combined U.S. Malls and Premium Outlets:
<table><tr><td></td><td>●</td><td>properties that are consolidated in our consolidated financial statements,</td></tr></table><table><tr><td></td><td>●</td><td>properties we account for under the equity method of accounting as joint ventures, and</td></tr></table><table><tr><td></td><td>●</td><td>the foregoing two categories of properties on a total portfolio basis.</td></tr></table>
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td>%/Basis Point</td><td></td><td></td><td></td><td></td><td>%/Basis Point</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td>Change (1)</td><td> </td><td colspan="2">2022</td><td> </td><td>Change (1)</td><td> </td><td colspan="2">2021</td><td></td></tr><tr><td>U.S. Malls and Premium Outlets:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated</td><td></td><td></td><td>95.7%</td><td></td><td>80 bps</td><td></td><td></td><td>94.9%</td><td></td><td>140 bps</td><td></td><td></td><td>93.5%</td><td></td></tr><tr><td>Unconsolidated</td><td></td><td></td><td>96.1%</td><td></td><td>120 bps</td><td></td><td></td><td>94.9%</td><td></td><td>180 bps</td><td></td><td></td><td>93.1%</td><td></td></tr><tr><td>Total Portfolio</td><td></td><td></td><td>95.8%</td><td></td><td>90 bps</td><td></td><td></td><td>94.9%</td><td></td><td>150 bps</td><td></td><td></td><td>93.4%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated</td><td></td><td>$</td><td> 55.47</td><td></td><td>2.8%</td><td></td><td>$</td><td> 53.95</td><td></td><td>2.6%</td><td></td><td>$</td><td> 52.59</td><td></td></tr><tr><td>Unconsolidated</td><td></td><td>$</td><td> 60.59</td><td></td><td>3.8%</td><td></td><td>$</td><td> 58.36</td><td></td><td>1.4%</td><td></td><td>$</td><td> 57.55</td><td></td></tr><tr><td>Total Portfolio</td><td></td><td>$</td><td> 56.82</td><td></td><td>3.1%</td><td></td><td>$</td><td> 55.13</td><td></td><td>2.3%</td><td></td><td>$</td><td> 53.91</td><td></td></tr><tr><td>U.S. TRG:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td> </td><td>95.7%</td><td></td><td>120 bps</td><td></td><td> </td><td>94.5%</td><td></td><td>330 bps</td><td></td><td> </td><td>91.2%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>$</td><td> 65.01</td><td></td><td>5.3%</td><td></td><td>$</td><td> 61.76</td><td></td><td>5.2%</td><td></td><td>$</td><td> 58.69</td><td></td></tr><tr><td>The Mills:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td> </td><td>97.8%</td><td></td><td>-40 bps</td><td></td><td> </td><td>98.2%</td><td></td><td>60 bps</td><td></td><td> </td><td>97.6%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>$</td><td> 36.38</td><td></td><td>4.3%</td><td></td><td>$</td><td> 34.89</td><td></td><td>3.2%</td><td></td><td>$</td><td> 33.80</td><td></td></tr></table>
<table><tr><td>(1)</td><td>Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period.</td></tr></table>
Ending Occupancy Levels and Average Base Minimum Rent per Square Foot.
Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation. Base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.
Current Leasing Activities
During the twelve months ended December 31, 2023, we signed 1,185 new leases and 1,841 renewal leases (excluding mall anchors and majors, new development, redevelopment and leases with terms of one year or less) with a fixed minimum rent across our U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, of which 8.3 million square feet related to consolidated properties. During 2022, we signed 1,262 new leases and 1,517 renewal leases with a fixed minimum rent, comprising approximately 9.1 million square feet, of which 7.0 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was $66.39 per square foot in 2023 and $55.41 per square foot in 2022 with an average tenant allowance on new leases of $64.31 per square foot and $53.01 per square foot, respectively.
Japan Data
The following are selected key operating statistics for our Premium Outlets in Japan. The information used to prepare these statistics has been supplied by the managing venture partner.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">December 31, </td><td> </td><td>%/basis point</td><td> </td><td colspan="2">December 31, </td><td> </td><td>%/basis point</td><td> </td><td colspan="2">December 31, </td></tr><tr><td></td><td></td><td colspan="2">2023</td><td></td><td>Change</td><td></td><td colspan="2">2022</td><td></td><td>Change</td><td></td><td colspan="2">2021</td></tr><tr><td>Ending Occupancy</td><td></td><td></td><td>99.7%</td><td></td><td>-10 bps</td><td></td><td></td><td>99.8%</td><td></td><td>0 bps</td><td></td><td></td><td>99.8%</td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>¥</td><td> 5,494</td><td></td><td>-4.93%</td><td></td><td>¥</td><td> 5,779</td><td></td><td>4.90%</td><td></td><td>¥</td><td> 5,509</td></tr></table>
62
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 44:
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Office</td><td>$</td><td>727,000 </td><td></td><td colspan="3"></td><td>$</td><td>718,686 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Retail</td><td colspan="2">188,561 </td><td></td><td colspan="3"></td><td colspan="2">205,753 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Residential</td><td colspan="2">21,910 </td><td></td><td colspan="3"></td><td colspan="2">19,600 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Alexander's</td><td colspan="2">40,098 </td><td></td><td colspan="3"></td><td colspan="2">37,469 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total New York</td><td colspan="2">977,569 </td><td></td><td colspan="3"></td><td colspan="2">981,508 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">THE MART(1)</td><td colspan="2">61,519 </td><td></td><td colspan="3"></td><td colspan="2">96,906 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">555 California Street(2)</td><td colspan="2">82,965 </td><td></td><td colspan="3"></td><td colspan="2">65,692 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">21,160 </td><td></td><td colspan="3"></td><td colspan="2">17,942 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total Other</td><td colspan="2">165,644 </td><td></td><td colspan="3"></td><td colspan="2">180,540 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share</td><td>$</td><td>1,143,213 </td><td></td><td colspan="3"></td><td>$</td><td>1,162,048 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
See notes below.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are summarized below.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Office</td><td>$</td><td>726,914 </td><td></td><td colspan="3"></td><td>$</td><td>715,407 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Retail</td><td colspan="2">180,932 </td><td></td><td colspan="3"></td><td colspan="2">188,846 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Residential</td><td colspan="2">20,588 </td><td></td><td colspan="3"></td><td colspan="2">18,214 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Alexander's</td><td colspan="2">41,435 </td><td></td><td colspan="3"></td><td colspan="2">40,532 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total New York</td><td colspan="2">969,869 </td><td></td><td colspan="3"></td><td colspan="2">962,999 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">THE MART(1)</td><td colspan="2">62,579 </td><td></td><td colspan="3"></td><td colspan="2">101,912 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">555 California Street(2)</td><td colspan="2">85,819 </td><td></td><td colspan="3"></td><td colspan="2">67,813 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">21,569 </td><td></td><td colspan="3"></td><td colspan="2">18,344 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total Other</td><td colspan="2">169,967 </td><td></td><td colspan="3"></td><td colspan="2">188,069 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share - cash basis</td><td>$</td><td>1,139,836 </td><td></td><td colspan="3"></td><td>$</td><td>1,151,068 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
(1)2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(2)2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
44
|
The following table sets forth these key operating statistics for the combined U.S. Malls and Premium Outlets:
<table><tr><td></td><td>●</td><td>properties that are consolidated in our consolidated financial statements,</td></tr></table><table><tr><td></td><td>●</td><td>properties we account for under the equity method of accounting as joint ventures, and</td></tr></table><table><tr><td></td><td>●</td><td>the foregoing two categories of properties on a total portfolio basis.</td></tr></table>
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td>%/Basis Point</td><td></td><td></td><td></td><td></td><td>%/Basis Point</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td>Change (1)</td><td> </td><td colspan="2">2022</td><td> </td><td>Change (1)</td><td> </td><td colspan="2">2021</td><td></td></tr><tr><td>U.S. Malls and Premium Outlets:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated</td><td></td><td></td><td>95.7%</td><td></td><td>80 bps</td><td></td><td></td><td>94.9%</td><td></td><td>140 bps</td><td></td><td></td><td>93.5%</td><td></td></tr><tr><td>Unconsolidated</td><td></td><td></td><td>96.1%</td><td></td><td>120 bps</td><td></td><td></td><td>94.9%</td><td></td><td>180 bps</td><td></td><td></td><td>93.1%</td><td></td></tr><tr><td>Total Portfolio</td><td></td><td></td><td>95.8%</td><td></td><td>90 bps</td><td></td><td></td><td>94.9%</td><td></td><td>150 bps</td><td></td><td></td><td>93.4%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated</td><td></td><td>$</td><td> 55.47</td><td></td><td>2.8%</td><td></td><td>$</td><td> 53.95</td><td></td><td>2.6%</td><td></td><td>$</td><td> 52.59</td><td></td></tr><tr><td>Unconsolidated</td><td></td><td>$</td><td> 60.59</td><td></td><td>3.8%</td><td></td><td>$</td><td> 58.36</td><td></td><td>1.4%</td><td></td><td>$</td><td> 57.55</td><td></td></tr><tr><td>Total Portfolio</td><td></td><td>$</td><td> 56.82</td><td></td><td>3.1%</td><td></td><td>$</td><td> 55.13</td><td></td><td>2.3%</td><td></td><td>$</td><td> 53.91</td><td></td></tr><tr><td>U.S. TRG:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td> </td><td>95.7%</td><td></td><td>120 bps</td><td></td><td> </td><td>94.5%</td><td></td><td>330 bps</td><td></td><td> </td><td>91.2%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>$</td><td> 65.01</td><td></td><td>5.3%</td><td></td><td>$</td><td> 61.76</td><td></td><td>5.2%</td><td></td><td>$</td><td> 58.69</td><td></td></tr><tr><td>The Mills:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td> </td><td>97.8%</td><td></td><td>-40 bps</td><td></td><td> </td><td>98.2%</td><td></td><td>60 bps</td><td></td><td> </td><td>97.6%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>$</td><td> 36.38</td><td></td><td>4.3%</td><td></td><td>$</td><td> 34.89</td><td></td><td>3.2%</td><td></td><td>$</td><td> 33.80</td><td></td></tr></table>
<table><tr><td>(1)</td><td>Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period.</td></tr></table>
Ending Occupancy Levels and Average Base Minimum Rent per Square Foot.
Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation. Base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.
Current Leasing Activities
During the twelve months ended December 31, 2023, we signed 1,185 new leases and 1,841 renewal leases (excluding mall anchors and majors, new development, redevelopment and leases with terms of one year or less) with a fixed minimum rent across our U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, of which 8.3 million square feet related to consolidated properties. During 2022, we signed 1,262 new leases and 1,517 renewal leases with a fixed minimum rent, comprising approximately 9.1 million square feet, of which 7.0 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was $66.39 per square foot in 2023 and $55.41 per square foot in 2022 with an average tenant allowance on new leases of $64.31 per square foot and $53.01 per square foot, respectively.
Japan Data
The following are selected key operating statistics for our Premium Outlets in Japan. The information used to prepare these statistics has been supplied by the managing venture partner.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">December 31, </td><td> </td><td>%/basis point</td><td> </td><td colspan="2">December 31, </td><td> </td><td>%/basis point</td><td> </td><td colspan="2">December 31, </td></tr><tr><td></td><td></td><td colspan="2">2023</td><td></td><td>Change</td><td></td><td colspan="2">2022</td><td></td><td>Change</td><td></td><td colspan="2">2021</td></tr><tr><td>Ending Occupancy</td><td></td><td></td><td>99.7%</td><td></td><td>-10 bps</td><td></td><td></td><td>99.8%</td><td></td><td>0 bps</td><td></td><td></td><td>99.8%</td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>¥</td><td> 5,494</td><td></td><td>-4.93%</td><td></td><td>¥</td><td> 5,779</td><td></td><td>4.90%</td><td></td><td>¥</td><td> 5,509</td></tr></table>
62
,
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Office</td><td>$</td><td>727,000 </td><td></td><td colspan="3"></td><td>$</td><td>718,686 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Retail</td><td colspan="2">188,561 </td><td></td><td colspan="3"></td><td colspan="2">205,753 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Residential</td><td colspan="2">21,910 </td><td></td><td colspan="3"></td><td colspan="2">19,600 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Alexander's</td><td colspan="2">40,098 </td><td></td><td colspan="3"></td><td colspan="2">37,469 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total New York</td><td colspan="2">977,569 </td><td></td><td colspan="3"></td><td colspan="2">981,508 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">THE MART(1)</td><td colspan="2">61,519 </td><td></td><td colspan="3"></td><td colspan="2">96,906 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">555 California Street(2)</td><td colspan="2">82,965 </td><td></td><td colspan="3"></td><td colspan="2">65,692 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">21,160 </td><td></td><td colspan="3"></td><td colspan="2">17,942 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total Other</td><td colspan="2">165,644 </td><td></td><td colspan="3"></td><td colspan="2">180,540 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share</td><td>$</td><td>1,143,213 </td><td></td><td colspan="3"></td><td>$</td><td>1,162,048 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
See notes below.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are summarized below.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Office</td><td>$</td><td>726,914 </td><td></td><td colspan="3"></td><td>$</td><td>715,407 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Retail</td><td colspan="2">180,932 </td><td></td><td colspan="3"></td><td colspan="2">188,846 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Residential</td><td colspan="2">20,588 </td><td></td><td colspan="3"></td><td colspan="2">18,214 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Alexander's</td><td colspan="2">41,435 </td><td></td><td colspan="3"></td><td colspan="2">40,532 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total New York</td><td colspan="2">969,869 </td><td></td><td colspan="3"></td><td colspan="2">962,999 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">THE MART(1)</td><td colspan="2">62,579 </td><td></td><td colspan="3"></td><td colspan="2">101,912 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">555 California Street(2)</td><td colspan="2">85,819 </td><td></td><td colspan="3"></td><td colspan="2">67,813 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">21,569 </td><td></td><td colspan="3"></td><td colspan="2">18,344 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total Other</td><td colspan="2">169,967 </td><td></td><td colspan="3"></td><td colspan="2">188,069 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share - cash basis</td><td>$</td><td>1,139,836 </td><td></td><td colspan="3"></td><td>$</td><td>1,151,068 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
(1)2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(2)2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
44
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q_com014
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Compare the leasing activity of Simon Property Group and Vornado Realty Trust for the year 2023.
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For the year 2023, Simon Property Group signed 1,185 new leases and 1,841 renewal leases across its U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, with an average annual initial base minimum rent for new leases of $66.39 per square foot.
Vornado Realty Trust's leasing activity for the year 2023 included 2,133,000 square feet of New York Office space at an initial rent of $98.66 per square foot, 299,000 square feet of New York Retail space at an initial rent of $118.47 per square foot, 337,000 square feet at THE MART at an initial rent of $52.97 per square foot, and 10,000 square feet at 555 California Street at an initial rent of $134.70 per square foot.
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Comparison
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64,65,66,67,68;45,46,47,48
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0001558370-24-001532;0000899689-24-000005
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations;ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 64: | | |
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| 0 | to reasonable cause and certain other conditions were met. As a result, failing to maintain REIT status would result in a significant increase in the income tax expense recorded and paid during those periods. |
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| 0 | ● | In the period of a significant acquisition of real estate, we make estimates as part of our valuation of the purchase price of asset acquisitions (including the components of excess investment in joint ventures) to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our real estate valuations are typically the determination of relative fair value to the buildings as-if-vacant, land and market value of in-place leases. In the case of the fair value of buildings and fair value of land and other intangibles, our estimates of the values of these components will affect the amount of depreciation or amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the market value of in-place leases, we make our best estimates of the tenants' ability to pay rents based upon the tenants' operating performance at the property, including the competitive position of the property in its market as well as sales psf, rents psf, and overall occupancy cost for the tenants in place at the acquisition date. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. |
Results of Operations
The following acquisitions, dispositions, and openings of consolidated properties affected our consolidated results in the comparative periods:
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| 0 | ● | On April 27, 2023, we opened Paris-Giverny Designer Outlet, a 228,000 square foot center in Vernon, France. We own a 74% interest in this center. |
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| 0 | ● | On June 17, 2022, we acquired an additional interest in Gloucester Premium Outlets from a joint venture, resulting in the consolidation of this property. |
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|---:|:---|:-----------------------------------------------------------------------|
| 0 | ● | During the second quarter of 2022, we disposed of one retail property. |
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| 0 | ● | During 2021, we disposed of three retail properties. |
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|---:|:---|:---------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | During the first quarter of 2021, we consolidated one Designer Outlet property in Europe that had previously been accounted for under the equity method. |
The following acquisitions, dispositions, and openings of noncontrolling interests in joint venture entities affected our income from unconsolidated entities in the comparative periods:
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|---:|:---|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. In addition, we sold a portion of our interest in ABG on November 29, 2023. These transactions reduced our ownership from 12.3% to 9.6%. |
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| 0 | ● | During the third quarter of 2023, we disposed of our interest in one unconsolidated retail property through foreclosure in satisfaction of its $114.8 million non-recourse loan. We recognized no gain or loss in connection with this disposal. |
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| 0 | ● | On September 7, 2023, we acquired an additional 4% ownership in TRG for approximately $199.6 million by issuing 1,725,000 units in the Operating Partnership, bringing our noncontrolling ownership interest in TRG to 84%. |
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|---:|:---|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | During the third quarter of 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million. |
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|---:|:---|:-----------------------------------------------------------------------|
| 0 | ● | During the fourth quarter of 2022, we disposed of one retail property. |
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| 0 | ● | During the fourth quarter of 2022, we sold to ABG all of our interests in the licensing venture of Eddie Bauer for additional interests in ABG. Our noncontrolling interest in ABG was approximately 12.3% after this transaction. |
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|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On December 19, 2022, we completed the acquisition of a 50% noncontrolling legal ownership interest in Jamestown, a global real estate investment and asset management company, as well as separate interests in certain real estate and working capital, for total cash consideration of $173.4 million. |
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| 0 | ● | On November 3, 2022, we opened Fukaya-Hanazono Premium Outlets, a 296,300 square foot center in Fukaya City, Japan. We own a 40% interest in this center. |
64
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 65: | | | |
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| 0 | ● | During the third quarter of 2022, we disposed of one retail property. |
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|---:|:---|:------------------------------------------------------------------------------------------------------|
| 0 | ● | During the fourth quarter of 2021, we disposed of our noncontrolling interest in one retail property. |
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| 0 | ● | On December 20, 2021, we sold a portion of our interest in ABG for cash consideration of $65.5 million and purchased additional interests in ABG for cash consideration of $100.0 million. |
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| 0 | ● | On October 15, 2021, we opened Jeju Premium Outlets, a 92,000 square foot center in Jeju Province, South Korea. We own a 50% interest in this center. |
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| 0 | ● | On July 1, 2021, we sold to ABG all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG. |
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| 0 | ● | On June 1, 2021, we and our partner, ABG, acquired the licensing rights of Eddie Bauer. Our noncontrolling interest in the licensing venture is 49% and was acquired for cash consideration of $100.8 million. |
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| 0 | ● | On April 12, 2021, we opened West Midlands Designer Outlet, a 197,000 square foot center in Cannock, United Kingdom. We own a 23.2% interest in this center. |
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|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | In the first quarter of 2021, we and our partner, ABG, both acquired additional 12.5% interests in the licensing and operations of Forever 21 for $56.3 million bringing our interest to 50%. Subsequently the Forever 21 operations were merged into SPARC Group. |
For the purposes of the following comparisons between the years ended December 31, 2023 and 2022 and the years ended December 31, 2022 and 2021, the above transactions are referred to as the property transactions. In the following discussions of our results of operations, "comparable" refers to properties we owned and operated in both years in the year to year comparisons.
Year Ended December 31, 2023 vs. Year Ended December 31, 2022
Lease income increased $259.2 million, due to an increase in fixed lease income of $286.7 million primarily due to an increase in fixed minimum lease consideration and higher occupancy, partially offset by a decrease in variable lease income based on tenant sales of $27.5 million.
Total other income increased $99.1 million, primarily due to a $56.6 million increase in interest income, a $52.0 million increase in mixed use and franchise operations income, a $13.1 million increase in dividend and distribution income and a $3.7 million increase in Simon Brand Ventures, fee and other income, partially offset by a $17.0 million decrease in lease settlement income and a $9.3 million decrease in land sale activity.
Home and regional office costs increased $23.0 million primarily due to increased personnel and compensation costs.
Other expense increased $35.6 million primarily due to increased mixed use and franchise operations expenses of $50.8 million, partially offset by the 2022 write-off of $13.4 million in development costs related to an international development project in Germany we no longer intended to pursue.
Interest expense increased $93.4 million primarily related to new USD bond issuances during 2023 of $69.5 million, activity with regards to the Credit Facilities of $24.5 million and $8.8 million from increased variable rates, partially offset by a USD bond payoff during 2023 of $14.7 million and a Euro bond payoff during 2022 of $9.8 million.
During 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million. During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. As a result, we recognized non-cash pre-tax gains on the deemed disposals of $59.1 million. During 2023, we also recorded our share of the gain on the sale of a portion of our ABG interests of $157.1 million. During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments.
Income and other tax expense decreased $1.6 million primarily related to the 2022 Eddie Bauer licensing transaction noted above of $39.7 million and an overall lower tax expense on our share of operating results from our other platform investments of approximately $27.2 million, partially offset by the tax impact of the SPARC and ABG transactions in 2023 noted above of $69.3 million.
65
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 66: Income from unconsolidated entities decreased $272.3 million primarily due to lower results of operations from our other platform investments.
During 2023, we recorded an $11.2 million loss on the disposition of certain assets by Klépierre and an impairment on a joint venture property, our share of which was $8.6 million, partially offset by an $8.7 million gain on the disposition of certain assets by a joint venture investment and an $8.1 million gain on excess insurance proceeds. During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property.
Simon's net income attributable to noncontrolling interests increased $21.0 million due to an increase in the net income of the Operating Partnership.
Year Ended December 31, 2022 vs. Year Ended December 31, 2021
Lease income increased $168.5 million, of which the property transactions accounted for a $23.2 million decrease. Comparable lease income increased $191.7 million, or 4.1%. Total lease income increased primarily due to an increase in fixed lease income of $156.6 million primarily due to an increase in fixed minimum lease consideration, higher occupancy, and an increase in variable lease income of $11.9 million primarily related to higher consideration based on tenant sales.
Total other income decreased $4.2 million, primarily due to a decrease in lease settlement income of $38.8 million, a $14.9 million gain from the sale of our interest in a multi-family residential property in 2021, and a $6.8 million non-cash dilution gain on a non-retail investment in 2021, partially offset by an $20.8 million increase in fee and other income, a $17.9 million increase related to Simon Brand Ventures and gift card revenues, a $9.8 million increase related to land sale activity and a $7.8 million increase in interest income.
Property operating expenses increased $48.4 million primarily due to the return to a more normalized operating environment following the peak of the COVID pandemic.
Other expense increased $11.7 million primarily due to an increase in legal fees and foreign currency revaluations.
Interest expense decreased $34.5 million primarily related to the early extinguishment of nine secured loans, the disposition of three retail properties, and the refinancing of two retail properties at lower interest rates in 2021, partially offset by the issuances of Euro and USD bonds and interest increases due to variable rates in 2022.
During 2021, we recorded a loss on extinguishment of debt of $51.8 million as a result of the early redemption of unsecured notes and the payoff of mortgages at nine properties.
During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments. During 2021, we recorded a non-cash gain of $159.8 million as a result of the sale to ABG of all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG and a gain on the sale of a portion of our interest in ABG of $18.8 million, as discussed further in Note 6.
Income and other tax expense decreased $73.7 million due to the impact in 2021 on deferred tax expense as a result of the ABG transaction noted above, which had a non-cash tax impact of $55.9 million, offset by the impact in 2022 on deferred tax expense of the 2022 ABG transaction noted above, which had a non-cash tax impact of $39.7 million, and lower tax expense in 2022 on our share of operating results from our other platform investments.
Income from unconsolidated entities decreased $134.9 million primarily due to unfavorable results of operations year over year from our other platform investments of $216.1 million, as well as the reversal in 2021 of a previously established deferred tax liability at Klépierre resulting in a non-cash gain, of which our share was $118.4 million, partially offset by favorable year over year results of operations across the properties and TRG in 2022.
During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property. During 2021, we recorded gains of $184.0 million related to the disposition of three consolidated properties, our interest in one unconsolidated property and the impact from the consolidation of one property that was previously unconsolidated, and gains of $21.2 million related to property insurance recoveries of previously depreciated assets.
Simon's net income attributable to noncontrolling interests decreased $6.2 million due to a decrease in the net income of the Operating Partnership.
66
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 67:
Liquidity and Capital Resources
Because we own long-lived income-producing assets, our financing strategy relies primarily on long-term fixed rate debt. Floating rate debt comprised 1.1% of our total consolidated debt at December 31, 2023. We also enter into interest rate protection agreements from time to time to manage our interest rate risk. We derive most of our liquidity from positive net cash flow from operations and distributions of capital from unconsolidated entities that totaled $4.2 billion in the aggregate during 2023. The Credit Facilities and the Commercial Paper program provide alternative sources of liquidity as our cash needs vary from time to time. Borrowing capacity under these sources may be increased as discussed further below.
Our balance of cash and cash equivalents increased $547.4 million during 2023 to $1.2 billion as of December 31, 2023 as further discussed below.
On December 31, 2023, we had an aggregate available borrowing capacity of approximately $8.1 billion under the Facilities, net of letters of credit of $58.6 million. For the year ended December 31, 2023, the maximum aggregate outstanding balance under the Credit Facilities was $1.1 billion and the weighted average outstanding balance was $962.6 million. The weighted average interest rate was 4.36% for the year ended December 31, 2023.
Simon has historically had access to public equity markets and the Operating Partnership has historically had access to private and public, short and long-term unsecured debt markets and access to secured debt and private equity from institutional investors at the property level.
Our business model and Simon's status as a REIT require us to regularly access the debt markets to raise funds for acquisition, development and redevelopment activity, and to refinance maturing debt. Simon may also, from time to time, access the equity capital markets to accomplish our business objectives. We believe we have sufficient cash on hand and availability under the Credit Facilities and the Commercial Paper program to address our debt maturities and capital needs through 2024.
Cash Flows
Our net cash flow from operating activities and distributions of capital from unconsolidated entities totaled $4.2 billion during 2023. In addition, we had net proceeds of debt from our debt financing and repayment activities of $971.3 million in 2023. These activities are further discussed below under "Financing and Debt." During 2023, we also:
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| 0 | ● | paid stockholder dividends and unitholder distributions totaling approximately $2.8 billion and preferred unit distributions totaling $5.2 million, |
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| 0 | ● | funded consolidated capital expenditures of $793.3 million (including development and other costs of $156.0 million, redevelopment and expansion costs of $328.8 million, and tenant costs and other operational capital expenditures of $308.5 million), |
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| 0 | ● | funded investments in unconsolidated entities of $84.0 million, |
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| 0 | ● | funded the purchase of $1.0 billion of short-term investments, |
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| 0 | ● | funded the repurchase of $140.6 million of Simon's common stock, and |
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|---:|:---|:-------------------------------------------------------------------------|
| 0 | ● | received proceeds from the sale of equity instruments of $304.1 million. |
In general, we anticipate that cash generated from operations will be sufficient to meet operating expenses, monthly debt service, recurring capital expenditures, and dividends to stockholders and/or distributions to partners necessary to maintain Simon's REIT qualification on a long-term basis. In addition, we expect to be able to generate or obtain capital for nonrecurring capital expenditures, such as acquisitions, major building redevelopments and expansions, as well as for scheduled principal maturities on outstanding indebtedness, from the following, however a severe and prolonged disruption and instability in the global financial markets, including the debt and equity capital markets, may affect our ability to access necessary capital:
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|---:|:---|:-------------------------------------------------------------------------------|
| 0 | ● | excess cash generated from operating performance and working capital reserves, |
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|---:|:---|:------------------------------------------------------------------|
| 0 | ● | borrowings on the Credit Facilities and Commercial Paper program, |
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|---:|:---|:---------------------------------------------------|
| 0 | ● | additional secured or unsecured debt financing, or |
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|---:|:---|:-----------------------------------------------------------|
| 0 | ● | additional equity raised in the public or private markets. |
67
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 68: We expect to generate positive cash flow from operations in 2024, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our tenants. A significant deterioration in projected cash flows from operations, could cause us to increase our reliance on available funds from the Credit Facilities and Commercial Paper program, further curtail planned capital expenditures, or seek other additional sources of financing.
Financing and Debt
Unsecured Debt
At December 31, 2023, our unsecured debt consisted of $20.7 billion of senior unsecured notes of the Operating Partnership, $305.0 million outstanding under the Credit Facility.
The Credit Facility can be increased in the form of additional commitments in an aggregate not to exceed $1.0 billion, for a total aggregate size of $6.0 billion, subject to obtaining additional lender commitments and satisfying certain customary conditions precedent. Borrowings may be denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 97% of the maximum revolving credit amount, as defined. The initial maturity date of the Credit Facility is June 30, 2027. The Credit Facility can be extended for two additional six-month periods to June 30, 2028, at our sole option, subject to satisfying certain customary conditions precedent.
Borrowings under the Credit Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Credit Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Credit Facility. Based upon our current credit ratings, the interest rate on the Credit Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR.
The Supplemental Facility, has a borrowing capacity of $3.5 to $4.5 billion during its term and provides for borrowings denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 100% of the maximum revolving credit amount, as defined. The initial maturity date of the Supplemental Facility is January 31, 2026 and can be extended for an additional year to January 31, 2027 at our sole option, subject to satisfying certain customary conditions precedent.
Borrowings under the Supplemental Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Supplemental Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Supplemental Facility. Based upon our current credit ratings, the interest rate on the Supplemental Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR.
On December 31, 2023 we had an aggregate available borrowing capacity of $8.1 billion under the Credit Facilities. The maximum aggregate outstanding balance under the Facilities during the year ended December 31, 2023 was $1.1 billion and the weighted average outstanding balance was $962.6 million. Letters of credit of $58.6 million were outstanding under the Facilities as of December 31, 2023.
Under the Commercial Paper program, the Operating Partnership may issue unsecured commercial paper notes, denominated in U.S. dollars, Euro and other currencies. Notes issued in non-U.S. currencies may be issued by one or more subsidiaries of the Operating Partnership and are guaranteed by the Operating Partnership. Notes will be sold under customary terms in the U.S. and Euro commercial paper note markets and rank (either by themselves or as a result of the guarantee described above) pari passu with the Operating Partnership's other unsecured senior indebtedness. The
68
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 45:
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
Reconciliation of Net Income (Loss) to NOI At Share and NOI At Share - Cash Basis for the Years Ended December 31, 2023 and 2022
Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the years ended December 31, 2023 and 2022.
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------|:--------------------------------|:----------|:-----|:----------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Net income (loss) | $ | 32,888 | | | $ | (382,612) |
| 4 | Depreciation and amortization expense | 434,273 | | | 504,502 | | |
| 5 | General and administrative expense | 162,883 | | | 133,731 | | |
| 6 | Impairment losses, transaction related costs and other | 50,691 | | | 31,722 | | |
| 7 | (Income) loss from partially owned entities | (38,689) | | | 461,351 | | |
| 8 | Income from real estate fund investments | (1,590) | | | (3,541) | | |
| 9 | Interest and other investment income, net | (41,697) | | | (19,869) | | |
| 10 | Interest and debt expense | 349,223 | | | 279,765 | | |
| 13 | Net gains on disposition of wholly owned and partially owned assets | (71,199) | | | (100,625) | | |
| 14 | Income tax expense | 29,222 | | | 21,660 | | |
| 16 | NOI from partially owned entities | 285,761 | | | 305,993 | | |
| 17 | NOI attributable to noncontrolling interests in consolidated subsidiaries | (48,553) | | | (70,029) | | |
| 18 | NOI at share | 1,143,213 | | | 1,162,048 | | |
| 19 | Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other | (3,377) | | | (10,980) | | |
| 20 | NOI at share - cash basis | $ | 1,139,836 | | | $ | 1,151,068 |
NOI At Share by Region(1)
| | | | | | | |
|---:|:---------------------------|:--------------------------------|:---|:-----|:----|:---|
| 1 | | For the Year Ended December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Region: | | | | | |
| 4 | New York metropolitan area | 88 | % | | 86 | % |
| 5 | Chicago, IL | 6 | % | | 8 | % |
| 6 | San Francisco, CA(1) | 6 | % | | 6 | % |
| 7 | | 100 | % | | 100 | % |
________________________________________
(1) 2023 excludes our $14,103,000 share of the receipt of tenant settlement, net of legal expenses.
45
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 46:
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022
Revenues
Our revenues were $1,811,163,000 for the year ended December 31, 2023 compared to $1,799,995,000 in the prior year, an increase of $11,168,000. Below are the details of the increase by segment:
| | | | | | | | | | | |
|---:|:-------------------------------------|:-------|:---------|:---------|:---------|:------|:---------|:--------|:----|:---------|
| 1 | (Amounts in thousands) | | | | | | | | | |
| 2 | (Decrease) increase due to: | Total | | New York | | Other | | | | |
| 3 | Rental revenues: | | | | | | | | | |
| 4 | Acquisitions, dispositions and other | $ | (42,082) | | | $ | (30,417) | | $ | (11,665) |
| 5 | Development and redevelopment | 3,855 | | | 3,855 | | | - | | |
| 6 | Trade shows | (223) | | | - | | | (223) | | |
| 7 | Same store operations | 38,251 | | | 16,198 | | | 22,053 | (1) | |
| 8 | | (199) | | | (10,364) | | | 10,165 | | |
| 10 | Fee and other income: | | | | | | | | | |
| 11 | BMS cleaning fees | 4,264 | | | 5,078 | | | (814) | | |
| 12 | Management and leasing fees | 2,001 | | | 1,974 | | | 27 | | |
| 13 | Other income | 5,102 | | | 6,028 | | | (926) | | |
| 14 | | 11,367 | | | 13,080 | | | (1,713) | | |
| 16 | Total increase in revenues | $ | 11,168 | | | $ | 2,716 | | $ | 8,452 |
________________________________________
See notes below.
Expenses
Our expenses were $1,565,167,000 for the year ended December 31, 2023 compared to $1,534,249,000 in the prior year, an increase of $30,918,000. Below are the details of the increase (decrease) by segment:
| | | | | | | | | | | |
|---:|:-------------------------------------------------------|:---------|:---------|:---------|:---------|:------|:---------|:--------|:----|:--------|
| 1 | (Amounts in thousands) | | | | | | | | | |
| 2 | (Decrease) increase due to: | Total | | New York | | Other | | | | |
| 3 | Operating: | | | | | | | | | |
| 4 | Acquisitions, dispositions and other | $ | (22,050) | | | $ | (12,709) | | $ | (9,341) |
| 5 | Development and redevelopment | 5,048 | | | 5,048 | | | - | | |
| 6 | Non-reimbursable expenses | 2,957 | | | 2,957 | | | - | | |
| 7 | Trade shows | 612 | | | - | | | 612 | | |
| 8 | BMS expenses | 4,831 | | | 5,645 | | | (814) | | |
| 9 | Same store operations | 39,849 | | | 16,389 | | | 23,460 | (2) | |
| 10 | | 31,247 | | | 17,330 | | | 13,917 | | |
| 12 | Depreciation and amortization: | | | | | | | | | |
| 13 | Acquisitions, dispositions and other | (77,474) | | | (77,474) | | | - | | |
| 14 | Development and redevelopment | 287 | | | 287 | | | - | | |
| 15 | Same store operations | 6,958 | | | 4,971 | | | 1,987 | | |
| 16 | | (70,229) | | | (72,216) | | | 1,987 | | |
| 18 | General and administrative | 29,152 | | (3) | 4,014 | | | 25,138 | | |
| 20 | Expense from deferred compensation plan liability | 21,779 | | | - | | | 21,779 | | |
| 22 | Impairment losses, transaction related costs and other | 18,969 | | | 27,475 | | (4) | (8,506) | | |
| 24 | Total increase (decrease) in expenses | $ | 30,918 | | | $ | (23,397) | | $ | 54,315 |
________________________________________
(1)2023 includes the receipt of a $21,350 tenant settlement, of which $6,405 is attributable to noncontrolling interests.
(2)2022 includes prior period accrual adjustments related to changes in the tax-assessed value of THE MART.
(3)Primarily due to non-cash expense related to the June 2023 equity compensation grant. See Note 12 - Stock-based Compensation in Part II, Item 8 of this Annual Report on Form 10-K for details.
(4)Primarily due to non-cash impairment losses ($45,007 in 2023 and $19,098 in 2022).
46
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 47:
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Income (Loss) from Partially Owned Entities
Below are the components of income (loss) from partially owned entities.
| | | | | | | | | |
|---:|:------------------------------------------------------------|:---------------------------------------------|:-----|:--------------------------------|:-------|:----------|:---|:----------|
| 1 | (Amounts in thousands) | Percentage Ownership as of December 31, 2023 | | For the Year Ended December 31, | | | | |
| 2 | | | 2023 | | 2022 | | | |
| 3 | Our share of net income (loss): | | | | | | | |
| 4 | Fifth Avenue and Times Square JV: | | | | | | | |
| 5 | Equity in net income(1) | 51.5% | | $ | 35,209 | | $ | 55,248 |
| 6 | Return on preferred equity, net of our share of the expense | | | 37,416 | | 37,416 | | |
| 7 | Non-cash impairment loss | | | - | | (489,859) | | |
| 8 | | | | 72,625 | | (397,195) | | |
| 9 | Partially owned office buildings(2)(3) | Various | | (73,589) | | (110,261) | | |
| 10 | Alexander's Inc.(4) | 32.4% | | 37,075 | | 22,973 | | |
| 11 | Other equity method investments(3)(5) | Various | | 2,578 | | 23,132 | | |
| 12 | | | | $ | 38,689 | | $ | (461,351) |
________________________________________
(1)2023 includes (i) a $5,120 accrual of default interest which was forgiven by the lender as part of the restructuring of the 697-703 Fifth Avenue loan and is amortized over the remaining term of the restructured loan, reducing future interest expense and (ii) lower income from lease renewals at 697-703 Fifth Avenue and 666 Fifth Avenue, partially offset by a decrease in our share of depreciation and amortization expense compared to the prior year, primarily resulting from non-cash impairment losses recognized in prior periods.
(2)Includes interests in 280 Park Avenue, 650 Madison Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
(3)In 2023 and 2022, we recognized $50,458 and $93,353, respectively, of impairment losses.
(4)On May 19, 2023, Alexander's completed the sale of the Rego Park III land parcel for $71,060. As a result of the sale, we recognized our $16,396 share of the net gain and received a $711 sales commission from Alexander's, of which $250 was paid to a third-party broker.
(5)Includes interests in Independence Plaza, Rosslyn Plaza and others. 2022 includes $17,185 of net gains from dispositions of two investments.
Income from Real Estate Fund Investments
Below is a summary of income from the Vornado Capital Partners Real Estate Fund ("the Fund") and the Crowne Plaza Times Square Hotel Joint Venture.
| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------|:--------------------------------|:--------|:-----|:---------|:---|:-------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Previously recorded unrealized loss on exited investments | $ | 247,575 | | | $ | 59,396 |
| 4 | Net realized loss on exited investments | (245,714) | | | (54,255) | | |
| 5 | Net investment (loss) income | (271) | | | 6,130 | | |
| 6 | Net unrealized loss on held investments | - | | | (7,730) | | |
| 8 | Income from real estate fund investments | 1,590 | | | 3,541 | | |
| 9 | Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries | 12,789 | | | (1,870) | | |
| 10 | Income from real estate fund investments net of noncontrolling interests in consolidated subsidiaries | $ | 14,379 | | | $ | 1,671 |
Interest and Other Investment Income, net
The following table sets forth the details of interest and other investment income, net.
| | | | | | | | |
|---:|:---------------------------------------------------------------|:--------------------------------|:-------|:-----|:------|:---|:-------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Interest on cash and cash equivalents and restricted cash | $ | 44,786 | | | $ | 7,553 |
| 4 | Credit losses on investments | (8,269) | | | - | | |
| 5 | Amortization of discount on investments in U.S. Treasury bills | 3,829 | | | 7,075 | | |
| 6 | Interest on loans receivable | 1,351 | | | 5,006 | | |
| 7 | Other, net | - | | | 235 | | |
| 8 | | $ | 41,697 | | | $ | 19,869 |
47
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 48:
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Interest and Debt Expense
Interest and debt expense was $349,223,000 for the year ended December 31, 2023, compared to $279,765,000 in the prior year, an increase of $69,458,000. This was primarily due to (i) $98,348,000 of higher interest expense resulting from higher average interest rates on our debt, partially offset by (ii) $23,977,000 of higher capitalized interest and debt expense.
Net Gains on Disposition of Wholly Owned and Partially Owned Assets
Net gains on disposition of wholly owned and partially owned assets of $71,199,000 for the year ended December 31, 2023, primarily consists of (i) $35,968,000 upon contribution of our Pier 94 leasehold to Pier 94 JV primarily due to the step-up of our retained investment in the leasehold interest to fair value, (ii) $20,181,000 from the sale of The Armory Show, and (iii) $14,127,000 from the sale of two condominium units at 220 CPS. Net gains on disposition of wholly owned and partially owned assets of $100,625,000 for the year ended December 31, 2022, primarily consists of (i) $41,874,000 from the sale of three condominium units and ancillary amenities at 220 CPS, (ii) $31,876,000 from the sale of 40 Fulton Street, (iii) $15,213,000 from the sale of Center Building located at 33-00 Northern Boulevard in Long Island City, New York, (iv) $13,613,000 from the refund of New York City real property transfer tax paid in connection with the April 2019 Fifth Avenue and Times Square JV transaction, and (v) $2,919,000 from the sale of 484-486 Broadway.
Income Tax Expense
Income tax expense was $29,222,000 for the year ended December 31, 2023, compared to $21,660,000 in the prior year, an increase of $7,562,000. This was primarily due to higher income tax expense incurred by our taxable REIT subsidiaries.
Net Loss Attributable to Noncontrolling Interests in Consolidated Subsidiaries
Net loss attributable to noncontrolling interests in consolidated subsidiaries was $75,967,000 for the year ended December 31, 2023, compared to $5,737,000 in the prior year, an increase of $70,230,000. This resulted primarily from the allocation of the impairment loss recognized on 606 Broadway and an increase in losses allocated to the redeemable noncontrolling interest in the Farley joint venture and the noncontrolling interests of Vornado Capital Partners Real Estate Fund.
Same Store Net Operating Income At Share
Same store NOI at share represents NOI at share from operations which are in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.
Below are reconciliations of NOI at share to same store NOI at share for our New York segment, THE MART, 555 California Street and other investments for the year ended December 31, 2023 compared to December 31, 2022.
| | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------|:---------|:----------|:---------|:---------|:---------|:--------|:----------------------|:---|:------|:---------|:---|:---------|:-------|:---|:-------|
| 1 | (Amounts in thousands) | Total | | New York | | THE MART | | 555 California Street | | Other | | | | | | |
| 2 | NOI at share for the year ended December 31, 2023 | $ | 1,143,213 | | | $ | 977,569 | | | $ | 61,519 | | $ | 82,965 | $ | 21,160 |
| 3 | Less NOI at share from: | | | | | | | | | | | | | | | |
| 4 | Dispositions | (1,270) | | | (1,556) | | | 286 | | | - | | - | | | |
| 5 | Development properties | (26,748) | | | (26,748) | | | - | | | - | | - | | | |
| 6 | Other non-same store (income) expense, net | (20,399) | | | 761 | | | - | | | - | | (21,160) | | | |
| 7 | Same store NOI at share for the year ended December 31, 2023 | $ | 1,094,796 | | | $ | 950,026 | | | $ | 61,805 | | $ | 82,965 | $ | - |
| 9 | NOI at share for the year ended December 31, 2022 | $ | 1,162,048 | | | $ | 981,508 | | | $ | 96,906 | | $ | 65,692 | $ | 17,942 |
| 10 | Less NOI at share from: | | | | | | | | | | | | | | | |
| 11 | Dispositions | (15,205) | | | (13,158) | | | (2,047) | | | - | | - | | | |
| 12 | Development properties | (24,088) | | | (24,088) | | | - | | | - | | - | | | |
| 13 | Other non-same store income, net | (32,838) | | | (14,896) | | | - | | | - | | (17,942) | | | |
| 14 | Same store NOI at share for the year ended December 31, 2022 | $ | 1,089,917 | | | $ | 929,366 | | | $ | 94,859 | | $ | 65,692 | $ | - |
| 16 | Increase (decrease) in same store NOI at share | $ | 4,879 | | | $ | 20,660 | | | $ | (33,054) | | $ | 17,273 | $ | - |
| 18 | % increase (decrease) in same store NOI at share | 0.4 | % | | 2.2 | % | | (34.8) | % | | 26.3 | % | - | % | | |
48
|
| | |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | to reasonable cause and certain other conditions were met. As a result, failing to maintain REIT status would result in a significant increase in the income tax expense recorded and paid during those periods. |
| | | |
|---:|:---|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | In the period of a significant acquisition of real estate, we make estimates as part of our valuation of the purchase price of asset acquisitions (including the components of excess investment in joint ventures) to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our real estate valuations are typically the determination of relative fair value to the buildings as-if-vacant, land and market value of in-place leases. In the case of the fair value of buildings and fair value of land and other intangibles, our estimates of the values of these components will affect the amount of depreciation or amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the market value of in-place leases, we make our best estimates of the tenants' ability to pay rents based upon the tenants' operating performance at the property, including the competitive position of the property in its market as well as sales psf, rents psf, and overall occupancy cost for the tenants in place at the acquisition date. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. |
Results of Operations
The following acquisitions, dispositions, and openings of consolidated properties affected our consolidated results in the comparative periods:
| | | |
|---:|:---|:--------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On April 27, 2023, we opened Paris-Giverny Designer Outlet, a 228,000 square foot center in Vernon, France. We own a 74% interest in this center. |
| | | |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On June 17, 2022, we acquired an additional interest in Gloucester Premium Outlets from a joint venture, resulting in the consolidation of this property. |
| | | |
|---:|:---|:-----------------------------------------------------------------------|
| 0 | ● | During the second quarter of 2022, we disposed of one retail property. |
| | | |
|---:|:---|:-----------------------------------------------------|
| 0 | ● | During 2021, we disposed of three retail properties. |
| | | |
|---:|:---|:---------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | During the first quarter of 2021, we consolidated one Designer Outlet property in Europe that had previously been accounted for under the equity method. |
The following acquisitions, dispositions, and openings of noncontrolling interests in joint venture entities affected our income from unconsolidated entities in the comparative periods:
| | | |
|---:|:---|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. In addition, we sold a portion of our interest in ABG on November 29, 2023. These transactions reduced our ownership from 12.3% to 9.6%. |
| | | |
|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | During the third quarter of 2023, we disposed of our interest in one unconsolidated retail property through foreclosure in satisfaction of its $114.8 million non-recourse loan. We recognized no gain or loss in connection with this disposal. |
| | | |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On September 7, 2023, we acquired an additional 4% ownership in TRG for approximately $199.6 million by issuing 1,725,000 units in the Operating Partnership, bringing our noncontrolling ownership interest in TRG to 84%. |
| | | |
|---:|:---|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | During the third quarter of 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million. |
| | | |
|---:|:---|:-----------------------------------------------------------------------|
| 0 | ● | During the fourth quarter of 2022, we disposed of one retail property. |
| | | |
|---:|:---|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | During the fourth quarter of 2022, we sold to ABG all of our interests in the licensing venture of Eddie Bauer for additional interests in ABG. Our noncontrolling interest in ABG was approximately 12.3% after this transaction. |
| | | |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On December 19, 2022, we completed the acquisition of a 50% noncontrolling legal ownership interest in Jamestown, a global real estate investment and asset management company, as well as separate interests in certain real estate and working capital, for total cash consideration of $173.4 million. |
| | | |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On November 3, 2022, we opened Fukaya-Hanazono Premium Outlets, a 296,300 square foot center in Fukaya City, Japan. We own a 40% interest in this center. |
64
, | | | |
|---:|:---|:----------------------------------------------------------------------|
| 0 | ● | During the third quarter of 2022, we disposed of one retail property. |
| | | |
|---:|:---|:------------------------------------------------------------------------------------------------------|
| 0 | ● | During the fourth quarter of 2021, we disposed of our noncontrolling interest in one retail property. |
| | | |
|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On December 20, 2021, we sold a portion of our interest in ABG for cash consideration of $65.5 million and purchased additional interests in ABG for cash consideration of $100.0 million. |
| | | |
|---:|:---|:------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On October 15, 2021, we opened Jeju Premium Outlets, a 92,000 square foot center in Jeju Province, South Korea. We own a 50% interest in this center. |
| | | |
|---:|:---|:--------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On July 1, 2021, we sold to ABG all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG. |
| | | |
|---:|:---|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On June 1, 2021, we and our partner, ABG, acquired the licensing rights of Eddie Bauer. Our noncontrolling interest in the licensing venture is 49% and was acquired for cash consideration of $100.8 million. |
| | | |
|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | On April 12, 2021, we opened West Midlands Designer Outlet, a 197,000 square foot center in Cannock, United Kingdom. We own a 23.2% interest in this center. |
| | | |
|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | In the first quarter of 2021, we and our partner, ABG, both acquired additional 12.5% interests in the licensing and operations of Forever 21 for $56.3 million bringing our interest to 50%. Subsequently the Forever 21 operations were merged into SPARC Group. |
For the purposes of the following comparisons between the years ended December 31, 2023 and 2022 and the years ended December 31, 2022 and 2021, the above transactions are referred to as the property transactions. In the following discussions of our results of operations, "comparable" refers to properties we owned and operated in both years in the year to year comparisons.
Year Ended December 31, 2023 vs. Year Ended December 31, 2022
Lease income increased $259.2 million, due to an increase in fixed lease income of $286.7 million primarily due to an increase in fixed minimum lease consideration and higher occupancy, partially offset by a decrease in variable lease income based on tenant sales of $27.5 million.
Total other income increased $99.1 million, primarily due to a $56.6 million increase in interest income, a $52.0 million increase in mixed use and franchise operations income, a $13.1 million increase in dividend and distribution income and a $3.7 million increase in Simon Brand Ventures, fee and other income, partially offset by a $17.0 million decrease in lease settlement income and a $9.3 million decrease in land sale activity.
Home and regional office costs increased $23.0 million primarily due to increased personnel and compensation costs.
Other expense increased $35.6 million primarily due to increased mixed use and franchise operations expenses of $50.8 million, partially offset by the 2022 write-off of $13.4 million in development costs related to an international development project in Germany we no longer intended to pursue.
Interest expense increased $93.4 million primarily related to new USD bond issuances during 2023 of $69.5 million, activity with regards to the Credit Facilities of $24.5 million and $8.8 million from increased variable rates, partially offset by a USD bond payoff during 2023 of $14.7 million and a Euro bond payoff during 2022 of $9.8 million.
During 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million. During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. As a result, we recognized non-cash pre-tax gains on the deemed disposals of $59.1 million. During 2023, we also recorded our share of the gain on the sale of a portion of our ABG interests of $157.1 million. During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments.
Income and other tax expense decreased $1.6 million primarily related to the 2022 Eddie Bauer licensing transaction noted above of $39.7 million and an overall lower tax expense on our share of operating results from our other platform investments of approximately $27.2 million, partially offset by the tax impact of the SPARC and ABG transactions in 2023 noted above of $69.3 million.
65
, Income from unconsolidated entities decreased $272.3 million primarily due to lower results of operations from our other platform investments.
During 2023, we recorded an $11.2 million loss on the disposition of certain assets by Klépierre and an impairment on a joint venture property, our share of which was $8.6 million, partially offset by an $8.7 million gain on the disposition of certain assets by a joint venture investment and an $8.1 million gain on excess insurance proceeds. During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property.
Simon's net income attributable to noncontrolling interests increased $21.0 million due to an increase in the net income of the Operating Partnership.
Year Ended December 31, 2022 vs. Year Ended December 31, 2021
Lease income increased $168.5 million, of which the property transactions accounted for a $23.2 million decrease. Comparable lease income increased $191.7 million, or 4.1%. Total lease income increased primarily due to an increase in fixed lease income of $156.6 million primarily due to an increase in fixed minimum lease consideration, higher occupancy, and an increase in variable lease income of $11.9 million primarily related to higher consideration based on tenant sales.
Total other income decreased $4.2 million, primarily due to a decrease in lease settlement income of $38.8 million, a $14.9 million gain from the sale of our interest in a multi-family residential property in 2021, and a $6.8 million non-cash dilution gain on a non-retail investment in 2021, partially offset by an $20.8 million increase in fee and other income, a $17.9 million increase related to Simon Brand Ventures and gift card revenues, a $9.8 million increase related to land sale activity and a $7.8 million increase in interest income.
Property operating expenses increased $48.4 million primarily due to the return to a more normalized operating environment following the peak of the COVID pandemic.
Other expense increased $11.7 million primarily due to an increase in legal fees and foreign currency revaluations.
Interest expense decreased $34.5 million primarily related to the early extinguishment of nine secured loans, the disposition of three retail properties, and the refinancing of two retail properties at lower interest rates in 2021, partially offset by the issuances of Euro and USD bonds and interest increases due to variable rates in 2022.
During 2021, we recorded a loss on extinguishment of debt of $51.8 million as a result of the early redemption of unsecured notes and the payoff of mortgages at nine properties.
During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments. During 2021, we recorded a non-cash gain of $159.8 million as a result of the sale to ABG of all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG and a gain on the sale of a portion of our interest in ABG of $18.8 million, as discussed further in Note 6.
Income and other tax expense decreased $73.7 million due to the impact in 2021 on deferred tax expense as a result of the ABG transaction noted above, which had a non-cash tax impact of $55.9 million, offset by the impact in 2022 on deferred tax expense of the 2022 ABG transaction noted above, which had a non-cash tax impact of $39.7 million, and lower tax expense in 2022 on our share of operating results from our other platform investments.
Income from unconsolidated entities decreased $134.9 million primarily due to unfavorable results of operations year over year from our other platform investments of $216.1 million, as well as the reversal in 2021 of a previously established deferred tax liability at Klépierre resulting in a non-cash gain, of which our share was $118.4 million, partially offset by favorable year over year results of operations across the properties and TRG in 2022.
During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property. During 2021, we recorded gains of $184.0 million related to the disposition of three consolidated properties, our interest in one unconsolidated property and the impact from the consolidation of one property that was previously unconsolidated, and gains of $21.2 million related to property insurance recoveries of previously depreciated assets.
Simon's net income attributable to noncontrolling interests decreased $6.2 million due to a decrease in the net income of the Operating Partnership.
66
,
Liquidity and Capital Resources
Because we own long-lived income-producing assets, our financing strategy relies primarily on long-term fixed rate debt. Floating rate debt comprised 1.1% of our total consolidated debt at December 31, 2023. We also enter into interest rate protection agreements from time to time to manage our interest rate risk. We derive most of our liquidity from positive net cash flow from operations and distributions of capital from unconsolidated entities that totaled $4.2 billion in the aggregate during 2023. The Credit Facilities and the Commercial Paper program provide alternative sources of liquidity as our cash needs vary from time to time. Borrowing capacity under these sources may be increased as discussed further below.
Our balance of cash and cash equivalents increased $547.4 million during 2023 to $1.2 billion as of December 31, 2023 as further discussed below.
On December 31, 2023, we had an aggregate available borrowing capacity of approximately $8.1 billion under the Facilities, net of letters of credit of $58.6 million. For the year ended December 31, 2023, the maximum aggregate outstanding balance under the Credit Facilities was $1.1 billion and the weighted average outstanding balance was $962.6 million. The weighted average interest rate was 4.36% for the year ended December 31, 2023.
Simon has historically had access to public equity markets and the Operating Partnership has historically had access to private and public, short and long-term unsecured debt markets and access to secured debt and private equity from institutional investors at the property level.
Our business model and Simon's status as a REIT require us to regularly access the debt markets to raise funds for acquisition, development and redevelopment activity, and to refinance maturing debt. Simon may also, from time to time, access the equity capital markets to accomplish our business objectives. We believe we have sufficient cash on hand and availability under the Credit Facilities and the Commercial Paper program to address our debt maturities and capital needs through 2024.
Cash Flows
Our net cash flow from operating activities and distributions of capital from unconsolidated entities totaled $4.2 billion during 2023. In addition, we had net proceeds of debt from our debt financing and repayment activities of $971.3 million in 2023. These activities are further discussed below under "Financing and Debt." During 2023, we also:
| | | |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | paid stockholder dividends and unitholder distributions totaling approximately $2.8 billion and preferred unit distributions totaling $5.2 million, |
| | | |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | funded consolidated capital expenditures of $793.3 million (including development and other costs of $156.0 million, redevelopment and expansion costs of $328.8 million, and tenant costs and other operational capital expenditures of $308.5 million), |
| | | |
|---:|:---|:----------------------------------------------------------------|
| 0 | ● | funded investments in unconsolidated entities of $84.0 million, |
| | | |
|---:|:---|:---------------------------------------------------------------|
| 0 | ● | funded the purchase of $1.0 billion of short-term investments, |
| | | |
|---:|:---|:---------------------------------------------------------------------|
| 0 | ● | funded the repurchase of $140.6 million of Simon's common stock, and |
| | | |
|---:|:---|:-------------------------------------------------------------------------|
| 0 | ● | received proceeds from the sale of equity instruments of $304.1 million. |
In general, we anticipate that cash generated from operations will be sufficient to meet operating expenses, monthly debt service, recurring capital expenditures, and dividends to stockholders and/or distributions to partners necessary to maintain Simon's REIT qualification on a long-term basis. In addition, we expect to be able to generate or obtain capital for nonrecurring capital expenditures, such as acquisitions, major building redevelopments and expansions, as well as for scheduled principal maturities on outstanding indebtedness, from the following, however a severe and prolonged disruption and instability in the global financial markets, including the debt and equity capital markets, may affect our ability to access necessary capital:
| | | |
|---:|:---|:-------------------------------------------------------------------------------|
| 0 | ● | excess cash generated from operating performance and working capital reserves, |
| | | |
|---:|:---|:------------------------------------------------------------------|
| 0 | ● | borrowings on the Credit Facilities and Commercial Paper program, |
| | | |
|---:|:---|:---------------------------------------------------|
| 0 | ● | additional secured or unsecured debt financing, or |
| | | |
|---:|:---|:-----------------------------------------------------------|
| 0 | ● | additional equity raised in the public or private markets. |
67
, We expect to generate positive cash flow from operations in 2024, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our tenants. A significant deterioration in projected cash flows from operations, could cause us to increase our reliance on available funds from the Credit Facilities and Commercial Paper program, further curtail planned capital expenditures, or seek other additional sources of financing.
Financing and Debt
Unsecured Debt
At December 31, 2023, our unsecured debt consisted of $20.7 billion of senior unsecured notes of the Operating Partnership, $305.0 million outstanding under the Credit Facility.
The Credit Facility can be increased in the form of additional commitments in an aggregate not to exceed $1.0 billion, for a total aggregate size of $6.0 billion, subject to obtaining additional lender commitments and satisfying certain customary conditions precedent. Borrowings may be denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 97% of the maximum revolving credit amount, as defined. The initial maturity date of the Credit Facility is June 30, 2027. The Credit Facility can be extended for two additional six-month periods to June 30, 2028, at our sole option, subject to satisfying certain customary conditions precedent.
Borrowings under the Credit Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Credit Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Credit Facility. Based upon our current credit ratings, the interest rate on the Credit Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR.
The Supplemental Facility, has a borrowing capacity of $3.5 to $4.5 billion during its term and provides for borrowings denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 100% of the maximum revolving credit amount, as defined. The initial maturity date of the Supplemental Facility is January 31, 2026 and can be extended for an additional year to January 31, 2027 at our sole option, subject to satisfying certain customary conditions precedent.
Borrowings under the Supplemental Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Supplemental Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Supplemental Facility. Based upon our current credit ratings, the interest rate on the Supplemental Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR.
On December 31, 2023 we had an aggregate available borrowing capacity of $8.1 billion under the Credit Facilities. The maximum aggregate outstanding balance under the Facilities during the year ended December 31, 2023 was $1.1 billion and the weighted average outstanding balance was $962.6 million. Letters of credit of $58.6 million were outstanding under the Facilities as of December 31, 2023.
Under the Commercial Paper program, the Operating Partnership may issue unsecured commercial paper notes, denominated in U.S. dollars, Euro and other currencies. Notes issued in non-U.S. currencies may be issued by one or more subsidiaries of the Operating Partnership and are guaranteed by the Operating Partnership. Notes will be sold under customary terms in the U.S. and Euro commercial paper note markets and rank (either by themselves or as a result of the guarantee described above) pari passu with the Operating Partnership's other unsecured senior indebtedness. The
68
,
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
Reconciliation of Net Income (Loss) to NOI At Share and NOI At Share - Cash Basis for the Years Ended December 31, 2023 and 2022
Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the years ended December 31, 2023 and 2022.
| | | | | | | | |
|---:|:-----------------------------------------------------------------------------------------------------------|:--------------------------------|:----------|:-----|:----------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Net income (loss) | $ | 32,888 | | | $ | (382,612) |
| 4 | Depreciation and amortization expense | 434,273 | | | 504,502 | | |
| 5 | General and administrative expense | 162,883 | | | 133,731 | | |
| 6 | Impairment losses, transaction related costs and other | 50,691 | | | 31,722 | | |
| 7 | (Income) loss from partially owned entities | (38,689) | | | 461,351 | | |
| 8 | Income from real estate fund investments | (1,590) | | | (3,541) | | |
| 9 | Interest and other investment income, net | (41,697) | | | (19,869) | | |
| 10 | Interest and debt expense | 349,223 | | | 279,765 | | |
| 13 | Net gains on disposition of wholly owned and partially owned assets | (71,199) | | | (100,625) | | |
| 14 | Income tax expense | 29,222 | | | 21,660 | | |
| 16 | NOI from partially owned entities | 285,761 | | | 305,993 | | |
| 17 | NOI attributable to noncontrolling interests in consolidated subsidiaries | (48,553) | | | (70,029) | | |
| 18 | NOI at share | 1,143,213 | | | 1,162,048 | | |
| 19 | Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other | (3,377) | | | (10,980) | | |
| 20 | NOI at share - cash basis | $ | 1,139,836 | | | $ | 1,151,068 |
NOI At Share by Region(1)
| | | | | | | |
|---:|:---------------------------|:--------------------------------|:---|:-----|:----|:---|
| 1 | | For the Year Ended December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Region: | | | | | |
| 4 | New York metropolitan area | 88 | % | | 86 | % |
| 5 | Chicago, IL | 6 | % | | 8 | % |
| 6 | San Francisco, CA(1) | 6 | % | | 6 | % |
| 7 | | 100 | % | | 100 | % |
________________________________________
(1) 2023 excludes our $14,103,000 share of the receipt of tenant settlement, net of legal expenses.
45
,
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022
Revenues
Our revenues were $1,811,163,000 for the year ended December 31, 2023 compared to $1,799,995,000 in the prior year, an increase of $11,168,000. Below are the details of the increase by segment:
| | | | | | | | | | | |
|---:|:-------------------------------------|:-------|:---------|:---------|:---------|:------|:---------|:--------|:----|:---------|
| 1 | (Amounts in thousands) | | | | | | | | | |
| 2 | (Decrease) increase due to: | Total | | New York | | Other | | | | |
| 3 | Rental revenues: | | | | | | | | | |
| 4 | Acquisitions, dispositions and other | $ | (42,082) | | | $ | (30,417) | | $ | (11,665) |
| 5 | Development and redevelopment | 3,855 | | | 3,855 | | | - | | |
| 6 | Trade shows | (223) | | | - | | | (223) | | |
| 7 | Same store operations | 38,251 | | | 16,198 | | | 22,053 | (1) | |
| 8 | | (199) | | | (10,364) | | | 10,165 | | |
| 10 | Fee and other income: | | | | | | | | | |
| 11 | BMS cleaning fees | 4,264 | | | 5,078 | | | (814) | | |
| 12 | Management and leasing fees | 2,001 | | | 1,974 | | | 27 | | |
| 13 | Other income | 5,102 | | | 6,028 | | | (926) | | |
| 14 | | 11,367 | | | 13,080 | | | (1,713) | | |
| 16 | Total increase in revenues | $ | 11,168 | | | $ | 2,716 | | $ | 8,452 |
________________________________________
See notes below.
Expenses
Our expenses were $1,565,167,000 for the year ended December 31, 2023 compared to $1,534,249,000 in the prior year, an increase of $30,918,000. Below are the details of the increase (decrease) by segment:
| | | | | | | | | | | |
|---:|:-------------------------------------------------------|:---------|:---------|:---------|:---------|:------|:---------|:--------|:----|:--------|
| 1 | (Amounts in thousands) | | | | | | | | | |
| 2 | (Decrease) increase due to: | Total | | New York | | Other | | | | |
| 3 | Operating: | | | | | | | | | |
| 4 | Acquisitions, dispositions and other | $ | (22,050) | | | $ | (12,709) | | $ | (9,341) |
| 5 | Development and redevelopment | 5,048 | | | 5,048 | | | - | | |
| 6 | Non-reimbursable expenses | 2,957 | | | 2,957 | | | - | | |
| 7 | Trade shows | 612 | | | - | | | 612 | | |
| 8 | BMS expenses | 4,831 | | | 5,645 | | | (814) | | |
| 9 | Same store operations | 39,849 | | | 16,389 | | | 23,460 | (2) | |
| 10 | | 31,247 | | | 17,330 | | | 13,917 | | |
| 12 | Depreciation and amortization: | | | | | | | | | |
| 13 | Acquisitions, dispositions and other | (77,474) | | | (77,474) | | | - | | |
| 14 | Development and redevelopment | 287 | | | 287 | | | - | | |
| 15 | Same store operations | 6,958 | | | 4,971 | | | 1,987 | | |
| 16 | | (70,229) | | | (72,216) | | | 1,987 | | |
| 18 | General and administrative | 29,152 | | (3) | 4,014 | | | 25,138 | | |
| 20 | Expense from deferred compensation plan liability | 21,779 | | | - | | | 21,779 | | |
| 22 | Impairment losses, transaction related costs and other | 18,969 | | | 27,475 | | (4) | (8,506) | | |
| 24 | Total increase (decrease) in expenses | $ | 30,918 | | | $ | (23,397) | | $ | 54,315 |
________________________________________
(1)2023 includes the receipt of a $21,350 tenant settlement, of which $6,405 is attributable to noncontrolling interests.
(2)2022 includes prior period accrual adjustments related to changes in the tax-assessed value of THE MART.
(3)Primarily due to non-cash expense related to the June 2023 equity compensation grant. See Note 12 - Stock-based Compensation in Part II, Item 8 of this Annual Report on Form 10-K for details.
(4)Primarily due to non-cash impairment losses ($45,007 in 2023 and $19,098 in 2022).
46
,
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Income (Loss) from Partially Owned Entities
Below are the components of income (loss) from partially owned entities.
| | | | | | | | | |
|---:|:------------------------------------------------------------|:---------------------------------------------|:-----|:--------------------------------|:-------|:----------|:---|:----------|
| 1 | (Amounts in thousands) | Percentage Ownership as of December 31, 2023 | | For the Year Ended December 31, | | | | |
| 2 | | | 2023 | | 2022 | | | |
| 3 | Our share of net income (loss): | | | | | | | |
| 4 | Fifth Avenue and Times Square JV: | | | | | | | |
| 5 | Equity in net income(1) | 51.5% | | $ | 35,209 | | $ | 55,248 |
| 6 | Return on preferred equity, net of our share of the expense | | | 37,416 | | 37,416 | | |
| 7 | Non-cash impairment loss | | | - | | (489,859) | | |
| 8 | | | | 72,625 | | (397,195) | | |
| 9 | Partially owned office buildings(2)(3) | Various | | (73,589) | | (110,261) | | |
| 10 | Alexander's Inc.(4) | 32.4% | | 37,075 | | 22,973 | | |
| 11 | Other equity method investments(3)(5) | Various | | 2,578 | | 23,132 | | |
| 12 | | | | $ | 38,689 | | $ | (461,351) |
________________________________________
(1)2023 includes (i) a $5,120 accrual of default interest which was forgiven by the lender as part of the restructuring of the 697-703 Fifth Avenue loan and is amortized over the remaining term of the restructured loan, reducing future interest expense and (ii) lower income from lease renewals at 697-703 Fifth Avenue and 666 Fifth Avenue, partially offset by a decrease in our share of depreciation and amortization expense compared to the prior year, primarily resulting from non-cash impairment losses recognized in prior periods.
(2)Includes interests in 280 Park Avenue, 650 Madison Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
(3)In 2023 and 2022, we recognized $50,458 and $93,353, respectively, of impairment losses.
(4)On May 19, 2023, Alexander's completed the sale of the Rego Park III land parcel for $71,060. As a result of the sale, we recognized our $16,396 share of the net gain and received a $711 sales commission from Alexander's, of which $250 was paid to a third-party broker.
(5)Includes interests in Independence Plaza, Rosslyn Plaza and others. 2022 includes $17,185 of net gains from dispositions of two investments.
Income from Real Estate Fund Investments
Below is a summary of income from the Vornado Capital Partners Real Estate Fund ("the Fund") and the Crowne Plaza Times Square Hotel Joint Venture.
| | | | | | | | |
|---:|:------------------------------------------------------------------------------------------------------|:--------------------------------|:--------|:-----|:---------|:---|:-------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Previously recorded unrealized loss on exited investments | $ | 247,575 | | | $ | 59,396 |
| 4 | Net realized loss on exited investments | (245,714) | | | (54,255) | | |
| 5 | Net investment (loss) income | (271) | | | 6,130 | | |
| 6 | Net unrealized loss on held investments | - | | | (7,730) | | |
| 8 | Income from real estate fund investments | 1,590 | | | 3,541 | | |
| 9 | Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries | 12,789 | | | (1,870) | | |
| 10 | Income from real estate fund investments net of noncontrolling interests in consolidated subsidiaries | $ | 14,379 | | | $ | 1,671 |
Interest and Other Investment Income, net
The following table sets forth the details of interest and other investment income, net.
| | | | | | | | |
|---:|:---------------------------------------------------------------|:--------------------------------|:-------|:-----|:------|:---|:-------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Interest on cash and cash equivalents and restricted cash | $ | 44,786 | | | $ | 7,553 |
| 4 | Credit losses on investments | (8,269) | | | - | | |
| 5 | Amortization of discount on investments in U.S. Treasury bills | 3,829 | | | 7,075 | | |
| 6 | Interest on loans receivable | 1,351 | | | 5,006 | | |
| 7 | Other, net | - | | | 235 | | |
| 8 | | $ | 41,697 | | | $ | 19,869 |
47
,
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Interest and Debt Expense
Interest and debt expense was $349,223,000 for the year ended December 31, 2023, compared to $279,765,000 in the prior year, an increase of $69,458,000. This was primarily due to (i) $98,348,000 of higher interest expense resulting from higher average interest rates on our debt, partially offset by (ii) $23,977,000 of higher capitalized interest and debt expense.
Net Gains on Disposition of Wholly Owned and Partially Owned Assets
Net gains on disposition of wholly owned and partially owned assets of $71,199,000 for the year ended December 31, 2023, primarily consists of (i) $35,968,000 upon contribution of our Pier 94 leasehold to Pier 94 JV primarily due to the step-up of our retained investment in the leasehold interest to fair value, (ii) $20,181,000 from the sale of The Armory Show, and (iii) $14,127,000 from the sale of two condominium units at 220 CPS. Net gains on disposition of wholly owned and partially owned assets of $100,625,000 for the year ended December 31, 2022, primarily consists of (i) $41,874,000 from the sale of three condominium units and ancillary amenities at 220 CPS, (ii) $31,876,000 from the sale of 40 Fulton Street, (iii) $15,213,000 from the sale of Center Building located at 33-00 Northern Boulevard in Long Island City, New York, (iv) $13,613,000 from the refund of New York City real property transfer tax paid in connection with the April 2019 Fifth Avenue and Times Square JV transaction, and (v) $2,919,000 from the sale of 484-486 Broadway.
Income Tax Expense
Income tax expense was $29,222,000 for the year ended December 31, 2023, compared to $21,660,000 in the prior year, an increase of $7,562,000. This was primarily due to higher income tax expense incurred by our taxable REIT subsidiaries.
Net Loss Attributable to Noncontrolling Interests in Consolidated Subsidiaries
Net loss attributable to noncontrolling interests in consolidated subsidiaries was $75,967,000 for the year ended December 31, 2023, compared to $5,737,000 in the prior year, an increase of $70,230,000. This resulted primarily from the allocation of the impairment loss recognized on 606 Broadway and an increase in losses allocated to the redeemable noncontrolling interest in the Farley joint venture and the noncontrolling interests of Vornado Capital Partners Real Estate Fund.
Same Store Net Operating Income At Share
Same store NOI at share represents NOI at share from operations which are in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.
Below are reconciliations of NOI at share to same store NOI at share for our New York segment, THE MART, 555 California Street and other investments for the year ended December 31, 2023 compared to December 31, 2022.
| | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------|:---------|:----------|:---------|:---------|:---------|:--------|:----------------------|:---|:------|:---------|:---|:---------|:-------|:---|:-------|
| 1 | (Amounts in thousands) | Total | | New York | | THE MART | | 555 California Street | | Other | | | | | | |
| 2 | NOI at share for the year ended December 31, 2023 | $ | 1,143,213 | | | $ | 977,569 | | | $ | 61,519 | | $ | 82,965 | $ | 21,160 |
| 3 | Less NOI at share from: | | | | | | | | | | | | | | | |
| 4 | Dispositions | (1,270) | | | (1,556) | | | 286 | | | - | | - | | | |
| 5 | Development properties | (26,748) | | | (26,748) | | | - | | | - | | - | | | |
| 6 | Other non-same store (income) expense, net | (20,399) | | | 761 | | | - | | | - | | (21,160) | | | |
| 7 | Same store NOI at share for the year ended December 31, 2023 | $ | 1,094,796 | | | $ | 950,026 | | | $ | 61,805 | | $ | 82,965 | $ | - |
| 9 | NOI at share for the year ended December 31, 2022 | $ | 1,162,048 | | | $ | 981,508 | | | $ | 96,906 | | $ | 65,692 | $ | 17,942 |
| 10 | Less NOI at share from: | | | | | | | | | | | | | | | |
| 11 | Dispositions | (15,205) | | | (13,158) | | | (2,047) | | | - | | - | | | |
| 12 | Development properties | (24,088) | | | (24,088) | | | - | | | - | | - | | | |
| 13 | Other non-same store income, net | (32,838) | | | (14,896) | | | - | | | - | | (17,942) | | | |
| 14 | Same store NOI at share for the year ended December 31, 2022 | $ | 1,089,917 | | | $ | 929,366 | | | $ | 94,859 | | $ | 65,692 | $ | - |
| 16 | Increase (decrease) in same store NOI at share | $ | 4,879 | | | $ | 20,660 | | | $ | (33,054) | | $ | 17,273 | $ | - |
| 18 | % increase (decrease) in same store NOI at share | 0.4 | % | | 2.2 | % | | (34.8) | % | | 26.3 | % | - | % | | |
48
|
SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 64: <table><tr><td></td><td></td><td>to reasonable cause and certain other conditions were met. As a result, failing to maintain REIT status would result in a significant increase in the income tax expense recorded and paid during those periods.</td></tr></table><table><tr><td></td><td>●</td><td>In the period of a significant acquisition of real estate, we make estimates as part of our valuation of the purchase price of asset acquisitions (including the components of excess investment in joint ventures) to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our real estate valuations are typically the determination of relative fair value to the buildings as-if-vacant, land and market value of in-place leases. In the case of the fair value of buildings and fair value of land and other intangibles, our estimates of the values of these components will affect the amount of depreciation or amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the market value of in-place leases, we make our best estimates of the tenants' ability to pay rents based upon the tenants' operating performance at the property, including the competitive position of the property in its market as well as sales psf, rents psf, and overall occupancy cost for the tenants in place at the acquisition date. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. </td></tr></table>
Results of Operations
The following acquisitions, dispositions, and openings of consolidated properties affected our consolidated results in the comparative periods:
<table><tr><td></td><td>●</td><td>On April 27, 2023, we opened Paris-Giverny Designer Outlet, a 228,000 square foot center in Vernon, France. We own a 74% interest in this center.</td></tr></table><table><tr><td></td><td>●</td><td>On June 17, 2022, we acquired an additional interest in Gloucester Premium Outlets from a joint venture, resulting in the consolidation of this property.</td></tr></table><table><tr><td></td><td>●</td><td>During the second quarter of 2022, we disposed of one retail property.</td></tr></table><table><tr><td></td><td>●</td><td>During 2021, we disposed of three retail properties.</td></tr></table><table><tr><td></td><td>●</td><td>During the first quarter of 2021, we consolidated one Designer Outlet property in Europe that had previously been accounted for under the equity method.</td></tr></table>The following acquisitions, dispositions, and openings of noncontrolling interests in joint venture entities affected our income from unconsolidated entities in the comparative periods:
<table><tr><td></td><td>●</td><td>During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. In addition, we sold a portion of our interest in ABG on November 29, 2023. These transactions reduced our ownership from 12.3% to 9.6%.</td></tr></table><table><tr><td></td><td>●</td><td>During the third quarter of 2023, we disposed of our interest in one unconsolidated retail property through foreclosure in satisfaction of its $114.8 million non-recourse loan. We recognized no gain or loss in connection with this disposal.</td></tr></table><table><tr><td></td><td>●</td><td>On September 7, 2023, we acquired an additional 4% ownership in TRG for approximately $199.6 million by issuing 1,725,000 units in the Operating Partnership, bringing our noncontrolling ownership interest in TRG to 84%.</td></tr></table><table><tr><td></td><td>●</td><td>During the third quarter of 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million.</td></tr></table><table><tr><td></td><td>●</td><td>During the fourth quarter of 2022, we disposed of one retail property.</td></tr></table><table><tr><td></td><td>●</td><td>During the fourth quarter of 2022, we sold to ABG all of our interests in the licensing venture of Eddie Bauer for additional interests in ABG. Our noncontrolling interest in ABG was approximately 12.3% after this transaction.</td></tr></table><table><tr><td></td><td>●</td><td>On December 19, 2022, we completed the acquisition of a 50% noncontrolling legal ownership interest in Jamestown, a global real estate investment and asset management company, as well as separate interests in certain real estate and working capital, for total cash consideration of $173.4 million.</td></tr></table><table><tr><td></td><td>●</td><td>On November 3, 2022, we opened Fukaya-Hanazono Premium Outlets, a 296,300 square foot center in Fukaya City, Japan. We own a 40% interest in this center.</td></tr></table>64
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 65: <table><tr><td></td><td>●</td><td>During the third quarter of 2022, we disposed of one retail property.</td></tr></table><table><tr><td></td><td>●</td><td>During the fourth quarter of 2021, we disposed of our noncontrolling interest in one retail property.</td></tr></table><table><tr><td></td><td>●</td><td>On December 20, 2021, we sold a portion of our interest in ABG for cash consideration of $65.5 million and purchased additional interests in ABG for cash consideration of $100.0 million. </td></tr></table><table><tr><td></td><td>●</td><td>On October 15, 2021, we opened Jeju Premium Outlets, a 92,000 square foot center in Jeju Province, South Korea. We own a 50% interest in this center.</td></tr></table><table><tr><td></td><td>●</td><td>On July 1, 2021, we sold to ABG all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG. </td></tr></table><table><tr><td></td><td>●</td><td>On June 1, 2021, we and our partner, ABG, acquired the licensing rights of Eddie Bauer. Our noncontrolling interest in the licensing venture is 49% and was acquired for cash consideration of $100.8 million.</td></tr></table><table><tr><td></td><td>●</td><td>On April 12, 2021, we opened West Midlands Designer Outlet, a 197,000 square foot center in Cannock, United Kingdom. We own a 23.2% interest in this center.</td></tr></table><table><tr><td></td><td>●</td><td>In the first quarter of 2021, we and our partner, ABG, both acquired additional 12.5% interests in the licensing and operations of Forever 21 for $56.3 million bringing our interest to 50%. Subsequently the Forever 21 operations were merged into SPARC Group.</td></tr></table>For the purposes of the following comparisons between the years ended December 31, 2023 and 2022 and the years ended December 31, 2022 and 2021, the above transactions are referred to as the property transactions. In the following discussions of our results of operations, "comparable" refers to properties we owned and operated in both years in the year to year comparisons.
Year Ended December 31, 2023 vs. Year Ended December 31, 2022
Lease income increased $259.2 million, due to an increase in fixed lease income of $286.7 million primarily due to an increase in fixed minimum lease consideration and higher occupancy, partially offset by a decrease in variable lease income based on tenant sales of $27.5 million.
Total other income increased $99.1 million, primarily due to a $56.6 million increase in interest income, a $52.0 million increase in mixed use and franchise operations income, a $13.1 million increase in dividend and distribution income and a $3.7 million increase in Simon Brand Ventures, fee and other income, partially offset by a $17.0 million decrease in lease settlement income and a $9.3 million decrease in land sale activity.
Home and regional office costs increased $23.0 million primarily due to increased personnel and compensation costs.
Other expense increased $35.6 million primarily due to increased mixed use and franchise operations expenses of $50.8 million, partially offset by the 2022 write-off of $13.4 million in development costs related to an international development project in Germany we no longer intended to pursue.
Interest expense increased $93.4 million primarily related to new USD bond issuances during 2023 of $69.5 million, activity with regards to the Credit Facilities of $24.5 million and $8.8 million from increased variable rates, partially offset by a USD bond payoff during 2023 of $14.7 million and a Euro bond payoff during 2022 of $9.8 million.
During 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million. During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. As a result, we recognized non-cash pre-tax gains on the deemed disposals of $59.1 million. During 2023, we also recorded our share of the gain on the sale of a portion of our ABG interests of $157.1 million. During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments.
Income and other tax expense decreased $1.6 million primarily related to the 2022 Eddie Bauer licensing transaction noted above of $39.7 million and an overall lower tax expense on our share of operating results from our other platform investments of approximately $27.2 million, partially offset by the tax impact of the SPARC and ABG transactions in 2023 noted above of $69.3 million.
65
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 66: Income from unconsolidated entities decreased $272.3 million primarily due to lower results of operations from our other platform investments.
During 2023, we recorded an $11.2 million loss on the disposition of certain assets by Klépierre and an impairment on a joint venture property, our share of which was $8.6 million, partially offset by an $8.7 million gain on the disposition of certain assets by a joint venture investment and an $8.1 million gain on excess insurance proceeds. During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property.
Simon's net income attributable to noncontrolling interests increased $21.0 million due to an increase in the net income of the Operating Partnership.
Year Ended December 31, 2022 vs. Year Ended December 31, 2021
Lease income increased $168.5 million, of which the property transactions accounted for a $23.2 million decrease. Comparable lease income increased $191.7 million, or 4.1%. Total lease income increased primarily due to an increase in fixed lease income of $156.6 million primarily due to an increase in fixed minimum lease consideration, higher occupancy, and an increase in variable lease income of $11.9 million primarily related to higher consideration based on tenant sales.
Total other income decreased $4.2 million, primarily due to a decrease in lease settlement income of $38.8 million, a $14.9 million gain from the sale of our interest in a multi-family residential property in 2021, and a $6.8 million non-cash dilution gain on a non-retail investment in 2021, partially offset by an $20.8 million increase in fee and other income, a $17.9 million increase related to Simon Brand Ventures and gift card revenues, a $9.8 million increase related to land sale activity and a $7.8 million increase in interest income.
Property operating expenses increased $48.4 million primarily due to the return to a more normalized operating environment following the peak of the COVID pandemic.
Other expense increased $11.7 million primarily due to an increase in legal fees and foreign currency revaluations.
Interest expense decreased $34.5 million primarily related to the early extinguishment of nine secured loans, the disposition of three retail properties, and the refinancing of two retail properties at lower interest rates in 2021, partially offset by the issuances of Euro and USD bonds and interest increases due to variable rates in 2022.
During 2021, we recorded a loss on extinguishment of debt of $51.8 million as a result of the early redemption of unsecured notes and the payoff of mortgages at nine properties.
During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments. During 2021, we recorded a non-cash gain of $159.8 million as a result of the sale to ABG of all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG and a gain on the sale of a portion of our interest in ABG of $18.8 million, as discussed further in Note 6.
Income and other tax expense decreased $73.7 million due to the impact in 2021 on deferred tax expense as a result of the ABG transaction noted above, which had a non-cash tax impact of $55.9 million, offset by the impact in 2022 on deferred tax expense of the 2022 ABG transaction noted above, which had a non-cash tax impact of $39.7 million, and lower tax expense in 2022 on our share of operating results from our other platform investments.
Income from unconsolidated entities decreased $134.9 million primarily due to unfavorable results of operations year over year from our other platform investments of $216.1 million, as well as the reversal in 2021 of a previously established deferred tax liability at Klépierre resulting in a non-cash gain, of which our share was $118.4 million, partially offset by favorable year over year results of operations across the properties and TRG in 2022.
During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property. During 2021, we recorded gains of $184.0 million related to the disposition of three consolidated properties, our interest in one unconsolidated property and the impact from the consolidation of one property that was previously unconsolidated, and gains of $21.2 million related to property insurance recoveries of previously depreciated assets.
Simon's net income attributable to noncontrolling interests decreased $6.2 million due to a decrease in the net income of the Operating Partnership.
66
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 67:
Liquidity and Capital Resources
Because we own long-lived income-producing assets, our financing strategy relies primarily on long-term fixed rate debt. Floating rate debt comprised 1.1% of our total consolidated debt at December 31, 2023. We also enter into interest rate protection agreements from time to time to manage our interest rate risk. We derive most of our liquidity from positive net cash flow from operations and distributions of capital from unconsolidated entities that totaled $4.2 billion in the aggregate during 2023. The Credit Facilities and the Commercial Paper program provide alternative sources of liquidity as our cash needs vary from time to time. Borrowing capacity under these sources may be increased as discussed further below.
Our balance of cash and cash equivalents increased $547.4 million during 2023 to $1.2 billion as of December 31, 2023 as further discussed below.
On December 31, 2023, we had an aggregate available borrowing capacity of approximately $8.1 billion under the Facilities, net of letters of credit of $58.6 million. For the year ended December 31, 2023, the maximum aggregate outstanding balance under the Credit Facilities was $1.1 billion and the weighted average outstanding balance was $962.6 million. The weighted average interest rate was 4.36% for the year ended December 31, 2023.
Simon has historically had access to public equity markets and the Operating Partnership has historically had access to private and public, short and long-term unsecured debt markets and access to secured debt and private equity from institutional investors at the property level.
Our business model and Simon's status as a REIT require us to regularly access the debt markets to raise funds for acquisition, development and redevelopment activity, and to refinance maturing debt. Simon may also, from time to time, access the equity capital markets to accomplish our business objectives. We believe we have sufficient cash on hand and availability under the Credit Facilities and the Commercial Paper program to address our debt maturities and capital needs through 2024.
Cash Flows
Our net cash flow from operating activities and distributions of capital from unconsolidated entities totaled $4.2 billion during 2023. In addition, we had net proceeds of debt from our debt financing and repayment activities of $971.3 million in 2023. These activities are further discussed below under "Financing and Debt." During 2023, we also:
<table><tr><td></td><td>●</td><td>paid stockholder dividends and unitholder distributions totaling approximately $2.8 billion and preferred unit distributions totaling $5.2 million,</td></tr></table><table><tr><td></td><td>●</td><td>funded consolidated capital expenditures of $793.3 million (including development and other costs of $156.0 million, redevelopment and expansion costs of $328.8 million, and tenant costs and other operational capital expenditures of $308.5 million),</td></tr></table><table><tr><td></td><td>●</td><td>funded investments in unconsolidated entities of $84.0 million, </td></tr></table><table><tr><td></td><td>●</td><td>funded the purchase of $1.0 billion of short-term investments,</td></tr></table><table><tr><td></td><td>●</td><td>funded the repurchase of $140.6 million of Simon's common stock, and</td></tr></table><table><tr><td></td><td>●</td><td>received proceeds from the sale of equity instruments of $304.1 million.</td></tr></table>In general, we anticipate that cash generated from operations will be sufficient to meet operating expenses, monthly debt service, recurring capital expenditures, and dividends to stockholders and/or distributions to partners necessary to maintain Simon's REIT qualification on a long-term basis. In addition, we expect to be able to generate or obtain capital for nonrecurring capital expenditures, such as acquisitions, major building redevelopments and expansions, as well as for scheduled principal maturities on outstanding indebtedness, from the following, however a severe and prolonged disruption and instability in the global financial markets, including the debt and equity capital markets, may affect our ability to access necessary capital:
<table><tr><td></td><td>●</td><td>excess cash generated from operating performance and working capital reserves,</td></tr></table>
<table><tr><td></td><td>●</td><td>borrowings on the Credit Facilities and Commercial Paper program,</td></tr></table>
<table><tr><td></td><td>●</td><td>additional secured or unsecured debt financing, or</td></tr></table><table><tr><td></td><td>●</td><td>additional equity raised in the public or private markets.</td></tr></table>67
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 68: We expect to generate positive cash flow from operations in 2024, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our tenants. A significant deterioration in projected cash flows from operations, could cause us to increase our reliance on available funds from the Credit Facilities and Commercial Paper program, further curtail planned capital expenditures, or seek other additional sources of financing.
Financing and Debt
Unsecured Debt
At December 31, 2023, our unsecured debt consisted of $20.7 billion of senior unsecured notes of the Operating Partnership, $305.0 million outstanding under the Credit Facility.
The Credit Facility can be increased in the form of additional commitments in an aggregate not to exceed $1.0 billion, for a total aggregate size of $6.0 billion, subject to obtaining additional lender commitments and satisfying certain customary conditions precedent. Borrowings may be denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 97% of the maximum revolving credit amount, as defined. The initial maturity date of the Credit Facility is June 30, 2027. The Credit Facility can be extended for two additional six-month periods to June 30, 2028, at our sole option, subject to satisfying certain customary conditions precedent.
Borrowings under the Credit Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Credit Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Credit Facility. Based upon our current credit ratings, the interest rate on the Credit Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR.
The Supplemental Facility, has a borrowing capacity of $3.5 to $4.5 billion during its term and provides for borrowings denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 100% of the maximum revolving credit amount, as defined. The initial maturity date of the Supplemental Facility is January 31, 2026 and can be extended for an additional year to January 31, 2027 at our sole option, subject to satisfying certain customary conditions precedent.
Borrowings under the Supplemental Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Supplemental Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Supplemental Facility. Based upon our current credit ratings, the interest rate on the Supplemental Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR.
On December 31, 2023 we had an aggregate available borrowing capacity of $8.1 billion under the Credit Facilities. The maximum aggregate outstanding balance under the Facilities during the year ended December 31, 2023 was $1.1 billion and the weighted average outstanding balance was $962.6 million. Letters of credit of $58.6 million were outstanding under the Facilities as of December 31, 2023.
Under the Commercial Paper program, the Operating Partnership may issue unsecured commercial paper notes, denominated in U.S. dollars, Euro and other currencies. Notes issued in non-U.S. currencies may be issued by one or more subsidiaries of the Operating Partnership and are guaranteed by the Operating Partnership. Notes will be sold under customary terms in the U.S. and Euro commercial paper note markets and rank (either by themselves or as a result of the guarantee described above) pari passu with the Operating Partnership's other unsecured senior indebtedness. The
68
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 45:
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
Reconciliation of Net Income (Loss) to NOI At Share and NOI At Share - Cash Basis for the Years Ended December 31, 2023 and 2022
Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the years ended December 31, 2023 and 2022.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income (loss)</td><td>$</td><td>32,888 </td><td></td><td colspan="3"></td><td>$</td><td>(382,612)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization expense</td><td colspan="2">434,273 </td><td></td><td colspan="3"></td><td colspan="2">504,502 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">General and administrative expense</td><td colspan="2">162,883 </td><td></td><td colspan="3"></td><td colspan="2">133,731 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Impairment losses, transaction related costs and other</td><td colspan="2">50,691 </td><td></td><td colspan="3"></td><td colspan="2">31,722 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Income) loss from partially owned entities</td><td colspan="2">(38,689)</td><td></td><td colspan="3"></td><td colspan="2">461,351 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income from real estate fund investments</td><td colspan="2">(1,590)</td><td></td><td colspan="3"></td><td colspan="2">(3,541)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest and other investment income, net</td><td colspan="2">(41,697)</td><td></td><td colspan="3"></td><td colspan="2">(19,869)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest and debt expense</td><td colspan="2">349,223 </td><td></td><td colspan="3"></td><td colspan="2">279,765 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net gains on disposition of wholly owned and partially owned assets</td><td colspan="2">(71,199)</td><td></td><td colspan="3"></td><td colspan="2">(100,625)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income tax expense </td><td colspan="2">29,222 </td><td></td><td colspan="3"></td><td colspan="2">21,660 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI from partially owned entities</td><td colspan="2">285,761 </td><td></td><td colspan="3"></td><td colspan="2">305,993 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI attributable to noncontrolling interests in consolidated subsidiaries</td><td colspan="2">(48,553)</td><td></td><td colspan="3"></td><td colspan="2">(70,029)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share</td><td colspan="2">1,143,213 </td><td></td><td colspan="3"></td><td colspan="2">1,162,048 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other</td><td colspan="2">(3,377)</td><td></td><td colspan="3"></td><td colspan="2">(10,980)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share - cash basis</td><td>$</td><td>1,139,836 </td><td></td><td colspan="3"></td><td>$</td><td>1,151,068 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
NOI At Share by Region(1)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Region:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York metropolitan area</td><td colspan="2">88 </td><td>%</td><td colspan="3"></td><td colspan="2">86 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Chicago, IL</td><td colspan="2">6 </td><td>%</td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">San Francisco, CA(1)</td><td colspan="2">6 </td><td>%</td><td colspan="3"></td><td colspan="2">6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="2">100 </td><td>%</td><td colspan="3"></td><td colspan="2">100 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
(1) 2023 excludes our $14,103,000 share of the receipt of tenant settlement, net of legal expenses.
45
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 46:
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022
Revenues
Our revenues were $1,811,163,000 for the year ended December 31, 2023 compared to $1,799,995,000 in the prior year, an increase of $11,168,000. Below are the details of the increase by segment:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"> </td><td colspan="3"> </td><td colspan="3"></td></tr><tr><td colspan="3">(Decrease) increase due to:</td><td colspan="3">Total</td><td colspan="3"></td><td colspan="3">New York</td><td colspan="3"> </td><td colspan="3">Other</td><td colspan="3"></td></tr><tr><td colspan="3">Rental revenues:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"> </td><td colspan="3"> </td><td colspan="3"></td></tr><tr><td colspan="3">Acquisitions, dispositions and other</td><td>$</td><td>(42,082)</td><td></td><td colspan="3"></td><td>$</td><td>(30,417)</td><td></td><td colspan="3"></td><td>$</td><td>(11,665)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Development and redevelopment</td><td colspan="2">3,855 </td><td></td><td colspan="3"></td><td colspan="2">3,855 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Trade shows</td><td colspan="2">(223)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(223)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Same store operations</td><td colspan="2">38,251 </td><td></td><td colspan="3"></td><td colspan="2">16,198 </td><td></td><td colspan="3"></td><td colspan="2">22,053 </td><td></td><td colspan="3">(1)</td></tr><tr><td colspan="3"> </td><td colspan="2">(199)</td><td></td><td colspan="3"></td><td colspan="2">(10,364)</td><td></td><td colspan="3"></td><td colspan="2">10,165 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Fee and other income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">BMS cleaning fees</td><td colspan="2">4,264 </td><td></td><td colspan="3"></td><td colspan="2">5,078 </td><td></td><td colspan="3"></td><td colspan="2">(814)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Management and leasing fees</td><td colspan="2">2,001 </td><td></td><td colspan="3"></td><td colspan="2">1,974 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Other income</td><td colspan="2">5,102 </td><td></td><td colspan="3"></td><td colspan="2">6,028 </td><td></td><td colspan="3"></td><td colspan="2">(926)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3"> </td><td colspan="2">11,367 </td><td></td><td colspan="3"></td><td colspan="2">13,080 </td><td></td><td colspan="3"></td><td colspan="2">(1,713)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total increase in revenues</td><td>$</td><td>11,168 </td><td></td><td colspan="3"></td><td>$</td><td>2,716 </td><td></td><td colspan="3"></td><td>$</td><td>8,452 </td><td></td><td colspan="3"></td></tr></table>________________________________________
See notes below.
Expenses
Our expenses were $1,565,167,000 for the year ended December 31, 2023 compared to $1,534,249,000 in the prior year, an increase of $30,918,000. Below are the details of the increase (decrease) by segment:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td></tr><tr><td colspan="3">(Decrease) increase due to:</td><td colspan="3">Total</td><td colspan="3"></td><td colspan="3">New York</td><td colspan="3"></td><td colspan="3">Other</td><td colspan="3"></td></tr><tr><td colspan="3">Operating:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td></tr><tr><td colspan="3">Acquisitions, dispositions and other</td><td>$</td><td>(22,050)</td><td></td><td colspan="3"></td><td>$</td><td>(12,709)</td><td></td><td colspan="3"></td><td>$</td><td>(9,341)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Development and redevelopment</td><td colspan="2">5,048 </td><td></td><td colspan="3"></td><td colspan="2">5,048 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Non-reimbursable expenses</td><td colspan="2">2,957 </td><td></td><td colspan="3"></td><td colspan="2">2,957 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Trade shows</td><td colspan="2">612 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">612 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">BMS expenses</td><td colspan="2">4,831 </td><td></td><td colspan="3"></td><td colspan="2">5,645 </td><td></td><td colspan="3"></td><td colspan="2">(814)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Same store operations</td><td colspan="2">39,849 </td><td></td><td colspan="3"></td><td colspan="2">16,389 </td><td></td><td colspan="3"></td><td colspan="2">23,460 </td><td></td><td colspan="3">(2)</td></tr><tr><td colspan="3"> </td><td colspan="2">31,247 </td><td></td><td colspan="3"></td><td colspan="2">17,330 </td><td></td><td colspan="3"></td><td colspan="2">13,917 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Acquisitions, dispositions and other</td><td colspan="2">(77,474)</td><td></td><td colspan="3"></td><td colspan="2">(77,474)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Development and redevelopment</td><td colspan="2">287 </td><td></td><td colspan="3"></td><td colspan="2">287 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Same store operations</td><td colspan="2">6,958 </td><td></td><td colspan="3"></td><td colspan="2">4,971 </td><td></td><td colspan="3"></td><td colspan="2">1,987 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"> </td><td colspan="2">(70,229)</td><td></td><td colspan="3"></td><td colspan="2">(72,216)</td><td></td><td colspan="3"></td><td colspan="2">1,987 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">29,152 </td><td></td><td colspan="3">(3)</td><td colspan="2">4,014 </td><td></td><td colspan="3"></td><td colspan="2">25,138 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Expense from deferred compensation plan liability</td><td colspan="2">21,779 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">21,779 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Impairment losses, transaction related costs and other</td><td colspan="2">18,969 </td><td></td><td colspan="3"></td><td colspan="2">27,475 </td><td></td><td colspan="3">(4)</td><td colspan="2">(8,506)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total increase (decrease) in expenses</td><td>$</td><td>30,918 </td><td></td><td colspan="3"></td><td>$</td><td>(23,397)</td><td></td><td colspan="3"></td><td>$</td><td>54,315 </td><td></td><td colspan="3"></td></tr></table>________________________________________
(1)2023 includes the receipt of a $21,350 tenant settlement, of which $6,405 is attributable to noncontrolling interests.
(2)2022 includes prior period accrual adjustments related to changes in the tax-assessed value of THE MART.
(3)Primarily due to non-cash expense related to the June 2023 equity compensation grant. See Note 12 - Stock-based Compensation in Part II, Item 8 of this Annual Report on Form 10-K for details.
(4)Primarily due to non-cash impairment losses ($45,007 in 2023 and $19,098 in 2022).
46
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 47:
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Income (Loss) from Partially Owned Entities
Below are the components of income (loss) from partially owned entities.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="3" rowspan="2">Percentage Ownership as of December 31, 2023</td><td colspan="3"></td><td colspan="9">For the Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Our share of net income (loss):</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Fifth Avenue and Times Square JV:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Equity in net income(1)</td><td colspan="3">51.5%</td><td colspan="3"></td><td>$</td><td>35,209 </td><td></td><td colspan="3"></td><td>$</td><td>55,248 </td><td></td></tr><tr><td colspan="3">Return on preferred equity, net of our share of the expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,416 </td><td></td><td colspan="3"></td><td colspan="2">37,416 </td><td></td></tr><tr><td colspan="3">Non-cash impairment loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(489,859)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">72,625 </td><td></td><td colspan="3"></td><td colspan="2">(397,195)</td><td></td></tr><tr><td colspan="3">Partially owned office buildings(2)(3)</td><td colspan="3">Various</td><td colspan="3"></td><td colspan="2">(73,589)</td><td></td><td colspan="3"></td><td colspan="2">(110,261)</td><td></td></tr><tr><td colspan="3">Alexander's Inc.(4)</td><td colspan="3">32.4%</td><td colspan="3"></td><td colspan="2">37,075 </td><td></td><td colspan="3"></td><td colspan="2">22,973 </td><td></td></tr><tr><td colspan="3">Other equity method investments(3)(5)</td><td colspan="3">Various</td><td colspan="3"></td><td colspan="2">2,578 </td><td></td><td colspan="3"></td><td colspan="2">23,132 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>38,689 </td><td></td><td colspan="3"></td><td>$</td><td>(461,351)</td><td></td></tr></table>________________________________________
(1)2023 includes (i) a $5,120 accrual of default interest which was forgiven by the lender as part of the restructuring of the 697-703 Fifth Avenue loan and is amortized over the remaining term of the restructured loan, reducing future interest expense and (ii) lower income from lease renewals at 697-703 Fifth Avenue and 666 Fifth Avenue, partially offset by a decrease in our share of depreciation and amortization expense compared to the prior year, primarily resulting from non-cash impairment losses recognized in prior periods.
(2)Includes interests in 280 Park Avenue, 650 Madison Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
(3)In 2023 and 2022, we recognized $50,458 and $93,353, respectively, of impairment losses.
(4)On May 19, 2023, Alexander's completed the sale of the Rego Park III land parcel for $71,060. As a result of the sale, we recognized our $16,396 share of the net gain and received a $711 sales commission from Alexander's, of which $250 was paid to a third-party broker.
(5)Includes interests in Independence Plaza, Rosslyn Plaza and others. 2022 includes $17,185 of net gains from dispositions of two investments.
Income from Real Estate Fund Investments
Below is a summary of income from the Vornado Capital Partners Real Estate Fund ("the Fund") and the Crowne Plaza Times Square Hotel Joint Venture.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="3">Previously recorded unrealized loss on exited investments</td><td>$</td><td>247,575 </td><td></td><td colspan="3"></td><td>$</td><td>59,396 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Net realized loss on exited investments</td><td colspan="2">(245,714)</td><td></td><td colspan="3"></td><td colspan="2">(54,255)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Net investment (loss) income </td><td colspan="2">(271)</td><td></td><td colspan="3"></td><td colspan="2">6,130 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Net unrealized loss on held investments</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,730)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income from real estate fund investments</td><td colspan="2">1,590 </td><td></td><td colspan="3"></td><td colspan="2">3,541 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries</td><td colspan="2">12,789 </td><td></td><td colspan="3"></td><td colspan="2">(1,870)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Income from real estate fund investments net of noncontrolling interests in consolidated subsidiaries</td><td>$</td><td>14,379 </td><td></td><td colspan="3"></td><td>$</td><td>1,671 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
Interest and Other Investment Income, net
The following table sets forth the details of interest and other investment income, net.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Interest on cash and cash equivalents and restricted cash</td><td>$</td><td>44,786 </td><td></td><td colspan="3"></td><td>$</td><td>7,553 </td><td></td></tr><tr><td colspan="3">Credit losses on investments</td><td colspan="2">(8,269)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Amortization of discount on investments in U.S. Treasury bills</td><td colspan="2">3,829 </td><td></td><td colspan="3"></td><td colspan="2">7,075 </td><td></td></tr><tr><td colspan="3">Interest on loans receivable</td><td colspan="2">1,351 </td><td></td><td colspan="3"></td><td colspan="2">5,006 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">235 </td><td></td></tr><tr><td colspan="3"></td><td>$</td><td>41,697 </td><td></td><td colspan="3"></td><td>$</td><td>19,869 </td><td></td></tr></table>
47
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 48:
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Interest and Debt Expense
Interest and debt expense was $349,223,000 for the year ended December 31, 2023, compared to $279,765,000 in the prior year, an increase of $69,458,000. This was primarily due to (i) $98,348,000 of higher interest expense resulting from higher average interest rates on our debt, partially offset by (ii) $23,977,000 of higher capitalized interest and debt expense.
Net Gains on Disposition of Wholly Owned and Partially Owned Assets
Net gains on disposition of wholly owned and partially owned assets of $71,199,000 for the year ended December 31, 2023, primarily consists of (i) $35,968,000 upon contribution of our Pier 94 leasehold to Pier 94 JV primarily due to the step-up of our retained investment in the leasehold interest to fair value, (ii) $20,181,000 from the sale of The Armory Show, and (iii) $14,127,000 from the sale of two condominium units at 220 CPS. Net gains on disposition of wholly owned and partially owned assets of $100,625,000 for the year ended December 31, 2022, primarily consists of (i) $41,874,000 from the sale of three condominium units and ancillary amenities at 220 CPS, (ii) $31,876,000 from the sale of 40 Fulton Street, (iii) $15,213,000 from the sale of Center Building located at 33-00 Northern Boulevard in Long Island City, New York, (iv) $13,613,000 from the refund of New York City real property transfer tax paid in connection with the April 2019 Fifth Avenue and Times Square JV transaction, and (v) $2,919,000 from the sale of 484-486 Broadway.
Income Tax Expense
Income tax expense was $29,222,000 for the year ended December 31, 2023, compared to $21,660,000 in the prior year, an increase of $7,562,000. This was primarily due to higher income tax expense incurred by our taxable REIT subsidiaries.
Net Loss Attributable to Noncontrolling Interests in Consolidated Subsidiaries
Net loss attributable to noncontrolling interests in consolidated subsidiaries was $75,967,000 for the year ended December 31, 2023, compared to $5,737,000 in the prior year, an increase of $70,230,000. This resulted primarily from the allocation of the impairment loss recognized on 606 Broadway and an increase in losses allocated to the redeemable noncontrolling interest in the Farley joint venture and the noncontrolling interests of Vornado Capital Partners Real Estate Fund.
Same Store Net Operating Income At Share
Same store NOI at share represents NOI at share from operations which are in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.
Below are reconciliations of NOI at share to same store NOI at share for our New York segment, THE MART, 555 California Street and other investments for the year ended December 31, 2023 compared to December 31, 2022.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="3">Total</td><td colspan="3"></td><td colspan="3">New York</td><td colspan="3"></td><td colspan="3">THE MART</td><td colspan="3"></td><td colspan="3">555 California Street</td><td colspan="3"></td><td colspan="3">Other</td></tr><tr><td colspan="3">NOI at share for the year ended December 31, 2023</td><td>$</td><td>1,143,213 </td><td></td><td colspan="3"></td><td>$</td><td>977,569 </td><td></td><td colspan="3"></td><td>$</td><td>61,519 </td><td></td><td colspan="3"></td><td>$</td><td>82,965 </td><td></td><td colspan="3"></td><td>$</td><td>21,160 </td><td></td></tr><tr><td colspan="3">Less NOI at share from:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dispositions</td><td colspan="2">(1,270)</td><td></td><td colspan="3"></td><td colspan="2">(1,556)</td><td></td><td colspan="3"></td><td colspan="2">286 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Development properties</td><td colspan="2">(26,748)</td><td></td><td colspan="3"></td><td colspan="2">(26,748)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other non-same store (income) expense, net</td><td colspan="2">(20,399)</td><td></td><td colspan="3"></td><td colspan="2">761 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(21,160)</td><td></td></tr><tr><td colspan="3">Same store NOI at share for the year ended December 31, 2023</td><td>$</td><td>1,094,796 </td><td></td><td colspan="3"></td><td>$</td><td>950,026 </td><td></td><td colspan="3"></td><td>$</td><td>61,805 </td><td></td><td colspan="3"></td><td>$</td><td>82,965 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share for the year ended December 31, 2022</td><td>$</td><td>1,162,048 </td><td></td><td colspan="3"></td><td>$</td><td>981,508 </td><td></td><td colspan="3"></td><td>$</td><td>96,906 </td><td></td><td colspan="3"></td><td>$</td><td>65,692 </td><td></td><td colspan="3"></td><td>$</td><td>17,942 </td><td></td></tr><tr><td colspan="3">Less NOI at share from:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dispositions</td><td colspan="2">(15,205)</td><td></td><td colspan="3"></td><td colspan="2">(13,158)</td><td></td><td colspan="3"></td><td colspan="2">(2,047)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Development properties</td><td colspan="2">(24,088)</td><td></td><td colspan="3"></td><td colspan="2">(24,088)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other non-same store income, net</td><td colspan="2">(32,838)</td><td></td><td colspan="3"></td><td colspan="2">(14,896)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17,942)</td><td></td></tr><tr><td colspan="3">Same store NOI at share for the year ended December 31, 2022</td><td>$</td><td>1,089,917 </td><td></td><td colspan="3"></td><td>$</td><td>929,366 </td><td></td><td colspan="3"></td><td>$</td><td>94,859 </td><td></td><td colspan="3"></td><td>$</td><td>65,692 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Increase (decrease) in same store NOI at share</td><td>$</td><td>4,879 </td><td></td><td colspan="3"></td><td>$</td><td>20,660 </td><td></td><td colspan="3"></td><td>$</td><td>(33,054)</td><td></td><td colspan="3"></td><td>$</td><td>17,273 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">% increase (decrease) in same store NOI at share</td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">(34.8)</td><td>%</td><td colspan="3"></td><td colspan="2">26.3 </td><td>%</td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr></table>48
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<table><tr><td></td><td></td><td>to reasonable cause and certain other conditions were met. As a result, failing to maintain REIT status would result in a significant increase in the income tax expense recorded and paid during those periods.</td></tr></table><table><tr><td></td><td>●</td><td>In the period of a significant acquisition of real estate, we make estimates as part of our valuation of the purchase price of asset acquisitions (including the components of excess investment in joint ventures) to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our real estate valuations are typically the determination of relative fair value to the buildings as-if-vacant, land and market value of in-place leases. In the case of the fair value of buildings and fair value of land and other intangibles, our estimates of the values of these components will affect the amount of depreciation or amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the market value of in-place leases, we make our best estimates of the tenants' ability to pay rents based upon the tenants' operating performance at the property, including the competitive position of the property in its market as well as sales psf, rents psf, and overall occupancy cost for the tenants in place at the acquisition date. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. </td></tr></table>
Results of Operations
The following acquisitions, dispositions, and openings of consolidated properties affected our consolidated results in the comparative periods:
<table><tr><td></td><td>●</td><td>On April 27, 2023, we opened Paris-Giverny Designer Outlet, a 228,000 square foot center in Vernon, France. We own a 74% interest in this center.</td></tr></table><table><tr><td></td><td>●</td><td>On June 17, 2022, we acquired an additional interest in Gloucester Premium Outlets from a joint venture, resulting in the consolidation of this property.</td></tr></table><table><tr><td></td><td>●</td><td>During the second quarter of 2022, we disposed of one retail property.</td></tr></table><table><tr><td></td><td>●</td><td>During 2021, we disposed of three retail properties.</td></tr></table><table><tr><td></td><td>●</td><td>During the first quarter of 2021, we consolidated one Designer Outlet property in Europe that had previously been accounted for under the equity method.</td></tr></table>The following acquisitions, dispositions, and openings of noncontrolling interests in joint venture entities affected our income from unconsolidated entities in the comparative periods:
<table><tr><td></td><td>●</td><td>During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. In addition, we sold a portion of our interest in ABG on November 29, 2023. These transactions reduced our ownership from 12.3% to 9.6%.</td></tr></table><table><tr><td></td><td>●</td><td>During the third quarter of 2023, we disposed of our interest in one unconsolidated retail property through foreclosure in satisfaction of its $114.8 million non-recourse loan. We recognized no gain or loss in connection with this disposal.</td></tr></table><table><tr><td></td><td>●</td><td>On September 7, 2023, we acquired an additional 4% ownership in TRG for approximately $199.6 million by issuing 1,725,000 units in the Operating Partnership, bringing our noncontrolling ownership interest in TRG to 84%.</td></tr></table><table><tr><td></td><td>●</td><td>During the third quarter of 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million.</td></tr></table><table><tr><td></td><td>●</td><td>During the fourth quarter of 2022, we disposed of one retail property.</td></tr></table><table><tr><td></td><td>●</td><td>During the fourth quarter of 2022, we sold to ABG all of our interests in the licensing venture of Eddie Bauer for additional interests in ABG. Our noncontrolling interest in ABG was approximately 12.3% after this transaction.</td></tr></table><table><tr><td></td><td>●</td><td>On December 19, 2022, we completed the acquisition of a 50% noncontrolling legal ownership interest in Jamestown, a global real estate investment and asset management company, as well as separate interests in certain real estate and working capital, for total cash consideration of $173.4 million.</td></tr></table><table><tr><td></td><td>●</td><td>On November 3, 2022, we opened Fukaya-Hanazono Premium Outlets, a 296,300 square foot center in Fukaya City, Japan. We own a 40% interest in this center.</td></tr></table>64
, <table><tr><td></td><td>●</td><td>During the third quarter of 2022, we disposed of one retail property.</td></tr></table><table><tr><td></td><td>●</td><td>During the fourth quarter of 2021, we disposed of our noncontrolling interest in one retail property.</td></tr></table><table><tr><td></td><td>●</td><td>On December 20, 2021, we sold a portion of our interest in ABG for cash consideration of $65.5 million and purchased additional interests in ABG for cash consideration of $100.0 million. </td></tr></table><table><tr><td></td><td>●</td><td>On October 15, 2021, we opened Jeju Premium Outlets, a 92,000 square foot center in Jeju Province, South Korea. We own a 50% interest in this center.</td></tr></table><table><tr><td></td><td>●</td><td>On July 1, 2021, we sold to ABG all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG. </td></tr></table><table><tr><td></td><td>●</td><td>On June 1, 2021, we and our partner, ABG, acquired the licensing rights of Eddie Bauer. Our noncontrolling interest in the licensing venture is 49% and was acquired for cash consideration of $100.8 million.</td></tr></table><table><tr><td></td><td>●</td><td>On April 12, 2021, we opened West Midlands Designer Outlet, a 197,000 square foot center in Cannock, United Kingdom. We own a 23.2% interest in this center.</td></tr></table><table><tr><td></td><td>●</td><td>In the first quarter of 2021, we and our partner, ABG, both acquired additional 12.5% interests in the licensing and operations of Forever 21 for $56.3 million bringing our interest to 50%. Subsequently the Forever 21 operations were merged into SPARC Group.</td></tr></table>For the purposes of the following comparisons between the years ended December 31, 2023 and 2022 and the years ended December 31, 2022 and 2021, the above transactions are referred to as the property transactions. In the following discussions of our results of operations, "comparable" refers to properties we owned and operated in both years in the year to year comparisons.
Year Ended December 31, 2023 vs. Year Ended December 31, 2022
Lease income increased $259.2 million, due to an increase in fixed lease income of $286.7 million primarily due to an increase in fixed minimum lease consideration and higher occupancy, partially offset by a decrease in variable lease income based on tenant sales of $27.5 million.
Total other income increased $99.1 million, primarily due to a $56.6 million increase in interest income, a $52.0 million increase in mixed use and franchise operations income, a $13.1 million increase in dividend and distribution income and a $3.7 million increase in Simon Brand Ventures, fee and other income, partially offset by a $17.0 million decrease in lease settlement income and a $9.3 million decrease in land sale activity.
Home and regional office costs increased $23.0 million primarily due to increased personnel and compensation costs.
Other expense increased $35.6 million primarily due to increased mixed use and franchise operations expenses of $50.8 million, partially offset by the 2022 write-off of $13.4 million in development costs related to an international development project in Germany we no longer intended to pursue.
Interest expense increased $93.4 million primarily related to new USD bond issuances during 2023 of $69.5 million, activity with regards to the Credit Facilities of $24.5 million and $8.8 million from increased variable rates, partially offset by a USD bond payoff during 2023 of $14.7 million and a Euro bond payoff during 2022 of $9.8 million.
During 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million. During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. As a result, we recognized non-cash pre-tax gains on the deemed disposals of $59.1 million. During 2023, we also recorded our share of the gain on the sale of a portion of our ABG interests of $157.1 million. During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments.
Income and other tax expense decreased $1.6 million primarily related to the 2022 Eddie Bauer licensing transaction noted above of $39.7 million and an overall lower tax expense on our share of operating results from our other platform investments of approximately $27.2 million, partially offset by the tax impact of the SPARC and ABG transactions in 2023 noted above of $69.3 million.
65
, Income from unconsolidated entities decreased $272.3 million primarily due to lower results of operations from our other platform investments.
During 2023, we recorded an $11.2 million loss on the disposition of certain assets by Klépierre and an impairment on a joint venture property, our share of which was $8.6 million, partially offset by an $8.7 million gain on the disposition of certain assets by a joint venture investment and an $8.1 million gain on excess insurance proceeds. During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property.
Simon's net income attributable to noncontrolling interests increased $21.0 million due to an increase in the net income of the Operating Partnership.
Year Ended December 31, 2022 vs. Year Ended December 31, 2021
Lease income increased $168.5 million, of which the property transactions accounted for a $23.2 million decrease. Comparable lease income increased $191.7 million, or 4.1%. Total lease income increased primarily due to an increase in fixed lease income of $156.6 million primarily due to an increase in fixed minimum lease consideration, higher occupancy, and an increase in variable lease income of $11.9 million primarily related to higher consideration based on tenant sales.
Total other income decreased $4.2 million, primarily due to a decrease in lease settlement income of $38.8 million, a $14.9 million gain from the sale of our interest in a multi-family residential property in 2021, and a $6.8 million non-cash dilution gain on a non-retail investment in 2021, partially offset by an $20.8 million increase in fee and other income, a $17.9 million increase related to Simon Brand Ventures and gift card revenues, a $9.8 million increase related to land sale activity and a $7.8 million increase in interest income.
Property operating expenses increased $48.4 million primarily due to the return to a more normalized operating environment following the peak of the COVID pandemic.
Other expense increased $11.7 million primarily due to an increase in legal fees and foreign currency revaluations.
Interest expense decreased $34.5 million primarily related to the early extinguishment of nine secured loans, the disposition of three retail properties, and the refinancing of two retail properties at lower interest rates in 2021, partially offset by the issuances of Euro and USD bonds and interest increases due to variable rates in 2022.
During 2021, we recorded a loss on extinguishment of debt of $51.8 million as a result of the early redemption of unsecured notes and the payoff of mortgages at nine properties.
During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments. During 2021, we recorded a non-cash gain of $159.8 million as a result of the sale to ABG of all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG and a gain on the sale of a portion of our interest in ABG of $18.8 million, as discussed further in Note 6.
Income and other tax expense decreased $73.7 million due to the impact in 2021 on deferred tax expense as a result of the ABG transaction noted above, which had a non-cash tax impact of $55.9 million, offset by the impact in 2022 on deferred tax expense of the 2022 ABG transaction noted above, which had a non-cash tax impact of $39.7 million, and lower tax expense in 2022 on our share of operating results from our other platform investments.
Income from unconsolidated entities decreased $134.9 million primarily due to unfavorable results of operations year over year from our other platform investments of $216.1 million, as well as the reversal in 2021 of a previously established deferred tax liability at Klépierre resulting in a non-cash gain, of which our share was $118.4 million, partially offset by favorable year over year results of operations across the properties and TRG in 2022.
During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property. During 2021, we recorded gains of $184.0 million related to the disposition of three consolidated properties, our interest in one unconsolidated property and the impact from the consolidation of one property that was previously unconsolidated, and gains of $21.2 million related to property insurance recoveries of previously depreciated assets.
Simon's net income attributable to noncontrolling interests decreased $6.2 million due to a decrease in the net income of the Operating Partnership.
66
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Liquidity and Capital Resources
Because we own long-lived income-producing assets, our financing strategy relies primarily on long-term fixed rate debt. Floating rate debt comprised 1.1% of our total consolidated debt at December 31, 2023. We also enter into interest rate protection agreements from time to time to manage our interest rate risk. We derive most of our liquidity from positive net cash flow from operations and distributions of capital from unconsolidated entities that totaled $4.2 billion in the aggregate during 2023. The Credit Facilities and the Commercial Paper program provide alternative sources of liquidity as our cash needs vary from time to time. Borrowing capacity under these sources may be increased as discussed further below.
Our balance of cash and cash equivalents increased $547.4 million during 2023 to $1.2 billion as of December 31, 2023 as further discussed below.
On December 31, 2023, we had an aggregate available borrowing capacity of approximately $8.1 billion under the Facilities, net of letters of credit of $58.6 million. For the year ended December 31, 2023, the maximum aggregate outstanding balance under the Credit Facilities was $1.1 billion and the weighted average outstanding balance was $962.6 million. The weighted average interest rate was 4.36% for the year ended December 31, 2023.
Simon has historically had access to public equity markets and the Operating Partnership has historically had access to private and public, short and long-term unsecured debt markets and access to secured debt and private equity from institutional investors at the property level.
Our business model and Simon's status as a REIT require us to regularly access the debt markets to raise funds for acquisition, development and redevelopment activity, and to refinance maturing debt. Simon may also, from time to time, access the equity capital markets to accomplish our business objectives. We believe we have sufficient cash on hand and availability under the Credit Facilities and the Commercial Paper program to address our debt maturities and capital needs through 2024.
Cash Flows
Our net cash flow from operating activities and distributions of capital from unconsolidated entities totaled $4.2 billion during 2023. In addition, we had net proceeds of debt from our debt financing and repayment activities of $971.3 million in 2023. These activities are further discussed below under "Financing and Debt." During 2023, we also:
<table><tr><td></td><td>●</td><td>paid stockholder dividends and unitholder distributions totaling approximately $2.8 billion and preferred unit distributions totaling $5.2 million,</td></tr></table><table><tr><td></td><td>●</td><td>funded consolidated capital expenditures of $793.3 million (including development and other costs of $156.0 million, redevelopment and expansion costs of $328.8 million, and tenant costs and other operational capital expenditures of $308.5 million),</td></tr></table><table><tr><td></td><td>●</td><td>funded investments in unconsolidated entities of $84.0 million, </td></tr></table><table><tr><td></td><td>●</td><td>funded the purchase of $1.0 billion of short-term investments,</td></tr></table><table><tr><td></td><td>●</td><td>funded the repurchase of $140.6 million of Simon's common stock, and</td></tr></table><table><tr><td></td><td>●</td><td>received proceeds from the sale of equity instruments of $304.1 million.</td></tr></table>In general, we anticipate that cash generated from operations will be sufficient to meet operating expenses, monthly debt service, recurring capital expenditures, and dividends to stockholders and/or distributions to partners necessary to maintain Simon's REIT qualification on a long-term basis. In addition, we expect to be able to generate or obtain capital for nonrecurring capital expenditures, such as acquisitions, major building redevelopments and expansions, as well as for scheduled principal maturities on outstanding indebtedness, from the following, however a severe and prolonged disruption and instability in the global financial markets, including the debt and equity capital markets, may affect our ability to access necessary capital:
<table><tr><td></td><td>●</td><td>excess cash generated from operating performance and working capital reserves,</td></tr></table>
<table><tr><td></td><td>●</td><td>borrowings on the Credit Facilities and Commercial Paper program,</td></tr></table>
<table><tr><td></td><td>●</td><td>additional secured or unsecured debt financing, or</td></tr></table><table><tr><td></td><td>●</td><td>additional equity raised in the public or private markets.</td></tr></table>67
, We expect to generate positive cash flow from operations in 2024, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our tenants. A significant deterioration in projected cash flows from operations, could cause us to increase our reliance on available funds from the Credit Facilities and Commercial Paper program, further curtail planned capital expenditures, or seek other additional sources of financing.
Financing and Debt
Unsecured Debt
At December 31, 2023, our unsecured debt consisted of $20.7 billion of senior unsecured notes of the Operating Partnership, $305.0 million outstanding under the Credit Facility.
The Credit Facility can be increased in the form of additional commitments in an aggregate not to exceed $1.0 billion, for a total aggregate size of $6.0 billion, subject to obtaining additional lender commitments and satisfying certain customary conditions precedent. Borrowings may be denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 97% of the maximum revolving credit amount, as defined. The initial maturity date of the Credit Facility is June 30, 2027. The Credit Facility can be extended for two additional six-month periods to June 30, 2028, at our sole option, subject to satisfying certain customary conditions precedent.
Borrowings under the Credit Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Credit Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Credit Facility. Based upon our current credit ratings, the interest rate on the Credit Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR.
The Supplemental Facility, has a borrowing capacity of $3.5 to $4.5 billion during its term and provides for borrowings denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 100% of the maximum revolving credit amount, as defined. The initial maturity date of the Supplemental Facility is January 31, 2026 and can be extended for an additional year to January 31, 2027 at our sole option, subject to satisfying certain customary conditions precedent.
Borrowings under the Supplemental Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Supplemental Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Supplemental Facility. Based upon our current credit ratings, the interest rate on the Supplemental Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR.
On December 31, 2023 we had an aggregate available borrowing capacity of $8.1 billion under the Credit Facilities. The maximum aggregate outstanding balance under the Facilities during the year ended December 31, 2023 was $1.1 billion and the weighted average outstanding balance was $962.6 million. Letters of credit of $58.6 million were outstanding under the Facilities as of December 31, 2023.
Under the Commercial Paper program, the Operating Partnership may issue unsecured commercial paper notes, denominated in U.S. dollars, Euro and other currencies. Notes issued in non-U.S. currencies may be issued by one or more subsidiaries of the Operating Partnership and are guaranteed by the Operating Partnership. Notes will be sold under customary terms in the U.S. and Euro commercial paper note markets and rank (either by themselves or as a result of the guarantee described above) pari passu with the Operating Partnership's other unsecured senior indebtedness. The
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NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
Reconciliation of Net Income (Loss) to NOI At Share and NOI At Share - Cash Basis for the Years Ended December 31, 2023 and 2022
Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the years ended December 31, 2023 and 2022.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income (loss)</td><td>$</td><td>32,888 </td><td></td><td colspan="3"></td><td>$</td><td>(382,612)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization expense</td><td colspan="2">434,273 </td><td></td><td colspan="3"></td><td colspan="2">504,502 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">General and administrative expense</td><td colspan="2">162,883 </td><td></td><td colspan="3"></td><td colspan="2">133,731 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Impairment losses, transaction related costs and other</td><td colspan="2">50,691 </td><td></td><td colspan="3"></td><td colspan="2">31,722 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Income) loss from partially owned entities</td><td colspan="2">(38,689)</td><td></td><td colspan="3"></td><td colspan="2">461,351 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income from real estate fund investments</td><td colspan="2">(1,590)</td><td></td><td colspan="3"></td><td colspan="2">(3,541)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest and other investment income, net</td><td colspan="2">(41,697)</td><td></td><td colspan="3"></td><td colspan="2">(19,869)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest and debt expense</td><td colspan="2">349,223 </td><td></td><td colspan="3"></td><td colspan="2">279,765 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net gains on disposition of wholly owned and partially owned assets</td><td colspan="2">(71,199)</td><td></td><td colspan="3"></td><td colspan="2">(100,625)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income tax expense </td><td colspan="2">29,222 </td><td></td><td colspan="3"></td><td colspan="2">21,660 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI from partially owned entities</td><td colspan="2">285,761 </td><td></td><td colspan="3"></td><td colspan="2">305,993 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI attributable to noncontrolling interests in consolidated subsidiaries</td><td colspan="2">(48,553)</td><td></td><td colspan="3"></td><td colspan="2">(70,029)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share</td><td colspan="2">1,143,213 </td><td></td><td colspan="3"></td><td colspan="2">1,162,048 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other</td><td colspan="2">(3,377)</td><td></td><td colspan="3"></td><td colspan="2">(10,980)</td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share - cash basis</td><td>$</td><td>1,139,836 </td><td></td><td colspan="3"></td><td>$</td><td>1,151,068 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
NOI At Share by Region(1)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Region:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York metropolitan area</td><td colspan="2">88 </td><td>%</td><td colspan="3"></td><td colspan="2">86 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Chicago, IL</td><td colspan="2">6 </td><td>%</td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">San Francisco, CA(1)</td><td colspan="2">6 </td><td>%</td><td colspan="3"></td><td colspan="2">6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="2">100 </td><td>%</td><td colspan="3"></td><td colspan="2">100 </td><td>%</td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
(1) 2023 excludes our $14,103,000 share of the receipt of tenant settlement, net of legal expenses.
45
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Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022
Revenues
Our revenues were $1,811,163,000 for the year ended December 31, 2023 compared to $1,799,995,000 in the prior year, an increase of $11,168,000. Below are the details of the increase by segment:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"> </td><td colspan="3"> </td><td colspan="3"></td></tr><tr><td colspan="3">(Decrease) increase due to:</td><td colspan="3">Total</td><td colspan="3"></td><td colspan="3">New York</td><td colspan="3"> </td><td colspan="3">Other</td><td colspan="3"></td></tr><tr><td colspan="3">Rental revenues:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"> </td><td colspan="3"> </td><td colspan="3"></td></tr><tr><td colspan="3">Acquisitions, dispositions and other</td><td>$</td><td>(42,082)</td><td></td><td colspan="3"></td><td>$</td><td>(30,417)</td><td></td><td colspan="3"></td><td>$</td><td>(11,665)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Development and redevelopment</td><td colspan="2">3,855 </td><td></td><td colspan="3"></td><td colspan="2">3,855 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Trade shows</td><td colspan="2">(223)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(223)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Same store operations</td><td colspan="2">38,251 </td><td></td><td colspan="3"></td><td colspan="2">16,198 </td><td></td><td colspan="3"></td><td colspan="2">22,053 </td><td></td><td colspan="3">(1)</td></tr><tr><td colspan="3"> </td><td colspan="2">(199)</td><td></td><td colspan="3"></td><td colspan="2">(10,364)</td><td></td><td colspan="3"></td><td colspan="2">10,165 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Fee and other income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">BMS cleaning fees</td><td colspan="2">4,264 </td><td></td><td colspan="3"></td><td colspan="2">5,078 </td><td></td><td colspan="3"></td><td colspan="2">(814)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Management and leasing fees</td><td colspan="2">2,001 </td><td></td><td colspan="3"></td><td colspan="2">1,974 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Other income</td><td colspan="2">5,102 </td><td></td><td colspan="3"></td><td colspan="2">6,028 </td><td></td><td colspan="3"></td><td colspan="2">(926)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3"> </td><td colspan="2">11,367 </td><td></td><td colspan="3"></td><td colspan="2">13,080 </td><td></td><td colspan="3"></td><td colspan="2">(1,713)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total increase in revenues</td><td>$</td><td>11,168 </td><td></td><td colspan="3"></td><td>$</td><td>2,716 </td><td></td><td colspan="3"></td><td>$</td><td>8,452 </td><td></td><td colspan="3"></td></tr></table>________________________________________
See notes below.
Expenses
Our expenses were $1,565,167,000 for the year ended December 31, 2023 compared to $1,534,249,000 in the prior year, an increase of $30,918,000. Below are the details of the increase (decrease) by segment:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td></tr><tr><td colspan="3">(Decrease) increase due to:</td><td colspan="3">Total</td><td colspan="3"></td><td colspan="3">New York</td><td colspan="3"></td><td colspan="3">Other</td><td colspan="3"></td></tr><tr><td colspan="3">Operating:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td></tr><tr><td colspan="3">Acquisitions, dispositions and other</td><td>$</td><td>(22,050)</td><td></td><td colspan="3"></td><td>$</td><td>(12,709)</td><td></td><td colspan="3"></td><td>$</td><td>(9,341)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Development and redevelopment</td><td colspan="2">5,048 </td><td></td><td colspan="3"></td><td colspan="2">5,048 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Non-reimbursable expenses</td><td colspan="2">2,957 </td><td></td><td colspan="3"></td><td colspan="2">2,957 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Trade shows</td><td colspan="2">612 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">612 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">BMS expenses</td><td colspan="2">4,831 </td><td></td><td colspan="3"></td><td colspan="2">5,645 </td><td></td><td colspan="3"></td><td colspan="2">(814)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Same store operations</td><td colspan="2">39,849 </td><td></td><td colspan="3"></td><td colspan="2">16,389 </td><td></td><td colspan="3"></td><td colspan="2">23,460 </td><td></td><td colspan="3">(2)</td></tr><tr><td colspan="3"> </td><td colspan="2">31,247 </td><td></td><td colspan="3"></td><td colspan="2">17,330 </td><td></td><td colspan="3"></td><td colspan="2">13,917 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Depreciation and amortization:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Acquisitions, dispositions and other</td><td colspan="2">(77,474)</td><td></td><td colspan="3"></td><td colspan="2">(77,474)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Development and redevelopment</td><td colspan="2">287 </td><td></td><td colspan="3"></td><td colspan="2">287 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Same store operations</td><td colspan="2">6,958 </td><td></td><td colspan="3"></td><td colspan="2">4,971 </td><td></td><td colspan="3"></td><td colspan="2">1,987 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"> </td><td colspan="2">(70,229)</td><td></td><td colspan="3"></td><td colspan="2">(72,216)</td><td></td><td colspan="3"></td><td colspan="2">1,987 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">29,152 </td><td></td><td colspan="3">(3)</td><td colspan="2">4,014 </td><td></td><td colspan="3"></td><td colspan="2">25,138 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Expense from deferred compensation plan liability</td><td colspan="2">21,779 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">21,779 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Impairment losses, transaction related costs and other</td><td colspan="2">18,969 </td><td></td><td colspan="3"></td><td colspan="2">27,475 </td><td></td><td colspan="3">(4)</td><td colspan="2">(8,506)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total increase (decrease) in expenses</td><td>$</td><td>30,918 </td><td></td><td colspan="3"></td><td>$</td><td>(23,397)</td><td></td><td colspan="3"></td><td>$</td><td>54,315 </td><td></td><td colspan="3"></td></tr></table>________________________________________
(1)2023 includes the receipt of a $21,350 tenant settlement, of which $6,405 is attributable to noncontrolling interests.
(2)2022 includes prior period accrual adjustments related to changes in the tax-assessed value of THE MART.
(3)Primarily due to non-cash expense related to the June 2023 equity compensation grant. See Note 12 - Stock-based Compensation in Part II, Item 8 of this Annual Report on Form 10-K for details.
(4)Primarily due to non-cash impairment losses ($45,007 in 2023 and $19,098 in 2022).
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Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Income (Loss) from Partially Owned Entities
Below are the components of income (loss) from partially owned entities.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="3" rowspan="2">Percentage Ownership as of December 31, 2023</td><td colspan="3"></td><td colspan="9">For the Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Our share of net income (loss):</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Fifth Avenue and Times Square JV:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Equity in net income(1)</td><td colspan="3">51.5%</td><td colspan="3"></td><td>$</td><td>35,209 </td><td></td><td colspan="3"></td><td>$</td><td>55,248 </td><td></td></tr><tr><td colspan="3">Return on preferred equity, net of our share of the expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">37,416 </td><td></td><td colspan="3"></td><td colspan="2">37,416 </td><td></td></tr><tr><td colspan="3">Non-cash impairment loss</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(489,859)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="2">72,625 </td><td></td><td colspan="3"></td><td colspan="2">(397,195)</td><td></td></tr><tr><td colspan="3">Partially owned office buildings(2)(3)</td><td colspan="3">Various</td><td colspan="3"></td><td colspan="2">(73,589)</td><td></td><td colspan="3"></td><td colspan="2">(110,261)</td><td></td></tr><tr><td colspan="3">Alexander's Inc.(4)</td><td colspan="3">32.4%</td><td colspan="3"></td><td colspan="2">37,075 </td><td></td><td colspan="3"></td><td colspan="2">22,973 </td><td></td></tr><tr><td colspan="3">Other equity method investments(3)(5)</td><td colspan="3">Various</td><td colspan="3"></td><td colspan="2">2,578 </td><td></td><td colspan="3"></td><td colspan="2">23,132 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td>$</td><td>38,689 </td><td></td><td colspan="3"></td><td>$</td><td>(461,351)</td><td></td></tr></table>________________________________________
(1)2023 includes (i) a $5,120 accrual of default interest which was forgiven by the lender as part of the restructuring of the 697-703 Fifth Avenue loan and is amortized over the remaining term of the restructured loan, reducing future interest expense and (ii) lower income from lease renewals at 697-703 Fifth Avenue and 666 Fifth Avenue, partially offset by a decrease in our share of depreciation and amortization expense compared to the prior year, primarily resulting from non-cash impairment losses recognized in prior periods.
(2)Includes interests in 280 Park Avenue, 650 Madison Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
(3)In 2023 and 2022, we recognized $50,458 and $93,353, respectively, of impairment losses.
(4)On May 19, 2023, Alexander's completed the sale of the Rego Park III land parcel for $71,060. As a result of the sale, we recognized our $16,396 share of the net gain and received a $711 sales commission from Alexander's, of which $250 was paid to a third-party broker.
(5)Includes interests in Independence Plaza, Rosslyn Plaza and others. 2022 includes $17,185 of net gains from dispositions of two investments.
Income from Real Estate Fund Investments
Below is a summary of income from the Vornado Capital Partners Real Estate Fund ("the Fund") and the Crowne Plaza Times Square Hotel Joint Venture.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td></tr><tr><td colspan="3">Previously recorded unrealized loss on exited investments</td><td>$</td><td>247,575 </td><td></td><td colspan="3"></td><td>$</td><td>59,396 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Net realized loss on exited investments</td><td colspan="2">(245,714)</td><td></td><td colspan="3"></td><td colspan="2">(54,255)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Net investment (loss) income </td><td colspan="2">(271)</td><td></td><td colspan="3"></td><td colspan="2">6,130 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Net unrealized loss on held investments</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(7,730)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income from real estate fund investments</td><td colspan="2">1,590 </td><td></td><td colspan="3"></td><td colspan="2">3,541 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries</td><td colspan="2">12,789 </td><td></td><td colspan="3"></td><td colspan="2">(1,870)</td><td></td><td colspan="3"></td></tr><tr><td colspan="3">Income from real estate fund investments net of noncontrolling interests in consolidated subsidiaries</td><td>$</td><td>14,379 </td><td></td><td colspan="3"></td><td>$</td><td>1,671 </td><td></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
Interest and Other Investment Income, net
The following table sets forth the details of interest and other investment income, net.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Interest on cash and cash equivalents and restricted cash</td><td>$</td><td>44,786 </td><td></td><td colspan="3"></td><td>$</td><td>7,553 </td><td></td></tr><tr><td colspan="3">Credit losses on investments</td><td colspan="2">(8,269)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Amortization of discount on investments in U.S. Treasury bills</td><td colspan="2">3,829 </td><td></td><td colspan="3"></td><td colspan="2">7,075 </td><td></td></tr><tr><td colspan="3">Interest on loans receivable</td><td colspan="2">1,351 </td><td></td><td colspan="3"></td><td colspan="2">5,006 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">235 </td><td></td></tr><tr><td colspan="3"></td><td>$</td><td>41,697 </td><td></td><td colspan="3"></td><td>$</td><td>19,869 </td><td></td></tr></table>
47
,
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued
Interest and Debt Expense
Interest and debt expense was $349,223,000 for the year ended December 31, 2023, compared to $279,765,000 in the prior year, an increase of $69,458,000. This was primarily due to (i) $98,348,000 of higher interest expense resulting from higher average interest rates on our debt, partially offset by (ii) $23,977,000 of higher capitalized interest and debt expense.
Net Gains on Disposition of Wholly Owned and Partially Owned Assets
Net gains on disposition of wholly owned and partially owned assets of $71,199,000 for the year ended December 31, 2023, primarily consists of (i) $35,968,000 upon contribution of our Pier 94 leasehold to Pier 94 JV primarily due to the step-up of our retained investment in the leasehold interest to fair value, (ii) $20,181,000 from the sale of The Armory Show, and (iii) $14,127,000 from the sale of two condominium units at 220 CPS. Net gains on disposition of wholly owned and partially owned assets of $100,625,000 for the year ended December 31, 2022, primarily consists of (i) $41,874,000 from the sale of three condominium units and ancillary amenities at 220 CPS, (ii) $31,876,000 from the sale of 40 Fulton Street, (iii) $15,213,000 from the sale of Center Building located at 33-00 Northern Boulevard in Long Island City, New York, (iv) $13,613,000 from the refund of New York City real property transfer tax paid in connection with the April 2019 Fifth Avenue and Times Square JV transaction, and (v) $2,919,000 from the sale of 484-486 Broadway.
Income Tax Expense
Income tax expense was $29,222,000 for the year ended December 31, 2023, compared to $21,660,000 in the prior year, an increase of $7,562,000. This was primarily due to higher income tax expense incurred by our taxable REIT subsidiaries.
Net Loss Attributable to Noncontrolling Interests in Consolidated Subsidiaries
Net loss attributable to noncontrolling interests in consolidated subsidiaries was $75,967,000 for the year ended December 31, 2023, compared to $5,737,000 in the prior year, an increase of $70,230,000. This resulted primarily from the allocation of the impairment loss recognized on 606 Broadway and an increase in losses allocated to the redeemable noncontrolling interest in the Farley joint venture and the noncontrolling interests of Vornado Capital Partners Real Estate Fund.
Same Store Net Operating Income At Share
Same store NOI at share represents NOI at share from operations which are in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.
Below are reconciliations of NOI at share to same store NOI at share for our New York segment, THE MART, 555 California Street and other investments for the year ended December 31, 2023 compared to December 31, 2022.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="3">Total</td><td colspan="3"></td><td colspan="3">New York</td><td colspan="3"></td><td colspan="3">THE MART</td><td colspan="3"></td><td colspan="3">555 California Street</td><td colspan="3"></td><td colspan="3">Other</td></tr><tr><td colspan="3">NOI at share for the year ended December 31, 2023</td><td>$</td><td>1,143,213 </td><td></td><td colspan="3"></td><td>$</td><td>977,569 </td><td></td><td colspan="3"></td><td>$</td><td>61,519 </td><td></td><td colspan="3"></td><td>$</td><td>82,965 </td><td></td><td colspan="3"></td><td>$</td><td>21,160 </td><td></td></tr><tr><td colspan="3">Less NOI at share from:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dispositions</td><td colspan="2">(1,270)</td><td></td><td colspan="3"></td><td colspan="2">(1,556)</td><td></td><td colspan="3"></td><td colspan="2">286 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Development properties</td><td colspan="2">(26,748)</td><td></td><td colspan="3"></td><td colspan="2">(26,748)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other non-same store (income) expense, net</td><td colspan="2">(20,399)</td><td></td><td colspan="3"></td><td colspan="2">761 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(21,160)</td><td></td></tr><tr><td colspan="3">Same store NOI at share for the year ended December 31, 2023</td><td>$</td><td>1,094,796 </td><td></td><td colspan="3"></td><td>$</td><td>950,026 </td><td></td><td colspan="3"></td><td>$</td><td>61,805 </td><td></td><td colspan="3"></td><td>$</td><td>82,965 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share for the year ended December 31, 2022</td><td>$</td><td>1,162,048 </td><td></td><td colspan="3"></td><td>$</td><td>981,508 </td><td></td><td colspan="3"></td><td>$</td><td>96,906 </td><td></td><td colspan="3"></td><td>$</td><td>65,692 </td><td></td><td colspan="3"></td><td>$</td><td>17,942 </td><td></td></tr><tr><td colspan="3">Less NOI at share from:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dispositions</td><td colspan="2">(15,205)</td><td></td><td colspan="3"></td><td colspan="2">(13,158)</td><td></td><td colspan="3"></td><td colspan="2">(2,047)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Development properties</td><td colspan="2">(24,088)</td><td></td><td colspan="3"></td><td colspan="2">(24,088)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Other non-same store income, net</td><td colspan="2">(32,838)</td><td></td><td colspan="3"></td><td colspan="2">(14,896)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(17,942)</td><td></td></tr><tr><td colspan="3">Same store NOI at share for the year ended December 31, 2022</td><td>$</td><td>1,089,917 </td><td></td><td colspan="3"></td><td>$</td><td>929,366 </td><td></td><td colspan="3"></td><td>$</td><td>94,859 </td><td></td><td colspan="3"></td><td>$</td><td>65,692 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Increase (decrease) in same store NOI at share</td><td>$</td><td>4,879 </td><td></td><td colspan="3"></td><td>$</td><td>20,660 </td><td></td><td colspan="3"></td><td>$</td><td>(33,054)</td><td></td><td colspan="3"></td><td>$</td><td>17,273 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">% increase (decrease) in same store NOI at share</td><td colspan="2">0.4 </td><td>%</td><td colspan="3"></td><td colspan="2">2.2 </td><td>%</td><td colspan="3"></td><td colspan="2">(34.8)</td><td>%</td><td colspan="3"></td><td colspan="2">26.3 </td><td>%</td><td colspan="3"></td><td colspan="2">- </td><td>%</td></tr></table>48
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q_com015
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Compare the profitability of the New York Office segment of Vornado Realty Trust with the U.S. Malls and Premium Outlets segment of Simon Property Group for the year 2023.
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For the year 2023, Vornado Realty Trust's New York Office segment contributed $727 million to NOI at share. The segment had an occupancy rate of 90.7%.
Simon Property Group's U.S. Malls and Premium Outlets segment had an ending occupancy of 95.8% and an average base minimum rent per square foot of $56.82. The segment's lease income increased by $259.2 million due to higher fixed minimum lease consideration and occupancy.
While Vornado's New York Office segment shows a significant contribution to NOI, Simon's U.S. Malls and Premium Outlets segment demonstrates strong occupancy and rental growth, indicating robust profitability.
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Comparison
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61, 62;30;44
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0001558370-24-001532;0000899689-24-000005;0000899689-24-000005
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations;ITEM 2. PROPERTIES;ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 61: | | | |
|---:|:---|:-----------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | a non-cash gain in 2022 on the disposal, exchange, or revaluation of equity interests, net of $121.2 million, or $0.32 per diluted share/unit, |
| | | |
|---:|:---|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | increased interest expense in 2023 of $93.4 million, or $0.25 per diluted share/unit, primarily due to new USD and EUR bond issuances as well as increases to rates on variable rate mortgages, |
| | | |
|---:|:---|:------------------------------------------------------------------------------------|
| 0 | ● | increased other expenses in 2023 of $35.6 million, or $0.10 per diluted share/unit, |
| | | |
|---:|:---|:-------------------------------------------------------------------------------------------------------|
| 0 | ● | increased depreciation and amortization in 2023 of $34.7 million, or $0.09 per diluted share/unit, and |
| | | |
|---:|:---|:-------------------------------------------------------------------------------------------------|
| 0 | ● | increased property operating expenses in 2023 of $25.2 million, or $0.07 per diluted share/unit. |
Portfolio NOI increased 4.9% in 2023 as compared to 2022. Average base minimum rent for U.S. Malls and Premium Outlets increased 3.1% to $56.82 psf as of December 31, 2023, from $55.13 psf as of December 31, 2022. Ending occupancy for our U.S. Malls and Premium Outlets increased 0.9% to 95.8% as of December 31, 2023, from 94.9% as of December 31, 2022, primarily due to strong leasing demand.
Our effective overall borrowing rate at December 31, 2023 on our consolidated indebtedness increased 27 basis points to 3.49% as compared to 3.22% at December 31, 2022. This increase was primarily due to an increase in the effective overall borrowing rate on variable rate debt of 198 basis points (5.91% at December 31, 2023 as compared to 3.93% at December 31, 2022) due to increasing benchmark rates, partially offset by a decrease in the amount of our variable rate debt and an increase in fixed rate debt. The weighted average years to maturity of our consolidated indebtedness was 8.1 years and 7.5 years at December 31, 2023 and 2022, respectively.
Our financing activity for the year ended December 31, 2023 included:
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|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | the Operating Partnership completing on November 14, 2023, the issuance of €750.0 million senior unsecured bonds ($808.0 million U.S. dollar equivalent) with a maturity date of November 14, 2026 and a fixed interest rate of 3.50%. The bonds are exchangeable into shares of Klépierre at the option of the holder of the bond at an initial common price of €27.2092. We may elect to settle the exchange with cash instead of shares. Proceeds were used to repay €750.0 million ($815.4 million U.S. dollar equivalent) outstanding under the Supplemental Facility on November 17, 2023. |
| | | |
|---:|:---|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | the Operating Partnership completing on November 9, 2023, the issuance of the following senior unsecured notes: $500 million with a fixed interest rate of 6.25% and $500 million with a fixed interest rate of 6.65%, with maturity dates of January 15, 2034 and January 15, 2054, respectively. |
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|---:|:---|:--------------------------------------------------------------------------------------------------|
| 0 | ● | borrowing $180.0 million under the Credit Facility and subsequently unencumbering two properties, |
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|---:|:---|:-----------------------------------------------------------------------------------------------------------------------|
| 0 | ● | completing, on June 1, 2023 the redemption at par of the Operating Partnership's $600 million 2.75% notes at maturity, |
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|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | the Operating Partnership completing on March 8, 2023, the issuance of the following senior unsecured notes: $650 million with a fixed interest rate of 5.5% and $650 million with a fixed interest rate of 5.85%, with maturity dates of March 8, 2033 and March 8, 2053, respectively. A portion of the net proceeds were used to fund the optional redemption at par of the Operating Partnerships $500 million floating interest rate notes due January 2024 on March 13, 2023, and |
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|---:|:---|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | Amending, restating, extending, and increasing our existing $4.0 billion unsecured revolving credit facility on March 14, 2023 with a new $5.0 billion unsecured revolving credit facility. |
United States Portfolio Data
The portfolio data discussed in this overview includes the following key operating statistics: ending occupancy, and average base minimum rent per square foot. We include acquired properties in this data beginning in the year of acquisition and remove disposed properties in the year of disposition. For comparative information purposes, we separate the information related to The Mills and TRG from our other U.S. operations. We also do not include any information for properties located outside the United States.
61
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 62: The following table sets forth these key operating statistics for the combined U.S. Malls and Premium Outlets:
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|---:|:---|:---------------------------------------------------------------------------|
| 0 | ● | properties that are consolidated in our consolidated financial statements, |
| | | |
|---:|:---|:---------------------------------------------------------------------------------------|
| 0 | ● | properties we account for under the equity method of accounting as joint ventures, and |
| | | |
|---:|:---|:-----------------------------------------------------------------------|
| 0 | ● | the foregoing two categories of properties on a total portfolio basis. |
| | | | | | | | | | | | | | | | |
|---:|:------------------------------------------|:---|:-----|:------|:-----------|:--------------|:-----|:---|:-----------|:---|:--------------|:---|:---|:------|:---|
| 0 | | | | | | | | | | | | | | | |
| 1 | | | | | | %/Basis Point | | | | | %/Basis Point | | | | |
| 2 | | | 2023 | | Change (1) | | 2022 | | Change (1) | | 2021 | | | | |
| 3 | U.S. Malls and Premium Outlets: | | | | | | | | | | | | | | |
| 4 | Ending Occupancy | | | | | | | | | | | | | | |
| 5 | Consolidated | | | 95.7% | | 80 bps | | | 94.9% | | 140 bps | | | 93.5% | |
| 6 | Unconsolidated | | | 96.1% | | 120 bps | | | 94.9% | | 180 bps | | | 93.1% | |
| 7 | Total Portfolio | | | 95.8% | | 90 bps | | | 94.9% | | 150 bps | | | 93.4% | |
| 8 | Average Base Minimum Rent per Square Foot | | | | | | | | | | | | | | |
| 9 | Consolidated | | $ | 55.47 | | 2.8% | | $ | 53.95 | | 2.6% | | $ | 52.59 | |
| 10 | Unconsolidated | | $ | 60.59 | | 3.8% | | $ | 58.36 | | 1.4% | | $ | 57.55 | |
| 11 | Total Portfolio | | $ | 56.82 | | 3.1% | | $ | 55.13 | | 2.3% | | $ | 53.91 | |
| 12 | U.S. TRG: | | | | | | | | | | | | | | |
| 13 | Ending Occupancy | | | 95.7% | | 120 bps | | | 94.5% | | 330 bps | | | 91.2% | |
| 14 | Average Base Minimum Rent per Square Foot | | $ | 65.01 | | 5.3% | | $ | 61.76 | | 5.2% | | $ | 58.69 | |
| 15 | The Mills: | | | | | | | | | | | | | | |
| 16 | Ending Occupancy | | | 97.8% | | -40 bps | | | 98.2% | | 60 bps | | | 97.6% | |
| 17 | Average Base Minimum Rent per Square Foot | | $ | 36.38 | | 4.3% | | $ | 34.89 | | 3.2% | | $ | 33.80 | |
| | | |
|---:|:----|:-------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | (1) | Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period. |
Ending Occupancy Levels and Average Base Minimum Rent per Square Foot.
Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation. Base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.
Current Leasing Activities
During the twelve months ended December 31, 2023, we signed 1,185 new leases and 1,841 renewal leases (excluding mall anchors and majors, new development, redevelopment and leases with terms of one year or less) with a fixed minimum rent across our U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, of which 8.3 million square feet related to consolidated properties. During 2022, we signed 1,262 new leases and 1,517 renewal leases with a fixed minimum rent, comprising approximately 9.1 million square feet, of which 7.0 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was $66.39 per square foot in 2023 and $55.41 per square foot in 2022 with an average tenant allowance on new leases of $64.31 per square foot and $53.01 per square foot, respectively.
Japan Data
The following are selected key operating statistics for our Premium Outlets in Japan. The information used to prepare these statistics has been supplied by the managing venture partner.
| | | | | | | | | | | | | | | |
|---:|:------------------------------------------|:---|:-------------|:------|:--------------|:--------|:-------------|:---|:--------------|:---|:-------------|:---|:---|:------|
| 0 | | | | | | | | | | | | | | |
| 1 | | | December 31, | | %/basis point | | December 31, | | %/basis point | | December 31, | | | |
| 2 | | | 2023 | | Change | | 2022 | | Change | | 2021 | | | |
| 3 | Ending Occupancy | | | 99.7% | | -10 bps | | | 99.8% | | 0 bps | | | 99.8% |
| 4 | Average Base Minimum Rent per Square Foot | | ¥ | 5,494 | | -4.93% | | ¥ | 5,779 | | 4.90% | | ¥ | 5,509 |
62
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 30:
NEW YORK
As of December 31, 2023, our New York segment consisted of 26.7 million square feet in 60 properties. The 26.7 million square feet is comprised of 20.4 million square feet of Manhattan office in 30 of the properties, 2.4 million square feet of Manhattan street retail in 50 of the properties, 1,662 units in five residential properties, and our 32.4% interest in Alexander's, which owns five properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens. The New York segment also includes nine garages totaling 1.6 million square feet (4,685 spaces).
As of December 31, 2023, the occupancy rate for our New York segment was 89.4%.
Occupancy and weighted average annual rent per square foot:
Office:
| | | | | | | | | | | | |
|---:|:-------------------|:------------------|:----------------------|:-----------|:------------------------------|:--------------|:-----------------------------------------------------|:-----|:---|:------|:------|
| 1 | | | | | Vornado's Ownership Interest | | | | | | |
| 2 | As of December 31, | Total Square Feet | In ServiceSquare Feet | | In ServiceSquare FeetAt Share | OccupancyRate | WeightedAverage Annual Escalated RentPer Square Foot | | | | |
| 3 | 2023 | 20,383,000 | | 18,699,000 | | 16,001,000 | | 90.7 | % | $ | 86.30 |
| 4 | 2022 | 19,902,000 | | 18,724,000 | | 16,028,000 | | 91.9 | % | 83.98 | |
| 5 | 2021 | 20,630,000 | | 19,442,000 | | 16,757,000 | | 92.2 | % | 80.01 | |
| 6 | 2020 | 20,586,000 | | 18,361,000 | | 15,413,000 | | 93.4 | % | 79.05 | |
| 7 | 2019 | 20,666,000 | | 19,070,000 | | 16,195,000 | | 96.9 | % | 76.26 | |
Retail:
| | | | | | | | | | | | |
|---:|:-------------------|:------------------|:----------------------|:----------|:------------------------------|:--------------|:-----------------------------------------------------|:-----|:---|:-------|:-------|
| 1 | | | | | Vornado's Ownership Interest | | | | | | |
| 2 | As of December 31, | Total Square Feet | In ServiceSquare Feet | | In ServiceSquare FeetAt Share | OccupancyRate | WeightedAverage Annual Escalated RentPer Square Foot | | | | |
| 3 | 2023 | 2,394,000 | | 2,123,000 | | 1,684,000 | | 74.9 | % | $ | 224.88 |
| 4 | 2022 | 2,556,000 | | 2,289,000 | | 1,851,000 | | 74.4 | % | 215.72 | |
| 5 | 2021 | 2,693,000 | | 2,267,000 | | 1,825,000 | | 80.7 | % | 214.22 | |
| 6 | 2020 | 2,690,000 | | 2,275,000 | | 1,805,000 | | 78.8 | % | 226.38 | |
| 7 | 2019 | 2,712,000 | | 2,300,000 | | 1,842,000 | | 94.5 | % | 209.86 | |
Occupancy and average monthly rent per unit:
Residential:
| | | | | | | | | | | |
|---:|:-------------------|:----------------------|:------|:-----------------------------|:--------------|:-----------------------------|:-----|:---|:------|:------|
| 1 | | | | Vornado's Ownership Interest | | | | | | |
| 2 | As of December 31, | Total Number of Units | | TotalNumber of Units | OccupancyRate | Average MonthlyRent Per Unit | | | | |
| 3 | 2023 | | 1,974 | | 939 | | 96.8 | % | $ | 4,115 |
| 4 | 2022 | | 1,976 | | 941 | | 96.7 | % | 3,882 | |
| 5 | 2021 | | 1,986 | | 951 | | 97.0 | % | 3,776 | |
| 6 | 2020 | | 1,995 | | 960 | | 84.9 | % | 3,714 | |
| 7 | 2019 | | 1,996 | | 960 | | 97.5 | % | 3,902 | |
30
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 44:
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
| | | | | | | | |
|---:|:-------------------------|:--------------------------------|:----------|:-----|:--------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | New York: | | | | | | |
| 4 | Office | $ | 727,000 | | | $ | 718,686 |
| 5 | Retail | 188,561 | | | 205,753 | | |
| 6 | Residential | 21,910 | | | 19,600 | | |
| 7 | Alexander's | 40,098 | | | 37,469 | | |
| 8 | Total New York | 977,569 | | | 981,508 | | |
| 10 | Other: | | | | | | |
| 11 | THE MART(1) | 61,519 | | | 96,906 | | |
| 12 | 555 California Street(2) | 82,965 | | | 65,692 | | |
| 13 | Other investments | 21,160 | | | 17,942 | | |
| 14 | Total Other | 165,644 | | | 180,540 | | |
| 16 | NOI at share | $ | 1,143,213 | | | $ | 1,162,048 |
________________________________________
See notes below.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are summarized below.
| | | | | | | | |
|---:|:--------------------------|:--------------------------------|:----------|:-----|:--------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | New York: | | | | | | |
| 4 | Office | $ | 726,914 | | | $ | 715,407 |
| 5 | Retail | 180,932 | | | 188,846 | | |
| 6 | Residential | 20,588 | | | 18,214 | | |
| 7 | Alexander's | 41,435 | | | 40,532 | | |
| 8 | Total New York | 969,869 | | | 962,999 | | |
| 10 | Other: | | | | | | |
| 11 | THE MART(1) | 62,579 | | | 101,912 | | |
| 12 | 555 California Street(2) | 85,819 | | | 67,813 | | |
| 13 | Other investments | 21,569 | | | 18,344 | | |
| 14 | Total Other | 169,967 | | | 188,069 | | |
| 16 | NOI at share - cash basis | $ | 1,139,836 | | | $ | 1,151,068 |
________________________________________
(1)2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(2)2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
44
|
| | | |
|---:|:---|:-----------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | a non-cash gain in 2022 on the disposal, exchange, or revaluation of equity interests, net of $121.2 million, or $0.32 per diluted share/unit, |
| | | |
|---:|:---|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | increased interest expense in 2023 of $93.4 million, or $0.25 per diluted share/unit, primarily due to new USD and EUR bond issuances as well as increases to rates on variable rate mortgages, |
| | | |
|---:|:---|:------------------------------------------------------------------------------------|
| 0 | ● | increased other expenses in 2023 of $35.6 million, or $0.10 per diluted share/unit, |
| | | |
|---:|:---|:-------------------------------------------------------------------------------------------------------|
| 0 | ● | increased depreciation and amortization in 2023 of $34.7 million, or $0.09 per diluted share/unit, and |
| | | |
|---:|:---|:-------------------------------------------------------------------------------------------------|
| 0 | ● | increased property operating expenses in 2023 of $25.2 million, or $0.07 per diluted share/unit. |
Portfolio NOI increased 4.9% in 2023 as compared to 2022. Average base minimum rent for U.S. Malls and Premium Outlets increased 3.1% to $56.82 psf as of December 31, 2023, from $55.13 psf as of December 31, 2022. Ending occupancy for our U.S. Malls and Premium Outlets increased 0.9% to 95.8% as of December 31, 2023, from 94.9% as of December 31, 2022, primarily due to strong leasing demand.
Our effective overall borrowing rate at December 31, 2023 on our consolidated indebtedness increased 27 basis points to 3.49% as compared to 3.22% at December 31, 2022. This increase was primarily due to an increase in the effective overall borrowing rate on variable rate debt of 198 basis points (5.91% at December 31, 2023 as compared to 3.93% at December 31, 2022) due to increasing benchmark rates, partially offset by a decrease in the amount of our variable rate debt and an increase in fixed rate debt. The weighted average years to maturity of our consolidated indebtedness was 8.1 years and 7.5 years at December 31, 2023 and 2022, respectively.
Our financing activity for the year ended December 31, 2023 included:
| | | |
|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | the Operating Partnership completing on November 14, 2023, the issuance of €750.0 million senior unsecured bonds ($808.0 million U.S. dollar equivalent) with a maturity date of November 14, 2026 and a fixed interest rate of 3.50%. The bonds are exchangeable into shares of Klépierre at the option of the holder of the bond at an initial common price of €27.2092. We may elect to settle the exchange with cash instead of shares. Proceeds were used to repay €750.0 million ($815.4 million U.S. dollar equivalent) outstanding under the Supplemental Facility on November 17, 2023. |
| | | |
|---:|:---|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | the Operating Partnership completing on November 9, 2023, the issuance of the following senior unsecured notes: $500 million with a fixed interest rate of 6.25% and $500 million with a fixed interest rate of 6.65%, with maturity dates of January 15, 2034 and January 15, 2054, respectively. |
| | | |
|---:|:---|:--------------------------------------------------------------------------------------------------|
| 0 | ● | borrowing $180.0 million under the Credit Facility and subsequently unencumbering two properties, |
| | | |
|---:|:---|:-----------------------------------------------------------------------------------------------------------------------|
| 0 | ● | completing, on June 1, 2023 the redemption at par of the Operating Partnership's $600 million 2.75% notes at maturity, |
| | | |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | the Operating Partnership completing on March 8, 2023, the issuance of the following senior unsecured notes: $650 million with a fixed interest rate of 5.5% and $650 million with a fixed interest rate of 5.85%, with maturity dates of March 8, 2033 and March 8, 2053, respectively. A portion of the net proceeds were used to fund the optional redemption at par of the Operating Partnerships $500 million floating interest rate notes due January 2024 on March 13, 2023, and |
| | | |
|---:|:---|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | ● | Amending, restating, extending, and increasing our existing $4.0 billion unsecured revolving credit facility on March 14, 2023 with a new $5.0 billion unsecured revolving credit facility. |
United States Portfolio Data
The portfolio data discussed in this overview includes the following key operating statistics: ending occupancy, and average base minimum rent per square foot. We include acquired properties in this data beginning in the year of acquisition and remove disposed properties in the year of disposition. For comparative information purposes, we separate the information related to The Mills and TRG from our other U.S. operations. We also do not include any information for properties located outside the United States.
61
, The following table sets forth these key operating statistics for the combined U.S. Malls and Premium Outlets:
| | | |
|---:|:---|:---------------------------------------------------------------------------|
| 0 | ● | properties that are consolidated in our consolidated financial statements, |
| | | |
|---:|:---|:---------------------------------------------------------------------------------------|
| 0 | ● | properties we account for under the equity method of accounting as joint ventures, and |
| | | |
|---:|:---|:-----------------------------------------------------------------------|
| 0 | ● | the foregoing two categories of properties on a total portfolio basis. |
| | | | | | | | | | | | | | | | |
|---:|:------------------------------------------|:---|:-----|:------|:-----------|:--------------|:-----|:---|:-----------|:---|:--------------|:---|:---|:------|:---|
| 0 | | | | | | | | | | | | | | | |
| 1 | | | | | | %/Basis Point | | | | | %/Basis Point | | | | |
| 2 | | | 2023 | | Change (1) | | 2022 | | Change (1) | | 2021 | | | | |
| 3 | U.S. Malls and Premium Outlets: | | | | | | | | | | | | | | |
| 4 | Ending Occupancy | | | | | | | | | | | | | | |
| 5 | Consolidated | | | 95.7% | | 80 bps | | | 94.9% | | 140 bps | | | 93.5% | |
| 6 | Unconsolidated | | | 96.1% | | 120 bps | | | 94.9% | | 180 bps | | | 93.1% | |
| 7 | Total Portfolio | | | 95.8% | | 90 bps | | | 94.9% | | 150 bps | | | 93.4% | |
| 8 | Average Base Minimum Rent per Square Foot | | | | | | | | | | | | | | |
| 9 | Consolidated | | $ | 55.47 | | 2.8% | | $ | 53.95 | | 2.6% | | $ | 52.59 | |
| 10 | Unconsolidated | | $ | 60.59 | | 3.8% | | $ | 58.36 | | 1.4% | | $ | 57.55 | |
| 11 | Total Portfolio | | $ | 56.82 | | 3.1% | | $ | 55.13 | | 2.3% | | $ | 53.91 | |
| 12 | U.S. TRG: | | | | | | | | | | | | | | |
| 13 | Ending Occupancy | | | 95.7% | | 120 bps | | | 94.5% | | 330 bps | | | 91.2% | |
| 14 | Average Base Minimum Rent per Square Foot | | $ | 65.01 | | 5.3% | | $ | 61.76 | | 5.2% | | $ | 58.69 | |
| 15 | The Mills: | | | | | | | | | | | | | | |
| 16 | Ending Occupancy | | | 97.8% | | -40 bps | | | 98.2% | | 60 bps | | | 97.6% | |
| 17 | Average Base Minimum Rent per Square Foot | | $ | 36.38 | | 4.3% | | $ | 34.89 | | 3.2% | | $ | 33.80 | |
| | | |
|---:|:----|:-------------------------------------------------------------------------------------------------------------------------------------------------------|
| 0 | (1) | Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period. |
Ending Occupancy Levels and Average Base Minimum Rent per Square Foot.
Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation. Base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.
Current Leasing Activities
During the twelve months ended December 31, 2023, we signed 1,185 new leases and 1,841 renewal leases (excluding mall anchors and majors, new development, redevelopment and leases with terms of one year or less) with a fixed minimum rent across our U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, of which 8.3 million square feet related to consolidated properties. During 2022, we signed 1,262 new leases and 1,517 renewal leases with a fixed minimum rent, comprising approximately 9.1 million square feet, of which 7.0 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was $66.39 per square foot in 2023 and $55.41 per square foot in 2022 with an average tenant allowance on new leases of $64.31 per square foot and $53.01 per square foot, respectively.
Japan Data
The following are selected key operating statistics for our Premium Outlets in Japan. The information used to prepare these statistics has been supplied by the managing venture partner.
| | | | | | | | | | | | | | | |
|---:|:------------------------------------------|:---|:-------------|:------|:--------------|:--------|:-------------|:---|:--------------|:---|:-------------|:---|:---|:------|
| 0 | | | | | | | | | | | | | | |
| 1 | | | December 31, | | %/basis point | | December 31, | | %/basis point | | December 31, | | | |
| 2 | | | 2023 | | Change | | 2022 | | Change | | 2021 | | | |
| 3 | Ending Occupancy | | | 99.7% | | -10 bps | | | 99.8% | | 0 bps | | | 99.8% |
| 4 | Average Base Minimum Rent per Square Foot | | ¥ | 5,494 | | -4.93% | | ¥ | 5,779 | | 4.90% | | ¥ | 5,509 |
62
,
NEW YORK
As of December 31, 2023, our New York segment consisted of 26.7 million square feet in 60 properties. The 26.7 million square feet is comprised of 20.4 million square feet of Manhattan office in 30 of the properties, 2.4 million square feet of Manhattan street retail in 50 of the properties, 1,662 units in five residential properties, and our 32.4% interest in Alexander's, which owns five properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens. The New York segment also includes nine garages totaling 1.6 million square feet (4,685 spaces).
As of December 31, 2023, the occupancy rate for our New York segment was 89.4%.
Occupancy and weighted average annual rent per square foot:
Office:
| | | | | | | | | | | | |
|---:|:-------------------|:------------------|:----------------------|:-----------|:------------------------------|:--------------|:-----------------------------------------------------|:-----|:---|:------|:------|
| 1 | | | | | Vornado's Ownership Interest | | | | | | |
| 2 | As of December 31, | Total Square Feet | In ServiceSquare Feet | | In ServiceSquare FeetAt Share | OccupancyRate | WeightedAverage Annual Escalated RentPer Square Foot | | | | |
| 3 | 2023 | 20,383,000 | | 18,699,000 | | 16,001,000 | | 90.7 | % | $ | 86.30 |
| 4 | 2022 | 19,902,000 | | 18,724,000 | | 16,028,000 | | 91.9 | % | 83.98 | |
| 5 | 2021 | 20,630,000 | | 19,442,000 | | 16,757,000 | | 92.2 | % | 80.01 | |
| 6 | 2020 | 20,586,000 | | 18,361,000 | | 15,413,000 | | 93.4 | % | 79.05 | |
| 7 | 2019 | 20,666,000 | | 19,070,000 | | 16,195,000 | | 96.9 | % | 76.26 | |
Retail:
| | | | | | | | | | | | |
|---:|:-------------------|:------------------|:----------------------|:----------|:------------------------------|:--------------|:-----------------------------------------------------|:-----|:---|:-------|:-------|
| 1 | | | | | Vornado's Ownership Interest | | | | | | |
| 2 | As of December 31, | Total Square Feet | In ServiceSquare Feet | | In ServiceSquare FeetAt Share | OccupancyRate | WeightedAverage Annual Escalated RentPer Square Foot | | | | |
| 3 | 2023 | 2,394,000 | | 2,123,000 | | 1,684,000 | | 74.9 | % | $ | 224.88 |
| 4 | 2022 | 2,556,000 | | 2,289,000 | | 1,851,000 | | 74.4 | % | 215.72 | |
| 5 | 2021 | 2,693,000 | | 2,267,000 | | 1,825,000 | | 80.7 | % | 214.22 | |
| 6 | 2020 | 2,690,000 | | 2,275,000 | | 1,805,000 | | 78.8 | % | 226.38 | |
| 7 | 2019 | 2,712,000 | | 2,300,000 | | 1,842,000 | | 94.5 | % | 209.86 | |
Occupancy and average monthly rent per unit:
Residential:
| | | | | | | | | | | |
|---:|:-------------------|:----------------------|:------|:-----------------------------|:--------------|:-----------------------------|:-----|:---|:------|:------|
| 1 | | | | Vornado's Ownership Interest | | | | | | |
| 2 | As of December 31, | Total Number of Units | | TotalNumber of Units | OccupancyRate | Average MonthlyRent Per Unit | | | | |
| 3 | 2023 | | 1,974 | | 939 | | 96.8 | % | $ | 4,115 |
| 4 | 2022 | | 1,976 | | 941 | | 96.7 | % | 3,882 | |
| 5 | 2021 | | 1,986 | | 951 | | 97.0 | % | 3,776 | |
| 6 | 2020 | | 1,995 | | 960 | | 84.9 | % | 3,714 | |
| 7 | 2019 | | 1,996 | | 960 | | 97.5 | % | 3,902 | |
30
,
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
| | | | | | | | |
|---:|:-------------------------|:--------------------------------|:----------|:-----|:--------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | New York: | | | | | | |
| 4 | Office | $ | 727,000 | | | $ | 718,686 |
| 5 | Retail | 188,561 | | | 205,753 | | |
| 6 | Residential | 21,910 | | | 19,600 | | |
| 7 | Alexander's | 40,098 | | | 37,469 | | |
| 8 | Total New York | 977,569 | | | 981,508 | | |
| 10 | Other: | | | | | | |
| 11 | THE MART(1) | 61,519 | | | 96,906 | | |
| 12 | 555 California Street(2) | 82,965 | | | 65,692 | | |
| 13 | Other investments | 21,160 | | | 17,942 | | |
| 14 | Total Other | 165,644 | | | 180,540 | | |
| 16 | NOI at share | $ | 1,143,213 | | | $ | 1,162,048 |
________________________________________
See notes below.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are summarized below.
| | | | | | | | |
|---:|:--------------------------|:--------------------------------|:----------|:-----|:--------|:---|:----------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | New York: | | | | | | |
| 4 | Office | $ | 726,914 | | | $ | 715,407 |
| 5 | Retail | 180,932 | | | 188,846 | | |
| 6 | Residential | 20,588 | | | 18,214 | | |
| 7 | Alexander's | 41,435 | | | 40,532 | | |
| 8 | Total New York | 969,869 | | | 962,999 | | |
| 10 | Other: | | | | | | |
| 11 | THE MART(1) | 62,579 | | | 101,912 | | |
| 12 | 555 California Street(2) | 85,819 | | | 67,813 | | |
| 13 | Other investments | 21,569 | | | 18,344 | | |
| 14 | Total Other | 169,967 | | | 188,069 | | |
| 16 | NOI at share - cash basis | $ | 1,139,836 | | | $ | 1,151,068 |
________________________________________
(1)2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(2)2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
44
|
SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 61: <table><tr><td></td><td>●</td><td>a non-cash gain in 2022 on the disposal, exchange, or revaluation of equity interests, net of $121.2 million, or $0.32 per diluted share/unit,</td></tr></table><table><tr><td></td><td>●</td><td>increased interest expense in 2023 of $93.4 million, or $0.25 per diluted share/unit, primarily due to new USD and EUR bond issuances as well as increases to rates on variable rate mortgages,</td></tr></table><table><tr><td></td><td>●</td><td>increased other expenses in 2023 of $35.6 million, or $0.10 per diluted share/unit,</td></tr></table><table><tr><td></td><td>●</td><td>increased depreciation and amortization in 2023 of $34.7 million, or $0.09 per diluted share/unit, and</td></tr></table><table><tr><td></td><td>●</td><td>increased property operating expenses in 2023 of $25.2 million, or $0.07 per diluted share/unit.</td></tr></table>
Portfolio NOI increased 4.9% in 2023 as compared to 2022. Average base minimum rent for U.S. Malls and Premium Outlets increased 3.1% to $56.82 psf as of December 31, 2023, from $55.13 psf as of December 31, 2022. Ending occupancy for our U.S. Malls and Premium Outlets increased 0.9% to 95.8% as of December 31, 2023, from 94.9% as of December 31, 2022, primarily due to strong leasing demand.
Our effective overall borrowing rate at December 31, 2023 on our consolidated indebtedness increased 27 basis points to 3.49% as compared to 3.22% at December 31, 2022. This increase was primarily due to an increase in the effective overall borrowing rate on variable rate debt of 198 basis points (5.91% at December 31, 2023 as compared to 3.93% at December 31, 2022) due to increasing benchmark rates, partially offset by a decrease in the amount of our variable rate debt and an increase in fixed rate debt. The weighted average years to maturity of our consolidated indebtedness was 8.1 years and 7.5 years at December 31, 2023 and 2022, respectively.
Our financing activity for the year ended December 31, 2023 included:
<table><tr><td></td><td>●</td><td>the Operating Partnership completing on November 14, 2023, the issuance of €750.0 million senior unsecured bonds ($808.0 million U.S. dollar equivalent) with a maturity date of November 14, 2026 and a fixed interest rate of 3.50%. The bonds are exchangeable into shares of Klépierre at the option of the holder of the bond at an initial common price of €27.2092. We may elect to settle the exchange with cash instead of shares. Proceeds were used to repay €750.0 million ($815.4 million U.S. dollar equivalent) outstanding under the Supplemental Facility on November 17, 2023.</td></tr></table><table><tr><td></td><td>●</td><td>the Operating Partnership completing on November 9, 2023, the issuance of the following senior unsecured notes: $500 million with a fixed interest rate of 6.25% and $500 million with a fixed interest rate of 6.65%, with maturity dates of January 15, 2034 and January 15, 2054, respectively. </td></tr></table><table><tr><td></td><td>●</td><td>borrowing $180.0 million under the Credit Facility and subsequently unencumbering two properties,</td></tr></table>
<table><tr><td></td><td>●</td><td>completing, on June 1, 2023 the redemption at par of the Operating Partnership's $600 million 2.75% notes at maturity,</td></tr></table>
<table><tr><td></td><td>●</td><td>the Operating Partnership completing on March 8, 2023, the issuance of the following senior unsecured notes: $650 million with a fixed interest rate of 5.5% and $650 million with a fixed interest rate of 5.85%, with maturity dates of March 8, 2033 and March 8, 2053, respectively. A portion of the net proceeds were used to fund the optional redemption at par of the Operating Partnerships $500 million floating interest rate notes due January 2024 on March 13, 2023, and</td></tr></table><table><tr><td></td><td>●</td><td>Amending, restating, extending, and increasing our existing $4.0 billion unsecured revolving credit facility on March 14, 2023 with a new $5.0 billion unsecured revolving credit facility.</td></tr></table>
United States Portfolio Data
The portfolio data discussed in this overview includes the following key operating statistics: ending occupancy, and average base minimum rent per square foot. We include acquired properties in this data beginning in the year of acquisition and remove disposed properties in the year of disposition. For comparative information purposes, we separate the information related to The Mills and TRG from our other U.S. operations. We also do not include any information for properties located outside the United States.
61
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 62: The following table sets forth these key operating statistics for the combined U.S. Malls and Premium Outlets:
<table><tr><td></td><td>●</td><td>properties that are consolidated in our consolidated financial statements,</td></tr></table><table><tr><td></td><td>●</td><td>properties we account for under the equity method of accounting as joint ventures, and</td></tr></table><table><tr><td></td><td>●</td><td>the foregoing two categories of properties on a total portfolio basis.</td></tr></table>
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td>%/Basis Point</td><td></td><td></td><td></td><td></td><td>%/Basis Point</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td>Change (1)</td><td> </td><td colspan="2">2022</td><td> </td><td>Change (1)</td><td> </td><td colspan="2">2021</td><td></td></tr><tr><td>U.S. Malls and Premium Outlets:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated</td><td></td><td></td><td>95.7%</td><td></td><td>80 bps</td><td></td><td></td><td>94.9%</td><td></td><td>140 bps</td><td></td><td></td><td>93.5%</td><td></td></tr><tr><td>Unconsolidated</td><td></td><td></td><td>96.1%</td><td></td><td>120 bps</td><td></td><td></td><td>94.9%</td><td></td><td>180 bps</td><td></td><td></td><td>93.1%</td><td></td></tr><tr><td>Total Portfolio</td><td></td><td></td><td>95.8%</td><td></td><td>90 bps</td><td></td><td></td><td>94.9%</td><td></td><td>150 bps</td><td></td><td></td><td>93.4%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated</td><td></td><td>$</td><td> 55.47</td><td></td><td>2.8%</td><td></td><td>$</td><td> 53.95</td><td></td><td>2.6%</td><td></td><td>$</td><td> 52.59</td><td></td></tr><tr><td>Unconsolidated</td><td></td><td>$</td><td> 60.59</td><td></td><td>3.8%</td><td></td><td>$</td><td> 58.36</td><td></td><td>1.4%</td><td></td><td>$</td><td> 57.55</td><td></td></tr><tr><td>Total Portfolio</td><td></td><td>$</td><td> 56.82</td><td></td><td>3.1%</td><td></td><td>$</td><td> 55.13</td><td></td><td>2.3%</td><td></td><td>$</td><td> 53.91</td><td></td></tr><tr><td>U.S. TRG:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td> </td><td>95.7%</td><td></td><td>120 bps</td><td></td><td> </td><td>94.5%</td><td></td><td>330 bps</td><td></td><td> </td><td>91.2%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>$</td><td> 65.01</td><td></td><td>5.3%</td><td></td><td>$</td><td> 61.76</td><td></td><td>5.2%</td><td></td><td>$</td><td> 58.69</td><td></td></tr><tr><td>The Mills:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td> </td><td>97.8%</td><td></td><td>-40 bps</td><td></td><td> </td><td>98.2%</td><td></td><td>60 bps</td><td></td><td> </td><td>97.6%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>$</td><td> 36.38</td><td></td><td>4.3%</td><td></td><td>$</td><td> 34.89</td><td></td><td>3.2%</td><td></td><td>$</td><td> 33.80</td><td></td></tr></table>
<table><tr><td>(1)</td><td>Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period.</td></tr></table>
Ending Occupancy Levels and Average Base Minimum Rent per Square Foot.
Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation. Base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.
Current Leasing Activities
During the twelve months ended December 31, 2023, we signed 1,185 new leases and 1,841 renewal leases (excluding mall anchors and majors, new development, redevelopment and leases with terms of one year or less) with a fixed minimum rent across our U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, of which 8.3 million square feet related to consolidated properties. During 2022, we signed 1,262 new leases and 1,517 renewal leases with a fixed minimum rent, comprising approximately 9.1 million square feet, of which 7.0 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was $66.39 per square foot in 2023 and $55.41 per square foot in 2022 with an average tenant allowance on new leases of $64.31 per square foot and $53.01 per square foot, respectively.
Japan Data
The following are selected key operating statistics for our Premium Outlets in Japan. The information used to prepare these statistics has been supplied by the managing venture partner.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">December 31, </td><td> </td><td>%/basis point</td><td> </td><td colspan="2">December 31, </td><td> </td><td>%/basis point</td><td> </td><td colspan="2">December 31, </td></tr><tr><td></td><td></td><td colspan="2">2023</td><td></td><td>Change</td><td></td><td colspan="2">2022</td><td></td><td>Change</td><td></td><td colspan="2">2021</td></tr><tr><td>Ending Occupancy</td><td></td><td></td><td>99.7%</td><td></td><td>-10 bps</td><td></td><td></td><td>99.8%</td><td></td><td>0 bps</td><td></td><td></td><td>99.8%</td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>¥</td><td> 5,494</td><td></td><td>-4.93%</td><td></td><td>¥</td><td> 5,779</td><td></td><td>4.90%</td><td></td><td>¥</td><td> 5,509</td></tr></table>
62
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 30:
NEW YORK
As of December 31, 2023, our New York segment consisted of 26.7 million square feet in 60 properties. The 26.7 million square feet is comprised of 20.4 million square feet of Manhattan office in 30 of the properties, 2.4 million square feet of Manhattan street retail in 50 of the properties, 1,662 units in five residential properties, and our 32.4% interest in Alexander's, which owns five properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens. The New York segment also includes nine garages totaling 1.6 million square feet (4,685 spaces).
As of December 31, 2023, the occupancy rate for our New York segment was 89.4%.
Occupancy and weighted average annual rent per square foot:
Office:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="15">Vornado's Ownership Interest</td></tr><tr><td colspan="3">As of December 31,</td><td colspan="3"></td><td colspan="3">Total Square Feet</td><td colspan="3"></td><td colspan="3">In ServiceSquare Feet</td><td colspan="3"></td><td colspan="3">In ServiceSquare FeetAt Share</td><td colspan="3"></td><td colspan="3">OccupancyRate</td><td colspan="3"></td><td colspan="3">WeightedAverage Annual Escalated RentPer Square Foot</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="2">20,383,000 </td><td></td><td colspan="3"></td><td colspan="2">18,699,000 </td><td></td><td colspan="3"></td><td colspan="2">16,001,000 </td><td></td><td colspan="3"></td><td colspan="2">90.7 </td><td>%</td><td colspan="3"></td><td>$</td><td>86.30 </td><td></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="2">19,902,000 </td><td></td><td colspan="3"></td><td colspan="2">18,724,000 </td><td></td><td colspan="3"></td><td colspan="2">16,028,000 </td><td></td><td colspan="3"></td><td colspan="2">91.9 </td><td>%</td><td colspan="3"></td><td colspan="2">83.98 </td><td></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="2">20,630,000 </td><td></td><td colspan="3"></td><td colspan="2">19,442,000 </td><td></td><td colspan="3"></td><td colspan="2">16,757,000 </td><td></td><td colspan="3"></td><td colspan="2">92.2 </td><td>%</td><td colspan="3"></td><td colspan="2">80.01 </td><td></td></tr><tr><td colspan="3">2020</td><td colspan="3"></td><td colspan="2">20,586,000 </td><td></td><td colspan="3"></td><td colspan="2">18,361,000 </td><td></td><td colspan="3"></td><td colspan="2">15,413,000 </td><td></td><td colspan="3"></td><td colspan="2">93.4 </td><td>%</td><td colspan="3"></td><td colspan="2">79.05 </td><td></td></tr><tr><td colspan="3">2019</td><td colspan="3"></td><td colspan="2">20,666,000 </td><td></td><td colspan="3"></td><td colspan="2">19,070,000 </td><td></td><td colspan="3"></td><td colspan="2">16,195,000 </td><td></td><td colspan="3"></td><td colspan="2">96.9 </td><td>%</td><td colspan="3"></td><td colspan="2">76.26 </td><td></td></tr></table>
Retail:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Vornado's Ownership Interest</td></tr><tr><td colspan="3">As of December 31,</td><td colspan="3"></td><td colspan="3">Total Square Feet</td><td colspan="3"></td><td colspan="3">In ServiceSquare Feet</td><td colspan="3"></td><td colspan="3">In ServiceSquare FeetAt Share</td><td colspan="3"></td><td colspan="3">OccupancyRate</td><td colspan="3"></td><td colspan="3">WeightedAverage Annual Escalated RentPer Square Foot</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="2">2,394,000 </td><td></td><td colspan="3"></td><td colspan="2">2,123,000 </td><td></td><td colspan="3"></td><td colspan="2">1,684,000 </td><td></td><td colspan="3"></td><td colspan="2">74.9 </td><td>%</td><td colspan="3"></td><td>$</td><td>224.88 </td><td></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="2">2,556,000 </td><td></td><td colspan="3"></td><td colspan="2">2,289,000 </td><td></td><td colspan="3"></td><td colspan="2">1,851,000 </td><td></td><td colspan="3"></td><td colspan="2">74.4 </td><td>%</td><td colspan="3"></td><td colspan="2">215.72 </td><td></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="2">2,693,000 </td><td></td><td colspan="3"></td><td colspan="2">2,267,000 </td><td></td><td colspan="3"></td><td colspan="2">1,825,000 </td><td></td><td colspan="3"></td><td colspan="2">80.7 </td><td>%</td><td colspan="3"></td><td colspan="2">214.22 </td><td></td></tr><tr><td colspan="3">2020</td><td colspan="3"></td><td colspan="2">2,690,000 </td><td></td><td colspan="3"></td><td colspan="2">2,275,000 </td><td></td><td colspan="3"></td><td colspan="2">1,805,000 </td><td></td><td colspan="3"></td><td colspan="2">78.8 </td><td>%</td><td colspan="3"></td><td colspan="2">226.38 </td><td></td></tr><tr><td colspan="3">2019</td><td colspan="3"></td><td colspan="2">2,712,000 </td><td></td><td colspan="3"></td><td colspan="2">2,300,000 </td><td></td><td colspan="3"></td><td colspan="2">1,842,000 </td><td></td><td colspan="3"></td><td colspan="2">94.5 </td><td>%</td><td colspan="3"></td><td colspan="2">209.86 </td><td></td></tr></table>
Occupancy and average monthly rent per unit:
Residential:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="6"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Vornado's Ownership Interest</td></tr><tr><td colspan="6">As of December 31,</td><td colspan="3"></td><td colspan="3">Total Number of Units</td><td colspan="3"></td><td colspan="3">TotalNumber of Units</td><td colspan="3"></td><td colspan="3">OccupancyRate</td><td colspan="3"></td><td colspan="3">Average MonthlyRent Per Unit</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,974 </td><td></td><td colspan="3"></td><td colspan="2">939 </td><td></td><td colspan="3"></td><td colspan="2">96.8 </td><td>%</td><td colspan="3"></td><td>$</td><td>4,115 </td><td></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,976 </td><td></td><td colspan="3"></td><td colspan="2">941 </td><td></td><td colspan="3"></td><td colspan="2">96.7 </td><td>%</td><td colspan="3"></td><td colspan="2">3,882 </td><td></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td><td colspan="3"></td><td colspan="2">951 </td><td></td><td colspan="3"></td><td colspan="2">97.0 </td><td>%</td><td colspan="3"></td><td colspan="2">3,776 </td><td></td></tr><tr><td colspan="3">2020</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,995 </td><td></td><td colspan="3"></td><td colspan="2">960 </td><td></td><td colspan="3"></td><td colspan="2">84.9 </td><td>%</td><td colspan="3"></td><td colspan="2">3,714 </td><td></td></tr><tr><td colspan="3">2019</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,996 </td><td></td><td colspan="3"></td><td colspan="2">960 </td><td></td><td colspan="3"></td><td colspan="2">97.5 </td><td>%</td><td colspan="3"></td><td colspan="2">3,902 </td><td></td></tr></table>
30
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 44:
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Office</td><td>$</td><td>727,000 </td><td></td><td colspan="3"></td><td>$</td><td>718,686 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Retail</td><td colspan="2">188,561 </td><td></td><td colspan="3"></td><td colspan="2">205,753 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Residential</td><td colspan="2">21,910 </td><td></td><td colspan="3"></td><td colspan="2">19,600 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Alexander's</td><td colspan="2">40,098 </td><td></td><td colspan="3"></td><td colspan="2">37,469 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total New York</td><td colspan="2">977,569 </td><td></td><td colspan="3"></td><td colspan="2">981,508 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">THE MART(1)</td><td colspan="2">61,519 </td><td></td><td colspan="3"></td><td colspan="2">96,906 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">555 California Street(2)</td><td colspan="2">82,965 </td><td></td><td colspan="3"></td><td colspan="2">65,692 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">21,160 </td><td></td><td colspan="3"></td><td colspan="2">17,942 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total Other</td><td colspan="2">165,644 </td><td></td><td colspan="3"></td><td colspan="2">180,540 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share</td><td>$</td><td>1,143,213 </td><td></td><td colspan="3"></td><td>$</td><td>1,162,048 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
See notes below.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are summarized below.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Office</td><td>$</td><td>726,914 </td><td></td><td colspan="3"></td><td>$</td><td>715,407 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Retail</td><td colspan="2">180,932 </td><td></td><td colspan="3"></td><td colspan="2">188,846 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Residential</td><td colspan="2">20,588 </td><td></td><td colspan="3"></td><td colspan="2">18,214 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Alexander's</td><td colspan="2">41,435 </td><td></td><td colspan="3"></td><td colspan="2">40,532 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total New York</td><td colspan="2">969,869 </td><td></td><td colspan="3"></td><td colspan="2">962,999 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">THE MART(1)</td><td colspan="2">62,579 </td><td></td><td colspan="3"></td><td colspan="2">101,912 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">555 California Street(2)</td><td colspan="2">85,819 </td><td></td><td colspan="3"></td><td colspan="2">67,813 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">21,569 </td><td></td><td colspan="3"></td><td colspan="2">18,344 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total Other</td><td colspan="2">169,967 </td><td></td><td colspan="3"></td><td colspan="2">188,069 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share - cash basis</td><td>$</td><td>1,139,836 </td><td></td><td colspan="3"></td><td>$</td><td>1,151,068 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
(1)2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(2)2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
44
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<table><tr><td></td><td>●</td><td>a non-cash gain in 2022 on the disposal, exchange, or revaluation of equity interests, net of $121.2 million, or $0.32 per diluted share/unit,</td></tr></table><table><tr><td></td><td>●</td><td>increased interest expense in 2023 of $93.4 million, or $0.25 per diluted share/unit, primarily due to new USD and EUR bond issuances as well as increases to rates on variable rate mortgages,</td></tr></table><table><tr><td></td><td>●</td><td>increased other expenses in 2023 of $35.6 million, or $0.10 per diluted share/unit,</td></tr></table><table><tr><td></td><td>●</td><td>increased depreciation and amortization in 2023 of $34.7 million, or $0.09 per diluted share/unit, and</td></tr></table><table><tr><td></td><td>●</td><td>increased property operating expenses in 2023 of $25.2 million, or $0.07 per diluted share/unit.</td></tr></table>
Portfolio NOI increased 4.9% in 2023 as compared to 2022. Average base minimum rent for U.S. Malls and Premium Outlets increased 3.1% to $56.82 psf as of December 31, 2023, from $55.13 psf as of December 31, 2022. Ending occupancy for our U.S. Malls and Premium Outlets increased 0.9% to 95.8% as of December 31, 2023, from 94.9% as of December 31, 2022, primarily due to strong leasing demand.
Our effective overall borrowing rate at December 31, 2023 on our consolidated indebtedness increased 27 basis points to 3.49% as compared to 3.22% at December 31, 2022. This increase was primarily due to an increase in the effective overall borrowing rate on variable rate debt of 198 basis points (5.91% at December 31, 2023 as compared to 3.93% at December 31, 2022) due to increasing benchmark rates, partially offset by a decrease in the amount of our variable rate debt and an increase in fixed rate debt. The weighted average years to maturity of our consolidated indebtedness was 8.1 years and 7.5 years at December 31, 2023 and 2022, respectively.
Our financing activity for the year ended December 31, 2023 included:
<table><tr><td></td><td>●</td><td>the Operating Partnership completing on November 14, 2023, the issuance of €750.0 million senior unsecured bonds ($808.0 million U.S. dollar equivalent) with a maturity date of November 14, 2026 and a fixed interest rate of 3.50%. The bonds are exchangeable into shares of Klépierre at the option of the holder of the bond at an initial common price of €27.2092. We may elect to settle the exchange with cash instead of shares. Proceeds were used to repay €750.0 million ($815.4 million U.S. dollar equivalent) outstanding under the Supplemental Facility on November 17, 2023.</td></tr></table><table><tr><td></td><td>●</td><td>the Operating Partnership completing on November 9, 2023, the issuance of the following senior unsecured notes: $500 million with a fixed interest rate of 6.25% and $500 million with a fixed interest rate of 6.65%, with maturity dates of January 15, 2034 and January 15, 2054, respectively. </td></tr></table><table><tr><td></td><td>●</td><td>borrowing $180.0 million under the Credit Facility and subsequently unencumbering two properties,</td></tr></table>
<table><tr><td></td><td>●</td><td>completing, on June 1, 2023 the redemption at par of the Operating Partnership's $600 million 2.75% notes at maturity,</td></tr></table>
<table><tr><td></td><td>●</td><td>the Operating Partnership completing on March 8, 2023, the issuance of the following senior unsecured notes: $650 million with a fixed interest rate of 5.5% and $650 million with a fixed interest rate of 5.85%, with maturity dates of March 8, 2033 and March 8, 2053, respectively. A portion of the net proceeds were used to fund the optional redemption at par of the Operating Partnerships $500 million floating interest rate notes due January 2024 on March 13, 2023, and</td></tr></table><table><tr><td></td><td>●</td><td>Amending, restating, extending, and increasing our existing $4.0 billion unsecured revolving credit facility on March 14, 2023 with a new $5.0 billion unsecured revolving credit facility.</td></tr></table>
United States Portfolio Data
The portfolio data discussed in this overview includes the following key operating statistics: ending occupancy, and average base minimum rent per square foot. We include acquired properties in this data beginning in the year of acquisition and remove disposed properties in the year of disposition. For comparative information purposes, we separate the information related to The Mills and TRG from our other U.S. operations. We also do not include any information for properties located outside the United States.
61
, The following table sets forth these key operating statistics for the combined U.S. Malls and Premium Outlets:
<table><tr><td></td><td>●</td><td>properties that are consolidated in our consolidated financial statements,</td></tr></table><table><tr><td></td><td>●</td><td>properties we account for under the equity method of accounting as joint ventures, and</td></tr></table><table><tr><td></td><td>●</td><td>the foregoing two categories of properties on a total portfolio basis.</td></tr></table>
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td>%/Basis Point</td><td></td><td></td><td></td><td></td><td>%/Basis Point</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td>Change (1)</td><td> </td><td colspan="2">2022</td><td> </td><td>Change (1)</td><td> </td><td colspan="2">2021</td><td></td></tr><tr><td>U.S. Malls and Premium Outlets:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated</td><td></td><td></td><td>95.7%</td><td></td><td>80 bps</td><td></td><td></td><td>94.9%</td><td></td><td>140 bps</td><td></td><td></td><td>93.5%</td><td></td></tr><tr><td>Unconsolidated</td><td></td><td></td><td>96.1%</td><td></td><td>120 bps</td><td></td><td></td><td>94.9%</td><td></td><td>180 bps</td><td></td><td></td><td>93.1%</td><td></td></tr><tr><td>Total Portfolio</td><td></td><td></td><td>95.8%</td><td></td><td>90 bps</td><td></td><td></td><td>94.9%</td><td></td><td>150 bps</td><td></td><td></td><td>93.4%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated</td><td></td><td>$</td><td> 55.47</td><td></td><td>2.8%</td><td></td><td>$</td><td> 53.95</td><td></td><td>2.6%</td><td></td><td>$</td><td> 52.59</td><td></td></tr><tr><td>Unconsolidated</td><td></td><td>$</td><td> 60.59</td><td></td><td>3.8%</td><td></td><td>$</td><td> 58.36</td><td></td><td>1.4%</td><td></td><td>$</td><td> 57.55</td><td></td></tr><tr><td>Total Portfolio</td><td></td><td>$</td><td> 56.82</td><td></td><td>3.1%</td><td></td><td>$</td><td> 55.13</td><td></td><td>2.3%</td><td></td><td>$</td><td> 53.91</td><td></td></tr><tr><td>U.S. TRG:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td> </td><td>95.7%</td><td></td><td>120 bps</td><td></td><td> </td><td>94.5%</td><td></td><td>330 bps</td><td></td><td> </td><td>91.2%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>$</td><td> 65.01</td><td></td><td>5.3%</td><td></td><td>$</td><td> 61.76</td><td></td><td>5.2%</td><td></td><td>$</td><td> 58.69</td><td></td></tr><tr><td>The Mills:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ending Occupancy</td><td></td><td> </td><td>97.8%</td><td></td><td>-40 bps</td><td></td><td> </td><td>98.2%</td><td></td><td>60 bps</td><td></td><td> </td><td>97.6%</td><td></td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>$</td><td> 36.38</td><td></td><td>4.3%</td><td></td><td>$</td><td> 34.89</td><td></td><td>3.2%</td><td></td><td>$</td><td> 33.80</td><td></td></tr></table>
<table><tr><td>(1)</td><td>Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period.</td></tr></table>
Ending Occupancy Levels and Average Base Minimum Rent per Square Foot.
Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation. Base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.
Current Leasing Activities
During the twelve months ended December 31, 2023, we signed 1,185 new leases and 1,841 renewal leases (excluding mall anchors and majors, new development, redevelopment and leases with terms of one year or less) with a fixed minimum rent across our U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, of which 8.3 million square feet related to consolidated properties. During 2022, we signed 1,262 new leases and 1,517 renewal leases with a fixed minimum rent, comprising approximately 9.1 million square feet, of which 7.0 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was $66.39 per square foot in 2023 and $55.41 per square foot in 2022 with an average tenant allowance on new leases of $64.31 per square foot and $53.01 per square foot, respectively.
Japan Data
The following are selected key operating statistics for our Premium Outlets in Japan. The information used to prepare these statistics has been supplied by the managing venture partner.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">December 31, </td><td> </td><td>%/basis point</td><td> </td><td colspan="2">December 31, </td><td> </td><td>%/basis point</td><td> </td><td colspan="2">December 31, </td></tr><tr><td></td><td></td><td colspan="2">2023</td><td></td><td>Change</td><td></td><td colspan="2">2022</td><td></td><td>Change</td><td></td><td colspan="2">2021</td></tr><tr><td>Ending Occupancy</td><td></td><td></td><td>99.7%</td><td></td><td>-10 bps</td><td></td><td></td><td>99.8%</td><td></td><td>0 bps</td><td></td><td></td><td>99.8%</td></tr><tr><td>Average Base Minimum Rent per Square Foot</td><td></td><td>¥</td><td> 5,494</td><td></td><td>-4.93%</td><td></td><td>¥</td><td> 5,779</td><td></td><td>4.90%</td><td></td><td>¥</td><td> 5,509</td></tr></table>
62
,
NEW YORK
As of December 31, 2023, our New York segment consisted of 26.7 million square feet in 60 properties. The 26.7 million square feet is comprised of 20.4 million square feet of Manhattan office in 30 of the properties, 2.4 million square feet of Manhattan street retail in 50 of the properties, 1,662 units in five residential properties, and our 32.4% interest in Alexander's, which owns five properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens. The New York segment also includes nine garages totaling 1.6 million square feet (4,685 spaces).
As of December 31, 2023, the occupancy rate for our New York segment was 89.4%.
Occupancy and weighted average annual rent per square foot:
Office:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="15">Vornado's Ownership Interest</td></tr><tr><td colspan="3">As of December 31,</td><td colspan="3"></td><td colspan="3">Total Square Feet</td><td colspan="3"></td><td colspan="3">In ServiceSquare Feet</td><td colspan="3"></td><td colspan="3">In ServiceSquare FeetAt Share</td><td colspan="3"></td><td colspan="3">OccupancyRate</td><td colspan="3"></td><td colspan="3">WeightedAverage Annual Escalated RentPer Square Foot</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="2">20,383,000 </td><td></td><td colspan="3"></td><td colspan="2">18,699,000 </td><td></td><td colspan="3"></td><td colspan="2">16,001,000 </td><td></td><td colspan="3"></td><td colspan="2">90.7 </td><td>%</td><td colspan="3"></td><td>$</td><td>86.30 </td><td></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="2">19,902,000 </td><td></td><td colspan="3"></td><td colspan="2">18,724,000 </td><td></td><td colspan="3"></td><td colspan="2">16,028,000 </td><td></td><td colspan="3"></td><td colspan="2">91.9 </td><td>%</td><td colspan="3"></td><td colspan="2">83.98 </td><td></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="2">20,630,000 </td><td></td><td colspan="3"></td><td colspan="2">19,442,000 </td><td></td><td colspan="3"></td><td colspan="2">16,757,000 </td><td></td><td colspan="3"></td><td colspan="2">92.2 </td><td>%</td><td colspan="3"></td><td colspan="2">80.01 </td><td></td></tr><tr><td colspan="3">2020</td><td colspan="3"></td><td colspan="2">20,586,000 </td><td></td><td colspan="3"></td><td colspan="2">18,361,000 </td><td></td><td colspan="3"></td><td colspan="2">15,413,000 </td><td></td><td colspan="3"></td><td colspan="2">93.4 </td><td>%</td><td colspan="3"></td><td colspan="2">79.05 </td><td></td></tr><tr><td colspan="3">2019</td><td colspan="3"></td><td colspan="2">20,666,000 </td><td></td><td colspan="3"></td><td colspan="2">19,070,000 </td><td></td><td colspan="3"></td><td colspan="2">16,195,000 </td><td></td><td colspan="3"></td><td colspan="2">96.9 </td><td>%</td><td colspan="3"></td><td colspan="2">76.26 </td><td></td></tr></table>
Retail:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Vornado's Ownership Interest</td></tr><tr><td colspan="3">As of December 31,</td><td colspan="3"></td><td colspan="3">Total Square Feet</td><td colspan="3"></td><td colspan="3">In ServiceSquare Feet</td><td colspan="3"></td><td colspan="3">In ServiceSquare FeetAt Share</td><td colspan="3"></td><td colspan="3">OccupancyRate</td><td colspan="3"></td><td colspan="3">WeightedAverage Annual Escalated RentPer Square Foot</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="2">2,394,000 </td><td></td><td colspan="3"></td><td colspan="2">2,123,000 </td><td></td><td colspan="3"></td><td colspan="2">1,684,000 </td><td></td><td colspan="3"></td><td colspan="2">74.9 </td><td>%</td><td colspan="3"></td><td>$</td><td>224.88 </td><td></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="2">2,556,000 </td><td></td><td colspan="3"></td><td colspan="2">2,289,000 </td><td></td><td colspan="3"></td><td colspan="2">1,851,000 </td><td></td><td colspan="3"></td><td colspan="2">74.4 </td><td>%</td><td colspan="3"></td><td colspan="2">215.72 </td><td></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="2">2,693,000 </td><td></td><td colspan="3"></td><td colspan="2">2,267,000 </td><td></td><td colspan="3"></td><td colspan="2">1,825,000 </td><td></td><td colspan="3"></td><td colspan="2">80.7 </td><td>%</td><td colspan="3"></td><td colspan="2">214.22 </td><td></td></tr><tr><td colspan="3">2020</td><td colspan="3"></td><td colspan="2">2,690,000 </td><td></td><td colspan="3"></td><td colspan="2">2,275,000 </td><td></td><td colspan="3"></td><td colspan="2">1,805,000 </td><td></td><td colspan="3"></td><td colspan="2">78.8 </td><td>%</td><td colspan="3"></td><td colspan="2">226.38 </td><td></td></tr><tr><td colspan="3">2019</td><td colspan="3"></td><td colspan="2">2,712,000 </td><td></td><td colspan="3"></td><td colspan="2">2,300,000 </td><td></td><td colspan="3"></td><td colspan="2">1,842,000 </td><td></td><td colspan="3"></td><td colspan="2">94.5 </td><td>%</td><td colspan="3"></td><td colspan="2">209.86 </td><td></td></tr></table>
Occupancy and average monthly rent per unit:
Residential:
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="6"> </td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="15">Vornado's Ownership Interest</td></tr><tr><td colspan="6">As of December 31,</td><td colspan="3"></td><td colspan="3">Total Number of Units</td><td colspan="3"></td><td colspan="3">TotalNumber of Units</td><td colspan="3"></td><td colspan="3">OccupancyRate</td><td colspan="3"></td><td colspan="3">Average MonthlyRent Per Unit</td></tr><tr><td colspan="3">2023</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,974 </td><td></td><td colspan="3"></td><td colspan="2">939 </td><td></td><td colspan="3"></td><td colspan="2">96.8 </td><td>%</td><td colspan="3"></td><td>$</td><td>4,115 </td><td></td></tr><tr><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,976 </td><td></td><td colspan="3"></td><td colspan="2">941 </td><td></td><td colspan="3"></td><td colspan="2">96.7 </td><td>%</td><td colspan="3"></td><td colspan="2">3,882 </td><td></td></tr><tr><td colspan="3">2021</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td><td colspan="3"></td><td colspan="2">951 </td><td></td><td colspan="3"></td><td colspan="2">97.0 </td><td>%</td><td colspan="3"></td><td colspan="2">3,776 </td><td></td></tr><tr><td colspan="3">2020</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,995 </td><td></td><td colspan="3"></td><td colspan="2">960 </td><td></td><td colspan="3"></td><td colspan="2">84.9 </td><td>%</td><td colspan="3"></td><td colspan="2">3,714 </td><td></td></tr><tr><td colspan="3">2019</td><td colspan="3"></td><td colspan="3"></td><td colspan="2">1,996 </td><td></td><td colspan="3"></td><td colspan="2">960 </td><td></td><td colspan="3"></td><td colspan="2">97.5 </td><td>%</td><td colspan="3"></td><td colspan="2">3,902 </td><td></td></tr></table>
30
,
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued
The elements of our New York and Other NOI at share for the years ended December 31, 2023 and 2022 are summarized below.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Office</td><td>$</td><td>727,000 </td><td></td><td colspan="3"></td><td>$</td><td>718,686 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Retail</td><td colspan="2">188,561 </td><td></td><td colspan="3"></td><td colspan="2">205,753 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Residential</td><td colspan="2">21,910 </td><td></td><td colspan="3"></td><td colspan="2">19,600 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Alexander's</td><td colspan="2">40,098 </td><td></td><td colspan="3"></td><td colspan="2">37,469 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total New York</td><td colspan="2">977,569 </td><td></td><td colspan="3"></td><td colspan="2">981,508 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">THE MART(1)</td><td colspan="2">61,519 </td><td></td><td colspan="3"></td><td colspan="2">96,906 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">555 California Street(2)</td><td colspan="2">82,965 </td><td></td><td colspan="3"></td><td colspan="2">65,692 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">21,160 </td><td></td><td colspan="3"></td><td colspan="2">17,942 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total Other</td><td colspan="2">165,644 </td><td></td><td colspan="3"></td><td colspan="2">180,540 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share</td><td>$</td><td>1,143,213 </td><td></td><td colspan="3"></td><td>$</td><td>1,162,048 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
See notes below.
The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2023 and 2022 are summarized below.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="9">For the Year Ended December 31,</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">New York:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Office</td><td>$</td><td>726,914 </td><td></td><td colspan="3"></td><td>$</td><td>715,407 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Retail</td><td colspan="2">180,932 </td><td></td><td colspan="3"></td><td colspan="2">188,846 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Residential</td><td colspan="2">20,588 </td><td></td><td colspan="3"></td><td colspan="2">18,214 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Alexander's</td><td colspan="2">41,435 </td><td></td><td colspan="3"></td><td colspan="2">40,532 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total New York</td><td colspan="2">969,869 </td><td></td><td colspan="3"></td><td colspan="2">962,999 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">THE MART(1)</td><td colspan="2">62,579 </td><td></td><td colspan="3"></td><td colspan="2">101,912 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">555 California Street(2)</td><td colspan="2">85,819 </td><td></td><td colspan="3"></td><td colspan="2">67,813 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other investments</td><td colspan="2">21,569 </td><td></td><td colspan="3"></td><td colspan="2">18,344 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total Other</td><td colspan="2">169,967 </td><td></td><td colspan="3"></td><td colspan="2">188,069 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">NOI at share - cash basis</td><td>$</td><td>1,139,836 </td><td></td><td colspan="3"></td><td>$</td><td>1,151,068 </td><td></td><td colspan="3"></td><td colspan="3"></td></tr></table>
________________________________________
(1)2022 includes prior period accrual adjustment related to changes in the tax-assessed value of THE MART.
(2)2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
44
|
q_com016
|
Compare the dividend policies of Simon Property Group and Vornado Realty Trust.
|
Simon Property Group paid a common stock dividend of $1.90 per share in the fourth quarter of 2023 and $7.45 per share for the year ended December 31, 2023. The company aims to maintain its status as a REIT by paying dividends and has a stock repurchase program in place.
Vornado Realty Trust anticipates paying one common share dividend in the fourth quarter of 2024, consistent with its aggregate 2023 common dividend of $0.675. The company also expects to pay approximately $62 million in cash dividends on outstanding preferred shares in 2024.
Both companies prioritize maintaining their REIT status through dividend payments, with Simon Property Group having a higher dividend payout and a stock repurchase program.
|
Comparison
|
86,87,88,89;63, 64
|
0001558370-24-001532;0000899689-24-000005
|
Item 8. Financial Statements and Supplementary Data;ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 86:
Simon Property Group, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------|:---|:-------------|:------------|:-------------|:---|:------------|
| 0 | | | | | | | |
| 1 | | | December 31, | | December 31, | | |
| 2 | | | 2023 | | 2022 | | |
| 3 | ASSETS: | | | | | | |
| 4 | Investment properties, at cost | | $ | 39,285,138 | | $ | 38,326,912 |
| 5 | Less - accumulated depreciation | | | 17,716,788 | | | 16,563,749 |
| 6 | | | | 21,568,350 | | | 21,763,163 |
| 7 | Cash and cash equivalents | | | 1,168,991 | | | 621,628 |
| 8 | Short-term investments | | | 1,000,000 | | | - |
| 9 | Tenant receivables and accrued revenue, net | | | 826,126 | | | 823,540 |
| 10 | Investment in TRG, at equity | | | 3,049,719 | | | 3,074,345 |
| 11 | Investment in Klépierre, at equity | | | 1,527,872 | | | 1,561,112 |
| 12 | Investment in other unconsolidated entities, at equity | | | 3,540,648 | | | 3,511,263 |
| 13 | Right-of-use assets, net | | | 484,073 | | | 496,930 |
| 14 | Deferred costs and other assets | | | 1,117,716 | | | 1,159,293 |
| 15 | Total assets | | $ | 34,283,495 | | $ | 33,011,274 |
| 16 | LIABILITIES: | | | | | | |
| 17 | Mortgages and unsecured indebtedness | | $ | 26,033,423 | | $ | 24,960,286 |
| 18 | Accounts payable, accrued expenses, intangibles, and deferred revenues | | | 1,693,248 | | | 1,491,583 |
| 19 | Cash distributions and losses in unconsolidated entities, at equity | | | 1,760,922 | | | 1,699,828 |
| 20 | Dividend payable | | | 1,842 | | | 1,997 |
| 21 | Lease liabilities | | | 484,861 | | | 497,953 |
| 22 | Other liabilities | | | 621,601 | | | 535,736 |
| 23 | Total liabilities | | | 30,595,897 | | | 29,187,383 |
| 24 | Commitments and contingencies | | | | | | |
| 25 | Limited partners' preferred interest in the Operating Partnership and noncontrolling redeemable interests | | | 195,949 | | | 212,239 |
| 26 | EQUITY: | | | | | | |
| 27 | Stockholders' Equity | | | | | | |
| 28 | Capital stock (850,000,000 total shares authorized, $0.0001 par value, 238,000,000 shares of excess common stock, 100,000,000 authorized shares of preferred stock): | | | | | | |
| 29 | Series J 83/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, 796,948 issued and outstanding with a liquidation value of $39,847 | | | 41,106 | | | 41,435 |
| 30 | Common stock, $0.0001 par value, 511,990,000 shares authorized, 342,895,886 and 342,905,419 issued and outstanding, respectively | | | 33 | | | 34 |
| 31 | Class B common stock, $0.0001 par value, 10,000 shares authorized, 8,000 issued and outstanding | | | - | | | - |
| 32 | Capital in excess of par value | | | 11,406,236 | | | 11,232,881 |
| 33 | Accumulated deficit | | | (6,095,576) | | | (5,926,974) |
| 34 | Accumulated other comprehensive loss | | | (172,787) | | | (164,873) |
| 35 | Common stock held in treasury, at cost, 16,983,364 and 15,959,628 shares, respectively | | | (2,156,178) | | | (2,043,979) |
| 36 | Total stockholders' equity | | | 3,022,834 | | | 3,138,524 |
| 37 | Noncontrolling interests | | | 468,815 | | | 473,128 |
| 38 | Total equity | | | 3,491,649 | | | 3,611,652 |
| 39 | Total liabilities and equity | | $ | 34,283,495 | | $ | 33,011,274 |
The accompanying notes are an integral part of these statements.
86
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 87:
Simon Property Group, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Dollars in thousands, except per share amounts)
| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|:---|:-------------------|:----------|:-----|:---|:----------|:---|:---|:----------|
| 0 | | | | | | | | | | |
| 1 | | | For the Year | | | | | | | |
| 2 | | | Ended December 31, | | | | | | | |
| 3 | | | 2023 | | 2022 | | 2021 | | | |
| 4 | REVENUE: | | | | | | | | | |
| 5 | Lease income | | $ | 5,164,335 | | $ | 4,905,175 | | $ | 4,736,719 |
| 6 | Management fees and other revenues | | | 125,995 | | | 116,904 | | | 106,483 |
| 7 | Other income | | | 368,506 | | | 269,368 | | | 273,587 |
| 8 | Total revenue | | | 5,658,836 | | | 5,291,447 | | | 5,116,789 |
| 9 | EXPENSES: | | | | | | | | | |
| 10 | Property operating | | | 489,346 | | | 464,135 | | | 415,720 |
| 11 | Depreciation and amortization | | | 1,262,107 | | | 1,227,371 | | | 1,262,715 |
| 12 | Real estate taxes | | | 441,783 | | | 443,224 | | | 458,953 |
| 13 | Repairs and maintenance | | | 97,257 | | | 93,595 | | | 96,391 |
| 14 | Advertising and promotion | | | 127,346 | | | 107,793 | | | 114,303 |
| 15 | Home and regional office costs | | | 207,618 | | | 184,592 | | | 184,660 |
| 16 | General and administrative | | | 38,513 | | | 34,971 | | | 30,339 |
| 17 | Other | | | 187,844 | | | 152,213 | | | 140,518 |
| 18 | Total operating expenses | | | 2,851,814 | | | 2,707,894 | | | 2,703,599 |
| 19 | OPERATING INCOME BEFORE OTHER ITEMS | | | 2,807,022 | | | 2,583,553 | | | 2,413,190 |
| 20 | Interest expense | | | (854,648) | | | (761,253) | | | (795,712) |
| 21 | Loss on extinguishment of debt | | | - | | | - | | | (51,841) |
| 22 | Gain on disposal, exchange, or revaluation of equity interests, net (Notes 3 and 6) | | | 362,019 | | | 121,177 | | | 178,672 |
| 23 | Income and other tax expense | | | (81,874) | | | (83,512) | | | (157,199) |
| 24 | Income from unconsolidated entities | | | 375,663 | | | 647,977 | | | 782,837 |
| 25 | Unrealized gains (losses) in fair value of publicly traded equity instruments and derivative instrument, net | | | 11,892 | | | (61,204) | | | (8,095) |
| 26 | (Loss) gain on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net | | | (3,056) | | | 5,647 | | | 206,855 |
| 27 | CONSOLIDATED NET INCOME | | | 2,617,018 | | | 2,452,385 | | | 2,568,707 |
| 28 | Net income attributable to noncontrolling interests | | | 333,892 | | | 312,850 | | | 319,076 |
| 29 | Preferred dividends | | | 3,337 | | | 3,337 | | | 3,337 |
| 30 | NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 2,279,789 | | $ | 2,136,198 | | $ | 2,246,294 |
| 31 | BASIC AND DILUTED EARNINGS PER COMMON SHARE: | | | | | | | | | |
| 32 | Net income attributable to common stockholders | | $ | 6.98 | | $ | 6.52 | | $ | 6.84 |
| 33 | | | | | | | | | | |
| 34 | Consolidated Net Income | | $ | 2,617,018 | | $ | 2,452,385 | | $ | 2,568,707 |
| 35 | Unrealized gain on derivative hedge agreements | | | 18,350 | | | 54,808 | | | 51,114 |
| 36 | Net gain reclassified from accumulated other comprehensive loss into earnings | | | (4,084) | | | (1,595) | | | (7,285) |
| 37 | Currency translation adjustments | | | (26,513) | | | (28,119) | | | (38,772) |
| 38 | Changes in available-for-sale securities and other | | | 2,254 | | | (2,009) | | | (1,014) |
| 39 | Comprehensive income | | | 2,607,025 | | | 2,475,470 | | | 2,572,750 |
| 40 | Comprehensive income attributable to noncontrolling interests | | | 331,814 | | | 315,622 | | | 319,629 |
| 41 | Comprehensive income attributable to common stockholders | | $ | 2,275,211 | | $ | 2,159,848 | | $ | 2,253,121 |
The accompanying notes are an integral part of these statements.
87
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 88:
Simon Property Group, Inc.
Consolidated Statements of Cash Flows
(Dollars in thousands)
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------|:---|:-------------------|:------------|:-----|:---|:------------|:---|:---|:-------------|
| 0 | | | | | | | | | | |
| 1 | | | For the Year | | | | | | | |
| 2 | | | Ended December 31, | | | | | | | |
| 3 | | | 2023 | | 2022 | | 2021 | | | |
| 4 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| 5 | Consolidated Net Income | | $ | 2,617,018 | | $ | 2,452,385 | | $ | 2,568,707 |
| 6 | Adjustments to reconcile consolidated net income to net cash provided by operating activities | | | | | | | | | |
| 7 | Depreciation and amortization | | | 1,333,584 | | | 1,292,113 | | | 1,325,895 |
| 8 | Loss on debt extinguishment | | | - | | | - | | | 51,841 |
| 9 | Loss (gain) on acquisition of controlling interests, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net | | | 3,056 | | | (5,647) | | | (206,855) |
| 10 | Gain on disposal, exchange, or revaluation of equity interests, net | | | (362,019) | | | (121,177) | | | (178,672) |
| 11 | Unrealized (gains) losses in fair value of publicly traded equity instruments and derivative instrument, net | | | (11,892) | | | 61,204 | | | 8,095 |
| 12 | Straight-line lease loss | | | 9,866 | | | 25,234 | | | 22,619 |
| 13 | Income from unconsolidated entities | | | (375,663) | | | (647,977) | | | (782,837) |
| 14 | Distributions of income from unconsolidated entities | | | 458,709 | | | 561,583 | | | 436,881 |
| 15 | Changes in assets and liabilities | | | | | | | | | |
| 16 | Tenant receivables and accrued revenue, net | | | (11,802) | | | 63,350 | | | 265,352 |
| 17 | Deferred costs and other assets | | | 24,423 | | | (104,567) | | | (77,592) |
| 18 | Accounts payable, accrued expenses, intangibles, deferred revenues and other | | | 245,513 | | | 190,103 | | | 203,968 |
| 19 | Net cash provided by operating activities | | | 3,930,793 | | | 3,766,604 | | | 3,637,402 |
| 20 | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
| 21 | Acquisitions | | | (65,829) | | | (203,364) | | | (257,080) |
| 22 | Funding of loans to related parties | | | (15,250) | | | (132,857) | | | (15,848) |
| 23 | Repayments of loans to related parties | | | 16,188 | | | 82,371 | | | 14,027 |
| 24 | Capital expenditures, net | | | (793,283) | | | (650,024) | | | (527,935) |
| 25 | Cash impact from the consolidation of properties | | | - | | | 20,988 | | | 5,595 |
| 26 | Net proceeds from sale of assets | | | - | | | 59,658 | | | 3,000 |
| 27 | Investments in unconsolidated entities | | | (83,961) | | | (235,792) | | | (56,901) |
| 28 | Purchase of short-term investments | | | (1,000,000) | | | - | | | - |
| 29 | Purchase of equity instruments | | | (31,742) | | | (66,140) | | | (33,605) |
| 30 | Proceeds from sales of equity instruments | | | 304,129 | | | 26,086 | | | 65,504 |
| 31 | Insurance proceeds for property restoration | | | 7,427 | | | - | | | 7,200 |
| 32 | Distributions of capital from unconsolidated entities and other | | | 299,140 | | | 472,510 | | | 243,279 |
| 33 | Net cash used in investing activities | | | (1,363,181) | | | (626,564) | | | (552,764) |
| 34 | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
| 35 | Proceeds from sales of common stock and other, net of transaction costs | | | (328) | | | (328) | | | (328) |
| 36 | Purchase of shares related to stock grant recipients' tax withholdings | | | (5,795) | | | (6,788) | | | (2,318) |
| 37 | Redemption of limited partner units | | | (13,524) | | | (1,852) | | | (2,220) |
| 38 | Purchase of treasury stock | | | (140,593) | | | (180,387) | | | - |
| 39 | Preferred unit redemptions | | | (2,500) | | | - | | | - |
| 40 | Proceeds from the special purpose acquisition company IPO, net of transaction costs | | | - | | | - | | | 338,121 |
| 41 | Proceeds from (establishment of) trust account for special purpose acquisition company | | | - | | | 345,000 | | | (345,000) |
| 42 | Liquidation of special purpose acquisition company | | | - | | | (345,000) | | | - |
| 43 | Distributions to noncontrolling interest holders in properties | | | (41,956) | | | (27,741) | | | (5,024) |
| 44 | Contributions from noncontrolling interest holders in properties | | | 9,813 | | | 29,681 | | | 20,902 |
| 45 | Preferred distributions of the Operating Partnership | | | (1,900) | | | (1,915) | | | (1,915) |
| 46 | Distributions to stockholders and preferred dividends | | | (2,439,233) | | | (2,264,007) | | | (2,351,764) |
| 47 | Distributions to limited partners | | | (355,548) | | | (326,550) | | | (337,021) |
| 48 | Cash paid to extinguish debt | | | - | | | - | | | (50,156) |
| 49 | Proceeds from issuance of debt, net of transaction costs | | | 3,629,840 | | | 3,449,403 | | | 9,251,217 |
| 50 | Repayments of debt | | | (2,658,525) | | | (3,721,864) | | | (10,076,809) |
| 51 | Net cash used in financing activities | | | (2,020,249) | | | (3,052,348) | | | (3,562,315) |
| 52 | INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | 547,363 | | | 87,692 | | | (477,677) |
| 53 | CASH AND CASH EQUIVALENTS, beginning of period | | | 621,628 | | | 533,936 | | | 1,011,613 |
| 54 | CASH AND CASH EQUIVALENTS, end of period | | $ | 1,168,991 | | $ | 621,628 | | $ | 533,936 |
The accompanying notes are an integral part of these statements.
88
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 89:
Simon Property Group, Inc.
Consolidated Statements of Equity
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:---|:----------|:-------|:-------|:---|:-------|:---|:------------------|:----------|:------------|:---|:-----------|:---|:---------------|:-------------|:-------|:---|:------------|:---|:---|:----------|:---|:---|:------------|:---|
| 0 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | | | | | | | | | Accumulated Other | | | | | | | | | | | | | | | | | |
| 2 | | | | | | | | | Comprehensive | | Capital in | | | | | Common Stock | | | | | | | | | | |
| 3 | | | Preferred | | Common | | Income | | Excess of Par | | Accumulated | | Held in | | Noncontrolling | | Total | | | | | | | | | |
| 4 | | | Stock | | Stock | | (Loss) | | Value | | Deficit | | Treasury | | Interests | | Equity | | | | | | | | | |
| 5 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6 | Balance at December 31, 2020 | | $ | 42,091 | | $ | 34 | | $ | (188,675) | | $ | 11,179,688 | | $ | (6,102,314) | | $ | (1,891,352) | | $ | 432,874 | | $ | 3,472,346 | |
| 7 | Exchange of limited partner units (58,571 common shares, Note 8) | | | | | | | | | | | | 539 | | | | | | | | | (539) | | | - | |
| 8 | Series J preferred stock premium amortization | | | (328) | | | | | | | | | | | | | | | | | | | | | (328) | |
| 9 | Stock incentive program (80,012 common shares, net) | | | | | | | | | | | | (9,229) | | | | | | 9,229 | | | | | | - | |
| 10 | Redemption of limited partner units (15,705 units) | | | | | | | | | | | | (2,061) | | | | | | | | | (159) | | | (2,220) | |
| 11 | Amortization of stock incentive | | | | | | | | | | | | 19,673 | | | | | | | | | | | | 19,673 | |
| 12 | Long-term incentive performance units | | | | | | | | | | | | | | | | | | | | | 17,755 | | | 17,755 | |
| 13 | Issuance of unit equivalents and other (20,374 common shares repurchased) | | | | | | | | | | | | 5,760 | | | (44,319) | | | (2,318) | | | 18,494 | | | (22,383) | |
| 14 | Unrealized gain on hedging activities | | | | | | | | | 44,676 | | | | | | | | | | | | 6,438 | | | 51,114 | |
| 15 | Currency translation adjustments | | | | | | | | | (33,932) | | | | | | | | | | | | (4,840) | | | (38,772) | |
| 16 | Changes in available-for-sale securities and other | | | | | | | | | (886) | | | | | | | | | | | | (128) | | | (1,014) | |
| 17 | Net gain reclassified from accumulated other comprehensive loss into earnings | | | | | | | | | (6,369) | | | | | | | | | | | | (916) | | | (7,285) | |
| 18 | Other comprehensive income | | | | | | | | | 3,489 | | | | | | | | | | | | 554 | | | 4,043 | |
| 19 | Adjustment to limited partners' interest from change in ownership in the Operating Partnership | | | | | | | | | | | | 18,620 | | | | | | | | | (18,620) | | | - | |
| 20 | Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests | | | | | | | | | | | | | | | (1,926,706) | | | | | | (276,698) | | | (2,203,404) | |
| 21 | Distribution to other noncontrolling interest partners | | | | | | | | | | | | | | | | | | | | | (2,708) | | | (2,708) | |
| 22 | Net income, excluding $1,915 attributable to preferred interests in the Operating Partnership and a $3,419 loss attributable to noncontrolling redeemable interests in properties | | | | | | | | | | | | | | | 2,249,631 | | | | | | 320,580 | | | 2,570,211 | |
| 23 | Balance at December 31, 2021 | | $ | 41,763 | | $ | 34 | | $ | (185,186) | | $ | 11,212,990 | | $ | (5,823,708) | | $ | (1,884,441) | | $ | 491,533 | | $ | 3,852,985 | |
| 24 | Exchange of limited partner units (2,680 common shares, Note 8) | | | | | | | | | | | | 27 | | | | | | | | | (27) | | | - | |
| 25 | Series J preferred stock premium amortization | | | (328) | | | | | | | | | | | | | | | | | | | | | (328) | |
| 26 | Stock incentive program (208,063 common shares, net) | | | | | | | | | | | | (27,637) | | | | | | 27,637 | | | | | | - | |
| 27 | Redemption of limited partner units (14,740 units) | | | | | | | | | | | | (1,708) | | | | | | | | | (144) | | | (1,852) | |
| 28 | Amortization of stock incentive | | | | | | | | | | | | 23,670 | | | | | | | | | | | | 23,670 | |
| 29 | Treasury stock purchase (1,830,022 shares) | | | | | | | | | | | | | | | | | | (180,387) | | | | | | (180,387) | |
| 30 | Long-term incentive performance units | | | | | | | | | | | | | | | | | | | | | 14,845 | | | 14,845 | |
| 31 | Issuance of unit equivalents and other (46,555 common shares repurchased) | | | | | | | | | | | | (2,769) | | | 21,206 | | | (6,788) | | | 10,600 | | | 22,249 | |
| 32 | Unrealized gain on hedging activities | | | | | | | | | 47,888 | | | | | | | | | | | | 6,920 | | | 54,808 | |
| 33 | Currency translation adjustments | | | | | | | | | (24,427) | | | | | | | | | | | | (3,692) | | | (28,119) | |
| 34 | Changes in available-for-sale securities and other | | | | | | | | | (1,755) | | | | | | | | | | | | (254) | | | (2,009) | |
| 35 | Net gain reclassified from accumulated other comprehensive loss into earnings | | | | | | | | | (1,393) | | | | | | | | | | | | (202) | | | (1,595) | |
| 36 | Other comprehensive income | | | | | | | | | 20,313 | | | | | | | | | | | | 2,772 | | | 23,085 | |
| 37 | Adjustment to limited partners' interest from change in ownership in the Operating Partnership | | | | | | | | | | | | 28,308 | | | | | | | | | (28,308) | | | - | |
| 38 | Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests | | | | | | | | | | | | | | | (2,264,007) | | | | | | (326,550) | | | (2,590,557) | |
| 39 | Distribution to other noncontrolling interest partners | | | | | | | | | | | | | | | | | | | | | (1,362) | | | (1,362) | |
| 40 | Net income, excluding $1,915 attributable to preferred interests in the Operating Partnership and $1,166 attributable to noncontrolling redeemable interests in properties | | | | | | | | | | | | | | | 2,139,535 | | | | | | 309,769 | | | 2,449,304 | |
| 41 | Balance at December 31, 2022 | | $ | 41,435 | | $ | 34 | | $ | (164,873) | | $ | 11,232,881 | | $ | (5,926,974) | | $ | (2,043,979) | | $ | 473,128 | | $ | 3,611,652 | |
89
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 63:
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------|:--------------------------------|:----------|:-----|:------------|:-----|:----------|:------------|:---|:----------|
| 1 | (Amounts in thousands, except per share amounts) | For the Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | REVENUES: | | | | | | | | | |
| 4 | Rental revenues | $ | 1,607,486 | | | $ | 1,607,685 | | $ | 1,424,531 |
| 5 | Fee and other income | 203,677 | | | 192,310 | | | 164,679 | | |
| 6 | Total revenues | 1,811,163 | | | 1,799,995 | | | 1,589,210 | | |
| 7 | EXPENSES: | | | | | | | | | |
| 8 | Operating | (905,158) | | | (873,911) | | | (797,315) | | |
| 9 | Depreciation and amortization | (434,273) | | | (504,502) | | | (412,347) | | |
| 10 | General and administrative | (162,883) | | | (133,731) | | | (134,545) | | |
| 11 | (Expense) benefit from deferred compensation plan liability | (12,162) | | | 9,617 | | | (9,847) | | |
| 12 | Impairment losses, transaction related costs and other | (50,691) | | | (31,722) | | | (13,815) | | |
| 13 | Total expenses | (1,565,167) | | | (1,534,249) | | | (1,367,869) | | |
| 15 | Income (loss) from partially owned entities | 38,689 | | | (461,351) | | | 130,517 | | |
| 16 | Income from real estate fund investments | 1,590 | | | 3,541 | | | 11,066 | | |
| 17 | Interest and other investment income, net | 41,697 | | | 19,869 | | | 4,612 | | |
| 18 | Income (loss) from deferred compensation plan assets | 12,162 | | | (9,617) | | | 9,847 | | |
| 19 | Interest and debt expense | (349,223) | | | (279,765) | | | (231,096) | | |
| 20 | Net gains on disposition of wholly owned and partially owned assets | 71,199 | | | 100,625 | | | 50,770 | | |
| 21 | Income (loss) before income taxes | 62,110 | | | (360,952) | | | 197,057 | | |
| 22 | Income tax (expense) benefit | (29,222) | | | (21,660) | | | 10,496 | | |
| 23 | Net income (loss) | 32,888 | | | (382,612) | | | 207,553 | | |
| 24 | Less net loss (income) attributable to noncontrolling interests in: | | | | | | | | | |
| 25 | Consolidated subsidiaries | 75,967 | | | 5,737 | | | (24,014) | | |
| 26 | Operating Partnership | (3,361) | | | 30,376 | | | (7,540) | | |
| 27 | Net income (loss) attributable to Vornado | 105,494 | | | (346,499) | | | 175,999 | | |
| 28 | Preferred share dividends | (62,116) | | | (62,116) | | | (65,880) | | |
| 29 | Series K preferred share issuance costs | - | | | - | | | (9,033) | | |
| 30 | NET INCOME (LOSS) attributable to common shareholders | $ | 43,378 | | | $ | (408,615) | | $ | 101,086 |
| 37 | INCOME (LOSS) PER COMMON SHARE - BASIC: | | | | | | | | | |
| 38 | Net income (loss) per common share | $ | 0.23 | | | $ | (2.13) | | $ | 0.53 |
| 39 | Weighted average shares outstanding | 191,005 | | | 191,775 | | | 191,551 | | |
| 41 | INCOME (LOSS) PER COMMON SHARE - DILUTED: | | | | | | | | | |
| 42 | Net income (loss) per common share | $ | 0.23 | | | $ | (2.13) | | $ | 0.53 |
| 43 | Weighted average shares outstanding | 191,856 | | | 191,775 | | | 192,122 | | |
See notes to consolidated financial statements.
63
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 64:
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:--------------------------------|:--------|:-----|:----------|:-----|:----------|:---------|:---|:--------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income (loss) | $ | 32,888 | | | $ | (382,612) | | $ | 207,553 |
| 4 | Other comprehensive (loss) income: | | | | | | | | | |
| 5 | Change in fair value of interest rate swaps and other | (112,051) | | | 190,493 | | | 51,338 | | |
| 6 | Other comprehensive (loss) income of nonconsolidated subsidiaries | (8,286) | | | 18,874 | | | 10,275 | | |
| 8 | Comprehensive (loss) income | (87,449) | | | (173,245) | | | 269,166 | | |
| 9 | Less comprehensive loss (income) attributable to noncontrolling interests | 85,665 | | | 19,247 | | | (35,602) | | |
| 10 | Comprehensive (loss) income attributable to Vornado | $ | (1,784) | | | $ | (153,998) | | $ | 233,564 |
See notes to consolidated financial statements.
64
|
Simon Property Group, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------|:---|:-------------|:------------|:-------------|:---|:------------|
| 0 | | | | | | | |
| 1 | | | December 31, | | December 31, | | |
| 2 | | | 2023 | | 2022 | | |
| 3 | ASSETS: | | | | | | |
| 4 | Investment properties, at cost | | $ | 39,285,138 | | $ | 38,326,912 |
| 5 | Less - accumulated depreciation | | | 17,716,788 | | | 16,563,749 |
| 6 | | | | 21,568,350 | | | 21,763,163 |
| 7 | Cash and cash equivalents | | | 1,168,991 | | | 621,628 |
| 8 | Short-term investments | | | 1,000,000 | | | - |
| 9 | Tenant receivables and accrued revenue, net | | | 826,126 | | | 823,540 |
| 10 | Investment in TRG, at equity | | | 3,049,719 | | | 3,074,345 |
| 11 | Investment in Klépierre, at equity | | | 1,527,872 | | | 1,561,112 |
| 12 | Investment in other unconsolidated entities, at equity | | | 3,540,648 | | | 3,511,263 |
| 13 | Right-of-use assets, net | | | 484,073 | | | 496,930 |
| 14 | Deferred costs and other assets | | | 1,117,716 | | | 1,159,293 |
| 15 | Total assets | | $ | 34,283,495 | | $ | 33,011,274 |
| 16 | LIABILITIES: | | | | | | |
| 17 | Mortgages and unsecured indebtedness | | $ | 26,033,423 | | $ | 24,960,286 |
| 18 | Accounts payable, accrued expenses, intangibles, and deferred revenues | | | 1,693,248 | | | 1,491,583 |
| 19 | Cash distributions and losses in unconsolidated entities, at equity | | | 1,760,922 | | | 1,699,828 |
| 20 | Dividend payable | | | 1,842 | | | 1,997 |
| 21 | Lease liabilities | | | 484,861 | | | 497,953 |
| 22 | Other liabilities | | | 621,601 | | | 535,736 |
| 23 | Total liabilities | | | 30,595,897 | | | 29,187,383 |
| 24 | Commitments and contingencies | | | | | | |
| 25 | Limited partners' preferred interest in the Operating Partnership and noncontrolling redeemable interests | | | 195,949 | | | 212,239 |
| 26 | EQUITY: | | | | | | |
| 27 | Stockholders' Equity | | | | | | |
| 28 | Capital stock (850,000,000 total shares authorized, $0.0001 par value, 238,000,000 shares of excess common stock, 100,000,000 authorized shares of preferred stock): | | | | | | |
| 29 | Series J 83/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, 796,948 issued and outstanding with a liquidation value of $39,847 | | | 41,106 | | | 41,435 |
| 30 | Common stock, $0.0001 par value, 511,990,000 shares authorized, 342,895,886 and 342,905,419 issued and outstanding, respectively | | | 33 | | | 34 |
| 31 | Class B common stock, $0.0001 par value, 10,000 shares authorized, 8,000 issued and outstanding | | | - | | | - |
| 32 | Capital in excess of par value | | | 11,406,236 | | | 11,232,881 |
| 33 | Accumulated deficit | | | (6,095,576) | | | (5,926,974) |
| 34 | Accumulated other comprehensive loss | | | (172,787) | | | (164,873) |
| 35 | Common stock held in treasury, at cost, 16,983,364 and 15,959,628 shares, respectively | | | (2,156,178) | | | (2,043,979) |
| 36 | Total stockholders' equity | | | 3,022,834 | | | 3,138,524 |
| 37 | Noncontrolling interests | | | 468,815 | | | 473,128 |
| 38 | Total equity | | | 3,491,649 | | | 3,611,652 |
| 39 | Total liabilities and equity | | $ | 34,283,495 | | $ | 33,011,274 |
The accompanying notes are an integral part of these statements.
86
,
Simon Property Group, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Dollars in thousands, except per share amounts)
| | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|:---|:-------------------|:----------|:-----|:---|:----------|:---|:---|:----------|
| 0 | | | | | | | | | | |
| 1 | | | For the Year | | | | | | | |
| 2 | | | Ended December 31, | | | | | | | |
| 3 | | | 2023 | | 2022 | | 2021 | | | |
| 4 | REVENUE: | | | | | | | | | |
| 5 | Lease income | | $ | 5,164,335 | | $ | 4,905,175 | | $ | 4,736,719 |
| 6 | Management fees and other revenues | | | 125,995 | | | 116,904 | | | 106,483 |
| 7 | Other income | | | 368,506 | | | 269,368 | | | 273,587 |
| 8 | Total revenue | | | 5,658,836 | | | 5,291,447 | | | 5,116,789 |
| 9 | EXPENSES: | | | | | | | | | |
| 10 | Property operating | | | 489,346 | | | 464,135 | | | 415,720 |
| 11 | Depreciation and amortization | | | 1,262,107 | | | 1,227,371 | | | 1,262,715 |
| 12 | Real estate taxes | | | 441,783 | | | 443,224 | | | 458,953 |
| 13 | Repairs and maintenance | | | 97,257 | | | 93,595 | | | 96,391 |
| 14 | Advertising and promotion | | | 127,346 | | | 107,793 | | | 114,303 |
| 15 | Home and regional office costs | | | 207,618 | | | 184,592 | | | 184,660 |
| 16 | General and administrative | | | 38,513 | | | 34,971 | | | 30,339 |
| 17 | Other | | | 187,844 | | | 152,213 | | | 140,518 |
| 18 | Total operating expenses | | | 2,851,814 | | | 2,707,894 | | | 2,703,599 |
| 19 | OPERATING INCOME BEFORE OTHER ITEMS | | | 2,807,022 | | | 2,583,553 | | | 2,413,190 |
| 20 | Interest expense | | | (854,648) | | | (761,253) | | | (795,712) |
| 21 | Loss on extinguishment of debt | | | - | | | - | | | (51,841) |
| 22 | Gain on disposal, exchange, or revaluation of equity interests, net (Notes 3 and 6) | | | 362,019 | | | 121,177 | | | 178,672 |
| 23 | Income and other tax expense | | | (81,874) | | | (83,512) | | | (157,199) |
| 24 | Income from unconsolidated entities | | | 375,663 | | | 647,977 | | | 782,837 |
| 25 | Unrealized gains (losses) in fair value of publicly traded equity instruments and derivative instrument, net | | | 11,892 | | | (61,204) | | | (8,095) |
| 26 | (Loss) gain on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net | | | (3,056) | | | 5,647 | | | 206,855 |
| 27 | CONSOLIDATED NET INCOME | | | 2,617,018 | | | 2,452,385 | | | 2,568,707 |
| 28 | Net income attributable to noncontrolling interests | | | 333,892 | | | 312,850 | | | 319,076 |
| 29 | Preferred dividends | | | 3,337 | | | 3,337 | | | 3,337 |
| 30 | NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 2,279,789 | | $ | 2,136,198 | | $ | 2,246,294 |
| 31 | BASIC AND DILUTED EARNINGS PER COMMON SHARE: | | | | | | | | | |
| 32 | Net income attributable to common stockholders | | $ | 6.98 | | $ | 6.52 | | $ | 6.84 |
| 33 | | | | | | | | | | |
| 34 | Consolidated Net Income | | $ | 2,617,018 | | $ | 2,452,385 | | $ | 2,568,707 |
| 35 | Unrealized gain on derivative hedge agreements | | | 18,350 | | | 54,808 | | | 51,114 |
| 36 | Net gain reclassified from accumulated other comprehensive loss into earnings | | | (4,084) | | | (1,595) | | | (7,285) |
| 37 | Currency translation adjustments | | | (26,513) | | | (28,119) | | | (38,772) |
| 38 | Changes in available-for-sale securities and other | | | 2,254 | | | (2,009) | | | (1,014) |
| 39 | Comprehensive income | | | 2,607,025 | | | 2,475,470 | | | 2,572,750 |
| 40 | Comprehensive income attributable to noncontrolling interests | | | 331,814 | | | 315,622 | | | 319,629 |
| 41 | Comprehensive income attributable to common stockholders | | $ | 2,275,211 | | $ | 2,159,848 | | $ | 2,253,121 |
The accompanying notes are an integral part of these statements.
87
,
Simon Property Group, Inc.
Consolidated Statements of Cash Flows
(Dollars in thousands)
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------------------------------------------------------------------------------------------|:---|:-------------------|:------------|:-----|:---|:------------|:---|:---|:-------------|
| 0 | | | | | | | | | | |
| 1 | | | For the Year | | | | | | | |
| 2 | | | Ended December 31, | | | | | | | |
| 3 | | | 2023 | | 2022 | | 2021 | | | |
| 4 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| 5 | Consolidated Net Income | | $ | 2,617,018 | | $ | 2,452,385 | | $ | 2,568,707 |
| 6 | Adjustments to reconcile consolidated net income to net cash provided by operating activities | | | | | | | | | |
| 7 | Depreciation and amortization | | | 1,333,584 | | | 1,292,113 | | | 1,325,895 |
| 8 | Loss on debt extinguishment | | | - | | | - | | | 51,841 |
| 9 | Loss (gain) on acquisition of controlling interests, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net | | | 3,056 | | | (5,647) | | | (206,855) |
| 10 | Gain on disposal, exchange, or revaluation of equity interests, net | | | (362,019) | | | (121,177) | | | (178,672) |
| 11 | Unrealized (gains) losses in fair value of publicly traded equity instruments and derivative instrument, net | | | (11,892) | | | 61,204 | | | 8,095 |
| 12 | Straight-line lease loss | | | 9,866 | | | 25,234 | | | 22,619 |
| 13 | Income from unconsolidated entities | | | (375,663) | | | (647,977) | | | (782,837) |
| 14 | Distributions of income from unconsolidated entities | | | 458,709 | | | 561,583 | | | 436,881 |
| 15 | Changes in assets and liabilities | | | | | | | | | |
| 16 | Tenant receivables and accrued revenue, net | | | (11,802) | | | 63,350 | | | 265,352 |
| 17 | Deferred costs and other assets | | | 24,423 | | | (104,567) | | | (77,592) |
| 18 | Accounts payable, accrued expenses, intangibles, deferred revenues and other | | | 245,513 | | | 190,103 | | | 203,968 |
| 19 | Net cash provided by operating activities | | | 3,930,793 | | | 3,766,604 | | | 3,637,402 |
| 20 | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
| 21 | Acquisitions | | | (65,829) | | | (203,364) | | | (257,080) |
| 22 | Funding of loans to related parties | | | (15,250) | | | (132,857) | | | (15,848) |
| 23 | Repayments of loans to related parties | | | 16,188 | | | 82,371 | | | 14,027 |
| 24 | Capital expenditures, net | | | (793,283) | | | (650,024) | | | (527,935) |
| 25 | Cash impact from the consolidation of properties | | | - | | | 20,988 | | | 5,595 |
| 26 | Net proceeds from sale of assets | | | - | | | 59,658 | | | 3,000 |
| 27 | Investments in unconsolidated entities | | | (83,961) | | | (235,792) | | | (56,901) |
| 28 | Purchase of short-term investments | | | (1,000,000) | | | - | | | - |
| 29 | Purchase of equity instruments | | | (31,742) | | | (66,140) | | | (33,605) |
| 30 | Proceeds from sales of equity instruments | | | 304,129 | | | 26,086 | | | 65,504 |
| 31 | Insurance proceeds for property restoration | | | 7,427 | | | - | | | 7,200 |
| 32 | Distributions of capital from unconsolidated entities and other | | | 299,140 | | | 472,510 | | | 243,279 |
| 33 | Net cash used in investing activities | | | (1,363,181) | | | (626,564) | | | (552,764) |
| 34 | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
| 35 | Proceeds from sales of common stock and other, net of transaction costs | | | (328) | | | (328) | | | (328) |
| 36 | Purchase of shares related to stock grant recipients' tax withholdings | | | (5,795) | | | (6,788) | | | (2,318) |
| 37 | Redemption of limited partner units | | | (13,524) | | | (1,852) | | | (2,220) |
| 38 | Purchase of treasury stock | | | (140,593) | | | (180,387) | | | - |
| 39 | Preferred unit redemptions | | | (2,500) | | | - | | | - |
| 40 | Proceeds from the special purpose acquisition company IPO, net of transaction costs | | | - | | | - | | | 338,121 |
| 41 | Proceeds from (establishment of) trust account for special purpose acquisition company | | | - | | | 345,000 | | | (345,000) |
| 42 | Liquidation of special purpose acquisition company | | | - | | | (345,000) | | | - |
| 43 | Distributions to noncontrolling interest holders in properties | | | (41,956) | | | (27,741) | | | (5,024) |
| 44 | Contributions from noncontrolling interest holders in properties | | | 9,813 | | | 29,681 | | | 20,902 |
| 45 | Preferred distributions of the Operating Partnership | | | (1,900) | | | (1,915) | | | (1,915) |
| 46 | Distributions to stockholders and preferred dividends | | | (2,439,233) | | | (2,264,007) | | | (2,351,764) |
| 47 | Distributions to limited partners | | | (355,548) | | | (326,550) | | | (337,021) |
| 48 | Cash paid to extinguish debt | | | - | | | - | | | (50,156) |
| 49 | Proceeds from issuance of debt, net of transaction costs | | | 3,629,840 | | | 3,449,403 | | | 9,251,217 |
| 50 | Repayments of debt | | | (2,658,525) | | | (3,721,864) | | | (10,076,809) |
| 51 | Net cash used in financing activities | | | (2,020,249) | | | (3,052,348) | | | (3,562,315) |
| 52 | INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | 547,363 | | | 87,692 | | | (477,677) |
| 53 | CASH AND CASH EQUIVALENTS, beginning of period | | | 621,628 | | | 533,936 | | | 1,011,613 |
| 54 | CASH AND CASH EQUIVALENTS, end of period | | $ | 1,168,991 | | $ | 621,628 | | $ | 533,936 |
The accompanying notes are an integral part of these statements.
88
,
Simon Property Group, Inc.
Consolidated Statements of Equity
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:---|:----------|:-------|:-------|:---|:-------|:---|:------------------|:----------|:------------|:---|:-----------|:---|:---------------|:-------------|:-------|:---|:------------|:---|:---|:----------|:---|:---|:------------|:---|
| 0 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | | | | | | | | | Accumulated Other | | | | | | | | | | | | | | | | | |
| 2 | | | | | | | | | Comprehensive | | Capital in | | | | | Common Stock | | | | | | | | | | |
| 3 | | | Preferred | | Common | | Income | | Excess of Par | | Accumulated | | Held in | | Noncontrolling | | Total | | | | | | | | | |
| 4 | | | Stock | | Stock | | (Loss) | | Value | | Deficit | | Treasury | | Interests | | Equity | | | | | | | | | |
| 5 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6 | Balance at December 31, 2020 | | $ | 42,091 | | $ | 34 | | $ | (188,675) | | $ | 11,179,688 | | $ | (6,102,314) | | $ | (1,891,352) | | $ | 432,874 | | $ | 3,472,346 | |
| 7 | Exchange of limited partner units (58,571 common shares, Note 8) | | | | | | | | | | | | 539 | | | | | | | | | (539) | | | - | |
| 8 | Series J preferred stock premium amortization | | | (328) | | | | | | | | | | | | | | | | | | | | | (328) | |
| 9 | Stock incentive program (80,012 common shares, net) | | | | | | | | | | | | (9,229) | | | | | | 9,229 | | | | | | - | |
| 10 | Redemption of limited partner units (15,705 units) | | | | | | | | | | | | (2,061) | | | | | | | | | (159) | | | (2,220) | |
| 11 | Amortization of stock incentive | | | | | | | | | | | | 19,673 | | | | | | | | | | | | 19,673 | |
| 12 | Long-term incentive performance units | | | | | | | | | | | | | | | | | | | | | 17,755 | | | 17,755 | |
| 13 | Issuance of unit equivalents and other (20,374 common shares repurchased) | | | | | | | | | | | | 5,760 | | | (44,319) | | | (2,318) | | | 18,494 | | | (22,383) | |
| 14 | Unrealized gain on hedging activities | | | | | | | | | 44,676 | | | | | | | | | | | | 6,438 | | | 51,114 | |
| 15 | Currency translation adjustments | | | | | | | | | (33,932) | | | | | | | | | | | | (4,840) | | | (38,772) | |
| 16 | Changes in available-for-sale securities and other | | | | | | | | | (886) | | | | | | | | | | | | (128) | | | (1,014) | |
| 17 | Net gain reclassified from accumulated other comprehensive loss into earnings | | | | | | | | | (6,369) | | | | | | | | | | | | (916) | | | (7,285) | |
| 18 | Other comprehensive income | | | | | | | | | 3,489 | | | | | | | | | | | | 554 | | | 4,043 | |
| 19 | Adjustment to limited partners' interest from change in ownership in the Operating Partnership | | | | | | | | | | | | 18,620 | | | | | | | | | (18,620) | | | - | |
| 20 | Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests | | | | | | | | | | | | | | | (1,926,706) | | | | | | (276,698) | | | (2,203,404) | |
| 21 | Distribution to other noncontrolling interest partners | | | | | | | | | | | | | | | | | | | | | (2,708) | | | (2,708) | |
| 22 | Net income, excluding $1,915 attributable to preferred interests in the Operating Partnership and a $3,419 loss attributable to noncontrolling redeemable interests in properties | | | | | | | | | | | | | | | 2,249,631 | | | | | | 320,580 | | | 2,570,211 | |
| 23 | Balance at December 31, 2021 | | $ | 41,763 | | $ | 34 | | $ | (185,186) | | $ | 11,212,990 | | $ | (5,823,708) | | $ | (1,884,441) | | $ | 491,533 | | $ | 3,852,985 | |
| 24 | Exchange of limited partner units (2,680 common shares, Note 8) | | | | | | | | | | | | 27 | | | | | | | | | (27) | | | - | |
| 25 | Series J preferred stock premium amortization | | | (328) | | | | | | | | | | | | | | | | | | | | | (328) | |
| 26 | Stock incentive program (208,063 common shares, net) | | | | | | | | | | | | (27,637) | | | | | | 27,637 | | | | | | - | |
| 27 | Redemption of limited partner units (14,740 units) | | | | | | | | | | | | (1,708) | | | | | | | | | (144) | | | (1,852) | |
| 28 | Amortization of stock incentive | | | | | | | | | | | | 23,670 | | | | | | | | | | | | 23,670 | |
| 29 | Treasury stock purchase (1,830,022 shares) | | | | | | | | | | | | | | | | | | (180,387) | | | | | | (180,387) | |
| 30 | Long-term incentive performance units | | | | | | | | | | | | | | | | | | | | | 14,845 | | | 14,845 | |
| 31 | Issuance of unit equivalents and other (46,555 common shares repurchased) | | | | | | | | | | | | (2,769) | | | 21,206 | | | (6,788) | | | 10,600 | | | 22,249 | |
| 32 | Unrealized gain on hedging activities | | | | | | | | | 47,888 | | | | | | | | | | | | 6,920 | | | 54,808 | |
| 33 | Currency translation adjustments | | | | | | | | | (24,427) | | | | | | | | | | | | (3,692) | | | (28,119) | |
| 34 | Changes in available-for-sale securities and other | | | | | | | | | (1,755) | | | | | | | | | | | | (254) | | | (2,009) | |
| 35 | Net gain reclassified from accumulated other comprehensive loss into earnings | | | | | | | | | (1,393) | | | | | | | | | | | | (202) | | | (1,595) | |
| 36 | Other comprehensive income | | | | | | | | | 20,313 | | | | | | | | | | | | 2,772 | | | 23,085 | |
| 37 | Adjustment to limited partners' interest from change in ownership in the Operating Partnership | | | | | | | | | | | | 28,308 | | | | | | | | | (28,308) | | | - | |
| 38 | Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests | | | | | | | | | | | | | | | (2,264,007) | | | | | | (326,550) | | | (2,590,557) | |
| 39 | Distribution to other noncontrolling interest partners | | | | | | | | | | | | | | | | | | | | | (1,362) | | | (1,362) | |
| 40 | Net income, excluding $1,915 attributable to preferred interests in the Operating Partnership and $1,166 attributable to noncontrolling redeemable interests in properties | | | | | | | | | | | | | | | 2,139,535 | | | | | | 309,769 | | | 2,449,304 | |
| 41 | Balance at December 31, 2022 | | $ | 41,435 | | $ | 34 | | $ | (164,873) | | $ | 11,232,881 | | $ | (5,926,974) | | $ | (2,043,979) | | $ | 473,128 | | $ | 3,611,652 | |
89
,
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------|:--------------------------------|:----------|:-----|:------------|:-----|:----------|:------------|:---|:----------|
| 1 | (Amounts in thousands, except per share amounts) | For the Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | REVENUES: | | | | | | | | | |
| 4 | Rental revenues | $ | 1,607,486 | | | $ | 1,607,685 | | $ | 1,424,531 |
| 5 | Fee and other income | 203,677 | | | 192,310 | | | 164,679 | | |
| 6 | Total revenues | 1,811,163 | | | 1,799,995 | | | 1,589,210 | | |
| 7 | EXPENSES: | | | | | | | | | |
| 8 | Operating | (905,158) | | | (873,911) | | | (797,315) | | |
| 9 | Depreciation and amortization | (434,273) | | | (504,502) | | | (412,347) | | |
| 10 | General and administrative | (162,883) | | | (133,731) | | | (134,545) | | |
| 11 | (Expense) benefit from deferred compensation plan liability | (12,162) | | | 9,617 | | | (9,847) | | |
| 12 | Impairment losses, transaction related costs and other | (50,691) | | | (31,722) | | | (13,815) | | |
| 13 | Total expenses | (1,565,167) | | | (1,534,249) | | | (1,367,869) | | |
| 15 | Income (loss) from partially owned entities | 38,689 | | | (461,351) | | | 130,517 | | |
| 16 | Income from real estate fund investments | 1,590 | | | 3,541 | | | 11,066 | | |
| 17 | Interest and other investment income, net | 41,697 | | | 19,869 | | | 4,612 | | |
| 18 | Income (loss) from deferred compensation plan assets | 12,162 | | | (9,617) | | | 9,847 | | |
| 19 | Interest and debt expense | (349,223) | | | (279,765) | | | (231,096) | | |
| 20 | Net gains on disposition of wholly owned and partially owned assets | 71,199 | | | 100,625 | | | 50,770 | | |
| 21 | Income (loss) before income taxes | 62,110 | | | (360,952) | | | 197,057 | | |
| 22 | Income tax (expense) benefit | (29,222) | | | (21,660) | | | 10,496 | | |
| 23 | Net income (loss) | 32,888 | | | (382,612) | | | 207,553 | | |
| 24 | Less net loss (income) attributable to noncontrolling interests in: | | | | | | | | | |
| 25 | Consolidated subsidiaries | 75,967 | | | 5,737 | | | (24,014) | | |
| 26 | Operating Partnership | (3,361) | | | 30,376 | | | (7,540) | | |
| 27 | Net income (loss) attributable to Vornado | 105,494 | | | (346,499) | | | 175,999 | | |
| 28 | Preferred share dividends | (62,116) | | | (62,116) | | | (65,880) | | |
| 29 | Series K preferred share issuance costs | - | | | - | | | (9,033) | | |
| 30 | NET INCOME (LOSS) attributable to common shareholders | $ | 43,378 | | | $ | (408,615) | | $ | 101,086 |
| 37 | INCOME (LOSS) PER COMMON SHARE - BASIC: | | | | | | | | | |
| 38 | Net income (loss) per common share | $ | 0.23 | | | $ | (2.13) | | $ | 0.53 |
| 39 | Weighted average shares outstanding | 191,005 | | | 191,775 | | | 191,551 | | |
| 41 | INCOME (LOSS) PER COMMON SHARE - DILUTED: | | | | | | | | | |
| 42 | Net income (loss) per common share | $ | 0.23 | | | $ | (2.13) | | $ | 0.53 |
| 43 | Weighted average shares outstanding | 191,856 | | | 191,775 | | | 192,122 | | |
See notes to consolidated financial statements.
63
,
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:--------------------------------|:--------|:-----|:----------|:-----|:----------|:---------|:---|:--------|
| 1 | (Amounts in thousands) | For the Year Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income (loss) | $ | 32,888 | | | $ | (382,612) | | $ | 207,553 |
| 4 | Other comprehensive (loss) income: | | | | | | | | | |
| 5 | Change in fair value of interest rate swaps and other | (112,051) | | | 190,493 | | | 51,338 | | |
| 6 | Other comprehensive (loss) income of nonconsolidated subsidiaries | (8,286) | | | 18,874 | | | 10,275 | | |
| 8 | Comprehensive (loss) income | (87,449) | | | (173,245) | | | 269,166 | | |
| 9 | Less comprehensive loss (income) attributable to noncontrolling interests | 85,665 | | | 19,247 | | | (35,602) | | |
| 10 | Comprehensive (loss) income attributable to Vornado | $ | (1,784) | | | $ | (153,998) | | $ | 233,564 |
See notes to consolidated financial statements.
64
|
SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 86:
Simon Property Group, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">December 31, </td><td> </td><td colspan="2">December 31, </td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td colspan="2">2022</td></tr><tr><td>ASSETS:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Investment properties, at cost</td><td></td><td>$</td><td> 39,285,138</td><td></td><td>$</td><td> 38,326,912</td></tr><tr><td>Less - accumulated depreciation</td><td></td><td> </td><td> 17,716,788</td><td></td><td> </td><td> 16,563,749</td></tr><tr><td></td><td></td><td> </td><td> 21,568,350</td><td></td><td> </td><td> 21,763,163</td></tr><tr><td>Cash and cash equivalents</td><td></td><td> </td><td> 1,168,991</td><td></td><td> </td><td> 621,628</td></tr><tr><td>Short-term investments</td><td></td><td></td><td> 1,000,000</td><td></td><td></td><td> -</td></tr><tr><td>Tenant receivables and accrued revenue, net</td><td></td><td> </td><td> 826,126</td><td></td><td> </td><td> 823,540</td></tr><tr><td>Investment in TRG, at equity</td><td></td><td> </td><td> 3,049,719</td><td></td><td> </td><td> 3,074,345</td></tr><tr><td>Investment in Klépierre, at equity</td><td></td><td> </td><td> 1,527,872</td><td></td><td> </td><td> 1,561,112</td></tr><tr><td>Investment in other unconsolidated entities, at equity</td><td></td><td></td><td> 3,540,648</td><td></td><td></td><td> 3,511,263</td></tr><tr><td>Right-of-use assets, net</td><td></td><td></td><td> 484,073</td><td></td><td></td><td> 496,930</td></tr><tr><td>Deferred costs and other assets</td><td></td><td> </td><td> 1,117,716</td><td></td><td> </td><td> 1,159,293</td></tr><tr><td>Total assets</td><td></td><td>$</td><td> 34,283,495</td><td></td><td>$</td><td> 33,011,274</td></tr><tr><td>LIABILITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Mortgages and unsecured indebtedness</td><td></td><td>$</td><td> 26,033,423</td><td></td><td>$</td><td> 24,960,286</td></tr><tr><td>Accounts payable, accrued expenses, intangibles, and deferred revenues</td><td></td><td> </td><td> 1,693,248</td><td></td><td> </td><td> 1,491,583</td></tr><tr><td>Cash distributions and losses in unconsolidated entities, at equity</td><td></td><td> </td><td> 1,760,922</td><td></td><td> </td><td> 1,699,828</td></tr><tr><td>Dividend payable</td><td></td><td></td><td> 1,842</td><td></td><td></td><td> 1,997</td></tr><tr><td>Lease liabilities</td><td></td><td></td><td> 484,861</td><td></td><td></td><td> 497,953</td></tr><tr><td>Other liabilities</td><td></td><td> </td><td> 621,601</td><td></td><td> </td><td> 535,736</td></tr><tr><td>Total liabilities</td><td></td><td> </td><td> 30,595,897</td><td></td><td> </td><td> 29,187,383</td></tr><tr><td>Commitments and contingencies</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Limited partners' preferred interest in the Operating Partnership and noncontrolling redeemable interests </td><td></td><td> </td><td> 195,949</td><td></td><td> </td><td> 212,239</td></tr><tr><td>EQUITY:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Stockholders' Equity</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Capital stock (850,000,000 total shares authorized, $0.0001 par value, 238,000,000 shares of excess common stock, 100,000,000 authorized shares of preferred stock):</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Series J 83/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, 796,948 issued and outstanding with a liquidation value of $39,847</td><td></td><td> </td><td> 41,106</td><td></td><td> </td><td> 41,435</td></tr><tr><td>Common stock, $0.0001 par value, 511,990,000 shares authorized, 342,895,886 and 342,905,419 issued and outstanding, respectively</td><td></td><td> </td><td> 33</td><td></td><td> </td><td> 34</td></tr><tr><td>Class B common stock, $0.0001 par value, 10,000 shares authorized, 8,000 issued and outstanding</td><td></td><td> </td><td> -</td><td></td><td> </td><td> -</td></tr><tr><td>Capital in excess of par value</td><td></td><td> </td><td> 11,406,236</td><td></td><td> </td><td> 11,232,881</td></tr><tr><td>Accumulated deficit</td><td></td><td> </td><td> (6,095,576)</td><td></td><td> </td><td> (5,926,974)</td></tr><tr><td>Accumulated other comprehensive loss</td><td></td><td> </td><td> (172,787)</td><td></td><td> </td><td> (164,873)</td></tr><tr><td>Common stock held in treasury, at cost, 16,983,364 and 15,959,628 shares, respectively</td><td></td><td> </td><td> (2,156,178)</td><td></td><td> </td><td> (2,043,979)</td></tr><tr><td>Total stockholders' equity</td><td></td><td> </td><td> 3,022,834</td><td></td><td> </td><td> 3,138,524</td></tr><tr><td>Noncontrolling interests</td><td></td><td> </td><td> 468,815</td><td></td><td> </td><td> 473,128</td></tr><tr><td>Total equity</td><td></td><td> </td><td> 3,491,649</td><td></td><td> </td><td> 3,611,652</td></tr><tr><td>Total liabilities and equity</td><td></td><td>$</td><td> 34,283,495</td><td></td><td>$</td><td> 33,011,274</td></tr></table>The accompanying notes are an integral part of these statements.
86
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 87:
Simon Property Group, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Dollars in thousands, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td colspan="8">For the Year</td></tr><tr><td></td><td></td><td colspan="8">Ended December 31, </td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td colspan="2">2022</td><td> </td><td colspan="2">2021</td></tr><tr><td>REVENUE:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Lease income</td><td></td><td>$</td><td> 5,164,335</td><td></td><td>$</td><td> 4,905,175</td><td></td><td>$</td><td> 4,736,719</td></tr><tr><td>Management fees and other revenues</td><td></td><td> </td><td> 125,995</td><td></td><td> </td><td> 116,904</td><td></td><td> </td><td> 106,483</td></tr><tr><td>Other income</td><td></td><td> </td><td> 368,506</td><td></td><td> </td><td> 269,368</td><td></td><td> </td><td> 273,587</td></tr><tr><td>Total revenue</td><td></td><td> </td><td> 5,658,836</td><td></td><td> </td><td> 5,291,447</td><td></td><td> </td><td> 5,116,789</td></tr><tr><td>EXPENSES:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Property operating</td><td></td><td> </td><td> 489,346</td><td></td><td> </td><td> 464,135</td><td></td><td> </td><td> 415,720</td></tr><tr><td>Depreciation and amortization</td><td></td><td> </td><td> 1,262,107</td><td></td><td> </td><td> 1,227,371</td><td></td><td> </td><td> 1,262,715</td></tr><tr><td>Real estate taxes</td><td></td><td> </td><td> 441,783</td><td></td><td> </td><td> 443,224</td><td></td><td> </td><td> 458,953</td></tr><tr><td>Repairs and maintenance</td><td></td><td> </td><td> 97,257</td><td></td><td> </td><td> 93,595</td><td></td><td> </td><td> 96,391</td></tr><tr><td>Advertising and promotion</td><td></td><td> </td><td> 127,346</td><td></td><td> </td><td> 107,793</td><td></td><td> </td><td> 114,303</td></tr><tr><td>Home and regional office costs</td><td></td><td> </td><td> 207,618</td><td></td><td> </td><td> 184,592</td><td></td><td> </td><td> 184,660</td></tr><tr><td>General and administrative</td><td></td><td> </td><td> 38,513</td><td></td><td> </td><td> 34,971</td><td></td><td> </td><td> 30,339</td></tr><tr><td>Other</td><td></td><td> </td><td> 187,844</td><td></td><td> </td><td> 152,213</td><td></td><td> </td><td> 140,518</td></tr><tr><td>Total operating expenses</td><td></td><td> </td><td> 2,851,814</td><td></td><td> </td><td> 2,707,894</td><td></td><td> </td><td> 2,703,599</td></tr><tr><td>OPERATING INCOME BEFORE OTHER ITEMS</td><td></td><td> </td><td> 2,807,022</td><td></td><td> </td><td> 2,583,553</td><td></td><td> </td><td> 2,413,190</td></tr><tr><td>Interest expense</td><td></td><td> </td><td> (854,648)</td><td></td><td> </td><td> (761,253)</td><td></td><td> </td><td> (795,712)</td></tr><tr><td>Loss on extinguishment of debt</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td><td></td><td></td><td> (51,841)</td></tr><tr><td>Gain on disposal, exchange, or revaluation of equity interests, net (Notes 3 and 6)</td><td></td><td></td><td> 362,019</td><td></td><td></td><td> 121,177</td><td></td><td></td><td> 178,672</td></tr><tr><td>Income and other tax expense</td><td></td><td> </td><td> (81,874)</td><td></td><td> </td><td> (83,512)</td><td></td><td> </td><td> (157,199)</td></tr><tr><td>Income from unconsolidated entities</td><td></td><td> </td><td> 375,663</td><td></td><td> </td><td> 647,977</td><td></td><td> </td><td> 782,837</td></tr><tr><td>Unrealized gains (losses) in fair value of publicly traded equity instruments and derivative instrument, net</td><td></td><td></td><td> 11,892</td><td></td><td></td><td> (61,204)</td><td></td><td></td><td> (8,095)</td></tr><tr><td>(Loss) gain on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net</td><td></td><td> </td><td> (3,056)</td><td></td><td> </td><td> 5,647</td><td></td><td> </td><td> 206,855</td></tr><tr><td>CONSOLIDATED NET INCOME</td><td></td><td></td><td> 2,617,018</td><td></td><td></td><td> 2,452,385</td><td></td><td></td><td> 2,568,707</td></tr><tr><td>Net income attributable to noncontrolling interests</td><td></td><td> </td><td> 333,892</td><td></td><td> </td><td> 312,850</td><td></td><td> </td><td> 319,076</td></tr><tr><td>Preferred dividends</td><td></td><td> </td><td> 3,337</td><td></td><td> </td><td> 3,337</td><td></td><td> </td><td> 3,337</td></tr><tr><td>NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS</td><td></td><td>$</td><td> 2,279,789</td><td></td><td>$</td><td> 2,136,198</td><td></td><td>$</td><td> 2,246,294</td></tr><tr><td>BASIC AND DILUTED EARNINGS PER COMMON SHARE:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income attributable to common stockholders</td><td></td><td>$</td><td> 6.98</td><td></td><td>$</td><td> 6.52</td><td></td><td>$</td><td> 6.84</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated Net Income</td><td></td><td>$</td><td> 2,617,018</td><td></td><td>$</td><td> 2,452,385</td><td></td><td>$</td><td> 2,568,707</td></tr><tr><td>Unrealized gain on derivative hedge agreements</td><td></td><td> </td><td> 18,350</td><td></td><td> </td><td> 54,808</td><td></td><td> </td><td> 51,114</td></tr><tr><td>Net gain reclassified from accumulated other comprehensive loss into earnings</td><td></td><td> </td><td> (4,084)</td><td></td><td> </td><td> (1,595)</td><td></td><td> </td><td> (7,285)</td></tr><tr><td>Currency translation adjustments</td><td></td><td> </td><td> (26,513)</td><td></td><td> </td><td> (28,119)</td><td></td><td> </td><td> (38,772)</td></tr><tr><td>Changes in available-for-sale securities and other</td><td></td><td> </td><td> 2,254</td><td></td><td> </td><td> (2,009)</td><td></td><td> </td><td> (1,014)</td></tr><tr><td>Comprehensive income</td><td></td><td> </td><td> 2,607,025</td><td></td><td> </td><td> 2,475,470</td><td></td><td> </td><td> 2,572,750</td></tr><tr><td>Comprehensive income attributable to noncontrolling interests</td><td></td><td> </td><td> 331,814</td><td></td><td> </td><td> 315,622</td><td></td><td> </td><td> 319,629</td></tr><tr><td>Comprehensive income attributable to common stockholders</td><td></td><td>$</td><td> 2,275,211</td><td></td><td>$</td><td> 2,159,848</td><td></td><td>$</td><td> 2,253,121</td></tr></table>
The accompanying notes are an integral part of these statements.
87
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 88:
Simon Property Group, Inc.
Consolidated Statements of Cash Flows
(Dollars in thousands)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td colspan="8">For the Year</td></tr><tr><td></td><td></td><td colspan="8">Ended December 31, </td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td colspan="2">2022</td><td> </td><td colspan="2">2021</td></tr><tr><td>CASH FLOWS FROM OPERATING ACTIVITIES:</td><td></td><td></td><td> </td><td> </td><td></td><td> </td><td> </td><td></td><td> </td></tr><tr><td>Consolidated Net Income</td><td></td><td>$</td><td> 2,617,018</td><td></td><td>$</td><td> 2,452,385</td><td></td><td>$</td><td> 2,568,707</td></tr><tr><td>Adjustments to reconcile consolidated net income to net cash provided by operating activities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Depreciation and amortization</td><td></td><td> </td><td> 1,333,584</td><td></td><td> </td><td> 1,292,113</td><td></td><td> </td><td> 1,325,895</td></tr><tr><td>Loss on debt extinguishment</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td><td></td><td></td><td> 51,841</td></tr><tr><td>Loss (gain) on acquisition of controlling interests, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net</td><td></td><td> </td><td> 3,056</td><td></td><td> </td><td> (5,647)</td><td></td><td> </td><td> (206,855)</td></tr><tr><td>Gain on disposal, exchange, or revaluation of equity interests, net</td><td></td><td></td><td> (362,019)</td><td></td><td></td><td> (121,177)</td><td></td><td></td><td> (178,672)</td></tr><tr><td>Unrealized (gains) losses in fair value of publicly traded equity instruments and derivative instrument, net</td><td></td><td></td><td> (11,892)</td><td></td><td></td><td> 61,204</td><td></td><td></td><td> 8,095</td></tr><tr><td>Straight-line lease loss</td><td></td><td> </td><td> 9,866</td><td></td><td> </td><td> 25,234</td><td></td><td> </td><td> 22,619</td></tr><tr><td>Income from unconsolidated entities</td><td></td><td> </td><td> (375,663)</td><td></td><td> </td><td> (647,977)</td><td></td><td> </td><td> (782,837)</td></tr><tr><td>Distributions of income from unconsolidated entities</td><td></td><td> </td><td> 458,709</td><td></td><td> </td><td> 561,583</td><td></td><td> </td><td> 436,881</td></tr><tr><td>Changes in assets and liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Tenant receivables and accrued revenue, net</td><td></td><td> </td><td> (11,802)</td><td></td><td> </td><td> 63,350</td><td></td><td> </td><td> 265,352</td></tr><tr><td>Deferred costs and other assets</td><td></td><td> </td><td> 24,423</td><td></td><td> </td><td> (104,567)</td><td></td><td> </td><td> (77,592)</td></tr><tr><td>Accounts payable, accrued expenses, intangibles, deferred revenues and other</td><td></td><td> </td><td> 245,513</td><td></td><td> </td><td> 190,103</td><td></td><td> </td><td> 203,968</td></tr><tr><td>Net cash provided by operating activities</td><td></td><td> </td><td> 3,930,793</td><td></td><td> </td><td> 3,766,604</td><td></td><td> </td><td> 3,637,402</td></tr><tr><td>CASH FLOWS FROM INVESTING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Acquisitions</td><td></td><td> </td><td> (65,829)</td><td></td><td> </td><td> (203,364)</td><td></td><td> </td><td> (257,080)</td></tr><tr><td>Funding of loans to related parties</td><td></td><td> </td><td> (15,250)</td><td></td><td> </td><td> (132,857)</td><td></td><td> </td><td> (15,848)</td></tr><tr><td>Repayments of loans to related parties</td><td></td><td> </td><td> 16,188</td><td></td><td> </td><td> 82,371</td><td></td><td> </td><td> 14,027</td></tr><tr><td>Capital expenditures, net</td><td></td><td> </td><td> (793,283)</td><td></td><td> </td><td> (650,024)</td><td></td><td> </td><td> (527,935)</td></tr><tr><td>Cash impact from the consolidation of properties</td><td></td><td> </td><td> -</td><td></td><td> </td><td> 20,988</td><td></td><td> </td><td> 5,595</td></tr><tr><td>Net proceeds from sale of assets</td><td></td><td> </td><td> -</td><td></td><td> </td><td> 59,658</td><td></td><td> </td><td> 3,000</td></tr><tr><td>Investments in unconsolidated entities</td><td></td><td> </td><td> (83,961)</td><td></td><td> </td><td> (235,792)</td><td></td><td> </td><td> (56,901)</td></tr><tr><td>Purchase of short-term investments</td><td></td><td></td><td> (1,000,000)</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td></tr><tr><td>Purchase of equity instruments</td><td></td><td> </td><td> (31,742)</td><td></td><td> </td><td> (66,140)</td><td></td><td> </td><td> (33,605)</td></tr><tr><td>Proceeds from sales of equity instruments</td><td></td><td> </td><td> 304,129</td><td></td><td> </td><td> 26,086</td><td></td><td> </td><td> 65,504</td></tr><tr><td>Insurance proceeds for property restoration</td><td></td><td></td><td> 7,427</td><td></td><td></td><td> -</td><td></td><td></td><td> 7,200</td></tr><tr><td>Distributions of capital from unconsolidated entities and other </td><td></td><td> </td><td> 299,140</td><td></td><td> </td><td> 472,510</td><td></td><td> </td><td> 243,279</td></tr><tr><td>Net cash used in investing activities</td><td></td><td> </td><td> (1,363,181)</td><td></td><td> </td><td> (626,564)</td><td></td><td> </td><td> (552,764)</td></tr><tr><td>CASH FLOWS FROM FINANCING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Proceeds from sales of common stock and other, net of transaction costs</td><td></td><td> </td><td> (328)</td><td></td><td> </td><td> (328)</td><td></td><td> </td><td> (328)</td></tr><tr><td>Purchase of shares related to stock grant recipients' tax withholdings</td><td></td><td></td><td> (5,795)</td><td></td><td></td><td> (6,788)</td><td></td><td></td><td> (2,318)</td></tr><tr><td>Redemption of limited partner units</td><td></td><td> </td><td> (13,524)</td><td></td><td> </td><td> (1,852)</td><td></td><td> </td><td> (2,220)</td></tr><tr><td>Purchase of treasury stock</td><td></td><td></td><td> (140,593)</td><td></td><td></td><td> (180,387)</td><td></td><td></td><td> -</td></tr><tr><td>Preferred unit redemptions</td><td></td><td></td><td> (2,500)</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td></tr><tr><td>Proceeds from the special purpose acquisition company IPO, net of transaction costs</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td><td></td><td></td><td> 338,121</td></tr><tr><td>Proceeds from (establishment of) trust account for special purpose acquisition company </td><td></td><td> </td><td> -</td><td></td><td> </td><td> 345,000</td><td></td><td> </td><td> (345,000)</td></tr><tr><td>Liquidation of special purpose acquisition company</td><td></td><td> </td><td> -</td><td></td><td> </td><td> (345,000)</td><td></td><td> </td><td> -</td></tr><tr><td>Distributions to noncontrolling interest holders in properties</td><td></td><td> </td><td> (41,956)</td><td></td><td> </td><td> (27,741)</td><td></td><td> </td><td> (5,024)</td></tr><tr><td>Contributions from noncontrolling interest holders in properties</td><td></td><td> </td><td> 9,813</td><td></td><td> </td><td> 29,681</td><td></td><td> </td><td> 20,902</td></tr><tr><td>Preferred distributions of the Operating Partnership</td><td></td><td> </td><td> (1,900)</td><td></td><td> </td><td> (1,915)</td><td></td><td> </td><td> (1,915)</td></tr><tr><td>Distributions to stockholders and preferred dividends</td><td></td><td> </td><td> (2,439,233)</td><td></td><td> </td><td> (2,264,007)</td><td></td><td> </td><td> (2,351,764)</td></tr><tr><td>Distributions to limited partners</td><td></td><td> </td><td> (355,548)</td><td></td><td> </td><td> (326,550)</td><td></td><td> </td><td> (337,021)</td></tr><tr><td>Cash paid to extinguish debt</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td><td></td><td></td><td> (50,156)</td></tr><tr><td>Proceeds from issuance of debt, net of transaction costs</td><td></td><td> </td><td> 3,629,840</td><td></td><td> </td><td> 3,449,403</td><td></td><td> </td><td> 9,251,217</td></tr><tr><td>Repayments of debt</td><td></td><td> </td><td> (2,658,525)</td><td></td><td> </td><td> (3,721,864)</td><td></td><td> </td><td> (10,076,809)</td></tr><tr><td>Net cash used in financing activities</td><td></td><td> </td><td> (2,020,249)</td><td></td><td> </td><td> (3,052,348)</td><td></td><td> </td><td> (3,562,315)</td></tr><tr><td>INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</td><td></td><td> </td><td> 547,363</td><td></td><td> </td><td> 87,692</td><td></td><td> </td><td> (477,677)</td></tr><tr><td>CASH AND CASH EQUIVALENTS, beginning of period</td><td></td><td> </td><td> 621,628</td><td></td><td> </td><td> 533,936</td><td></td><td> </td><td> 1,011,613</td></tr><tr><td>CASH AND CASH EQUIVALENTS, end of period</td><td></td><td>$</td><td> 1,168,991</td><td></td><td>$</td><td> 621,628</td><td></td><td>$</td><td> 533,936</td></tr></table>The accompanying notes are an integral part of these statements.
88
, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 89:
Simon Property Group, Inc.
Consolidated Statements of Equity
(Dollars in thousands)
<table><tr><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th></tr><tr><th></th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th><th colspan="2">Accumulated Other</th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th></tr><tr><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th colspan="2">Comprehensive</th><th></th><th colspan="2">Capital in</th><th></th><th></th><th></th><th></th><th colspan="2">Common Stock</th><th></th><th></th><th></th><th></th><th></th><th></th><th> </th></tr><tr><th></th><th></th><th colspan="2">Preferred</th><th></th><th colspan="2">Common</th><th></th><th colspan="2">Income</th><th></th><th colspan="2">Excess of Par</th><th></th><th colspan="2">Accumulated</th><th></th><th colspan="2">Held in</th><th></th><th colspan="2">Noncontrolling</th><th></th><th colspan="2">Total</th><th> </th></tr><tr><th></th><th></th><th colspan="2">Stock</th><th></th><th colspan="2">Stock</th><th></th><th colspan="2">(Loss)</th><th></th><th colspan="2">Value</th><th></th><th colspan="2">Deficit</th><th></th><th colspan="2">Treasury</th><th></th><th colspan="2">Interests</th><th></th><th colspan="2">Equity</th><th> </th></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Balance at December 31, 2020</td><td></td><td>$</td><td> 42,091</td><td></td><td>$</td><td> 34</td><td></td><td>$</td><td> (188,675)</td><td></td><td>$</td><td> 11,179,688</td><td></td><td>$</td><td> (6,102,314)</td><td></td><td>$</td><td> (1,891,352)</td><td></td><td>$</td><td> 432,874</td><td></td><td>$</td><td> 3,472,346</td><td></td></tr><tr><td>Exchange of limited partner units (58,571 common shares, Note 8)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 539</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (539)</td><td></td><td></td><td> -</td><td></td></tr><tr><td>Series J preferred stock premium amortization</td><td></td><td></td><td> (328)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (328)</td><td></td></tr><tr><td>Stock incentive program (80,012 common shares, net)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (9,229)</td><td></td><td></td><td></td><td></td><td></td><td> 9,229</td><td></td><td></td><td></td><td></td><td></td><td> -</td><td></td></tr><tr><td>Redemption of limited partner units (15,705 units)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (2,061)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (159)</td><td></td><td></td><td> (2,220)</td><td></td></tr><tr><td>Amortization of stock incentive</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 19,673</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 19,673</td><td></td></tr><tr><td>Long-term incentive performance units</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 17,755</td><td></td><td></td><td> 17,755</td><td></td></tr><tr><td>Issuance of unit equivalents and other (20,374 common shares repurchased)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 5,760</td><td></td><td></td><td> (44,319)</td><td></td><td></td><td> (2,318)</td><td></td><td></td><td> 18,494</td><td></td><td></td><td> (22,383)</td><td></td></tr><tr><td>Unrealized gain on hedging activities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 44,676</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 6,438</td><td></td><td></td><td> 51,114</td><td></td></tr><tr><td>Currency translation adjustments</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (33,932)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (4,840)</td><td></td><td></td><td> (38,772)</td><td></td></tr><tr><td>Changes in available-for-sale securities and other</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (886)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (128)</td><td></td><td></td><td> (1,014)</td><td></td></tr><tr><td>Net gain reclassified from accumulated other comprehensive loss into earnings</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (6,369)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (916)</td><td></td><td></td><td> (7,285)</td><td></td></tr><tr><td>Other comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 3,489</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 554</td><td></td><td> </td><td> 4,043</td><td></td></tr><tr><td>Adjustment to limited partners' interest from change in ownership in the Operating Partnership</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 18,620</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (18,620)</td><td></td><td></td><td> -</td><td></td></tr><tr><td>Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,926,706)</td><td></td><td></td><td></td><td></td><td></td><td> (276,698)</td><td></td><td></td><td> (2,203,404)</td><td></td></tr><tr><td>Distribution to other noncontrolling interest partners</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (2,708)</td><td></td><td></td><td> (2,708)</td><td></td></tr><tr><td>Net income, excluding $1,915 attributable to preferred interests in the Operating Partnership and a $3,419 loss attributable to noncontrolling redeemable interests in properties</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 2,249,631</td><td></td><td></td><td></td><td></td><td></td><td> 320,580</td><td></td><td></td><td> 2,570,211</td><td></td></tr><tr><td>Balance at December 31, 2021</td><td></td><td>$</td><td> 41,763</td><td></td><td>$</td><td> 34</td><td></td><td>$</td><td> (185,186)</td><td></td><td>$</td><td> 11,212,990</td><td></td><td>$</td><td> (5,823,708)</td><td></td><td>$</td><td> (1,884,441)</td><td></td><td>$</td><td> 491,533</td><td></td><td>$</td><td> 3,852,985</td><td></td></tr><tr><td>Exchange of limited partner units (2,680 common shares, Note 8)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 27</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (27)</td><td></td><td></td><td> -</td><td></td></tr><tr><td>Series J preferred stock premium amortization</td><td></td><td></td><td> (328)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (328)</td><td></td></tr><tr><td>Stock incentive program (208,063 common shares, net)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (27,637)</td><td></td><td></td><td></td><td></td><td></td><td> 27,637</td><td></td><td></td><td></td><td></td><td></td><td> -</td><td></td></tr><tr><td>Redemption of limited partner units (14,740 units)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,708)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (144)</td><td></td><td></td><td> (1,852)</td><td></td></tr><tr><td>Amortization of stock incentive</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 23,670</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 23,670</td><td></td></tr><tr><td>Treasury stock purchase (1,830,022 shares)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (180,387)</td><td></td><td></td><td></td><td></td><td></td><td> (180,387)</td><td></td></tr><tr><td>Long-term incentive performance units</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 14,845</td><td></td><td></td><td> 14,845</td><td></td></tr><tr><td>Issuance of unit equivalents and other (46,555 common shares repurchased)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (2,769)</td><td></td><td></td><td> 21,206</td><td></td><td></td><td> (6,788)</td><td></td><td></td><td> 10,600</td><td></td><td></td><td> 22,249</td><td></td></tr><tr><td>Unrealized gain on hedging activities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 47,888</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 6,920</td><td></td><td></td><td> 54,808</td><td></td></tr><tr><td>Currency translation adjustments</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (24,427)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (3,692)</td><td></td><td></td><td> (28,119)</td><td></td></tr><tr><td>Changes in available-for-sale securities and other</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,755)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (254)</td><td></td><td></td><td> (2,009)</td><td></td></tr><tr><td>Net gain reclassified from accumulated other comprehensive loss into earnings</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,393)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (202)</td><td></td><td></td><td> (1,595)</td><td></td></tr><tr><td>Other comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 20,313</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 2,772</td><td></td><td></td><td> 23,085</td><td></td></tr><tr><td>Adjustment to limited partners' interest from change in ownership in the Operating Partnership</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 28,308</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (28,308)</td><td></td><td></td><td> -</td><td></td></tr><tr><td>Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (2,264,007)</td><td></td><td></td><td></td><td></td><td></td><td> (326,550)</td><td></td><td></td><td> (2,590,557)</td><td></td></tr><tr><td>Distribution to other noncontrolling interest partners</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,362)</td><td></td><td></td><td> (1,362)</td><td></td></tr><tr><td>Net income, excluding $1,915 attributable to preferred interests in the Operating Partnership and $1,166 attributable to noncontrolling redeemable interests in properties</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 2,139,535</td><td></td><td></td><td></td><td></td><td></td><td> 309,769</td><td></td><td></td><td> 2,449,304</td><td></td></tr><tr><td>Balance at December 31, 2022</td><td></td><td>$</td><td> 41,435</td><td></td><td>$</td><td> 34</td><td></td><td>$</td><td> (164,873)</td><td></td><td>$</td><td> 11,232,881</td><td></td><td>$</td><td> (5,926,974)</td><td></td><td>$</td><td> (2,043,979)</td><td></td><td>$</td><td> 473,128</td><td></td><td>$</td><td> 3,611,652</td><td></td></tr></table>89
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 63:
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands, except per share amounts)</td><td colspan="15">For the Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUES:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Rental revenues</td><td>$</td><td>1,607,486 </td><td></td><td colspan="3"></td><td>$</td><td>1,607,685 </td><td></td><td colspan="3"></td><td>$</td><td>1,424,531 </td><td></td></tr><tr><td colspan="3">Fee and other income</td><td colspan="2">203,677 </td><td></td><td colspan="3"></td><td colspan="2">192,310 </td><td></td><td colspan="3"></td><td colspan="2">164,679 </td><td></td></tr><tr><td colspan="3">Total revenues</td><td colspan="2">1,811,163 </td><td></td><td colspan="3"></td><td colspan="2">1,799,995 </td><td></td><td colspan="3"></td><td colspan="2">1,589,210 </td><td></td></tr><tr><td colspan="3">EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating</td><td colspan="2">(905,158)</td><td></td><td colspan="3"></td><td colspan="2">(873,911)</td><td></td><td colspan="3"></td><td colspan="2">(797,315)</td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">(434,273)</td><td></td><td colspan="3"></td><td colspan="2">(504,502)</td><td></td><td colspan="3"></td><td colspan="2">(412,347)</td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">(162,883)</td><td></td><td colspan="3"></td><td colspan="2">(133,731)</td><td></td><td colspan="3"></td><td colspan="2">(134,545)</td><td></td></tr><tr><td colspan="3">(Expense) benefit from deferred compensation plan liability</td><td colspan="2">(12,162)</td><td></td><td colspan="3"></td><td colspan="2">9,617 </td><td></td><td colspan="3"></td><td colspan="2">(9,847)</td><td></td></tr><tr><td colspan="3">Impairment losses, transaction related costs and other</td><td colspan="2">(50,691)</td><td></td><td colspan="3"></td><td colspan="2">(31,722)</td><td></td><td colspan="3"></td><td colspan="2">(13,815)</td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="2">(1,565,167)</td><td></td><td colspan="3"></td><td colspan="2">(1,534,249)</td><td></td><td colspan="3"></td><td colspan="2">(1,367,869)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income (loss) from partially owned entities</td><td colspan="2">38,689 </td><td></td><td colspan="3"></td><td colspan="2">(461,351)</td><td></td><td colspan="3"></td><td colspan="2">130,517 </td><td></td></tr><tr><td colspan="3">Income from real estate fund investments</td><td colspan="2">1,590 </td><td></td><td colspan="3"></td><td colspan="2">3,541 </td><td></td><td colspan="3"></td><td colspan="2">11,066 </td><td></td></tr><tr><td colspan="3">Interest and other investment income, net</td><td colspan="2">41,697 </td><td></td><td colspan="3"></td><td colspan="2">19,869 </td><td></td><td colspan="3"></td><td colspan="2">4,612 </td><td></td></tr><tr><td colspan="3">Income (loss) from deferred compensation plan assets</td><td colspan="2">12,162 </td><td></td><td colspan="3"></td><td colspan="2">(9,617)</td><td></td><td colspan="3"></td><td colspan="2">9,847 </td><td></td></tr><tr><td colspan="3">Interest and debt expense</td><td colspan="2">(349,223)</td><td></td><td colspan="3"></td><td colspan="2">(279,765)</td><td></td><td colspan="3"></td><td colspan="2">(231,096)</td><td></td></tr><tr><td colspan="3">Net gains on disposition of wholly owned and partially owned assets</td><td colspan="2">71,199 </td><td></td><td colspan="3"></td><td colspan="2">100,625 </td><td></td><td colspan="3"></td><td colspan="2">50,770 </td><td></td></tr><tr><td colspan="3">Income (loss) before income taxes</td><td colspan="2">62,110 </td><td></td><td colspan="3"></td><td colspan="2">(360,952)</td><td></td><td colspan="3"></td><td colspan="2">197,057 </td><td></td></tr><tr><td colspan="3">Income tax (expense) benefit</td><td colspan="2">(29,222)</td><td></td><td colspan="3"></td><td colspan="2">(21,660)</td><td></td><td colspan="3"></td><td colspan="2">10,496 </td><td></td></tr><tr><td colspan="3">Net income (loss) </td><td colspan="2">32,888 </td><td></td><td colspan="3"></td><td colspan="2">(382,612)</td><td></td><td colspan="3"></td><td colspan="2">207,553 </td><td></td></tr><tr><td colspan="3">Less net loss (income) attributable to noncontrolling interests in:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Consolidated subsidiaries</td><td colspan="2">75,967 </td><td></td><td colspan="3"></td><td colspan="2">5,737 </td><td></td><td colspan="3"></td><td colspan="2">(24,014)</td><td></td></tr><tr><td colspan="3">Operating Partnership</td><td colspan="2">(3,361)</td><td></td><td colspan="3"></td><td colspan="2">30,376 </td><td></td><td colspan="3"></td><td colspan="2">(7,540)</td><td></td></tr><tr><td colspan="3">Net income (loss) attributable to Vornado</td><td colspan="2">105,494 </td><td></td><td colspan="3"></td><td colspan="2">(346,499)</td><td></td><td colspan="3"></td><td colspan="2">175,999 </td><td></td></tr><tr><td colspan="3">Preferred share dividends</td><td colspan="2">(62,116)</td><td></td><td colspan="3"></td><td colspan="2">(62,116)</td><td></td><td colspan="3"></td><td colspan="2">(65,880)</td><td></td></tr><tr><td colspan="3">Series K preferred share issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(9,033)</td><td></td></tr><tr><td colspan="3">NET INCOME (LOSS) attributable to common shareholders</td><td>$</td><td>43,378 </td><td></td><td colspan="3"></td><td>$</td><td>(408,615)</td><td></td><td colspan="3"></td><td>$</td><td>101,086 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">INCOME (LOSS) PER COMMON SHARE - BASIC:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Net income (loss) per common share</td><td>$</td><td>0.23 </td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>0.53 </td><td></td></tr><tr><td colspan="3">Weighted average shares outstanding</td><td colspan="2">191,005 </td><td></td><td colspan="3"></td><td colspan="2">191,775 </td><td></td><td colspan="3"></td><td colspan="2">191,551 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">INCOME (LOSS) PER COMMON SHARE - DILUTED:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Net income (loss) per common share</td><td>$</td><td>0.23 </td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>0.53 </td><td></td></tr><tr><td colspan="3">Weighted average shares outstanding</td><td colspan="2">191,856 </td><td></td><td colspan="3"></td><td colspan="2">191,775 </td><td></td><td colspan="3"></td><td colspan="2">192,122 </td><td></td></tr></table>See notes to consolidated financial statements.
63
, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 64:
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="15">For the Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income (loss) </td><td>$</td><td>32,888 </td><td></td><td colspan="3"></td><td>$</td><td>(382,612)</td><td></td><td colspan="3"></td><td>$</td><td>207,553 </td><td></td></tr><tr><td colspan="3">Other comprehensive (loss) income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in fair value of interest rate swaps and other</td><td colspan="2">(112,051)</td><td></td><td colspan="3"></td><td colspan="2">190,493 </td><td></td><td colspan="3"></td><td colspan="2">51,338 </td><td></td></tr><tr><td colspan="3">Other comprehensive (loss) income of nonconsolidated subsidiaries</td><td colspan="2">(8,286)</td><td></td><td colspan="3"></td><td colspan="2">18,874 </td><td></td><td colspan="3"></td><td colspan="2">10,275 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Comprehensive (loss) income </td><td colspan="2">(87,449)</td><td></td><td colspan="3"></td><td colspan="2">(173,245)</td><td></td><td colspan="3"></td><td colspan="2">269,166 </td><td></td></tr><tr><td colspan="3">Less comprehensive loss (income) attributable to noncontrolling interests</td><td colspan="2">85,665 </td><td></td><td colspan="3"></td><td colspan="2">19,247 </td><td></td><td colspan="3"></td><td colspan="2">(35,602)</td><td></td></tr><tr><td colspan="3">Comprehensive (loss) income attributable to Vornado</td><td>$</td><td>(1,784)</td><td></td><td colspan="3"></td><td>$</td><td>(153,998)</td><td></td><td colspan="3"></td><td>$</td><td>233,564 </td><td></td></tr></table>See notes to consolidated financial statements.
64
|
Simon Property Group, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td> </td><td colspan="2">December 31, </td><td> </td><td colspan="2">December 31, </td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td colspan="2">2022</td></tr><tr><td>ASSETS:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Investment properties, at cost</td><td></td><td>$</td><td> 39,285,138</td><td></td><td>$</td><td> 38,326,912</td></tr><tr><td>Less - accumulated depreciation</td><td></td><td> </td><td> 17,716,788</td><td></td><td> </td><td> 16,563,749</td></tr><tr><td></td><td></td><td> </td><td> 21,568,350</td><td></td><td> </td><td> 21,763,163</td></tr><tr><td>Cash and cash equivalents</td><td></td><td> </td><td> 1,168,991</td><td></td><td> </td><td> 621,628</td></tr><tr><td>Short-term investments</td><td></td><td></td><td> 1,000,000</td><td></td><td></td><td> -</td></tr><tr><td>Tenant receivables and accrued revenue, net</td><td></td><td> </td><td> 826,126</td><td></td><td> </td><td> 823,540</td></tr><tr><td>Investment in TRG, at equity</td><td></td><td> </td><td> 3,049,719</td><td></td><td> </td><td> 3,074,345</td></tr><tr><td>Investment in Klépierre, at equity</td><td></td><td> </td><td> 1,527,872</td><td></td><td> </td><td> 1,561,112</td></tr><tr><td>Investment in other unconsolidated entities, at equity</td><td></td><td></td><td> 3,540,648</td><td></td><td></td><td> 3,511,263</td></tr><tr><td>Right-of-use assets, net</td><td></td><td></td><td> 484,073</td><td></td><td></td><td> 496,930</td></tr><tr><td>Deferred costs and other assets</td><td></td><td> </td><td> 1,117,716</td><td></td><td> </td><td> 1,159,293</td></tr><tr><td>Total assets</td><td></td><td>$</td><td> 34,283,495</td><td></td><td>$</td><td> 33,011,274</td></tr><tr><td>LIABILITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Mortgages and unsecured indebtedness</td><td></td><td>$</td><td> 26,033,423</td><td></td><td>$</td><td> 24,960,286</td></tr><tr><td>Accounts payable, accrued expenses, intangibles, and deferred revenues</td><td></td><td> </td><td> 1,693,248</td><td></td><td> </td><td> 1,491,583</td></tr><tr><td>Cash distributions and losses in unconsolidated entities, at equity</td><td></td><td> </td><td> 1,760,922</td><td></td><td> </td><td> 1,699,828</td></tr><tr><td>Dividend payable</td><td></td><td></td><td> 1,842</td><td></td><td></td><td> 1,997</td></tr><tr><td>Lease liabilities</td><td></td><td></td><td> 484,861</td><td></td><td></td><td> 497,953</td></tr><tr><td>Other liabilities</td><td></td><td> </td><td> 621,601</td><td></td><td> </td><td> 535,736</td></tr><tr><td>Total liabilities</td><td></td><td> </td><td> 30,595,897</td><td></td><td> </td><td> 29,187,383</td></tr><tr><td>Commitments and contingencies</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Limited partners' preferred interest in the Operating Partnership and noncontrolling redeemable interests </td><td></td><td> </td><td> 195,949</td><td></td><td> </td><td> 212,239</td></tr><tr><td>EQUITY:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Stockholders' Equity</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Capital stock (850,000,000 total shares authorized, $0.0001 par value, 238,000,000 shares of excess common stock, 100,000,000 authorized shares of preferred stock):</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Series J 83/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, 796,948 issued and outstanding with a liquidation value of $39,847</td><td></td><td> </td><td> 41,106</td><td></td><td> </td><td> 41,435</td></tr><tr><td>Common stock, $0.0001 par value, 511,990,000 shares authorized, 342,895,886 and 342,905,419 issued and outstanding, respectively</td><td></td><td> </td><td> 33</td><td></td><td> </td><td> 34</td></tr><tr><td>Class B common stock, $0.0001 par value, 10,000 shares authorized, 8,000 issued and outstanding</td><td></td><td> </td><td> -</td><td></td><td> </td><td> -</td></tr><tr><td>Capital in excess of par value</td><td></td><td> </td><td> 11,406,236</td><td></td><td> </td><td> 11,232,881</td></tr><tr><td>Accumulated deficit</td><td></td><td> </td><td> (6,095,576)</td><td></td><td> </td><td> (5,926,974)</td></tr><tr><td>Accumulated other comprehensive loss</td><td></td><td> </td><td> (172,787)</td><td></td><td> </td><td> (164,873)</td></tr><tr><td>Common stock held in treasury, at cost, 16,983,364 and 15,959,628 shares, respectively</td><td></td><td> </td><td> (2,156,178)</td><td></td><td> </td><td> (2,043,979)</td></tr><tr><td>Total stockholders' equity</td><td></td><td> </td><td> 3,022,834</td><td></td><td> </td><td> 3,138,524</td></tr><tr><td>Noncontrolling interests</td><td></td><td> </td><td> 468,815</td><td></td><td> </td><td> 473,128</td></tr><tr><td>Total equity</td><td></td><td> </td><td> 3,491,649</td><td></td><td> </td><td> 3,611,652</td></tr><tr><td>Total liabilities and equity</td><td></td><td>$</td><td> 34,283,495</td><td></td><td>$</td><td> 33,011,274</td></tr></table>The accompanying notes are an integral part of these statements.
86
,
Simon Property Group, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Dollars in thousands, except per share amounts)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td colspan="8">For the Year</td></tr><tr><td></td><td></td><td colspan="8">Ended December 31, </td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td colspan="2">2022</td><td> </td><td colspan="2">2021</td></tr><tr><td>REVENUE:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Lease income</td><td></td><td>$</td><td> 5,164,335</td><td></td><td>$</td><td> 4,905,175</td><td></td><td>$</td><td> 4,736,719</td></tr><tr><td>Management fees and other revenues</td><td></td><td> </td><td> 125,995</td><td></td><td> </td><td> 116,904</td><td></td><td> </td><td> 106,483</td></tr><tr><td>Other income</td><td></td><td> </td><td> 368,506</td><td></td><td> </td><td> 269,368</td><td></td><td> </td><td> 273,587</td></tr><tr><td>Total revenue</td><td></td><td> </td><td> 5,658,836</td><td></td><td> </td><td> 5,291,447</td><td></td><td> </td><td> 5,116,789</td></tr><tr><td>EXPENSES:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Property operating</td><td></td><td> </td><td> 489,346</td><td></td><td> </td><td> 464,135</td><td></td><td> </td><td> 415,720</td></tr><tr><td>Depreciation and amortization</td><td></td><td> </td><td> 1,262,107</td><td></td><td> </td><td> 1,227,371</td><td></td><td> </td><td> 1,262,715</td></tr><tr><td>Real estate taxes</td><td></td><td> </td><td> 441,783</td><td></td><td> </td><td> 443,224</td><td></td><td> </td><td> 458,953</td></tr><tr><td>Repairs and maintenance</td><td></td><td> </td><td> 97,257</td><td></td><td> </td><td> 93,595</td><td></td><td> </td><td> 96,391</td></tr><tr><td>Advertising and promotion</td><td></td><td> </td><td> 127,346</td><td></td><td> </td><td> 107,793</td><td></td><td> </td><td> 114,303</td></tr><tr><td>Home and regional office costs</td><td></td><td> </td><td> 207,618</td><td></td><td> </td><td> 184,592</td><td></td><td> </td><td> 184,660</td></tr><tr><td>General and administrative</td><td></td><td> </td><td> 38,513</td><td></td><td> </td><td> 34,971</td><td></td><td> </td><td> 30,339</td></tr><tr><td>Other</td><td></td><td> </td><td> 187,844</td><td></td><td> </td><td> 152,213</td><td></td><td> </td><td> 140,518</td></tr><tr><td>Total operating expenses</td><td></td><td> </td><td> 2,851,814</td><td></td><td> </td><td> 2,707,894</td><td></td><td> </td><td> 2,703,599</td></tr><tr><td>OPERATING INCOME BEFORE OTHER ITEMS</td><td></td><td> </td><td> 2,807,022</td><td></td><td> </td><td> 2,583,553</td><td></td><td> </td><td> 2,413,190</td></tr><tr><td>Interest expense</td><td></td><td> </td><td> (854,648)</td><td></td><td> </td><td> (761,253)</td><td></td><td> </td><td> (795,712)</td></tr><tr><td>Loss on extinguishment of debt</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td><td></td><td></td><td> (51,841)</td></tr><tr><td>Gain on disposal, exchange, or revaluation of equity interests, net (Notes 3 and 6)</td><td></td><td></td><td> 362,019</td><td></td><td></td><td> 121,177</td><td></td><td></td><td> 178,672</td></tr><tr><td>Income and other tax expense</td><td></td><td> </td><td> (81,874)</td><td></td><td> </td><td> (83,512)</td><td></td><td> </td><td> (157,199)</td></tr><tr><td>Income from unconsolidated entities</td><td></td><td> </td><td> 375,663</td><td></td><td> </td><td> 647,977</td><td></td><td> </td><td> 782,837</td></tr><tr><td>Unrealized gains (losses) in fair value of publicly traded equity instruments and derivative instrument, net</td><td></td><td></td><td> 11,892</td><td></td><td></td><td> (61,204)</td><td></td><td></td><td> (8,095)</td></tr><tr><td>(Loss) gain on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net</td><td></td><td> </td><td> (3,056)</td><td></td><td> </td><td> 5,647</td><td></td><td> </td><td> 206,855</td></tr><tr><td>CONSOLIDATED NET INCOME</td><td></td><td></td><td> 2,617,018</td><td></td><td></td><td> 2,452,385</td><td></td><td></td><td> 2,568,707</td></tr><tr><td>Net income attributable to noncontrolling interests</td><td></td><td> </td><td> 333,892</td><td></td><td> </td><td> 312,850</td><td></td><td> </td><td> 319,076</td></tr><tr><td>Preferred dividends</td><td></td><td> </td><td> 3,337</td><td></td><td> </td><td> 3,337</td><td></td><td> </td><td> 3,337</td></tr><tr><td>NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS</td><td></td><td>$</td><td> 2,279,789</td><td></td><td>$</td><td> 2,136,198</td><td></td><td>$</td><td> 2,246,294</td></tr><tr><td>BASIC AND DILUTED EARNINGS PER COMMON SHARE:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income attributable to common stockholders</td><td></td><td>$</td><td> 6.98</td><td></td><td>$</td><td> 6.52</td><td></td><td>$</td><td> 6.84</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated Net Income</td><td></td><td>$</td><td> 2,617,018</td><td></td><td>$</td><td> 2,452,385</td><td></td><td>$</td><td> 2,568,707</td></tr><tr><td>Unrealized gain on derivative hedge agreements</td><td></td><td> </td><td> 18,350</td><td></td><td> </td><td> 54,808</td><td></td><td> </td><td> 51,114</td></tr><tr><td>Net gain reclassified from accumulated other comprehensive loss into earnings</td><td></td><td> </td><td> (4,084)</td><td></td><td> </td><td> (1,595)</td><td></td><td> </td><td> (7,285)</td></tr><tr><td>Currency translation adjustments</td><td></td><td> </td><td> (26,513)</td><td></td><td> </td><td> (28,119)</td><td></td><td> </td><td> (38,772)</td></tr><tr><td>Changes in available-for-sale securities and other</td><td></td><td> </td><td> 2,254</td><td></td><td> </td><td> (2,009)</td><td></td><td> </td><td> (1,014)</td></tr><tr><td>Comprehensive income</td><td></td><td> </td><td> 2,607,025</td><td></td><td> </td><td> 2,475,470</td><td></td><td> </td><td> 2,572,750</td></tr><tr><td>Comprehensive income attributable to noncontrolling interests</td><td></td><td> </td><td> 331,814</td><td></td><td> </td><td> 315,622</td><td></td><td> </td><td> 319,629</td></tr><tr><td>Comprehensive income attributable to common stockholders</td><td></td><td>$</td><td> 2,275,211</td><td></td><td>$</td><td> 2,159,848</td><td></td><td>$</td><td> 2,253,121</td></tr></table>
The accompanying notes are an integral part of these statements.
87
,
Simon Property Group, Inc.
Consolidated Statements of Cash Flows
(Dollars in thousands)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td colspan="8">For the Year</td></tr><tr><td></td><td></td><td colspan="8">Ended December 31, </td></tr><tr><td></td><td> </td><td colspan="2">2023</td><td> </td><td colspan="2">2022</td><td> </td><td colspan="2">2021</td></tr><tr><td>CASH FLOWS FROM OPERATING ACTIVITIES:</td><td></td><td></td><td> </td><td> </td><td></td><td> </td><td> </td><td></td><td> </td></tr><tr><td>Consolidated Net Income</td><td></td><td>$</td><td> 2,617,018</td><td></td><td>$</td><td> 2,452,385</td><td></td><td>$</td><td> 2,568,707</td></tr><tr><td>Adjustments to reconcile consolidated net income to net cash provided by operating activities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Depreciation and amortization</td><td></td><td> </td><td> 1,333,584</td><td></td><td> </td><td> 1,292,113</td><td></td><td> </td><td> 1,325,895</td></tr><tr><td>Loss on debt extinguishment</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td><td></td><td></td><td> 51,841</td></tr><tr><td>Loss (gain) on acquisition of controlling interests, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net</td><td></td><td> </td><td> 3,056</td><td></td><td> </td><td> (5,647)</td><td></td><td> </td><td> (206,855)</td></tr><tr><td>Gain on disposal, exchange, or revaluation of equity interests, net</td><td></td><td></td><td> (362,019)</td><td></td><td></td><td> (121,177)</td><td></td><td></td><td> (178,672)</td></tr><tr><td>Unrealized (gains) losses in fair value of publicly traded equity instruments and derivative instrument, net</td><td></td><td></td><td> (11,892)</td><td></td><td></td><td> 61,204</td><td></td><td></td><td> 8,095</td></tr><tr><td>Straight-line lease loss</td><td></td><td> </td><td> 9,866</td><td></td><td> </td><td> 25,234</td><td></td><td> </td><td> 22,619</td></tr><tr><td>Income from unconsolidated entities</td><td></td><td> </td><td> (375,663)</td><td></td><td> </td><td> (647,977)</td><td></td><td> </td><td> (782,837)</td></tr><tr><td>Distributions of income from unconsolidated entities</td><td></td><td> </td><td> 458,709</td><td></td><td> </td><td> 561,583</td><td></td><td> </td><td> 436,881</td></tr><tr><td>Changes in assets and liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Tenant receivables and accrued revenue, net</td><td></td><td> </td><td> (11,802)</td><td></td><td> </td><td> 63,350</td><td></td><td> </td><td> 265,352</td></tr><tr><td>Deferred costs and other assets</td><td></td><td> </td><td> 24,423</td><td></td><td> </td><td> (104,567)</td><td></td><td> </td><td> (77,592)</td></tr><tr><td>Accounts payable, accrued expenses, intangibles, deferred revenues and other</td><td></td><td> </td><td> 245,513</td><td></td><td> </td><td> 190,103</td><td></td><td> </td><td> 203,968</td></tr><tr><td>Net cash provided by operating activities</td><td></td><td> </td><td> 3,930,793</td><td></td><td> </td><td> 3,766,604</td><td></td><td> </td><td> 3,637,402</td></tr><tr><td>CASH FLOWS FROM INVESTING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Acquisitions</td><td></td><td> </td><td> (65,829)</td><td></td><td> </td><td> (203,364)</td><td></td><td> </td><td> (257,080)</td></tr><tr><td>Funding of loans to related parties</td><td></td><td> </td><td> (15,250)</td><td></td><td> </td><td> (132,857)</td><td></td><td> </td><td> (15,848)</td></tr><tr><td>Repayments of loans to related parties</td><td></td><td> </td><td> 16,188</td><td></td><td> </td><td> 82,371</td><td></td><td> </td><td> 14,027</td></tr><tr><td>Capital expenditures, net</td><td></td><td> </td><td> (793,283)</td><td></td><td> </td><td> (650,024)</td><td></td><td> </td><td> (527,935)</td></tr><tr><td>Cash impact from the consolidation of properties</td><td></td><td> </td><td> -</td><td></td><td> </td><td> 20,988</td><td></td><td> </td><td> 5,595</td></tr><tr><td>Net proceeds from sale of assets</td><td></td><td> </td><td> -</td><td></td><td> </td><td> 59,658</td><td></td><td> </td><td> 3,000</td></tr><tr><td>Investments in unconsolidated entities</td><td></td><td> </td><td> (83,961)</td><td></td><td> </td><td> (235,792)</td><td></td><td> </td><td> (56,901)</td></tr><tr><td>Purchase of short-term investments</td><td></td><td></td><td> (1,000,000)</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td></tr><tr><td>Purchase of equity instruments</td><td></td><td> </td><td> (31,742)</td><td></td><td> </td><td> (66,140)</td><td></td><td> </td><td> (33,605)</td></tr><tr><td>Proceeds from sales of equity instruments</td><td></td><td> </td><td> 304,129</td><td></td><td> </td><td> 26,086</td><td></td><td> </td><td> 65,504</td></tr><tr><td>Insurance proceeds for property restoration</td><td></td><td></td><td> 7,427</td><td></td><td></td><td> -</td><td></td><td></td><td> 7,200</td></tr><tr><td>Distributions of capital from unconsolidated entities and other </td><td></td><td> </td><td> 299,140</td><td></td><td> </td><td> 472,510</td><td></td><td> </td><td> 243,279</td></tr><tr><td>Net cash used in investing activities</td><td></td><td> </td><td> (1,363,181)</td><td></td><td> </td><td> (626,564)</td><td></td><td> </td><td> (552,764)</td></tr><tr><td>CASH FLOWS FROM FINANCING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Proceeds from sales of common stock and other, net of transaction costs</td><td></td><td> </td><td> (328)</td><td></td><td> </td><td> (328)</td><td></td><td> </td><td> (328)</td></tr><tr><td>Purchase of shares related to stock grant recipients' tax withholdings</td><td></td><td></td><td> (5,795)</td><td></td><td></td><td> (6,788)</td><td></td><td></td><td> (2,318)</td></tr><tr><td>Redemption of limited partner units</td><td></td><td> </td><td> (13,524)</td><td></td><td> </td><td> (1,852)</td><td></td><td> </td><td> (2,220)</td></tr><tr><td>Purchase of treasury stock</td><td></td><td></td><td> (140,593)</td><td></td><td></td><td> (180,387)</td><td></td><td></td><td> -</td></tr><tr><td>Preferred unit redemptions</td><td></td><td></td><td> (2,500)</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td></tr><tr><td>Proceeds from the special purpose acquisition company IPO, net of transaction costs</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td><td></td><td></td><td> 338,121</td></tr><tr><td>Proceeds from (establishment of) trust account for special purpose acquisition company </td><td></td><td> </td><td> -</td><td></td><td> </td><td> 345,000</td><td></td><td> </td><td> (345,000)</td></tr><tr><td>Liquidation of special purpose acquisition company</td><td></td><td> </td><td> -</td><td></td><td> </td><td> (345,000)</td><td></td><td> </td><td> -</td></tr><tr><td>Distributions to noncontrolling interest holders in properties</td><td></td><td> </td><td> (41,956)</td><td></td><td> </td><td> (27,741)</td><td></td><td> </td><td> (5,024)</td></tr><tr><td>Contributions from noncontrolling interest holders in properties</td><td></td><td> </td><td> 9,813</td><td></td><td> </td><td> 29,681</td><td></td><td> </td><td> 20,902</td></tr><tr><td>Preferred distributions of the Operating Partnership</td><td></td><td> </td><td> (1,900)</td><td></td><td> </td><td> (1,915)</td><td></td><td> </td><td> (1,915)</td></tr><tr><td>Distributions to stockholders and preferred dividends</td><td></td><td> </td><td> (2,439,233)</td><td></td><td> </td><td> (2,264,007)</td><td></td><td> </td><td> (2,351,764)</td></tr><tr><td>Distributions to limited partners</td><td></td><td> </td><td> (355,548)</td><td></td><td> </td><td> (326,550)</td><td></td><td> </td><td> (337,021)</td></tr><tr><td>Cash paid to extinguish debt</td><td></td><td></td><td> -</td><td></td><td></td><td> -</td><td></td><td></td><td> (50,156)</td></tr><tr><td>Proceeds from issuance of debt, net of transaction costs</td><td></td><td> </td><td> 3,629,840</td><td></td><td> </td><td> 3,449,403</td><td></td><td> </td><td> 9,251,217</td></tr><tr><td>Repayments of debt</td><td></td><td> </td><td> (2,658,525)</td><td></td><td> </td><td> (3,721,864)</td><td></td><td> </td><td> (10,076,809)</td></tr><tr><td>Net cash used in financing activities</td><td></td><td> </td><td> (2,020,249)</td><td></td><td> </td><td> (3,052,348)</td><td></td><td> </td><td> (3,562,315)</td></tr><tr><td>INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</td><td></td><td> </td><td> 547,363</td><td></td><td> </td><td> 87,692</td><td></td><td> </td><td> (477,677)</td></tr><tr><td>CASH AND CASH EQUIVALENTS, beginning of period</td><td></td><td> </td><td> 621,628</td><td></td><td> </td><td> 533,936</td><td></td><td> </td><td> 1,011,613</td></tr><tr><td>CASH AND CASH EQUIVALENTS, end of period</td><td></td><td>$</td><td> 1,168,991</td><td></td><td>$</td><td> 621,628</td><td></td><td>$</td><td> 533,936</td></tr></table>The accompanying notes are an integral part of these statements.
88
,
Simon Property Group, Inc.
Consolidated Statements of Equity
(Dollars in thousands)
<table><tr><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th></tr><tr><th></th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th><th colspan="2">Accumulated Other</th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th><th></th><th></th><th> </th></tr><tr><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th></th><th colspan="2">Comprehensive</th><th></th><th colspan="2">Capital in</th><th></th><th></th><th></th><th></th><th colspan="2">Common Stock</th><th></th><th></th><th></th><th></th><th></th><th></th><th> </th></tr><tr><th></th><th></th><th colspan="2">Preferred</th><th></th><th colspan="2">Common</th><th></th><th colspan="2">Income</th><th></th><th colspan="2">Excess of Par</th><th></th><th colspan="2">Accumulated</th><th></th><th colspan="2">Held in</th><th></th><th colspan="2">Noncontrolling</th><th></th><th colspan="2">Total</th><th> </th></tr><tr><th></th><th></th><th colspan="2">Stock</th><th></th><th colspan="2">Stock</th><th></th><th colspan="2">(Loss)</th><th></th><th colspan="2">Value</th><th></th><th colspan="2">Deficit</th><th></th><th colspan="2">Treasury</th><th></th><th colspan="2">Interests</th><th></th><th colspan="2">Equity</th><th> </th></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Balance at December 31, 2020</td><td></td><td>$</td><td> 42,091</td><td></td><td>$</td><td> 34</td><td></td><td>$</td><td> (188,675)</td><td></td><td>$</td><td> 11,179,688</td><td></td><td>$</td><td> (6,102,314)</td><td></td><td>$</td><td> (1,891,352)</td><td></td><td>$</td><td> 432,874</td><td></td><td>$</td><td> 3,472,346</td><td></td></tr><tr><td>Exchange of limited partner units (58,571 common shares, Note 8)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 539</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (539)</td><td></td><td></td><td> -</td><td></td></tr><tr><td>Series J preferred stock premium amortization</td><td></td><td></td><td> (328)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (328)</td><td></td></tr><tr><td>Stock incentive program (80,012 common shares, net)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (9,229)</td><td></td><td></td><td></td><td></td><td></td><td> 9,229</td><td></td><td></td><td></td><td></td><td></td><td> -</td><td></td></tr><tr><td>Redemption of limited partner units (15,705 units)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (2,061)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (159)</td><td></td><td></td><td> (2,220)</td><td></td></tr><tr><td>Amortization of stock incentive</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 19,673</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 19,673</td><td></td></tr><tr><td>Long-term incentive performance units</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 17,755</td><td></td><td></td><td> 17,755</td><td></td></tr><tr><td>Issuance of unit equivalents and other (20,374 common shares repurchased)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 5,760</td><td></td><td></td><td> (44,319)</td><td></td><td></td><td> (2,318)</td><td></td><td></td><td> 18,494</td><td></td><td></td><td> (22,383)</td><td></td></tr><tr><td>Unrealized gain on hedging activities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 44,676</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 6,438</td><td></td><td></td><td> 51,114</td><td></td></tr><tr><td>Currency translation adjustments</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (33,932)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (4,840)</td><td></td><td></td><td> (38,772)</td><td></td></tr><tr><td>Changes in available-for-sale securities and other</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (886)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (128)</td><td></td><td></td><td> (1,014)</td><td></td></tr><tr><td>Net gain reclassified from accumulated other comprehensive loss into earnings</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (6,369)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (916)</td><td></td><td></td><td> (7,285)</td><td></td></tr><tr><td>Other comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 3,489</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 554</td><td></td><td> </td><td> 4,043</td><td></td></tr><tr><td>Adjustment to limited partners' interest from change in ownership in the Operating Partnership</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 18,620</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (18,620)</td><td></td><td></td><td> -</td><td></td></tr><tr><td>Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,926,706)</td><td></td><td></td><td></td><td></td><td></td><td> (276,698)</td><td></td><td></td><td> (2,203,404)</td><td></td></tr><tr><td>Distribution to other noncontrolling interest partners</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (2,708)</td><td></td><td></td><td> (2,708)</td><td></td></tr><tr><td>Net income, excluding $1,915 attributable to preferred interests in the Operating Partnership and a $3,419 loss attributable to noncontrolling redeemable interests in properties</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 2,249,631</td><td></td><td></td><td></td><td></td><td></td><td> 320,580</td><td></td><td></td><td> 2,570,211</td><td></td></tr><tr><td>Balance at December 31, 2021</td><td></td><td>$</td><td> 41,763</td><td></td><td>$</td><td> 34</td><td></td><td>$</td><td> (185,186)</td><td></td><td>$</td><td> 11,212,990</td><td></td><td>$</td><td> (5,823,708)</td><td></td><td>$</td><td> (1,884,441)</td><td></td><td>$</td><td> 491,533</td><td></td><td>$</td><td> 3,852,985</td><td></td></tr><tr><td>Exchange of limited partner units (2,680 common shares, Note 8)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 27</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (27)</td><td></td><td></td><td> -</td><td></td></tr><tr><td>Series J preferred stock premium amortization</td><td></td><td></td><td> (328)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (328)</td><td></td></tr><tr><td>Stock incentive program (208,063 common shares, net)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (27,637)</td><td></td><td></td><td></td><td></td><td></td><td> 27,637</td><td></td><td></td><td></td><td></td><td></td><td> -</td><td></td></tr><tr><td>Redemption of limited partner units (14,740 units)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,708)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (144)</td><td></td><td></td><td> (1,852)</td><td></td></tr><tr><td>Amortization of stock incentive</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 23,670</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 23,670</td><td></td></tr><tr><td>Treasury stock purchase (1,830,022 shares)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (180,387)</td><td></td><td></td><td></td><td></td><td></td><td> (180,387)</td><td></td></tr><tr><td>Long-term incentive performance units</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 14,845</td><td></td><td></td><td> 14,845</td><td></td></tr><tr><td>Issuance of unit equivalents and other (46,555 common shares repurchased)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (2,769)</td><td></td><td></td><td> 21,206</td><td></td><td></td><td> (6,788)</td><td></td><td></td><td> 10,600</td><td></td><td></td><td> 22,249</td><td></td></tr><tr><td>Unrealized gain on hedging activities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 47,888</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 6,920</td><td></td><td></td><td> 54,808</td><td></td></tr><tr><td>Currency translation adjustments</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (24,427)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (3,692)</td><td></td><td></td><td> (28,119)</td><td></td></tr><tr><td>Changes in available-for-sale securities and other</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,755)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (254)</td><td></td><td></td><td> (2,009)</td><td></td></tr><tr><td>Net gain reclassified from accumulated other comprehensive loss into earnings</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,393)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (202)</td><td></td><td></td><td> (1,595)</td><td></td></tr><tr><td>Other comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 20,313</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 2,772</td><td></td><td></td><td> 23,085</td><td></td></tr><tr><td>Adjustment to limited partners' interest from change in ownership in the Operating Partnership</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 28,308</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (28,308)</td><td></td><td></td><td> -</td><td></td></tr><tr><td>Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (2,264,007)</td><td></td><td></td><td></td><td></td><td></td><td> (326,550)</td><td></td><td></td><td> (2,590,557)</td><td></td></tr><tr><td>Distribution to other noncontrolling interest partners</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> (1,362)</td><td></td><td></td><td> (1,362)</td><td></td></tr><tr><td>Net income, excluding $1,915 attributable to preferred interests in the Operating Partnership and $1,166 attributable to noncontrolling redeemable interests in properties</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td> 2,139,535</td><td></td><td></td><td></td><td></td><td></td><td> 309,769</td><td></td><td></td><td> 2,449,304</td><td></td></tr><tr><td>Balance at December 31, 2022</td><td></td><td>$</td><td> 41,435</td><td></td><td>$</td><td> 34</td><td></td><td>$</td><td> (164,873)</td><td></td><td>$</td><td> 11,232,881</td><td></td><td>$</td><td> (5,926,974)</td><td></td><td>$</td><td> (2,043,979)</td><td></td><td>$</td><td> 473,128</td><td></td><td>$</td><td> 3,611,652</td><td></td></tr></table>89
,
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands, except per share amounts)</td><td colspan="15">For the Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">REVENUES:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Rental revenues</td><td>$</td><td>1,607,486 </td><td></td><td colspan="3"></td><td>$</td><td>1,607,685 </td><td></td><td colspan="3"></td><td>$</td><td>1,424,531 </td><td></td></tr><tr><td colspan="3">Fee and other income</td><td colspan="2">203,677 </td><td></td><td colspan="3"></td><td colspan="2">192,310 </td><td></td><td colspan="3"></td><td colspan="2">164,679 </td><td></td></tr><tr><td colspan="3">Total revenues</td><td colspan="2">1,811,163 </td><td></td><td colspan="3"></td><td colspan="2">1,799,995 </td><td></td><td colspan="3"></td><td colspan="2">1,589,210 </td><td></td></tr><tr><td colspan="3">EXPENSES:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Operating</td><td colspan="2">(905,158)</td><td></td><td colspan="3"></td><td colspan="2">(873,911)</td><td></td><td colspan="3"></td><td colspan="2">(797,315)</td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">(434,273)</td><td></td><td colspan="3"></td><td colspan="2">(504,502)</td><td></td><td colspan="3"></td><td colspan="2">(412,347)</td><td></td></tr><tr><td colspan="3">General and administrative</td><td colspan="2">(162,883)</td><td></td><td colspan="3"></td><td colspan="2">(133,731)</td><td></td><td colspan="3"></td><td colspan="2">(134,545)</td><td></td></tr><tr><td colspan="3">(Expense) benefit from deferred compensation plan liability</td><td colspan="2">(12,162)</td><td></td><td colspan="3"></td><td colspan="2">9,617 </td><td></td><td colspan="3"></td><td colspan="2">(9,847)</td><td></td></tr><tr><td colspan="3">Impairment losses, transaction related costs and other</td><td colspan="2">(50,691)</td><td></td><td colspan="3"></td><td colspan="2">(31,722)</td><td></td><td colspan="3"></td><td colspan="2">(13,815)</td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="2">(1,565,167)</td><td></td><td colspan="3"></td><td colspan="2">(1,534,249)</td><td></td><td colspan="3"></td><td colspan="2">(1,367,869)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Income (loss) from partially owned entities</td><td colspan="2">38,689 </td><td></td><td colspan="3"></td><td colspan="2">(461,351)</td><td></td><td colspan="3"></td><td colspan="2">130,517 </td><td></td></tr><tr><td colspan="3">Income from real estate fund investments</td><td colspan="2">1,590 </td><td></td><td colspan="3"></td><td colspan="2">3,541 </td><td></td><td colspan="3"></td><td colspan="2">11,066 </td><td></td></tr><tr><td colspan="3">Interest and other investment income, net</td><td colspan="2">41,697 </td><td></td><td colspan="3"></td><td colspan="2">19,869 </td><td></td><td colspan="3"></td><td colspan="2">4,612 </td><td></td></tr><tr><td colspan="3">Income (loss) from deferred compensation plan assets</td><td colspan="2">12,162 </td><td></td><td colspan="3"></td><td colspan="2">(9,617)</td><td></td><td colspan="3"></td><td colspan="2">9,847 </td><td></td></tr><tr><td colspan="3">Interest and debt expense</td><td colspan="2">(349,223)</td><td></td><td colspan="3"></td><td colspan="2">(279,765)</td><td></td><td colspan="3"></td><td colspan="2">(231,096)</td><td></td></tr><tr><td colspan="3">Net gains on disposition of wholly owned and partially owned assets</td><td colspan="2">71,199 </td><td></td><td colspan="3"></td><td colspan="2">100,625 </td><td></td><td colspan="3"></td><td colspan="2">50,770 </td><td></td></tr><tr><td colspan="3">Income (loss) before income taxes</td><td colspan="2">62,110 </td><td></td><td colspan="3"></td><td colspan="2">(360,952)</td><td></td><td colspan="3"></td><td colspan="2">197,057 </td><td></td></tr><tr><td colspan="3">Income tax (expense) benefit</td><td colspan="2">(29,222)</td><td></td><td colspan="3"></td><td colspan="2">(21,660)</td><td></td><td colspan="3"></td><td colspan="2">10,496 </td><td></td></tr><tr><td colspan="3">Net income (loss) </td><td colspan="2">32,888 </td><td></td><td colspan="3"></td><td colspan="2">(382,612)</td><td></td><td colspan="3"></td><td colspan="2">207,553 </td><td></td></tr><tr><td colspan="3">Less net loss (income) attributable to noncontrolling interests in:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Consolidated subsidiaries</td><td colspan="2">75,967 </td><td></td><td colspan="3"></td><td colspan="2">5,737 </td><td></td><td colspan="3"></td><td colspan="2">(24,014)</td><td></td></tr><tr><td colspan="3">Operating Partnership</td><td colspan="2">(3,361)</td><td></td><td colspan="3"></td><td colspan="2">30,376 </td><td></td><td colspan="3"></td><td colspan="2">(7,540)</td><td></td></tr><tr><td colspan="3">Net income (loss) attributable to Vornado</td><td colspan="2">105,494 </td><td></td><td colspan="3"></td><td colspan="2">(346,499)</td><td></td><td colspan="3"></td><td colspan="2">175,999 </td><td></td></tr><tr><td colspan="3">Preferred share dividends</td><td colspan="2">(62,116)</td><td></td><td colspan="3"></td><td colspan="2">(62,116)</td><td></td><td colspan="3"></td><td colspan="2">(65,880)</td><td></td></tr><tr><td colspan="3">Series K preferred share issuance costs</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(9,033)</td><td></td></tr><tr><td colspan="3">NET INCOME (LOSS) attributable to common shareholders</td><td>$</td><td>43,378 </td><td></td><td colspan="3"></td><td>$</td><td>(408,615)</td><td></td><td colspan="3"></td><td>$</td><td>101,086 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">INCOME (LOSS) PER COMMON SHARE - BASIC:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Net income (loss) per common share</td><td>$</td><td>0.23 </td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>0.53 </td><td></td></tr><tr><td colspan="3">Weighted average shares outstanding</td><td colspan="2">191,005 </td><td></td><td colspan="3"></td><td colspan="2">191,775 </td><td></td><td colspan="3"></td><td colspan="2">191,551 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">INCOME (LOSS) PER COMMON SHARE - DILUTED:</td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td><td colspan="3"></td><td colspan="3"> </td></tr><tr><td colspan="3">Net income (loss) per common share</td><td>$</td><td>0.23 </td><td></td><td colspan="3"></td><td>$</td><td>(2.13)</td><td></td><td colspan="3"></td><td>$</td><td>0.53 </td><td></td></tr><tr><td colspan="3">Weighted average shares outstanding</td><td colspan="2">191,856 </td><td></td><td colspan="3"></td><td colspan="2">191,775 </td><td></td><td colspan="3"></td><td colspan="2">192,122 </td><td></td></tr></table>See notes to consolidated financial statements.
63
,
VORNADO REALTY TRUST
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Amounts in thousands)</td><td colspan="15">For the Year Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income (loss) </td><td>$</td><td>32,888 </td><td></td><td colspan="3"></td><td>$</td><td>(382,612)</td><td></td><td colspan="3"></td><td>$</td><td>207,553 </td><td></td></tr><tr><td colspan="3">Other comprehensive (loss) income:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Change in fair value of interest rate swaps and other</td><td colspan="2">(112,051)</td><td></td><td colspan="3"></td><td colspan="2">190,493 </td><td></td><td colspan="3"></td><td colspan="2">51,338 </td><td></td></tr><tr><td colspan="3">Other comprehensive (loss) income of nonconsolidated subsidiaries</td><td colspan="2">(8,286)</td><td></td><td colspan="3"></td><td colspan="2">18,874 </td><td></td><td colspan="3"></td><td colspan="2">10,275 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Comprehensive (loss) income </td><td colspan="2">(87,449)</td><td></td><td colspan="3"></td><td colspan="2">(173,245)</td><td></td><td colspan="3"></td><td colspan="2">269,166 </td><td></td></tr><tr><td colspan="3">Less comprehensive loss (income) attributable to noncontrolling interests</td><td colspan="2">85,665 </td><td></td><td colspan="3"></td><td colspan="2">19,247 </td><td></td><td colspan="3"></td><td colspan="2">(35,602)</td><td></td></tr><tr><td colspan="3">Comprehensive (loss) income attributable to Vornado</td><td>$</td><td>(1,784)</td><td></td><td colspan="3"></td><td>$</td><td>(153,998)</td><td></td><td colspan="3"></td><td>$</td><td>233,564 </td><td></td></tr></table>See notes to consolidated financial statements.
64
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q_com017
|
What is the trend in Discount Revenue between the year 2021 to 2023?
|
Discount Revenue Trend:
2021: $24,563 million
2022: $30,739 million (25.1% increase)
2023: $33,416 million (8.7% increase)
|
Comparison
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45
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0000004962-24-000013
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 45:
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:-------|:---|:------|:------|:------|:---|:---|:---|:---|:-------|:---|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 | $ | 2,677 | | | 9 | % | | $ | 6,176 | 25 | % |
| 4 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | 1,185 | 20 | | | 875 | | | 17 | | | | |
| 5 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | 484 | 11 | | | 1,205 | | | 36 | | | | |
| 6 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | 68 | 4 | | | 81 | | | 5 | | | | |
| 7 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | 4,414 | 10 | | | 8,337 | | | 24 | | | | |
| 8 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | 7,325 | 58 | | | 3,625 | | | 40 | | | | |
| 9 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | 4,086 | # | | 1,480 | | | # | | | | | |
| 10 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | 3,239 | 33 | | | 2,145 | | | 28 | | | | |
| 11 | Total revenues net of interest expense | $ | 60,515 | | | $ | 52,862 | | $ | 42,380 | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 12 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
45
|
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
| | | | | | | | | | | | | | | | | | | | | | |
|---:|:--------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------------|:--------------|:-------|:---|:------|:------|:------|:---|:---|:---|:---|:-------|:---|:---|
| 1 | Years Ended December 31, | | | | | | | Change | Change | | | | | | | | | | | | |
| 2 | (Millions, except percentages) | 2023 | | 2022 | | 2021 | | 2023 vs. 2022 | 2022 vs. 2021 | | | | | | | | | | | | |
| 3 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 | $ | 2,677 | | | 9 | % | | $ | 6,176 | 25 | % |
| 4 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | 1,185 | 20 | | | 875 | | | 17 | | | | |
| 5 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | 484 | 11 | | | 1,205 | | | 36 | | | | |
| 6 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | 68 | 4 | | | 81 | | | 5 | | | | |
| 7 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | 4,414 | 10 | | | 8,337 | | | 24 | | | | |
| 8 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | 7,325 | 58 | | | 3,625 | | | 40 | | | | |
| 9 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | 4,086 | # | | 1,480 | | | # | | | | | |
| 10 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | 3,239 | 33 | | | 2,145 | | | 28 | | | | |
| 11 | Total revenues net of interest expense | $ | 60,515 | | | $ | 52,862 | | $ | 42,380 | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 12 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | | |
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
45
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 45:
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td><td colspan="3"></td><td>$</td><td>2,677 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>6,176 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td><td colspan="3"></td><td colspan="2">1,185 </td><td></td><td colspan="3"></td><td colspan="2">20 </td><td></td><td colspan="3"></td><td colspan="2">875 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td><td colspan="3"></td><td colspan="2">484 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,205 </td><td></td><td colspan="3"></td><td colspan="2">36 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">81 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td><td colspan="3"></td><td colspan="2">4,414 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">8,337 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td><td colspan="3"></td><td colspan="2">7,325 </td><td></td><td colspan="3"></td><td colspan="2">58 </td><td></td><td colspan="3"></td><td colspan="2">3,625 </td><td></td><td colspan="3"></td><td colspan="2">40 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td><td colspan="3"></td><td colspan="2">4,086 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">1,480 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td><td colspan="3"></td><td colspan="2">3,239 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">2,145 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td>60,515 </td><td></td><td colspan="3"></td><td>$</td><td>52,862 </td><td></td><td colspan="3"></td><td>$</td><td>42,380 </td><td></td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
45
|
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in the "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2023 compared to the year ended December 31, 2022, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2022 compared to 2021, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td><td colspan="3"></td><td>$</td><td>2,677 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>6,176 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td><td colspan="3"></td><td colspan="2">1,185 </td><td></td><td colspan="3"></td><td colspan="2">20 </td><td></td><td colspan="3"></td><td colspan="2">875 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td><td colspan="3"></td><td colspan="2">484 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,205 </td><td></td><td colspan="3"></td><td colspan="2">36 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">4 </td><td></td><td colspan="3"></td><td colspan="2">81 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td><td colspan="3"></td><td colspan="2">4,414 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">8,337 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td><td colspan="3"></td><td colspan="2">7,325 </td><td></td><td colspan="3"></td><td colspan="2">58 </td><td></td><td colspan="3"></td><td colspan="2">3,625 </td><td></td><td colspan="3"></td><td colspan="2">40 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td><td colspan="3"></td><td colspan="2">4,086 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">1,480 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td><td colspan="3"></td><td colspan="2">3,239 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td></td><td colspan="3"></td><td colspan="2">2,145 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td>60,515 </td><td></td><td colspan="3"></td><td>$</td><td>52,862 </td><td></td><td colspan="3"></td><td>$</td><td>42,380 </td><td></td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 9 percent. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by foreign exchange related revenues associated with Card Member cross-currency spending and growth in delinquency fees.
Processed revenue increased, primarily driven by an increase in network partner volumes, partially offset by a decrease in volumes associated with the decommission of one of our alternative payment solutions. See Tables 5 and 6 for more details on processed volume performance.
Interest income increased, primarily driven by higher interest rates and growth in revolving loan balances.
Interest expense increased, primarily driven by higher interest rates paid on customer deposits.
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q_com018
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What are the trends in operating cash flows of the company between the years 2021 to 2023?
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American Express’s operating cash flows have fluctuated over the past three years, reflecting changes in the company’s net income, provisions for credit losses, and working capital adjustments.
2021: The company generated $14,645 million in operating cash flows.
2022: Operating cash flows rose to $21,079 million, marking a 43.9% increase.
2023: Operating cash flows declined slightly to $18,559 million, a 12% decrease compared to 2022.
In summary, while operating cash flows grew significantly in 2022, they declined in 2023.
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Comparison
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0000004962-24-000013
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 97:
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:---------|:-------|:-----|:---------|:-----|:-------|:---------|:---|:-------|
| 1 | Years Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Cash Flows from Operating Activities | | | | | | | | | |
| 3 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 4 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 5 | Provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 6 | Depreciation and amortization | 1,651 | | | 1,626 | | | 1,695 | | |
| 7 | Stock-based compensation | 450 | | | 375 | | | 330 | | |
| 8 | Deferred taxes | (1,329) | | | (1,189) | | | 294 | | |
| 9 | Other items (a) | 664 | | | 365 | | | (772) | | |
| 10 | Originations of loans held-for-sale | (54) | | | (277) | | | - | | |
| 11 | Proceeds from sales of loans held-for-sale | 59 | | | 277 | | | - | | |
| 12 | Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | | | | | | | | | |
| 13 | Other assets | (1,244) | | | 1,391 | | | 1,068 | | |
| 14 | Accounts payable & other liabilities | 5,065 | | | 8,815 | | | 5,389 | | |
| 15 | Net cash provided by operating activities | 18,559 | | | 21,079 | | | 14,645 | | |
| 16 | Cash Flows from Investing Activities | | | | | | | | | |
| 17 | Sale of investments | 2 | | | 26 | | | 62 | | |
| 18 | Maturities and redemptions of investments | 3,888 | | | 1,892 | | | 20,032 | | |
| 19 | Purchase of investments | (1,572) | | | (4,175) | | | (1,517) | | |
| 20 | Net increase in Card Member loans and receivables, and other loans (b) | (25,124) | | | (29,562) | | | (27,557) | | |
| 21 | Purchase of premises and equipment, net of sales: 2023, $2; 2022, $1; 2021, $88 | (1,563) | | | (1,855) | | | (1,550) | | |
| 22 | Net (Acquisitions)/dispositions, net of cash acquired | (64) | | | (15) | | | 1 | | |
| 24 | Net cash used in investing activities | (24,433) | | | (33,689) | | | (10,529) | | |
| 25 | Cash Flows from Financing Activities | | | | | | | | | |
| 26 | Net increase (decrease) in customer deposits | 18,915 | | | 25,902 | | | (2,468) | | |
| 27 | Net (decrease) increase in short-term borrowings (b) | (105) | | | (706) | | | 461 | | |
| 28 | Proceeds from long-term debt | 15,674 | | | 23,230 | | | 7,788 | | |
| 29 | Payments of long-term debt | (10,703) | | | (18,906) | | | (11,662) | | |
| 30 | Issuance of American Express preferred shares | - | | | - | | | 1,584 | | |
| 31 | Redemption of American Express preferred shares | - | | | - | | | (1,600) | | |
| 32 | Issuance of American Express common shares | 28 | | | 56 | | | 64 | | |
| 33 | Repurchase of American Express common shares and other | (3,650) | | | (3,502) | | | (7,652) | | |
| 34 | Dividends paid | (1,780) | | | (1,565) | | | (1,448) | | |
| 35 | Net cash provided by (used in) financing activities | 18,379 | | | 24,509 | | | (14,933) | | |
| 36 | Effect of foreign currency exchange rates on cash and cash equivalents | 177 | | | (13) | | | (120) | | |
| 37 | Net increase (decrease) in cash and cash equivalents | 12,682 | | | 11,886 | | | (10,937) | | |
| 38 | Cash and cash equivalents at beginning of year | 33,914 | | | 22,028 | | | 32,965 | | |
| 39 | Cash and cash equivalents at end of year | $ | 46,596 | | | $ | 33,914 | | $ | 22,028 |
(a)Includes gains and losses on fair value hedges, losses on tax credit investments, net gains and losses on Amex Ventures investments and changes in equity method investments.
(b)Excludes an increase of $117 million related to non-cash activity during 2023.
Net income taxes paid during 2023, 2022 and 2021 were $3.3 billion, $3.0 billion and $1.6 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $6.4 billion, $2.2 billion and $1.1 billion, respectively.
See Notes to Consolidated Financial Statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:---------|:-------|:-----|:---------|:-----|:-------|:---------|:---|:-------|
| 1 | Years Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Cash Flows from Operating Activities | | | | | | | | | |
| 3 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 4 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 5 | Provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 6 | Depreciation and amortization | 1,651 | | | 1,626 | | | 1,695 | | |
| 7 | Stock-based compensation | 450 | | | 375 | | | 330 | | |
| 8 | Deferred taxes | (1,329) | | | (1,189) | | | 294 | | |
| 9 | Other items (a) | 664 | | | 365 | | | (772) | | |
| 10 | Originations of loans held-for-sale | (54) | | | (277) | | | - | | |
| 11 | Proceeds from sales of loans held-for-sale | 59 | | | 277 | | | - | | |
| 12 | Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | | | | | | | | | |
| 13 | Other assets | (1,244) | | | 1,391 | | | 1,068 | | |
| 14 | Accounts payable & other liabilities | 5,065 | | | 8,815 | | | 5,389 | | |
| 15 | Net cash provided by operating activities | 18,559 | | | 21,079 | | | 14,645 | | |
| 16 | Cash Flows from Investing Activities | | | | | | | | | |
| 17 | Sale of investments | 2 | | | 26 | | | 62 | | |
| 18 | Maturities and redemptions of investments | 3,888 | | | 1,892 | | | 20,032 | | |
| 19 | Purchase of investments | (1,572) | | | (4,175) | | | (1,517) | | |
| 20 | Net increase in Card Member loans and receivables, and other loans (b) | (25,124) | | | (29,562) | | | (27,557) | | |
| 21 | Purchase of premises and equipment, net of sales: 2023, $2; 2022, $1; 2021, $88 | (1,563) | | | (1,855) | | | (1,550) | | |
| 22 | Net (Acquisitions)/dispositions, net of cash acquired | (64) | | | (15) | | | 1 | | |
| 24 | Net cash used in investing activities | (24,433) | | | (33,689) | | | (10,529) | | |
| 25 | Cash Flows from Financing Activities | | | | | | | | | |
| 26 | Net increase (decrease) in customer deposits | 18,915 | | | 25,902 | | | (2,468) | | |
| 27 | Net (decrease) increase in short-term borrowings (b) | (105) | | | (706) | | | 461 | | |
| 28 | Proceeds from long-term debt | 15,674 | | | 23,230 | | | 7,788 | | |
| 29 | Payments of long-term debt | (10,703) | | | (18,906) | | | (11,662) | | |
| 30 | Issuance of American Express preferred shares | - | | | - | | | 1,584 | | |
| 31 | Redemption of American Express preferred shares | - | | | - | | | (1,600) | | |
| 32 | Issuance of American Express common shares | 28 | | | 56 | | | 64 | | |
| 33 | Repurchase of American Express common shares and other | (3,650) | | | (3,502) | | | (7,652) | | |
| 34 | Dividends paid | (1,780) | | | (1,565) | | | (1,448) | | |
| 35 | Net cash provided by (used in) financing activities | 18,379 | | | 24,509 | | | (14,933) | | |
| 36 | Effect of foreign currency exchange rates on cash and cash equivalents | 177 | | | (13) | | | (120) | | |
| 37 | Net increase (decrease) in cash and cash equivalents | 12,682 | | | 11,886 | | | (10,937) | | |
| 38 | Cash and cash equivalents at beginning of year | 33,914 | | | 22,028 | | | 32,965 | | |
| 39 | Cash and cash equivalents at end of year | $ | 46,596 | | | $ | 33,914 | | $ | 22,028 |
(a)Includes gains and losses on fair value hedges, losses on tax credit investments, net gains and losses on Amex Ventures investments and changes in equity method investments.
(b)Excludes an increase of $117 million related to non-cash activity during 2023.
Net income taxes paid during 2023, 2022 and 2021 were $3.3 billion, $3.0 billion and $1.6 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $6.4 billion, $2.2 billion and $1.1 billion, respectively.
See Notes to Consolidated Financial Statements.
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 97:
CONSOLIDATED STATEMENTS OF CASH FLOWS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash Flows from Operating Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="3"></td><td colspan="2">1,651 </td><td></td><td colspan="3"></td><td colspan="2">1,626 </td><td></td><td colspan="3"></td><td colspan="2">1,695 </td><td></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="3"></td><td colspan="2">450 </td><td></td><td colspan="3"></td><td colspan="2">375 </td><td></td><td colspan="3"></td><td colspan="2">330 </td><td></td></tr><tr><td colspan="3">Deferred taxes</td><td colspan="3"></td><td colspan="2">(1,329)</td><td></td><td colspan="3"></td><td colspan="2">(1,189)</td><td></td><td colspan="3"></td><td colspan="2">294 </td><td></td></tr><tr><td colspan="3">Other items (a)</td><td colspan="3"></td><td colspan="2">664 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td><td colspan="3"></td><td colspan="2">(772)</td><td></td></tr><tr><td colspan="3">Originations of loans held-for-sale</td><td colspan="3"></td><td colspan="2">(54)</td><td></td><td colspan="3"></td><td colspan="2">(277)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Proceeds from sales of loans held-for-sale</td><td colspan="3"></td><td colspan="2">59 </td><td></td><td colspan="3"></td><td colspan="2">277 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="3"></td><td colspan="2">(1,244)</td><td></td><td colspan="3"></td><td colspan="2">1,391 </td><td></td><td colspan="3"></td><td colspan="2">1,068 </td><td></td></tr><tr><td colspan="3">Accounts payable & other liabilities</td><td colspan="3"></td><td colspan="2">5,065 </td><td></td><td colspan="3"></td><td colspan="2">8,815 </td><td></td><td colspan="3"></td><td colspan="2">5,389 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="3"></td><td colspan="2">18,559 </td><td></td><td colspan="3"></td><td colspan="2">21,079 </td><td></td><td colspan="3"></td><td colspan="2">14,645 </td><td></td></tr><tr><td colspan="3">Cash Flows from Investing Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Sale of investments</td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td><td colspan="3"></td><td colspan="2">62 </td><td></td></tr><tr><td colspan="3">Maturities and redemptions of investments</td><td colspan="3"></td><td colspan="2">3,888 </td><td></td><td colspan="3"></td><td colspan="2">1,892 </td><td></td><td colspan="3"></td><td colspan="2">20,032 </td><td></td></tr><tr><td colspan="3">Purchase of investments</td><td colspan="3"></td><td colspan="2">(1,572)</td><td></td><td colspan="3"></td><td colspan="2">(4,175)</td><td></td><td colspan="3"></td><td colspan="2">(1,517)</td><td></td></tr><tr><td colspan="3">Net increase in Card Member loans and receivables, and other loans (b)</td><td colspan="3"></td><td colspan="2">(25,124)</td><td></td><td colspan="3"></td><td colspan="2">(29,562)</td><td></td><td colspan="3"></td><td colspan="2">(27,557)</td><td></td></tr><tr><td colspan="3">Purchase of premises and equipment, net of sales: 2023, $2; 2022, $1; 2021, $88</td><td colspan="3"></td><td colspan="2">(1,563)</td><td></td><td colspan="3"></td><td colspan="2">(1,855)</td><td></td><td colspan="3"></td><td colspan="2">(1,550)</td><td></td></tr><tr><td colspan="3">Net (Acquisitions)/dispositions, net of cash acquired</td><td colspan="3"></td><td colspan="2">(64)</td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="3"></td><td colspan="2">(24,433)</td><td></td><td colspan="3"></td><td colspan="2">(33,689)</td><td></td><td colspan="3"></td><td colspan="2">(10,529)</td><td></td></tr><tr><td colspan="3">Cash Flows from Financing Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net increase (decrease) in customer deposits</td><td colspan="3"></td><td colspan="2">18,915 </td><td></td><td colspan="3"></td><td colspan="2">25,902 </td><td></td><td colspan="3"></td><td colspan="2">(2,468)</td><td></td></tr><tr><td colspan="3">Net (decrease) increase in short-term borrowings (b)</td><td colspan="3"></td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(706)</td><td></td><td colspan="3"></td><td colspan="2">461 </td><td></td></tr><tr><td colspan="3">Proceeds from long-term debt</td><td colspan="3"></td><td colspan="2">15,674 </td><td></td><td colspan="3"></td><td colspan="2">23,230 </td><td></td><td colspan="3"></td><td colspan="2">7,788 </td><td></td></tr><tr><td colspan="3">Payments of long-term debt</td><td colspan="3"></td><td colspan="2">(10,703)</td><td></td><td colspan="3"></td><td colspan="2">(18,906)</td><td></td><td colspan="3"></td><td colspan="2">(11,662)</td><td></td></tr><tr><td colspan="3">Issuance of American Express preferred shares</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,584 </td><td></td></tr><tr><td colspan="3">Redemption of American Express preferred shares</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,600)</td><td></td></tr><tr><td colspan="3">Issuance of American Express common shares</td><td colspan="3"></td><td colspan="2">28 </td><td></td><td colspan="3"></td><td colspan="2">56 </td><td></td><td colspan="3"></td><td colspan="2">64 </td><td></td></tr><tr><td colspan="3">Repurchase of American Express common shares and other</td><td colspan="3"></td><td colspan="2">(3,650)</td><td></td><td colspan="3"></td><td colspan="2">(3,502)</td><td></td><td colspan="3"></td><td colspan="2">(7,652)</td><td></td></tr><tr><td colspan="3">Dividends paid</td><td colspan="3"></td><td colspan="2">(1,780)</td><td></td><td colspan="3"></td><td colspan="2">(1,565)</td><td></td><td colspan="3"></td><td colspan="2">(1,448)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="3"></td><td colspan="2">18,379 </td><td></td><td colspan="3"></td><td colspan="2">24,509 </td><td></td><td colspan="3"></td><td colspan="2">(14,933)</td><td></td></tr><tr><td colspan="3">Effect of foreign currency exchange rates on cash and cash equivalents</td><td colspan="3"></td><td colspan="2">177 </td><td></td><td colspan="3"></td><td colspan="2">(13)</td><td></td><td colspan="3"></td><td colspan="2">(120)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash and cash equivalents</td><td colspan="3"></td><td colspan="2">12,682 </td><td></td><td colspan="3"></td><td colspan="2">11,886 </td><td></td><td colspan="3"></td><td colspan="2">(10,937)</td><td></td></tr><tr><td colspan="3">Cash and cash equivalents at beginning of year</td><td colspan="3"></td><td colspan="2">33,914 </td><td></td><td colspan="3"></td><td colspan="2">22,028 </td><td></td><td colspan="3"></td><td colspan="2">32,965 </td><td></td></tr><tr><td colspan="3">Cash and cash equivalents at end of year</td><td colspan="3"></td><td>$</td><td>46,596 </td><td></td><td colspan="3"></td><td>$</td><td>33,914 </td><td></td><td colspan="3"></td><td>$</td><td>22,028 </td><td></td></tr></table>(a)Includes gains and losses on fair value hedges, losses on tax credit investments, net gains and losses on Amex Ventures investments and changes in equity method investments.
(b)Excludes an increase of $117 million related to non-cash activity during 2023.
Net income taxes paid during 2023, 2022 and 2021 were $3.3 billion, $3.0 billion and $1.6 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $6.4 billion, $2.2 billion and $1.1 billion, respectively.
See Notes to Consolidated Financial Statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash Flows from Operating Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="3"></td><td colspan="2">1,651 </td><td></td><td colspan="3"></td><td colspan="2">1,626 </td><td></td><td colspan="3"></td><td colspan="2">1,695 </td><td></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="3"></td><td colspan="2">450 </td><td></td><td colspan="3"></td><td colspan="2">375 </td><td></td><td colspan="3"></td><td colspan="2">330 </td><td></td></tr><tr><td colspan="3">Deferred taxes</td><td colspan="3"></td><td colspan="2">(1,329)</td><td></td><td colspan="3"></td><td colspan="2">(1,189)</td><td></td><td colspan="3"></td><td colspan="2">294 </td><td></td></tr><tr><td colspan="3">Other items (a)</td><td colspan="3"></td><td colspan="2">664 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td><td colspan="3"></td><td colspan="2">(772)</td><td></td></tr><tr><td colspan="3">Originations of loans held-for-sale</td><td colspan="3"></td><td colspan="2">(54)</td><td></td><td colspan="3"></td><td colspan="2">(277)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Proceeds from sales of loans held-for-sale</td><td colspan="3"></td><td colspan="2">59 </td><td></td><td colspan="3"></td><td colspan="2">277 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="3"></td><td colspan="2">(1,244)</td><td></td><td colspan="3"></td><td colspan="2">1,391 </td><td></td><td colspan="3"></td><td colspan="2">1,068 </td><td></td></tr><tr><td colspan="3">Accounts payable & other liabilities</td><td colspan="3"></td><td colspan="2">5,065 </td><td></td><td colspan="3"></td><td colspan="2">8,815 </td><td></td><td colspan="3"></td><td colspan="2">5,389 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="3"></td><td colspan="2">18,559 </td><td></td><td colspan="3"></td><td colspan="2">21,079 </td><td></td><td colspan="3"></td><td colspan="2">14,645 </td><td></td></tr><tr><td colspan="3">Cash Flows from Investing Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Sale of investments</td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td><td colspan="3"></td><td colspan="2">62 </td><td></td></tr><tr><td colspan="3">Maturities and redemptions of investments</td><td colspan="3"></td><td colspan="2">3,888 </td><td></td><td colspan="3"></td><td colspan="2">1,892 </td><td></td><td colspan="3"></td><td colspan="2">20,032 </td><td></td></tr><tr><td colspan="3">Purchase of investments</td><td colspan="3"></td><td colspan="2">(1,572)</td><td></td><td colspan="3"></td><td colspan="2">(4,175)</td><td></td><td colspan="3"></td><td colspan="2">(1,517)</td><td></td></tr><tr><td colspan="3">Net increase in Card Member loans and receivables, and other loans (b)</td><td colspan="3"></td><td colspan="2">(25,124)</td><td></td><td colspan="3"></td><td colspan="2">(29,562)</td><td></td><td colspan="3"></td><td colspan="2">(27,557)</td><td></td></tr><tr><td colspan="3">Purchase of premises and equipment, net of sales: 2023, $2; 2022, $1; 2021, $88</td><td colspan="3"></td><td colspan="2">(1,563)</td><td></td><td colspan="3"></td><td colspan="2">(1,855)</td><td></td><td colspan="3"></td><td colspan="2">(1,550)</td><td></td></tr><tr><td colspan="3">Net (Acquisitions)/dispositions, net of cash acquired</td><td colspan="3"></td><td colspan="2">(64)</td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="3"></td><td colspan="2">(24,433)</td><td></td><td colspan="3"></td><td colspan="2">(33,689)</td><td></td><td colspan="3"></td><td colspan="2">(10,529)</td><td></td></tr><tr><td colspan="3">Cash Flows from Financing Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net increase (decrease) in customer deposits</td><td colspan="3"></td><td colspan="2">18,915 </td><td></td><td colspan="3"></td><td colspan="2">25,902 </td><td></td><td colspan="3"></td><td colspan="2">(2,468)</td><td></td></tr><tr><td colspan="3">Net (decrease) increase in short-term borrowings (b)</td><td colspan="3"></td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(706)</td><td></td><td colspan="3"></td><td colspan="2">461 </td><td></td></tr><tr><td colspan="3">Proceeds from long-term debt</td><td colspan="3"></td><td colspan="2">15,674 </td><td></td><td colspan="3"></td><td colspan="2">23,230 </td><td></td><td colspan="3"></td><td colspan="2">7,788 </td><td></td></tr><tr><td colspan="3">Payments of long-term debt</td><td colspan="3"></td><td colspan="2">(10,703)</td><td></td><td colspan="3"></td><td colspan="2">(18,906)</td><td></td><td colspan="3"></td><td colspan="2">(11,662)</td><td></td></tr><tr><td colspan="3">Issuance of American Express preferred shares</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,584 </td><td></td></tr><tr><td colspan="3">Redemption of American Express preferred shares</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,600)</td><td></td></tr><tr><td colspan="3">Issuance of American Express common shares</td><td colspan="3"></td><td colspan="2">28 </td><td></td><td colspan="3"></td><td colspan="2">56 </td><td></td><td colspan="3"></td><td colspan="2">64 </td><td></td></tr><tr><td colspan="3">Repurchase of American Express common shares and other</td><td colspan="3"></td><td colspan="2">(3,650)</td><td></td><td colspan="3"></td><td colspan="2">(3,502)</td><td></td><td colspan="3"></td><td colspan="2">(7,652)</td><td></td></tr><tr><td colspan="3">Dividends paid</td><td colspan="3"></td><td colspan="2">(1,780)</td><td></td><td colspan="3"></td><td colspan="2">(1,565)</td><td></td><td colspan="3"></td><td colspan="2">(1,448)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="3"></td><td colspan="2">18,379 </td><td></td><td colspan="3"></td><td colspan="2">24,509 </td><td></td><td colspan="3"></td><td colspan="2">(14,933)</td><td></td></tr><tr><td colspan="3">Effect of foreign currency exchange rates on cash and cash equivalents</td><td colspan="3"></td><td colspan="2">177 </td><td></td><td colspan="3"></td><td colspan="2">(13)</td><td></td><td colspan="3"></td><td colspan="2">(120)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash and cash equivalents</td><td colspan="3"></td><td colspan="2">12,682 </td><td></td><td colspan="3"></td><td colspan="2">11,886 </td><td></td><td colspan="3"></td><td colspan="2">(10,937)</td><td></td></tr><tr><td colspan="3">Cash and cash equivalents at beginning of year</td><td colspan="3"></td><td colspan="2">33,914 </td><td></td><td colspan="3"></td><td colspan="2">22,028 </td><td></td><td colspan="3"></td><td colspan="2">32,965 </td><td></td></tr><tr><td colspan="3">Cash and cash equivalents at end of year</td><td colspan="3"></td><td>$</td><td>46,596 </td><td></td><td colspan="3"></td><td>$</td><td>33,914 </td><td></td><td colspan="3"></td><td>$</td><td>22,028 </td><td></td></tr></table>(a)Includes gains and losses on fair value hedges, losses on tax credit investments, net gains and losses on Amex Ventures investments and changes in equity method investments.
(b)Excludes an increase of $117 million related to non-cash activity during 2023.
Net income taxes paid during 2023, 2022 and 2021 were $3.3 billion, $3.0 billion and $1.6 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $6.4 billion, $2.2 billion and $1.1 billion, respectively.
See Notes to Consolidated Financial Statements.
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q_com019
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What is the trend of card member receivables between year 2021 and 2023?
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Between 2021 and 2023, American Express’s Card Member receivables demonstrated consistent growth:
2021: Card Member receivables stood at $53,645 million.
2022: They increased to $57,613 million, representing a 7% growth ($3,968 million increase).
2023: Card Member receivables further rose to $60,411 million, a 5% growth ($2,798 million increase) compared to 2022.
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Comparison
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43
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0000004962-24-000013
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
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TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
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TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
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q_com020
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What is the trend of card member loans of American Express between FY 2021 to 2023?
|
Trend in Card Member Loans:
2021: $88,562 million
2022: $107,964 million (22% increase from 2021)
2023: $125,995 million (17% increase from 2022)
Analysis:
Loan Growth: Card Member loans increased significantly by 22% in 2022 and 17% in 2023, reflecting higher borrowing and usage.
|
Comparison
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43
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0000004962-24-000013
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
|
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
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TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
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q_com021
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What is the trend in billed business between the year 2021 to 2023?
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Billed Business Trend (2021-2023):
2021: $1,089.8 billion
2022: $1,338.3 billion (23% increase from 2021)
2023: $1,459.6 billion (9% increase from 2022)
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Comparison
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43
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0000004962-24-000013
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
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TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
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TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
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What the growth in the network volumes of American Express for the years 2021 to 2023? Compare its performance to that of Discover Financial Services for the same period.
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American Express Network Volumes Growth:
For American Express, network volumes have shown consistent growth over the past three years. In 2021, network volumes were $1,284.2 billion. This increased to $1,552.8 billion in 2022, reflecting a growth rate of 21%. By 2023, network volumes further rose to $1,680.1 billion, marking an additional growth of 8% from the previous year. Overall, from 2021 to 2023, American Express experienced a cumulative growth of 31%.
Discover Financial Services Network Volumes:
In contrast, Discover Financial Services reported network transaction volumes as follows: $503,517 million in 2021, $549,857 million in 2022, and $589,158 million in 2023. This translates to a growth rate of 9% from 2021 to 2022, and an additional 7% growth from 2022 to 2023. The total growth over the three-year period was approximately 17%.
Comparison:
When comparing the growth rates, American Express's network volumes grew by 31% over the three years, which is significantly higher than Discover Financial Services’ 17% growth. American Express achieved a higher growth rate, indicating a stronger expansion in network transaction volumes compared to Discover Financial Services. This reflects American Express’s robust performance and increasing market presence relative to its industry peer.
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Comparison
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A);Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 57: The following table presents segment data (dollars in millions):| | | | | | | | | | | |
|---:|:---------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Digital Banking | | | | | | | | | |
| 4 | Interest income | | | | | | | | | |
| 5 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 6 | Private student loans | 1,033 | | | 831 | | | 742 | | |
| 7 | Personal loans | 1,156 | | | 872 | | | 878 | | |
| 8 | Other loans | 326 | | | 167 | | | 114 | | |
| 9 | Other interest income | 892 | | | 362 | | | 200 | | |
| 10 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 11 | Interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 12 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 13 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 14 | Other income | 2,311 | | | 2,118 | | | 1,745 | | |
| 15 | Other expense | 5,822 | | | 5,049 | | | 4,549 | | |
| 16 | Income before income taxes | 3,570 | | | 5,709 | | | 6,495 | | |
| 17 | Payment Services | | | | | | | | | |
| 20 | Other income | 450 | | | 176 | | | 789 | | |
| 21 | Other expense | 194 | | | 167 | | | 256 | | |
| 22 | Income before income taxes | 256 | | | 9 | | | 533 | | |
| 23 | Total income before income taxes | $ | 3,826 | | | $ | 5,718 | | $ | 7,028 |
The following table presents information on transaction volume (dollars in millions):
| | | | | | | | | | | |
|---:|:----------------------------------------|:---------------------------------|:--------|:-----|:--------|:-----|:--------|:--------|:---|:--------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Network Transaction Volume | | | | | | | | | |
| 4 | PULSE Network | $ | 285,616 | | | $ | 253,072 | | $ | 247,913 |
| 5 | Network Partners | 39,671 | | | 44,542 | | | 40,707 | | |
| 6 | Diners Club(1) | 39,299 | | | 33,505 | | | 25,937 | | |
| 7 | Total Payment Services | 364,586 | | | 331,119 | | | 314,557 | | |
| 8 | Discover Network - Proprietary(2) | 224,572 | | | 218,738 | | | 188,960 | | |
| 9 | Total Network Transaction Volume | $ | 589,158 | | | $ | 549,857 | | $ | 503,517 |
| 10 | Transactions Processed on Networks | | | | | | | | | |
| 11 | Discover Network | 3,728 | | | 3,617 | | | 3,259 | | |
| 12 | PULSE Network | 7,705 | | | 6,200 | | | 5,632 | | |
| 13 | Total Transaction Processed on Networks | 11,433 | | | 9,817 | | | 8,891 | | |
| 14 | Credit Card Volume | | | | | | | | | |
| 15 | Discover Card Volume(3) | $ | 232,785 | | | $ | 224,477 | | $ | 192,755 |
| 16 | Discover Card Sales Volume(4) | $ | 217,914 | | | $ | 210,645 | | $ | 182,125 |
(1)Diners Club volume is derived from data provided by licensees for Diners Club branded cards issued outside North America and is subject to subsequent revision or amendment.
(2)Represents gross Discover card sales volume on the Discover Network.
(3)Represents Discover card activity related to sales net of returns, balance transfers, cash advances and other activity.
(4)Represents Discover card activity related to sales net of returns.
-57-
|
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
| | | | | | | | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------------------------------|:--------|:--------|:--------|:-----|:--------|:--------------|:--------|:--------------|:----|:-------|:------|:--------|:---|:---|:-----|:---|:-------|:----|:---|
| 1 | Years Ended December 31, | | | | | | Change | | Change | | | | | | | | | | | |
| 2 | (Millions, except percentages, per share amounts and where indicated) | 2023 | | 2022 | | 2021 | 2023 vs. 2022 | | 2022 vs. 2021 | | | | | | | | | | | |
| 3 | Selected Income Statement Data | | | | | | | | | | | | | | | | | | | |
| 4 | Total revenues net of interest expense | $ | 60,515 | | $ | 52,862 | $ | 42,380 | | $ | 7,653 | | | 14 | % | | $ | 10,482 | 25 | % |
| 5 | Provisions for credit losses | 4,923 | | 2,182 | | (1,419) | 2,741 | | | # | | 3,601 | | | # | | | | | |
| 6 | Total expenses | 45,079 | | 41,095 | | 33,110 | 3,984 | | | 10 | | | 7,985 | | | 24 | | | | |
| 7 | Pretax income | 10,513 | | 9,585 | | 10,689 | 928 | | | 10 | | | (1,104) | | | (10) | | | | |
| 8 | Income tax provision | 2,139 | | 2,071 | | 2,629 | 68 | | | 3 | | | (558) | | | (21) | | | | |
| 9 | Net income | 8,374 | | 7,514 | | 8,060 | 860 | | | 11 | | | (546) | | | (7) | | | | |
| 10 | Earnings per common share - diluted (a) | $ | 11.21 | | $ | 9.85 | $ | 10.02 | | $ | 1.36 | | | 14 | % | | $ | (0.17) | (2) | % |
| 12 | Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
| 13 | Cash and cash equivalents | $ | 46,596 | | $ | 33,914 | $ | 22,028 | | $ | 12,682 | | | 37 | % | | $ | 11,886 | 54 | % |
| 14 | Card Member receivables | 60,411 | | 57,613 | | 53,645 | 2,798 | | | 5 | | | 3,968 | | | 7 | | | | |
| 15 | Card Member loans | 125,995 | | 107,964 | | 88,562 | 18,031 | | | 17 | | | 19,402 | | | 22 | | | | |
| 16 | Customer deposits | 129,144 | | 110,239 | | 84,382 | 18,905 | | | 17 | | | 25,857 | | | 31 | | | | |
| 17 | Long-term debt | $ | 47,866 | | $ | 42,573 | $ | 38,675 | | $ | 5,293 | | | 12 | % | | $ | 3,898 | 10 | % |
| 19 | Common Share Statistics (b) | | | | | | | | | | | | | | | | | | | |
| 20 | Cash dividends declared per common share | $ | 2.40 | | $ | 2.08 | $ | 1.72 | | $ | 0.32 | | | 15 | % | | $ | 0.36 | 21 | % |
| 21 | Average common shares outstanding: | | | | | | | | | | | | | | | | | | | |
| 22 | Basic | 735 | | 751 | | 789 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 23 | Diluted | 736 | | 752 | | 790 | (16) | | | (2) | % | | (38) | | | (5) | % | | | |
| 25 | Selected Metrics and Ratios | | | | | | | | | | | | | | | | | | | |
| 26 | Network volumes (Billions) | $ | 1,680.1 | | $ | 1,552.8 | $ | 1,284.2 | | $ | 127 | | | 8 | % | | $ | 269 | 21 | % |
| 27 | Billed business (Billions) | $ | 1,459.6 | | $ | 1,338.3 | $ | 1,089.8 | | $ | 121 | | | 9 | % | | $ | 249 | 23 | % |
| 28 | Card Member loans and receivables | | | | | | | | | | | | | | | | | | | |
| 29 | Net write-off rate - principal, interest and fees (c) | 2.0 | % | | 1.0 | % | 0.8 | % | | | | | | | | | | | | |
| 30 | Net write-off rate - principal only - consumer and small business (c)(d) | 1.8 | % | | 0.9 | % | 0.7 | % | | | | | | | | | | | | |
| 31 | 30+ days past due as a % of total - consumer and small business (e) | 1.3 | % | | 1.1 | % | 0.7 | % | | | | | | | | | | | | |
| 32 | Effective tax rate | 20.3 | % | | 21.6 | % | 24.6 | % | | | | | | | | | | | | |
| 35 | Return on average equity (f) | 31.5 | % | | 32.3 | % | 33.7 | % | | | | | | | | | | | | |
| 36 | Common Equity Tier 1 | 10.5 | % | | 10.3 | % | 10.5 | % | | | | | | | | | | | | |
| 44 | # Denotes a variance of 100 percent or more | | | | | | | | | | | | | | | | | | | |
(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
, The following table presents segment data (dollars in millions):| | | | | | | | | | | |
|---:|:---------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Digital Banking | | | | | | | | | |
| 4 | Interest income | | | | | | | | | |
| 5 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 6 | Private student loans | 1,033 | | | 831 | | | 742 | | |
| 7 | Personal loans | 1,156 | | | 872 | | | 878 | | |
| 8 | Other loans | 326 | | | 167 | | | 114 | | |
| 9 | Other interest income | 892 | | | 362 | | | 200 | | |
| 10 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 11 | Interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 12 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 13 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 14 | Other income | 2,311 | | | 2,118 | | | 1,745 | | |
| 15 | Other expense | 5,822 | | | 5,049 | | | 4,549 | | |
| 16 | Income before income taxes | 3,570 | | | 5,709 | | | 6,495 | | |
| 17 | Payment Services | | | | | | | | | |
| 20 | Other income | 450 | | | 176 | | | 789 | | |
| 21 | Other expense | 194 | | | 167 | | | 256 | | |
| 22 | Income before income taxes | 256 | | | 9 | | | 533 | | |
| 23 | Total income before income taxes | $ | 3,826 | | | $ | 5,718 | | $ | 7,028 |
The following table presents information on transaction volume (dollars in millions):
| | | | | | | | | | | |
|---:|:----------------------------------------|:---------------------------------|:--------|:-----|:--------|:-----|:--------|:--------|:---|:--------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Network Transaction Volume | | | | | | | | | |
| 4 | PULSE Network | $ | 285,616 | | | $ | 253,072 | | $ | 247,913 |
| 5 | Network Partners | 39,671 | | | 44,542 | | | 40,707 | | |
| 6 | Diners Club(1) | 39,299 | | | 33,505 | | | 25,937 | | |
| 7 | Total Payment Services | 364,586 | | | 331,119 | | | 314,557 | | |
| 8 | Discover Network - Proprietary(2) | 224,572 | | | 218,738 | | | 188,960 | | |
| 9 | Total Network Transaction Volume | $ | 589,158 | | | $ | 549,857 | | $ | 503,517 |
| 10 | Transactions Processed on Networks | | | | | | | | | |
| 11 | Discover Network | 3,728 | | | 3,617 | | | 3,259 | | |
| 12 | PULSE Network | 7,705 | | | 6,200 | | | 5,632 | | |
| 13 | Total Transaction Processed on Networks | 11,433 | | | 9,817 | | | 8,891 | | |
| 14 | Credit Card Volume | | | | | | | | | |
| 15 | Discover Card Volume(3) | $ | 232,785 | | | $ | 224,477 | | $ | 192,755 |
| 16 | Discover Card Sales Volume(4) | $ | 217,914 | | | $ | 210,645 | | $ | 182,125 |
(1)Diners Club volume is derived from data provided by licensees for Diners Club branded cards issued outside North America and is subject to subsequent revision or amendment.
(2)Represents gross Discover card sales volume on the Discover Network.
(3)Represents Discover card activity related to sales net of returns, balance transfers, cash advances and other activity.
(4)Represents Discover card activity related to sales net of returns.
-57-
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 43:
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 57: The following table presents segment data (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Digital Banking</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Private student loans</td><td colspan="2">1,033 </td><td></td><td colspan="3"></td><td colspan="2">831 </td><td></td><td colspan="3"></td><td colspan="2">742 </td><td></td></tr><tr><td colspan="3">Personal loans</td><td colspan="2">1,156 </td><td></td><td colspan="3"></td><td colspan="2">872 </td><td></td><td colspan="3"></td><td colspan="2">878 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">326 </td><td></td><td colspan="3"></td><td colspan="2">167 </td><td></td><td colspan="3"></td><td colspan="2">114 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">892 </td><td></td><td colspan="3"></td><td colspan="2">362 </td><td></td><td colspan="3"></td><td colspan="2">200 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">2,311 </td><td></td><td colspan="3"></td><td colspan="2">2,118 </td><td></td><td colspan="3"></td><td colspan="2">1,745 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">5,822 </td><td></td><td colspan="3"></td><td colspan="2">5,049 </td><td></td><td colspan="3"></td><td colspan="2">4,549 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,570 </td><td></td><td colspan="3"></td><td colspan="2">5,709 </td><td></td><td colspan="3"></td><td colspan="2">6,495 </td><td></td></tr><tr><td colspan="3">Payment Services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other income</td><td colspan="2">450 </td><td></td><td colspan="3"></td><td colspan="2">176 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">194 </td><td></td><td colspan="3"></td><td colspan="2">167 </td><td></td><td colspan="3"></td><td colspan="2">256 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">256 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">533 </td><td></td></tr><tr><td colspan="3">Total income before income taxes</td><td>$</td><td>3,826 </td><td></td><td colspan="3"></td><td>$</td><td>5,718 </td><td></td><td colspan="3"></td><td>$</td><td>7,028 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The following table presents information on transaction volume (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Network Transaction Volume</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">PULSE Network</td><td>$</td><td>285,616 </td><td></td><td colspan="3"></td><td>$</td><td>253,072 </td><td></td><td colspan="3"></td><td>$</td><td>247,913 </td><td></td></tr><tr><td colspan="3">Network Partners</td><td colspan="2">39,671 </td><td></td><td colspan="3"></td><td colspan="2">44,542 </td><td></td><td colspan="3"></td><td colspan="2">40,707 </td><td></td></tr><tr><td colspan="3">Diners Club(1)</td><td colspan="2">39,299 </td><td></td><td colspan="3"></td><td colspan="2">33,505 </td><td></td><td colspan="3"></td><td colspan="2">25,937 </td><td></td></tr><tr><td colspan="3">Total Payment Services</td><td colspan="2">364,586 </td><td></td><td colspan="3"></td><td colspan="2">331,119 </td><td></td><td colspan="3"></td><td colspan="2">314,557 </td><td></td></tr><tr><td colspan="3">Discover Network - Proprietary(2)</td><td colspan="2">224,572 </td><td></td><td colspan="3"></td><td colspan="2">218,738 </td><td></td><td colspan="3"></td><td colspan="2">188,960 </td><td></td></tr><tr><td colspan="3">Total Network Transaction Volume</td><td>$</td><td>589,158 </td><td></td><td colspan="3"></td><td>$</td><td>549,857 </td><td></td><td colspan="3"></td><td>$</td><td>503,517 </td><td></td></tr><tr><td colspan="3">Transactions Processed on Networks</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discover Network</td><td colspan="2">3,728 </td><td></td><td colspan="3"></td><td colspan="2">3,617 </td><td></td><td colspan="3"></td><td colspan="2">3,259 </td><td></td></tr><tr><td colspan="3">PULSE Network</td><td colspan="2">7,705 </td><td></td><td colspan="3"></td><td colspan="2">6,200 </td><td></td><td colspan="3"></td><td colspan="2">5,632 </td><td></td></tr><tr><td colspan="3">Total Transaction Processed on Networks</td><td colspan="2">11,433 </td><td></td><td colspan="3"></td><td colspan="2">9,817 </td><td></td><td colspan="3"></td><td colspan="2">8,891 </td><td></td></tr><tr><td colspan="3">Credit Card Volume</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discover Card Volume(3)</td><td>$</td><td>232,785 </td><td></td><td colspan="3"></td><td>$</td><td>224,477 </td><td></td><td colspan="3"></td><td>$</td><td>192,755 </td><td></td></tr><tr><td colspan="3">Discover Card Sales Volume(4)</td><td>$</td><td>217,914 </td><td></td><td colspan="3"></td><td>$</td><td>210,645 </td><td></td><td colspan="3"></td><td>$</td><td>182,125 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
(1)Diners Club volume is derived from data provided by licensees for Diners Club branded cards issued outside North America and is subject to subsequent revision or amendment.
(2)Represents gross Discover card sales volume on the Discover Network.
(3)Represents Discover card activity related to sales net of returns, balance transfers, cash advances and other activity.
(4)Represents Discover card activity related to sales net of returns.
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TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31,</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="9">Change</td><td colspan="3"></td><td colspan="9">Change</td></tr><tr><td colspan="3">(Millions, except percentages, per share amounts and where indicated)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="9">2023 vs. 2022</td><td colspan="3"></td><td colspan="9">2022 vs. 2021</td></tr><tr><td colspan="3">Selected Income Statement Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td>$</td><td colspan="2">60,515</td><td colspan="3"></td><td>$</td><td colspan="2">52,862</td><td colspan="3"></td><td>$</td><td colspan="2">42,380</td><td colspan="3"></td><td>$</td><td>7,653 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>10,482 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3">4,923</td><td colspan="3"></td><td colspan="3">2,182</td><td colspan="3"></td><td colspan="3">(1,419)</td><td colspan="3"></td><td colspan="2">2,741 </td><td></td><td colspan="3"></td><td colspan="3">#</td><td colspan="3"></td><td colspan="2">3,601 </td><td></td><td colspan="3"></td><td colspan="3">#</td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="3">45,079</td><td colspan="3"></td><td colspan="3">41,095</td><td colspan="3"></td><td colspan="3">33,110</td><td colspan="3"></td><td colspan="2">3,984 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">7,985 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="3">10,513</td><td colspan="3"></td><td colspan="3">9,585</td><td colspan="3"></td><td colspan="3">10,689</td><td colspan="3"></td><td colspan="2">928 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">(1,104)</td><td></td><td colspan="3"></td><td colspan="2">(10)</td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="3">2,139</td><td colspan="3"></td><td colspan="3">2,071</td><td colspan="3"></td><td colspan="3">2,629</td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td><td colspan="3"></td><td colspan="2">(558)</td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="3">8,374</td><td colspan="3"></td><td colspan="3">7,514</td><td colspan="3"></td><td colspan="3">8,060</td><td colspan="3"></td><td colspan="2">860 </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">(546)</td><td></td><td colspan="3"></td><td colspan="2">(7)</td><td></td></tr><tr><td colspan="3">Earnings per common share - diluted (a)</td><td colspan="3"></td><td>$</td><td colspan="2">11.21</td><td colspan="3"></td><td>$</td><td colspan="2">9.85</td><td colspan="3"></td><td>$</td><td colspan="2">10.02</td><td colspan="3"></td><td>$</td><td>1.36 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td>$</td><td>(0.17)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Balance Sheet Data</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td>$</td><td colspan="2">46,596</td><td colspan="3"></td><td>$</td><td colspan="2">33,914</td><td colspan="3"></td><td>$</td><td colspan="2">22,028</td><td colspan="3"></td><td>$</td><td>12,682 </td><td></td><td colspan="3"></td><td colspan="2">37 </td><td>%</td><td colspan="3"></td><td>$</td><td>11,886 </td><td></td><td colspan="3"></td><td colspan="2">54 </td><td>%</td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="3">60,411</td><td colspan="3"></td><td colspan="3">57,613</td><td colspan="3"></td><td colspan="3">53,645</td><td colspan="3"></td><td colspan="2">2,798 </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="3">125,995</td><td colspan="3"></td><td colspan="3">107,964</td><td colspan="3"></td><td colspan="3">88,562</td><td colspan="3"></td><td colspan="2">18,031 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">19,402 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td colspan="3">129,144</td><td colspan="3"></td><td colspan="3">110,239</td><td colspan="3"></td><td colspan="3">84,382</td><td colspan="3"></td><td colspan="2">18,905 </td><td></td><td colspan="3"></td><td colspan="2">17 </td><td></td><td colspan="3"></td><td colspan="2">25,857 </td><td></td><td colspan="3"></td><td colspan="2">31 </td><td></td></tr><tr><td colspan="3">Long-term debt</td><td colspan="3"></td><td>$</td><td colspan="2">47,866</td><td colspan="3"></td><td>$</td><td colspan="2">42,573</td><td colspan="3"></td><td>$</td><td colspan="2">38,675</td><td colspan="3"></td><td>$</td><td>5,293 </td><td></td><td colspan="3"></td><td colspan="2">12 </td><td>%</td><td colspan="3"></td><td>$</td><td>3,898 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Share Statistics (b)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared per common share</td><td colspan="3"></td><td>$</td><td colspan="2">2.40</td><td colspan="3"></td><td>$</td><td colspan="2">2.08</td><td colspan="3"></td><td>$</td><td colspan="2">1.72</td><td colspan="3"></td><td>$</td><td>0.32 </td><td></td><td colspan="3"></td><td colspan="2">15 </td><td>%</td><td colspan="3"></td><td>$</td><td>0.36 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Average common shares outstanding:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="3">735</td><td colspan="3"></td><td colspan="3">751</td><td colspan="3"></td><td colspan="3">789</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="3">736</td><td colspan="3"></td><td colspan="3">752</td><td colspan="3"></td><td colspan="3">790</td><td colspan="3"></td><td colspan="2">(16)</td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td>%</td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Selected Metrics and Ratios</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Network volumes (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,680.1</td><td colspan="3"></td><td>$</td><td colspan="2">1,552.8</td><td colspan="3"></td><td>$</td><td colspan="2">1,284.2</td><td colspan="3"></td><td>$</td><td>127 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">21 </td><td>%</td></tr><tr><td colspan="3">Billed business (Billions)</td><td colspan="3"></td><td>$</td><td colspan="2">1,459.6</td><td colspan="3"></td><td>$</td><td colspan="2">1,338.3</td><td colspan="3"></td><td>$</td><td colspan="2">1,089.8</td><td colspan="3"></td><td>$</td><td>121 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td>%</td><td colspan="3"></td><td>$</td><td>249 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td></tr><tr><td colspan="3">Card Member loans and receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal, interest and fees (c)</td><td colspan="3"></td><td colspan="2">2.0 </td><td>%</td><td colspan="3"></td><td colspan="2">1.0 </td><td>%</td><td colspan="3"></td><td colspan="2">0.8 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net write-off rate - principal only - consumer and small business (c)(d)</td><td colspan="3"></td><td colspan="2">1.8 </td><td>%</td><td colspan="3"></td><td colspan="2">0.9 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">30+ days past due as a % of total - consumer and small business (e)</td><td colspan="3"></td><td colspan="2">1.3 </td><td>%</td><td colspan="3"></td><td colspan="2">1.1 </td><td>%</td><td colspan="3"></td><td colspan="2">0.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Effective tax rate</td><td colspan="3"></td><td colspan="2">20.3 </td><td>%</td><td colspan="3"></td><td colspan="2">21.6 </td><td>%</td><td colspan="3"></td><td colspan="2">24.6 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Return on average equity (f)</td><td colspan="3"></td><td colspan="2">31.5 </td><td>%</td><td colspan="3"></td><td colspan="2">32.3 </td><td>%</td><td colspan="3"></td><td colspan="2">33.7 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common Equity Tier 1</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="2">10.3 </td><td>%</td><td colspan="3"></td><td colspan="2">10.5 </td><td>%</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="45"># Denotes a variance of 100 percent or more</td></tr></table>(a)Represents net income, less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021. Refer to Note 16 and Note 21 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(b)Our common stock trades principally on The New York Stock Exchange under the trading symbol AXP.
(c)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(d)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(e)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 12 for 90+ days past billing metrics for corporate receivables.
(f)Return on average equity (ROE) is calculated by dividing (i) net income for the period by (ii) average shareholders' equity for the period.
43
, The following table presents segment data (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Digital Banking</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Private student loans</td><td colspan="2">1,033 </td><td></td><td colspan="3"></td><td colspan="2">831 </td><td></td><td colspan="3"></td><td colspan="2">742 </td><td></td></tr><tr><td colspan="3">Personal loans</td><td colspan="2">1,156 </td><td></td><td colspan="3"></td><td colspan="2">872 </td><td></td><td colspan="3"></td><td colspan="2">878 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">326 </td><td></td><td colspan="3"></td><td colspan="2">167 </td><td></td><td colspan="3"></td><td colspan="2">114 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">892 </td><td></td><td colspan="3"></td><td colspan="2">362 </td><td></td><td colspan="3"></td><td colspan="2">200 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">2,311 </td><td></td><td colspan="3"></td><td colspan="2">2,118 </td><td></td><td colspan="3"></td><td colspan="2">1,745 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">5,822 </td><td></td><td colspan="3"></td><td colspan="2">5,049 </td><td></td><td colspan="3"></td><td colspan="2">4,549 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,570 </td><td></td><td colspan="3"></td><td colspan="2">5,709 </td><td></td><td colspan="3"></td><td colspan="2">6,495 </td><td></td></tr><tr><td colspan="3">Payment Services</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other income</td><td colspan="2">450 </td><td></td><td colspan="3"></td><td colspan="2">176 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">194 </td><td></td><td colspan="3"></td><td colspan="2">167 </td><td></td><td colspan="3"></td><td colspan="2">256 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">256 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">533 </td><td></td></tr><tr><td colspan="3">Total income before income taxes</td><td>$</td><td>3,826 </td><td></td><td colspan="3"></td><td>$</td><td>5,718 </td><td></td><td colspan="3"></td><td>$</td><td>7,028 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The following table presents information on transaction volume (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Network Transaction Volume</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">PULSE Network</td><td>$</td><td>285,616 </td><td></td><td colspan="3"></td><td>$</td><td>253,072 </td><td></td><td colspan="3"></td><td>$</td><td>247,913 </td><td></td></tr><tr><td colspan="3">Network Partners</td><td colspan="2">39,671 </td><td></td><td colspan="3"></td><td colspan="2">44,542 </td><td></td><td colspan="3"></td><td colspan="2">40,707 </td><td></td></tr><tr><td colspan="3">Diners Club(1)</td><td colspan="2">39,299 </td><td></td><td colspan="3"></td><td colspan="2">33,505 </td><td></td><td colspan="3"></td><td colspan="2">25,937 </td><td></td></tr><tr><td colspan="3">Total Payment Services</td><td colspan="2">364,586 </td><td></td><td colspan="3"></td><td colspan="2">331,119 </td><td></td><td colspan="3"></td><td colspan="2">314,557 </td><td></td></tr><tr><td colspan="3">Discover Network - Proprietary(2)</td><td colspan="2">224,572 </td><td></td><td colspan="3"></td><td colspan="2">218,738 </td><td></td><td colspan="3"></td><td colspan="2">188,960 </td><td></td></tr><tr><td colspan="3">Total Network Transaction Volume</td><td>$</td><td>589,158 </td><td></td><td colspan="3"></td><td>$</td><td>549,857 </td><td></td><td colspan="3"></td><td>$</td><td>503,517 </td><td></td></tr><tr><td colspan="3">Transactions Processed on Networks</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discover Network</td><td colspan="2">3,728 </td><td></td><td colspan="3"></td><td colspan="2">3,617 </td><td></td><td colspan="3"></td><td colspan="2">3,259 </td><td></td></tr><tr><td colspan="3">PULSE Network</td><td colspan="2">7,705 </td><td></td><td colspan="3"></td><td colspan="2">6,200 </td><td></td><td colspan="3"></td><td colspan="2">5,632 </td><td></td></tr><tr><td colspan="3">Total Transaction Processed on Networks</td><td colspan="2">11,433 </td><td></td><td colspan="3"></td><td colspan="2">9,817 </td><td></td><td colspan="3"></td><td colspan="2">8,891 </td><td></td></tr><tr><td colspan="3">Credit Card Volume</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discover Card Volume(3)</td><td>$</td><td>232,785 </td><td></td><td colspan="3"></td><td>$</td><td>224,477 </td><td></td><td colspan="3"></td><td>$</td><td>192,755 </td><td></td></tr><tr><td colspan="3">Discover Card Sales Volume(4)</td><td>$</td><td>217,914 </td><td></td><td colspan="3"></td><td>$</td><td>210,645 </td><td></td><td colspan="3"></td><td>$</td><td>182,125 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
(1)Diners Club volume is derived from data provided by licensees for Diners Club branded cards issued outside North America and is subject to subsequent revision or amendment.
(2)Represents gross Discover card sales volume on the Discover Network.
(3)Represents Discover card activity related to sales net of returns, balance transfers, cash advances and other activity.
(4)Represents Discover card activity related to sales net of returns.
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q_com023
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Compare the ROI of American Express and Discover Financial Services for the year 2022 and 2023.
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ROI Comparison: American Express vs. Discover Financial Services
American Express
2023: Net Income: $8,374 million, Total Assets: $261,108 million, ROI: 3.2%
2022: Net Income: $7,514 million, Total Assets: $228,354 million, ROI: 3.3%
Discover Financial Services
2023: Net Income: $2,940 million, Total Assets: $151,522 million, ROI: 1.9%
2022: Net Income: $4,374 million, Total Assets: $131,706 million, ROI: 3.3%
Summary
In 2023, American Express achieved an ROI of 3.2%, surpassing Discover Financial Services, which reported an ROI of 1.9%.
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Comparison
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94,96;85,86
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0000004962-24-000013;0001393612-24-000010
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA;Item 8. Financial Statements and Supplementary Data
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 96:
CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:--------|:--------|:-----|:--------|:---|:--------|
| 1 | December 31 (Millions, except share data) | 2023 | | 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Cash and cash equivalents | | | | | | |
| 4 | Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5) | $ | 7,118 | | | $ | 5,510 |
| 5 | Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318) | 39,312 | | | 28,097 | | |
| 6 | Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54) | 166 | | | 307 | | |
| 7 | Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544) | 46,596 | | | 33,914 | | |
| 8 | Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229 | 60,237 | | | 57,384 | | |
| 10 | Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747 | 120,877 | | | 104,217 | | |
| 11 | Other loans, less reserves for credit losses: 2023, $126; 2022, $59 | 6,960 | | | 5,357 | | |
| 12 | Investment securities | 2,186 | | | 4,578 | | |
| 13 | Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850 | 5,138 | | | 5,215 | | |
| 14 | Other assets, less reserves for credit losses: 2023, $27; 2022, $22 | 19,114 | | | 17,689 | | |
| 15 | Total assets | $ | 261,108 | | | $ | 228,354 |
| 16 | Liabilities and Shareholders' Equity | | | | | | |
| 17 | Liabilities | | | | | | |
| 18 | Customer deposits | $ | 129,144 | | | $ | 110,239 |
| 19 | Accounts payable | 13,109 | | | 12,133 | | |
| 20 | Short-term borrowings | 1,293 | | | 1,348 | | |
| 21 | Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662) | 47,866 | | | 42,573 | | |
| 22 | Other liabilities | 41,639 | | | 37,350 | | |
| 23 | Total liabilities | $ | 233,051 | | | $ | 203,643 |
| 24 | Contingencies and Commitments (Note 12) | | | | | | |
| 25 | Shareholders' Equity | | | | | | |
| 26 | Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16) | - | | | - | | |
| 27 | Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 | 145 | | | 149 | | |
| 28 | Additional paid-in capital | 11,372 | | | 11,493 | | |
| 29 | Retained earnings | 19,612 | | | 16,279 | | |
| 30 | Accumulated other comprehensive income (loss) | (3,072) | | | (3,210) | | |
| 31 | Total shareholders' equity | 28,057 | | | 24,711 | | |
| 32 | Total liabilities and shareholders' equity | $ | 261,108 | | | $ | 228,354 |
See Notes to Consolidated Financial Statements.
96
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
-85-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
-86-
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CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
,
CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:--------|:--------|:-----|:--------|:---|:--------|
| 1 | December 31 (Millions, except share data) | 2023 | | 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Cash and cash equivalents | | | | | | |
| 4 | Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5) | $ | 7,118 | | | $ | 5,510 |
| 5 | Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318) | 39,312 | | | 28,097 | | |
| 6 | Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54) | 166 | | | 307 | | |
| 7 | Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544) | 46,596 | | | 33,914 | | |
| 8 | Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229 | 60,237 | | | 57,384 | | |
| 10 | Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747 | 120,877 | | | 104,217 | | |
| 11 | Other loans, less reserves for credit losses: 2023, $126; 2022, $59 | 6,960 | | | 5,357 | | |
| 12 | Investment securities | 2,186 | | | 4,578 | | |
| 13 | Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850 | 5,138 | | | 5,215 | | |
| 14 | Other assets, less reserves for credit losses: 2023, $27; 2022, $22 | 19,114 | | | 17,689 | | |
| 15 | Total assets | $ | 261,108 | | | $ | 228,354 |
| 16 | Liabilities and Shareholders' Equity | | | | | | |
| 17 | Liabilities | | | | | | |
| 18 | Customer deposits | $ | 129,144 | | | $ | 110,239 |
| 19 | Accounts payable | 13,109 | | | 12,133 | | |
| 20 | Short-term borrowings | 1,293 | | | 1,348 | | |
| 21 | Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662) | 47,866 | | | 42,573 | | |
| 22 | Other liabilities | 41,639 | | | 37,350 | | |
| 23 | Total liabilities | $ | 233,051 | | | $ | 203,643 |
| 24 | Contingencies and Commitments (Note 12) | | | | | | |
| 25 | Shareholders' Equity | | | | | | |
| 26 | Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16) | - | | | - | | |
| 27 | Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 | 145 | | | 149 | | |
| 28 | Additional paid-in capital | 11,372 | | | 11,493 | | |
| 29 | Retained earnings | 19,612 | | | 16,279 | | |
| 30 | Accumulated other comprehensive income (loss) | (3,072) | | | (3,210) | | |
| 31 | Total shareholders' equity | 28,057 | | | 24,711 | | |
| 32 | Total liabilities and shareholders' equity | $ | 261,108 | | | $ | 228,354 |
See Notes to Consolidated Financial Statements.
96
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
-85-
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 96:
CONSOLIDATED BALANCE SHEETS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">December 31 (Millions, except share data)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5)</td><td colspan="3"></td><td>$</td><td>7,118 </td><td></td><td colspan="3"></td><td>$</td><td>5,510 </td><td></td></tr><tr><td colspan="3">Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318)</td><td colspan="3"></td><td colspan="2">39,312 </td><td></td><td colspan="3"></td><td colspan="2">28,097 </td><td></td></tr><tr><td colspan="3">Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54)</td><td colspan="3"></td><td colspan="2">166 </td><td></td><td colspan="3"></td><td colspan="2">307 </td><td></td></tr><tr><td colspan="3">Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544)</td><td colspan="3"></td><td colspan="2">46,596 </td><td></td><td colspan="3"></td><td colspan="2">33,914 </td><td></td></tr><tr><td colspan="3">Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229</td><td colspan="3"></td><td colspan="2">60,237 </td><td></td><td colspan="3"></td><td colspan="2">57,384 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747</td><td colspan="3"></td><td colspan="2">120,877 </td><td></td><td colspan="3"></td><td colspan="2">104,217 </td><td></td></tr><tr><td colspan="3">Other loans, less reserves for credit losses: 2023, $126; 2022, $59</td><td colspan="3"></td><td colspan="2">6,960 </td><td></td><td colspan="3"></td><td colspan="2">5,357 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="3"></td><td colspan="2">2,186 </td><td></td><td colspan="3"></td><td colspan="2">4,578 </td><td></td></tr><tr><td colspan="3">Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850</td><td colspan="3"></td><td colspan="2">5,138 </td><td></td><td colspan="3"></td><td colspan="2">5,215 </td><td></td></tr><tr><td colspan="3">Other assets, less reserves for credit losses: 2023, $27; 2022, $22</td><td colspan="3"></td><td colspan="2">19,114 </td><td></td><td colspan="3"></td><td colspan="2">17,689 </td><td></td></tr><tr><td colspan="3">Total assets</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td>$</td><td>129,144 </td><td></td><td colspan="3"></td><td>$</td><td>110,239 </td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="3"></td><td colspan="2">13,109 </td><td></td><td colspan="3"></td><td colspan="2">12,133 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="3"></td><td colspan="2">1,293 </td><td></td><td colspan="3"></td><td colspan="2">1,348 </td><td></td></tr><tr><td colspan="3">Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662)</td><td colspan="3"></td><td colspan="2">47,866 </td><td></td><td colspan="3"></td><td colspan="2">42,573 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="3"></td><td colspan="2">41,639 </td><td></td><td colspan="3"></td><td colspan="2">37,350 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="3"></td><td>$</td><td>233,051 </td><td></td><td colspan="3"></td><td>$</td><td>203,643 </td><td></td></tr><tr><td colspan="3">Contingencies and Commitments (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16)</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 </td><td colspan="3"></td><td colspan="2">145 </td><td></td><td colspan="3"></td><td colspan="2">149 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="3"></td><td colspan="2">11,372 </td><td></td><td colspan="3"></td><td colspan="2">11,493 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="3"></td><td colspan="2">19,612 </td><td></td><td colspan="3"></td><td colspan="2">16,279 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">(3,072)</td><td></td><td colspan="3"></td><td colspan="2">(3,210)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="3"></td><td colspan="2">28,057 </td><td></td><td colspan="3"></td><td colspan="2">24,711 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
96
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
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CONSOLIDATED BALANCE SHEETS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">December 31 (Millions, except share data)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5)</td><td colspan="3"></td><td>$</td><td>7,118 </td><td></td><td colspan="3"></td><td>$</td><td>5,510 </td><td></td></tr><tr><td colspan="3">Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318)</td><td colspan="3"></td><td colspan="2">39,312 </td><td></td><td colspan="3"></td><td colspan="2">28,097 </td><td></td></tr><tr><td colspan="3">Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54)</td><td colspan="3"></td><td colspan="2">166 </td><td></td><td colspan="3"></td><td colspan="2">307 </td><td></td></tr><tr><td colspan="3">Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544)</td><td colspan="3"></td><td colspan="2">46,596 </td><td></td><td colspan="3"></td><td colspan="2">33,914 </td><td></td></tr><tr><td colspan="3">Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229</td><td colspan="3"></td><td colspan="2">60,237 </td><td></td><td colspan="3"></td><td colspan="2">57,384 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747</td><td colspan="3"></td><td colspan="2">120,877 </td><td></td><td colspan="3"></td><td colspan="2">104,217 </td><td></td></tr><tr><td colspan="3">Other loans, less reserves for credit losses: 2023, $126; 2022, $59</td><td colspan="3"></td><td colspan="2">6,960 </td><td></td><td colspan="3"></td><td colspan="2">5,357 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="3"></td><td colspan="2">2,186 </td><td></td><td colspan="3"></td><td colspan="2">4,578 </td><td></td></tr><tr><td colspan="3">Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850</td><td colspan="3"></td><td colspan="2">5,138 </td><td></td><td colspan="3"></td><td colspan="2">5,215 </td><td></td></tr><tr><td colspan="3">Other assets, less reserves for credit losses: 2023, $27; 2022, $22</td><td colspan="3"></td><td colspan="2">19,114 </td><td></td><td colspan="3"></td><td colspan="2">17,689 </td><td></td></tr><tr><td colspan="3">Total assets</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td>$</td><td>129,144 </td><td></td><td colspan="3"></td><td>$</td><td>110,239 </td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="3"></td><td colspan="2">13,109 </td><td></td><td colspan="3"></td><td colspan="2">12,133 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="3"></td><td colspan="2">1,293 </td><td></td><td colspan="3"></td><td colspan="2">1,348 </td><td></td></tr><tr><td colspan="3">Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662)</td><td colspan="3"></td><td colspan="2">47,866 </td><td></td><td colspan="3"></td><td colspan="2">42,573 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="3"></td><td colspan="2">41,639 </td><td></td><td colspan="3"></td><td colspan="2">37,350 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="3"></td><td>$</td><td>233,051 </td><td></td><td colspan="3"></td><td>$</td><td>203,643 </td><td></td></tr><tr><td colspan="3">Contingencies and Commitments (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16)</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 </td><td colspan="3"></td><td colspan="2">145 </td><td></td><td colspan="3"></td><td colspan="2">149 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="3"></td><td colspan="2">11,372 </td><td></td><td colspan="3"></td><td colspan="2">11,493 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="3"></td><td colspan="2">19,612 </td><td></td><td colspan="3"></td><td colspan="2">16,279 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">(3,072)</td><td></td><td colspan="3"></td><td colspan="2">(3,210)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="3"></td><td colspan="2">28,057 </td><td></td><td colspan="3"></td><td colspan="2">24,711 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
96
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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q_com024
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Compare the ROE of American Express and Discover Financial Services for the year 2022 and 2023.
|
Return on Equity (ROE) Comparison: American Express vs. Discover Financial Services
American Express:
2023:
Net Income: $8,374 million
Average Shareholders’ Equity: $27,263.5 million ([$28,057 million (2023) + $24,711 million (2022)] / 2)
ROE: 30.7%
2022:
Net Income: $7,514 million
Average Shareholders’ Equity: $24,711 million
ROE: 30.4%
Discover Financial Services:
2023:
Net Income: $2,940 million
Average Shareholders’ Equity: $14,586 million ([$14,828 million (2023) + $14,344 million (2022)] / 2)
ROE: 20.2%
2022:
Net Income: $4,374 million
Average Shareholders’ Equity: $14,344 million
ROE: 30.5%
Summary
In 2023, American Express achieved an ROE of 30.7%, surpassing Discover Financial Services, which reported an ROE of 20.2%.
|
Comparison
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94,95,96,97,98;85,86,87,88,89
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0000004962-24-000013;0001393612-24-000010
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA;Item 8. Financial Statements and Supplementary Data
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 95:
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | | | | | | | | | |
|---:|:---------------------------------------------------------------------|:-----|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | Year Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 3 | Other comprehensive income (loss): | | | | | | | | | |
| 4 | Net unrealized debt securities gains (losses), net of tax | | | | (87) | | | (42) | | |
| 5 | Foreign currency translation adjustments, net of hedges and tax | | | | (230) | | | (163) | | |
| 6 | Net unrealized pension and other postretirement benefits, net of tax | 37 | | | 52 | | | 155 | | |
| 7 | Other comprehensive income (loss) | 138 | | | (265) | | | (50) | | |
| 8 | Comprehensive income | $ | 8,512 | | | $ | 7,249 | | $ | 8,010 |
See Notes to Consolidated Financial Statements.
95
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 96:
CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:--------|:--------|:-----|:--------|:---|:--------|
| 1 | December 31 (Millions, except share data) | 2023 | | 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Cash and cash equivalents | | | | | | |
| 4 | Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5) | $ | 7,118 | | | $ | 5,510 |
| 5 | Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318) | 39,312 | | | 28,097 | | |
| 6 | Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54) | 166 | | | 307 | | |
| 7 | Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544) | 46,596 | | | 33,914 | | |
| 8 | Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229 | 60,237 | | | 57,384 | | |
| 10 | Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747 | 120,877 | | | 104,217 | | |
| 11 | Other loans, less reserves for credit losses: 2023, $126; 2022, $59 | 6,960 | | | 5,357 | | |
| 12 | Investment securities | 2,186 | | | 4,578 | | |
| 13 | Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850 | 5,138 | | | 5,215 | | |
| 14 | Other assets, less reserves for credit losses: 2023, $27; 2022, $22 | 19,114 | | | 17,689 | | |
| 15 | Total assets | $ | 261,108 | | | $ | 228,354 |
| 16 | Liabilities and Shareholders' Equity | | | | | | |
| 17 | Liabilities | | | | | | |
| 18 | Customer deposits | $ | 129,144 | | | $ | 110,239 |
| 19 | Accounts payable | 13,109 | | | 12,133 | | |
| 20 | Short-term borrowings | 1,293 | | | 1,348 | | |
| 21 | Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662) | 47,866 | | | 42,573 | | |
| 22 | Other liabilities | 41,639 | | | 37,350 | | |
| 23 | Total liabilities | $ | 233,051 | | | $ | 203,643 |
| 24 | Contingencies and Commitments (Note 12) | | | | | | |
| 25 | Shareholders' Equity | | | | | | |
| 26 | Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16) | - | | | - | | |
| 27 | Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 | 145 | | | 149 | | |
| 28 | Additional paid-in capital | 11,372 | | | 11,493 | | |
| 29 | Retained earnings | 19,612 | | | 16,279 | | |
| 30 | Accumulated other comprehensive income (loss) | (3,072) | | | (3,210) | | |
| 31 | Total shareholders' equity | 28,057 | | | 24,711 | | |
| 32 | Total liabilities and shareholders' equity | $ | 261,108 | | | $ | 228,354 |
See Notes to Consolidated Financial Statements.
96
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 97:
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:---------|:-------|:-----|:---------|:-----|:-------|:---------|:---|:-------|
| 1 | Years Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Cash Flows from Operating Activities | | | | | | | | | |
| 3 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 4 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 5 | Provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 6 | Depreciation and amortization | 1,651 | | | 1,626 | | | 1,695 | | |
| 7 | Stock-based compensation | 450 | | | 375 | | | 330 | | |
| 8 | Deferred taxes | (1,329) | | | (1,189) | | | 294 | | |
| 9 | Other items (a) | 664 | | | 365 | | | (772) | | |
| 10 | Originations of loans held-for-sale | (54) | | | (277) | | | - | | |
| 11 | Proceeds from sales of loans held-for-sale | 59 | | | 277 | | | - | | |
| 12 | Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | | | | | | | | | |
| 13 | Other assets | (1,244) | | | 1,391 | | | 1,068 | | |
| 14 | Accounts payable & other liabilities | 5,065 | | | 8,815 | | | 5,389 | | |
| 15 | Net cash provided by operating activities | 18,559 | | | 21,079 | | | 14,645 | | |
| 16 | Cash Flows from Investing Activities | | | | | | | | | |
| 17 | Sale of investments | 2 | | | 26 | | | 62 | | |
| 18 | Maturities and redemptions of investments | 3,888 | | | 1,892 | | | 20,032 | | |
| 19 | Purchase of investments | (1,572) | | | (4,175) | | | (1,517) | | |
| 20 | Net increase in Card Member loans and receivables, and other loans (b) | (25,124) | | | (29,562) | | | (27,557) | | |
| 21 | Purchase of premises and equipment, net of sales: 2023, $2; 2022, $1; 2021, $88 | (1,563) | | | (1,855) | | | (1,550) | | |
| 22 | Net (Acquisitions)/dispositions, net of cash acquired | (64) | | | (15) | | | 1 | | |
| 24 | Net cash used in investing activities | (24,433) | | | (33,689) | | | (10,529) | | |
| 25 | Cash Flows from Financing Activities | | | | | | | | | |
| 26 | Net increase (decrease) in customer deposits | 18,915 | | | 25,902 | | | (2,468) | | |
| 27 | Net (decrease) increase in short-term borrowings (b) | (105) | | | (706) | | | 461 | | |
| 28 | Proceeds from long-term debt | 15,674 | | | 23,230 | | | 7,788 | | |
| 29 | Payments of long-term debt | (10,703) | | | (18,906) | | | (11,662) | | |
| 30 | Issuance of American Express preferred shares | - | | | - | | | 1,584 | | |
| 31 | Redemption of American Express preferred shares | - | | | - | | | (1,600) | | |
| 32 | Issuance of American Express common shares | 28 | | | 56 | | | 64 | | |
| 33 | Repurchase of American Express common shares and other | (3,650) | | | (3,502) | | | (7,652) | | |
| 34 | Dividends paid | (1,780) | | | (1,565) | | | (1,448) | | |
| 35 | Net cash provided by (used in) financing activities | 18,379 | | | 24,509 | | | (14,933) | | |
| 36 | Effect of foreign currency exchange rates on cash and cash equivalents | 177 | | | (13) | | | (120) | | |
| 37 | Net increase (decrease) in cash and cash equivalents | 12,682 | | | 11,886 | | | (10,937) | | |
| 38 | Cash and cash equivalents at beginning of year | 33,914 | | | 22,028 | | | 32,965 | | |
| 39 | Cash and cash equivalents at end of year | $ | 46,596 | | | $ | 33,914 | | $ | 22,028 |
(a)Includes gains and losses on fair value hedges, losses on tax credit investments, net gains and losses on Amex Ventures investments and changes in equity method investments.
(b)Excludes an increase of $117 million related to non-cash activity during 2023.
Net income taxes paid during 2023, 2022 and 2021 were $3.3 billion, $3.0 billion and $1.6 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $6.4 billion, $2.2 billion and $1.1 billion, respectively.
See Notes to Consolidated Financial Statements.
97
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 98:
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
| | | | | | | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------|:--------|:-------|:-----------------|:---|:--------------|:---|:---------------------------|:----------------------------------------------|:--------|:------------------|:--------|:-------|:--------|:---|:--------|:---|:-------|
| 1 | (Millions, except per share amounts) | Total | | Preferred Shares | | Common Shares | | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | | Retained Earnings | | | | | | | |
| 2 | Balances as of December 31, 2020 | $ | 22,984 | | | $ | - | | $ | 161 | | $ | 11,881 | | $ | (2,895) | $ | 13,837 |
| 4 | Net income | 8,060 | | | - | | | - | | - | | - | | 8,060 | | | | |
| 5 | Other comprehensive loss | (50) | | | - | | | - | | - | | (50) | | - | | | | |
| 6 | Preferred shares issued | 1,584 | | | - | | | - | | 1,584 | | - | | - | | | | |
| 7 | Redemption of preferred shares | (1,600) | | | - | | | - | | (1,584) | | - | | (16) | | | | |
| 8 | Repurchase of common shares | (7,598) | | | - | | | (9) | | (631) | | - | | (6,958) | | | | |
| 9 | Other changes, primarily employee plans | 227 | | | - | | | 1 | | 245 | | - | | (19) | | | | |
| 10 | Cash dividends declared preferred Series B, $36,419.41 per share | (27) | | | - | | | - | | - | | - | | (27) | | | | |
| 11 | Cash dividends declared preferred Series C, $26,317.47 per share | (23) | | | - | | | - | | - | | - | | (23) | | | | |
| 12 | Cash dividends declared preferred Series D, $13,213.89 per share | (21) | | | - | | | - | | - | | - | | (21) | | | | |
| 13 | Cash dividends declared common, $1.72 per share | (1,359) | | | - | | | - | | - | | - | | (1,359) | | | | |
| 14 | Balances as of December 31, 2021 | 22,177 | | | - | | | 153 | | 11,495 | | (2,945) | | 13,474 | | | | |
| 16 | Net income | 7,514 | | | - | | | - | | - | | - | | 7,514 | | | | |
| 17 | Other comprehensive loss | (265) | | | - | | | - | | - | | (265) | | - | | | | |
| 20 | Repurchase of common shares | (3,332) | | | - | | | (4) | | (302) | | - | | (3,026) | | | | |
| 21 | Other changes, primarily employee plans | 242 | | | - | | | - | | 300 | | - | | (58) | | | | |
| 24 | Cash dividends declared preferred Series D, $35,993.05 per share | (57) | | | - | | | - | | - | | - | | (57) | | | | |
| 25 | Cash dividends declared common, $2.08 per share | (1,568) | | | - | | | - | | - | | - | | (1,568) | | | | |
| 26 | Balances as of December 31, 2022 | 24,711 | | | - | | | 149 | | 11,493 | | (3,210) | | 16,279 | | | | |
| 27 | Net income | 8,374 | | | - | | | - | | - | | - | | 8,374 | | | | |
| 28 | Other comprehensive income | 138 | | | - | | | - | | - | | 138 | | - | | | | |
| 31 | Repurchase of common shares | (3,519) | | | - | | | (4) | | (334) | | - | | (3,181) | | | | |
| 32 | Other changes, primarily employee plans | 181 | | | - | | | - | | 213 | | - | | (32) | | | | |
| 35 | Cash dividends declared preferred Series D, $35,993.05 per share | (58) | | | - | | | - | | - | | - | | (58) | | | | |
| 36 | Cash dividends declared common, $2.40 per share | (1,770) | | | - | | | - | | - | | - | | (1,770) | | | | |
| 37 | Balances as of December 31, 2023 | $ | 28,057 | | | $ | - | | $ | 145 | | $ | 11,372 | | $ | (3,072) | $ | 19,612 |
See Notes to Consolidated Financial Statements.
98
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
-85-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
-86-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 87:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:---------------------------------|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 4 | Other comprehensive income (loss), net of tax | | | | | | | | | |
| 5 | Unrealized gains (losses) on available-for-sale investment securities, net of tax | 99 | | | (250) | | | (170) | | |
| 6 | Unrealized gains (losses) on cash flow hedges, net of tax | 6 | | | (5) | | | 3 | | |
| 7 | Unrealized pension and post-retirement plan gains, net of tax | 9 | | | 10 | | | 28 | | |
| 8 | Other comprehensive income (loss) | 114 | | | (245) | | | (139) | | |
| 9 | Comprehensive income | $ | 3,054 | | | $ | 4,129 | | $ | 5,283 |
See Notes to the Consolidated Financial Statements.
-87-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 88:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Changes in Stockholders' Equity
(dollars in millions, shares in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------------------------|:----------------|:-------------|:------|:-------------------------|:-----------------|:--------|:----------------------------------------------|:---|:--------------|:---|:-------------------------|:---|:-------|:------|:-------|:---------|:---|:------|:--------|:---|:---------|:---|:-------|
| 1 | | Preferred Stock | Common Stock | | AdditionalPaid-inCapital | RetainedEarnings | | Accumulated Other Comprehensive Income (Loss) | | TreasuryStock | | TotalStockholders'Equity | | | | | | | | | | | | |
| 3 | | Shares | Amount | | Shares | Amount | | | | | | | | | | | | | | | | | | |
| 4 | Balance at December 31, 2020 | 11 | | $ | 1,056 | | 567,898 | | | $ | 6 | | $ | 4,257 | $ | 19,754 | | $ | 45 | | $ | (14,435) | $ | 10,683 |
| 5 | Net income | - | | - | | - | | | - | | | - | | 5,422 | - | | - | | | 5,422 | | | | |
| 6 | Other comprehensive loss | - | | - | | - | | | - | | | - | | - | (139) | | - | | | (139) | | | | |
| 7 | Purchases of treasury stock | - | | - | | - | | | - | | | - | | - | - | | (2,260) | | | (2,260) | | | | |
| 8 | Common stock issued under employee benefit plans | - | | - | | 88 | | | - | | | 9 | | - | - | | - | | | 9 | | | | |
| 9 | Common stock issued and stock-based compensation expense | - | | - | | 845 | | | - | | | 103 | | - | - | | - | | | 103 | | | | |
| 11 | Dividends - common stock ($1.88 per share) | - | | - | | - | | | - | | | - | | (569) | - | | - | | | (569) | | | | |
| 12 | Dividends - Series C preferred stock ($5,500 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 13 | Dividends - Series D preferred stock ($7,674 per share) | - | | - | | - | | | - | | | - | | (38) | - | | - | | | (38) | | | | |
| 14 | Balance at December 31, 2021 | 11 | | 1,056 | | 568,831 | | | 6 | | | 4,369 | | 24,538 | (94) | | (16,695) | | | 13,180 | | | | |
| 16 | Net income | - | | - | | - | | | - | | | - | | 4,374 | - | | - | | | 4,374 | | | | |
| 17 | Other comprehensive loss | - | | - | | - | | | - | | | - | | - | (245) | | - | | | (245) | | | | |
| 18 | Purchases of treasury stock | - | | - | | - | | | - | | | - | | - | - | | (2,359) | | | (2,359) | | | | |
| 19 | Common stock issued under employee benefit plans | - | | - | | 107 | | | - | | | 10 | | - | - | | - | | | 10 | | | | |
| 20 | Common stock issued and stock-based compensation expense | - | | - | | 751 | | | - | | | 89 | | - | - | | - | | | 89 | | | | |
| 22 | Dividends - common stock ($2.30 per share) | - | | - | | - | | | - | | | - | | (643) | - | | - | | | (643) | | | | |
| 23 | Dividends - Series C preferred stock ($5,500 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 24 | Dividends - Series D preferred stock ($6,125 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 25 | Balance at December 31, 2022 | 11 | | 1,056 | | 569,689 | | | 6 | | | 4,468 | | 28,207 | (339) | | (19,054) | | | 14,344 | | | | |
| 26 | Cumulative effect of ASU No. 2022-02 adoption | - | | - | | - | | | - | | | - | | 52 | - | | - | | | 52 | | | | |
| 27 | Net income | - | | - | | - | | | - | | | - | | 2,940 | - | | - | | | 2,940 | | | | |
| 28 | Other comprehensive income | - | | - | | - | | | - | | | - | | - | 114 | | - | | | 114 | | | | |
| 29 | Purchases of treasury stock | - | | - | | - | | | - | | | - | | - | - | | (1,956) | | | (1,956) | | | | |
| 30 | Common stock issued under employee benefit plans | - | | - | | 118 | | | - | | | 11 | | - | - | | - | | | 11 | | | | |
| 31 | Common stock issued and stock-based compensation expense | - | | - | | 1,031 | | | - | | | 74 | | - | - | | - | | | 74 | | | | |
| 33 | Dividends - common stock ($2.70 per share) | - | | - | | - | | | - | | | - | | (689) | - | | - | | | (689) | | | | |
| 34 | Dividends - Series C preferred stock ($5,500 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 35 | Dividends - Series D preferred stock ($6,125 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 36 | Balance at December 31, 2023 | 11 | | $ | 1,056 | | 570,838 | | | $ | 6 | | $ | 4,553 | $ | 30,448 | | $ | (225) | | $ | (21,010) | $ | 14,828 |
See Notes to the Consolidated Financial Statements.
-88-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 89:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Cash Flows
(dollars in millions)
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:---------------------------------|:-------|:-----|:---------|:-----|:------|:--------|:---|:-------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Cash flows provided by operating activities | | | | | | | | | |
| 4 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 5 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 6 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 7 | Deferred income taxes | (626) | | | (433) | | | 318 | | |
| 8 | Depreciation and amortization | 458 | | | 561 | | | 531 | | |
| 9 | Amortization of deferred revenues | (468) | | | (365) | | | (295) | | |
| 10 | Net losses (gains) on investments and other assets | 50 | | | 261 | | | (382) | | |
| 11 | Other, net | 110 | | | 125 | | | 257 | | |
| 12 | Changes in assets and liabilities: | | | | | | | | | |
| 13 | Increase in other assets | (658) | | | (846) | | | (496) | | |
| 14 | Increase in accrued expenses and other liabilities | 739 | | | 1,104 | | | 446 | | |
| 15 | Net cash provided by operating activities | 8,563 | | | 7,140 | | | 6,019 | | |
| 17 | Cash flows provided by (used for) investing activities | | | | | | | | | |
| 18 | Maturities of other short-term investments | - | | | - | | | 2,200 | | |
| 20 | Maturities of available-for-sale investment securities | 1,831 | | | 2,084 | | | 2,727 | | |
| 21 | Purchases of available-for-sale investment securities | (2,996) | | | (7,682) | | | (9) | | |
| 22 | Maturities of held-to-maturity investment securities | 16 | | | 32 | | | 82 | | |
| 23 | Purchases of held-to-maturity investment securities | (49) | | | (50) | | | (28) | | |
| 24 | Net change in principal on loans originated for investment | (19,934) | | | (19,961) | | | (4,574) | | |
| 25 | Proceeds from the sale of available for sale securities | - | | | - | | | 5 | | |
| 26 | Proceeds from the sale of other investments | 44 | | | 336 | | | 1 | | |
| 27 | Purchases of other investments | (100) | | | (169) | | | (170) | | |
| 28 | Proceeds from sale of premises and equipment | - | | | 9 | | | - | | |
| 29 | Purchases of premises and equipment | (303) | | | (236) | | | (194) | | |
| 30 | Net cash (used for) provided by investing activities | (21,491) | | | (25,637) | | | 40 | | |
| 32 | Cash flows (used for) provided by financing activities | | | | | | | | | |
| 33 | Net change in short-term borrowings | 750 | | | (1,750) | | | 1,750 | | |
| 34 | Net change in deposits | 17,250 | | | 19,208 | | | (4,533) | | |
| 35 | Proceeds from issuance of securitized debt | 2,230 | | | 5,620 | | | 1,727 | | |
| 36 | Maturities and repayment of securitized debt | (1,494) | | | (4,395) | | | (3,451) | | |
| 37 | Proceeds from issuance of other long-term borrowings | 2,041 | | | 1,265 | | | - | | |
| 38 | Maturities and repayments of other long-term borrowings | (2,340) | | | (834) | | | (922) | | |
| 39 | Proceeds from issuance of common stock | 12 | | | 10 | | | 9 | | |
| 42 | Dividends paid on common and preferred stock | (752) | | | (703) | | | (636) | | |
| 43 | Purchases of treasury stock | (1,938) | | | (2,359) | | | (2,260) | | |
| 44 | Net cash provided by (used for) financing activities | 15,759 | | | 16,062 | | | (8,316) | | |
| 45 | Net increase (decrease) in cash, cash equivalents and restricted cash | 2,831 | | | (2,435) | | | (2,257) | | |
| 46 | Cash, cash equivalents and restricted cash, at the beginning of the period | 8,897 | | | 11,332 | | | 13,589 | | |
| 47 | Cash, cash equivalents and restricted cash, at the end of the period | $ | 11,728 | | | $ | 8,897 | | $ | 11,332 |
| 49 | Reconciliation of cash, cash equivalents and restricted cash | | | | | | | | | |
| 50 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 | | $ | 8,750 |
| 51 | Restricted cash | 43 | | | 41 | | | 2,582 | | |
| 52 | Cash, cash equivalents and restricted cash, at the end of the period | $ | 11,728 | | | $ | 8,897 | | $ | 11,332 |
| 54 | Supplemental disclosures of cash flow information: | | | | | | | | | |
| 55 | Cash paid during the period for: | | | | | | | | | |
| 56 | Interest expense | $ | 4,508 | | | $ | 1,666 | | $ | 1,077 |
| 57 | Income taxes, net of income tax refunds | $ | 1,605 | | | $ | 1,865 | | $ | 1,305 |
See Notes to the Consolidated Financial Statements.
-89-
|
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | |
|---:|:--------------------------------------------------------------------------|:-------|:-------|:-----|:-------|:-----|:-------|:--------|:---|:-------|
| 1 | Year Ended December 31 (Millions, except per share amounts) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Revenues | | | | | | | | | |
| 3 | Non-interest revenues | | | | | | | | | |
| 4 | Discount revenue | $ | 33,416 | | | $ | 30,739 | | $ | 24,563 |
| 5 | Net card fees | 7,255 | | | 6,070 | | | 5,195 | | |
| 6 | Service fees and other revenue | 5,005 | | | 4,521 | | | 3,316 | | |
| 7 | Processed revenue | 1,705 | | | 1,637 | | | 1,556 | | |
| 8 | Total non-interest revenues | 47,381 | | | 42,967 | | | 34,630 | | |
| 9 | Interest income | | | | | | | | | |
| 10 | Interest on loans | 17,697 | | | 11,967 | | | 8,850 | | |
| 11 | Interest and dividends on investment securities | 128 | | | 96 | | | 83 | | |
| 12 | Deposits with banks and other | 2,158 | | | 595 | | | 100 | | |
| 13 | Total interest income | 19,983 | | | 12,658 | | | 9,033 | | |
| 14 | Interest expense | | | | | | | | | |
| 15 | Deposits | 4,865 | | | 1,527 | | | 458 | | |
| 16 | Long-term debt and other | 1,984 | | | 1,236 | | | 825 | | |
| 17 | Total interest expense | 6,849 | | | 2,763 | | | 1,283 | | |
| 18 | Net interest income | 13,134 | | | 9,895 | | | 7,750 | | |
| 19 | Total revenues net of interest expense | 60,515 | | | 52,862 | | | 42,380 | | |
| 20 | Provisions for credit losses | | | | | | | | | |
| 21 | Card Member receivables | 880 | | | 627 | | | (73) | | |
| 22 | Card Member loans | 3,839 | | | 1,514 | | | (1,155) | | |
| 23 | Other | 204 | | | 41 | | | (191) | | |
| 24 | Total provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 25 | Total revenues net of interest expense after provisions for credit losses | 55,592 | | | 50,680 | | | 43,799 | | |
| 26 | Expenses | | | | | | | | | |
| 27 | Card Member rewards | 15,367 | | | 14,002 | | | 11,007 | | |
| 28 | Business development | 5,657 | | | 4,943 | | | 3,762 | | |
| 29 | Card Member services | 3,968 | | | 2,959 | | | 1,993 | | |
| 30 | Marketing | 5,213 | | | 5,458 | | | 5,291 | | |
| 31 | Salaries and employee benefits | 8,067 | | | 7,252 | | | 6,240 | | |
| 32 | Other, net | 6,807 | | | 6,481 | | | 4,817 | | |
| 33 | Total expenses | 45,079 | | | 41,095 | | | 33,110 | | |
| 34 | Pretax income | 10,513 | | | 9,585 | | | 10,689 | | |
| 35 | Income tax provision | 2,139 | | | 2,071 | | | 2,629 | | |
| 36 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 37 | Earnings per Common Share - (Note 21)(a) | | | | | | | | | |
| 38 | Basic | $ | 11.23 | | | $ | 9.86 | | $ | 10.04 |
| 39 | Diluted | $ | 11.21 | | | $ | 9.85 | | $ | 10.02 |
| 40 | Average common shares outstanding for earnings per common share: | | | | | | | | | |
| 41 | Basic | | | | 751 | | | 789 | | |
| 42 | Diluted | | | | 752 | | | 790 | | |
(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
,
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | | | | | | | | | |
|---:|:---------------------------------------------------------------------|:-----|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | Year Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 3 | Other comprehensive income (loss): | | | | | | | | | |
| 4 | Net unrealized debt securities gains (losses), net of tax | | | | (87) | | | (42) | | |
| 5 | Foreign currency translation adjustments, net of hedges and tax | | | | (230) | | | (163) | | |
| 6 | Net unrealized pension and other postretirement benefits, net of tax | 37 | | | 52 | | | 155 | | |
| 7 | Other comprehensive income (loss) | 138 | | | (265) | | | (50) | | |
| 8 | Comprehensive income | $ | 8,512 | | | $ | 7,249 | | $ | 8,010 |
See Notes to Consolidated Financial Statements.
95
,
CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:--------|:--------|:-----|:--------|:---|:--------|
| 1 | December 31 (Millions, except share data) | 2023 | | 2022 | | | |
| 2 | Assets | | | | | | |
| 3 | Cash and cash equivalents | | | | | | |
| 4 | Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5) | $ | 7,118 | | | $ | 5,510 |
| 5 | Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318) | 39,312 | | | 28,097 | | |
| 6 | Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54) | 166 | | | 307 | | |
| 7 | Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544) | 46,596 | | | 33,914 | | |
| 8 | Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229 | 60,237 | | | 57,384 | | |
| 10 | Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747 | 120,877 | | | 104,217 | | |
| 11 | Other loans, less reserves for credit losses: 2023, $126; 2022, $59 | 6,960 | | | 5,357 | | |
| 12 | Investment securities | 2,186 | | | 4,578 | | |
| 13 | Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850 | 5,138 | | | 5,215 | | |
| 14 | Other assets, less reserves for credit losses: 2023, $27; 2022, $22 | 19,114 | | | 17,689 | | |
| 15 | Total assets | $ | 261,108 | | | $ | 228,354 |
| 16 | Liabilities and Shareholders' Equity | | | | | | |
| 17 | Liabilities | | | | | | |
| 18 | Customer deposits | $ | 129,144 | | | $ | 110,239 |
| 19 | Accounts payable | 13,109 | | | 12,133 | | |
| 20 | Short-term borrowings | 1,293 | | | 1,348 | | |
| 21 | Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662) | 47,866 | | | 42,573 | | |
| 22 | Other liabilities | 41,639 | | | 37,350 | | |
| 23 | Total liabilities | $ | 233,051 | | | $ | 203,643 |
| 24 | Contingencies and Commitments (Note 12) | | | | | | |
| 25 | Shareholders' Equity | | | | | | |
| 26 | Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16) | - | | | - | | |
| 27 | Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 | 145 | | | 149 | | |
| 28 | Additional paid-in capital | 11,372 | | | 11,493 | | |
| 29 | Retained earnings | 19,612 | | | 16,279 | | |
| 30 | Accumulated other comprehensive income (loss) | (3,072) | | | (3,210) | | |
| 31 | Total shareholders' equity | 28,057 | | | 24,711 | | |
| 32 | Total liabilities and shareholders' equity | $ | 261,108 | | | $ | 228,354 |
See Notes to Consolidated Financial Statements.
96
,
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------------------|:---------|:-------|:-----|:---------|:-----|:-------|:---------|:---|:-------|
| 1 | Years Ended December 31 (Millions) | 2023 | | 2022 | | 2021 | | | | |
| 2 | Cash Flows from Operating Activities | | | | | | | | | |
| 3 | Net income | $ | 8,374 | | | $ | 7,514 | | $ | 8,060 |
| 4 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 5 | Provisions for credit losses | 4,923 | | | 2,182 | | | (1,419) | | |
| 6 | Depreciation and amortization | 1,651 | | | 1,626 | | | 1,695 | | |
| 7 | Stock-based compensation | 450 | | | 375 | | | 330 | | |
| 8 | Deferred taxes | (1,329) | | | (1,189) | | | 294 | | |
| 9 | Other items (a) | 664 | | | 365 | | | (772) | | |
| 10 | Originations of loans held-for-sale | (54) | | | (277) | | | - | | |
| 11 | Proceeds from sales of loans held-for-sale | 59 | | | 277 | | | - | | |
| 12 | Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | | | | | | | | | |
| 13 | Other assets | (1,244) | | | 1,391 | | | 1,068 | | |
| 14 | Accounts payable & other liabilities | 5,065 | | | 8,815 | | | 5,389 | | |
| 15 | Net cash provided by operating activities | 18,559 | | | 21,079 | | | 14,645 | | |
| 16 | Cash Flows from Investing Activities | | | | | | | | | |
| 17 | Sale of investments | 2 | | | 26 | | | 62 | | |
| 18 | Maturities and redemptions of investments | 3,888 | | | 1,892 | | | 20,032 | | |
| 19 | Purchase of investments | (1,572) | | | (4,175) | | | (1,517) | | |
| 20 | Net increase in Card Member loans and receivables, and other loans (b) | (25,124) | | | (29,562) | | | (27,557) | | |
| 21 | Purchase of premises and equipment, net of sales: 2023, $2; 2022, $1; 2021, $88 | (1,563) | | | (1,855) | | | (1,550) | | |
| 22 | Net (Acquisitions)/dispositions, net of cash acquired | (64) | | | (15) | | | 1 | | |
| 24 | Net cash used in investing activities | (24,433) | | | (33,689) | | | (10,529) | | |
| 25 | Cash Flows from Financing Activities | | | | | | | | | |
| 26 | Net increase (decrease) in customer deposits | 18,915 | | | 25,902 | | | (2,468) | | |
| 27 | Net (decrease) increase in short-term borrowings (b) | (105) | | | (706) | | | 461 | | |
| 28 | Proceeds from long-term debt | 15,674 | | | 23,230 | | | 7,788 | | |
| 29 | Payments of long-term debt | (10,703) | | | (18,906) | | | (11,662) | | |
| 30 | Issuance of American Express preferred shares | - | | | - | | | 1,584 | | |
| 31 | Redemption of American Express preferred shares | - | | | - | | | (1,600) | | |
| 32 | Issuance of American Express common shares | 28 | | | 56 | | | 64 | | |
| 33 | Repurchase of American Express common shares and other | (3,650) | | | (3,502) | | | (7,652) | | |
| 34 | Dividends paid | (1,780) | | | (1,565) | | | (1,448) | | |
| 35 | Net cash provided by (used in) financing activities | 18,379 | | | 24,509 | | | (14,933) | | |
| 36 | Effect of foreign currency exchange rates on cash and cash equivalents | 177 | | | (13) | | | (120) | | |
| 37 | Net increase (decrease) in cash and cash equivalents | 12,682 | | | 11,886 | | | (10,937) | | |
| 38 | Cash and cash equivalents at beginning of year | 33,914 | | | 22,028 | | | 32,965 | | |
| 39 | Cash and cash equivalents at end of year | $ | 46,596 | | | $ | 33,914 | | $ | 22,028 |
(a)Includes gains and losses on fair value hedges, losses on tax credit investments, net gains and losses on Amex Ventures investments and changes in equity method investments.
(b)Excludes an increase of $117 million related to non-cash activity during 2023.
Net income taxes paid during 2023, 2022 and 2021 were $3.3 billion, $3.0 billion and $1.6 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $6.4 billion, $2.2 billion and $1.1 billion, respectively.
See Notes to Consolidated Financial Statements.
97
,
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
| | | | | | | | | | | | | | | | | | | |
|---:|:-----------------------------------------------------------------|:--------|:-------|:-----------------|:---|:--------------|:---|:---------------------------|:----------------------------------------------|:--------|:------------------|:--------|:-------|:--------|:---|:--------|:---|:-------|
| 1 | (Millions, except per share amounts) | Total | | Preferred Shares | | Common Shares | | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | | Retained Earnings | | | | | | | |
| 2 | Balances as of December 31, 2020 | $ | 22,984 | | | $ | - | | $ | 161 | | $ | 11,881 | | $ | (2,895) | $ | 13,837 |
| 4 | Net income | 8,060 | | | - | | | - | | - | | - | | 8,060 | | | | |
| 5 | Other comprehensive loss | (50) | | | - | | | - | | - | | (50) | | - | | | | |
| 6 | Preferred shares issued | 1,584 | | | - | | | - | | 1,584 | | - | | - | | | | |
| 7 | Redemption of preferred shares | (1,600) | | | - | | | - | | (1,584) | | - | | (16) | | | | |
| 8 | Repurchase of common shares | (7,598) | | | - | | | (9) | | (631) | | - | | (6,958) | | | | |
| 9 | Other changes, primarily employee plans | 227 | | | - | | | 1 | | 245 | | - | | (19) | | | | |
| 10 | Cash dividends declared preferred Series B, $36,419.41 per share | (27) | | | - | | | - | | - | | - | | (27) | | | | |
| 11 | Cash dividends declared preferred Series C, $26,317.47 per share | (23) | | | - | | | - | | - | | - | | (23) | | | | |
| 12 | Cash dividends declared preferred Series D, $13,213.89 per share | (21) | | | - | | | - | | - | | - | | (21) | | | | |
| 13 | Cash dividends declared common, $1.72 per share | (1,359) | | | - | | | - | | - | | - | | (1,359) | | | | |
| 14 | Balances as of December 31, 2021 | 22,177 | | | - | | | 153 | | 11,495 | | (2,945) | | 13,474 | | | | |
| 16 | Net income | 7,514 | | | - | | | - | | - | | - | | 7,514 | | | | |
| 17 | Other comprehensive loss | (265) | | | - | | | - | | - | | (265) | | - | | | | |
| 20 | Repurchase of common shares | (3,332) | | | - | | | (4) | | (302) | | - | | (3,026) | | | | |
| 21 | Other changes, primarily employee plans | 242 | | | - | | | - | | 300 | | - | | (58) | | | | |
| 24 | Cash dividends declared preferred Series D, $35,993.05 per share | (57) | | | - | | | - | | - | | - | | (57) | | | | |
| 25 | Cash dividends declared common, $2.08 per share | (1,568) | | | - | | | - | | - | | - | | (1,568) | | | | |
| 26 | Balances as of December 31, 2022 | 24,711 | | | - | | | 149 | | 11,493 | | (3,210) | | 16,279 | | | | |
| 27 | Net income | 8,374 | | | - | | | - | | - | | - | | 8,374 | | | | |
| 28 | Other comprehensive income | 138 | | | - | | | - | | - | | 138 | | - | | | | |
| 31 | Repurchase of common shares | (3,519) | | | - | | | (4) | | (334) | | - | | (3,181) | | | | |
| 32 | Other changes, primarily employee plans | 181 | | | - | | | - | | 213 | | - | | (32) | | | | |
| 35 | Cash dividends declared preferred Series D, $35,993.05 per share | (58) | | | - | | | - | | - | | - | | (58) | | | | |
| 36 | Cash dividends declared common, $2.40 per share | (1,770) | | | - | | | - | | - | | - | | (1,770) | | | | |
| 37 | Balances as of December 31, 2023 | $ | 28,057 | | | $ | - | | $ | 145 | | $ | 11,372 | | $ | (3,072) | $ | 19,612 |
See Notes to Consolidated Financial Statements.
98
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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Consolidated Statements of Comprehensive Income
(dollars in millions)
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:---------------------------------|:------|:-----|:------|:-----|:------|:------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 4 | Other comprehensive income (loss), net of tax | | | | | | | | | |
| 5 | Unrealized gains (losses) on available-for-sale investment securities, net of tax | 99 | | | (250) | | | (170) | | |
| 6 | Unrealized gains (losses) on cash flow hedges, net of tax | 6 | | | (5) | | | 3 | | |
| 7 | Unrealized pension and post-retirement plan gains, net of tax | 9 | | | 10 | | | 28 | | |
| 8 | Other comprehensive income (loss) | 114 | | | (245) | | | (139) | | |
| 9 | Comprehensive income | $ | 3,054 | | | $ | 4,129 | | $ | 5,283 |
See Notes to the Consolidated Financial Statements.
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Consolidated Statements of Changes in Stockholders' Equity
(dollars in millions, shares in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------------------------|:----------------|:-------------|:------|:-------------------------|:-----------------|:--------|:----------------------------------------------|:---|:--------------|:---|:-------------------------|:---|:-------|:------|:-------|:---------|:---|:------|:--------|:---|:---------|:---|:-------|
| 1 | | Preferred Stock | Common Stock | | AdditionalPaid-inCapital | RetainedEarnings | | Accumulated Other Comprehensive Income (Loss) | | TreasuryStock | | TotalStockholders'Equity | | | | | | | | | | | | |
| 3 | | Shares | Amount | | Shares | Amount | | | | | | | | | | | | | | | | | | |
| 4 | Balance at December 31, 2020 | 11 | | $ | 1,056 | | 567,898 | | | $ | 6 | | $ | 4,257 | $ | 19,754 | | $ | 45 | | $ | (14,435) | $ | 10,683 |
| 5 | Net income | - | | - | | - | | | - | | | - | | 5,422 | - | | - | | | 5,422 | | | | |
| 6 | Other comprehensive loss | - | | - | | - | | | - | | | - | | - | (139) | | - | | | (139) | | | | |
| 7 | Purchases of treasury stock | - | | - | | - | | | - | | | - | | - | - | | (2,260) | | | (2,260) | | | | |
| 8 | Common stock issued under employee benefit plans | - | | - | | 88 | | | - | | | 9 | | - | - | | - | | | 9 | | | | |
| 9 | Common stock issued and stock-based compensation expense | - | | - | | 845 | | | - | | | 103 | | - | - | | - | | | 103 | | | | |
| 11 | Dividends - common stock ($1.88 per share) | - | | - | | - | | | - | | | - | | (569) | - | | - | | | (569) | | | | |
| 12 | Dividends - Series C preferred stock ($5,500 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 13 | Dividends - Series D preferred stock ($7,674 per share) | - | | - | | - | | | - | | | - | | (38) | - | | - | | | (38) | | | | |
| 14 | Balance at December 31, 2021 | 11 | | 1,056 | | 568,831 | | | 6 | | | 4,369 | | 24,538 | (94) | | (16,695) | | | 13,180 | | | | |
| 16 | Net income | - | | - | | - | | | - | | | - | | 4,374 | - | | - | | | 4,374 | | | | |
| 17 | Other comprehensive loss | - | | - | | - | | | - | | | - | | - | (245) | | - | | | (245) | | | | |
| 18 | Purchases of treasury stock | - | | - | | - | | | - | | | - | | - | - | | (2,359) | | | (2,359) | | | | |
| 19 | Common stock issued under employee benefit plans | - | | - | | 107 | | | - | | | 10 | | - | - | | - | | | 10 | | | | |
| 20 | Common stock issued and stock-based compensation expense | - | | - | | 751 | | | - | | | 89 | | - | - | | - | | | 89 | | | | |
| 22 | Dividends - common stock ($2.30 per share) | - | | - | | - | | | - | | | - | | (643) | - | | - | | | (643) | | | | |
| 23 | Dividends - Series C preferred stock ($5,500 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 24 | Dividends - Series D preferred stock ($6,125 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 25 | Balance at December 31, 2022 | 11 | | 1,056 | | 569,689 | | | 6 | | | 4,468 | | 28,207 | (339) | | (19,054) | | | 14,344 | | | | |
| 26 | Cumulative effect of ASU No. 2022-02 adoption | - | | - | | - | | | - | | | - | | 52 | - | | - | | | 52 | | | | |
| 27 | Net income | - | | - | | - | | | - | | | - | | 2,940 | - | | - | | | 2,940 | | | | |
| 28 | Other comprehensive income | - | | - | | - | | | - | | | - | | - | 114 | | - | | | 114 | | | | |
| 29 | Purchases of treasury stock | - | | - | | - | | | - | | | - | | - | - | | (1,956) | | | (1,956) | | | | |
| 30 | Common stock issued under employee benefit plans | - | | - | | 118 | | | - | | | 11 | | - | - | | - | | | 11 | | | | |
| 31 | Common stock issued and stock-based compensation expense | - | | - | | 1,031 | | | - | | | 74 | | - | - | | - | | | 74 | | | | |
| 33 | Dividends - common stock ($2.70 per share) | - | | - | | - | | | - | | | - | | (689) | - | | - | | | (689) | | | | |
| 34 | Dividends - Series C preferred stock ($5,500 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 35 | Dividends - Series D preferred stock ($6,125 per share) | - | | - | | - | | | - | | | - | | (31) | - | | - | | | (31) | | | | |
| 36 | Balance at December 31, 2023 | 11 | | $ | 1,056 | | 570,838 | | | $ | 6 | | $ | 4,553 | $ | 30,448 | | $ | (225) | | $ | (21,010) | $ | 14,828 |
See Notes to the Consolidated Financial Statements.
-88-
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Cash Flows
(dollars in millions)
| | | | | | | | | | | |
|---:|:----------------------------------------------------------------------------------|:---------------------------------|:-------|:-----|:---------|:-----|:------|:--------|:---|:-------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Cash flows provided by operating activities | | | | | | | | | |
| 4 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 5 | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| 6 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 7 | Deferred income taxes | (626) | | | (433) | | | 318 | | |
| 8 | Depreciation and amortization | 458 | | | 561 | | | 531 | | |
| 9 | Amortization of deferred revenues | (468) | | | (365) | | | (295) | | |
| 10 | Net losses (gains) on investments and other assets | 50 | | | 261 | | | (382) | | |
| 11 | Other, net | 110 | | | 125 | | | 257 | | |
| 12 | Changes in assets and liabilities: | | | | | | | | | |
| 13 | Increase in other assets | (658) | | | (846) | | | (496) | | |
| 14 | Increase in accrued expenses and other liabilities | 739 | | | 1,104 | | | 446 | | |
| 15 | Net cash provided by operating activities | 8,563 | | | 7,140 | | | 6,019 | | |
| 17 | Cash flows provided by (used for) investing activities | | | | | | | | | |
| 18 | Maturities of other short-term investments | - | | | - | | | 2,200 | | |
| 20 | Maturities of available-for-sale investment securities | 1,831 | | | 2,084 | | | 2,727 | | |
| 21 | Purchases of available-for-sale investment securities | (2,996) | | | (7,682) | | | (9) | | |
| 22 | Maturities of held-to-maturity investment securities | 16 | | | 32 | | | 82 | | |
| 23 | Purchases of held-to-maturity investment securities | (49) | | | (50) | | | (28) | | |
| 24 | Net change in principal on loans originated for investment | (19,934) | | | (19,961) | | | (4,574) | | |
| 25 | Proceeds from the sale of available for sale securities | - | | | - | | | 5 | | |
| 26 | Proceeds from the sale of other investments | 44 | | | 336 | | | 1 | | |
| 27 | Purchases of other investments | (100) | | | (169) | | | (170) | | |
| 28 | Proceeds from sale of premises and equipment | - | | | 9 | | | - | | |
| 29 | Purchases of premises and equipment | (303) | | | (236) | | | (194) | | |
| 30 | Net cash (used for) provided by investing activities | (21,491) | | | (25,637) | | | 40 | | |
| 32 | Cash flows (used for) provided by financing activities | | | | | | | | | |
| 33 | Net change in short-term borrowings | 750 | | | (1,750) | | | 1,750 | | |
| 34 | Net change in deposits | 17,250 | | | 19,208 | | | (4,533) | | |
| 35 | Proceeds from issuance of securitized debt | 2,230 | | | 5,620 | | | 1,727 | | |
| 36 | Maturities and repayment of securitized debt | (1,494) | | | (4,395) | | | (3,451) | | |
| 37 | Proceeds from issuance of other long-term borrowings | 2,041 | | | 1,265 | | | - | | |
| 38 | Maturities and repayments of other long-term borrowings | (2,340) | | | (834) | | | (922) | | |
| 39 | Proceeds from issuance of common stock | 12 | | | 10 | | | 9 | | |
| 42 | Dividends paid on common and preferred stock | (752) | | | (703) | | | (636) | | |
| 43 | Purchases of treasury stock | (1,938) | | | (2,359) | | | (2,260) | | |
| 44 | Net cash provided by (used for) financing activities | 15,759 | | | 16,062 | | | (8,316) | | |
| 45 | Net increase (decrease) in cash, cash equivalents and restricted cash | 2,831 | | | (2,435) | | | (2,257) | | |
| 46 | Cash, cash equivalents and restricted cash, at the beginning of the period | 8,897 | | | 11,332 | | | 13,589 | | |
| 47 | Cash, cash equivalents and restricted cash, at the end of the period | $ | 11,728 | | | $ | 8,897 | | $ | 11,332 |
| 49 | Reconciliation of cash, cash equivalents and restricted cash | | | | | | | | | |
| 50 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 | | $ | 8,750 |
| 51 | Restricted cash | 43 | | | 41 | | | 2,582 | | |
| 52 | Cash, cash equivalents and restricted cash, at the end of the period | $ | 11,728 | | | $ | 8,897 | | $ | 11,332 |
| 54 | Supplemental disclosures of cash flow information: | | | | | | | | | |
| 55 | Cash paid during the period for: | | | | | | | | | |
| 56 | Interest expense | $ | 4,508 | | | $ | 1,666 | | $ | 1,077 |
| 57 | Income taxes, net of income tax refunds | $ | 1,605 | | | $ | 1,865 | | $ | 1,305 |
See Notes to the Consolidated Financial Statements.
-89-
|
AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 94:
CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 95:
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net unrealized debt securities gains (losses), net of tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(87)</td><td></td><td colspan="3"></td><td colspan="2">(42)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustments, net of hedges and tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(230)</td><td></td><td colspan="3"></td><td colspan="2">(163)</td><td></td></tr><tr><td colspan="3">Net unrealized pension and other postretirement benefits, net of tax</td><td colspan="3"></td><td colspan="2">37 </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td><td colspan="3"></td><td colspan="2">155 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td colspan="3"></td><td>$</td><td>8,512 </td><td></td><td colspan="3"></td><td>$</td><td>7,249 </td><td></td><td colspan="3"></td><td>$</td><td>8,010 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
95
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 96:
CONSOLIDATED BALANCE SHEETS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">December 31 (Millions, except share data)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5)</td><td colspan="3"></td><td>$</td><td>7,118 </td><td></td><td colspan="3"></td><td>$</td><td>5,510 </td><td></td></tr><tr><td colspan="3">Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318)</td><td colspan="3"></td><td colspan="2">39,312 </td><td></td><td colspan="3"></td><td colspan="2">28,097 </td><td></td></tr><tr><td colspan="3">Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54)</td><td colspan="3"></td><td colspan="2">166 </td><td></td><td colspan="3"></td><td colspan="2">307 </td><td></td></tr><tr><td colspan="3">Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544)</td><td colspan="3"></td><td colspan="2">46,596 </td><td></td><td colspan="3"></td><td colspan="2">33,914 </td><td></td></tr><tr><td colspan="3">Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229</td><td colspan="3"></td><td colspan="2">60,237 </td><td></td><td colspan="3"></td><td colspan="2">57,384 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747</td><td colspan="3"></td><td colspan="2">120,877 </td><td></td><td colspan="3"></td><td colspan="2">104,217 </td><td></td></tr><tr><td colspan="3">Other loans, less reserves for credit losses: 2023, $126; 2022, $59</td><td colspan="3"></td><td colspan="2">6,960 </td><td></td><td colspan="3"></td><td colspan="2">5,357 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="3"></td><td colspan="2">2,186 </td><td></td><td colspan="3"></td><td colspan="2">4,578 </td><td></td></tr><tr><td colspan="3">Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850</td><td colspan="3"></td><td colspan="2">5,138 </td><td></td><td colspan="3"></td><td colspan="2">5,215 </td><td></td></tr><tr><td colspan="3">Other assets, less reserves for credit losses: 2023, $27; 2022, $22</td><td colspan="3"></td><td colspan="2">19,114 </td><td></td><td colspan="3"></td><td colspan="2">17,689 </td><td></td></tr><tr><td colspan="3">Total assets</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td>$</td><td>129,144 </td><td></td><td colspan="3"></td><td>$</td><td>110,239 </td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="3"></td><td colspan="2">13,109 </td><td></td><td colspan="3"></td><td colspan="2">12,133 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="3"></td><td colspan="2">1,293 </td><td></td><td colspan="3"></td><td colspan="2">1,348 </td><td></td></tr><tr><td colspan="3">Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662)</td><td colspan="3"></td><td colspan="2">47,866 </td><td></td><td colspan="3"></td><td colspan="2">42,573 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="3"></td><td colspan="2">41,639 </td><td></td><td colspan="3"></td><td colspan="2">37,350 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="3"></td><td>$</td><td>233,051 </td><td></td><td colspan="3"></td><td>$</td><td>203,643 </td><td></td></tr><tr><td colspan="3">Contingencies and Commitments (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16)</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 </td><td colspan="3"></td><td colspan="2">145 </td><td></td><td colspan="3"></td><td colspan="2">149 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="3"></td><td colspan="2">11,372 </td><td></td><td colspan="3"></td><td colspan="2">11,493 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="3"></td><td colspan="2">19,612 </td><td></td><td colspan="3"></td><td colspan="2">16,279 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">(3,072)</td><td></td><td colspan="3"></td><td colspan="2">(3,210)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="3"></td><td colspan="2">28,057 </td><td></td><td colspan="3"></td><td colspan="2">24,711 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
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, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 97:
CONSOLIDATED STATEMENTS OF CASH FLOWS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash Flows from Operating Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="3"></td><td colspan="2">1,651 </td><td></td><td colspan="3"></td><td colspan="2">1,626 </td><td></td><td colspan="3"></td><td colspan="2">1,695 </td><td></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="3"></td><td colspan="2">450 </td><td></td><td colspan="3"></td><td colspan="2">375 </td><td></td><td colspan="3"></td><td colspan="2">330 </td><td></td></tr><tr><td colspan="3">Deferred taxes</td><td colspan="3"></td><td colspan="2">(1,329)</td><td></td><td colspan="3"></td><td colspan="2">(1,189)</td><td></td><td colspan="3"></td><td colspan="2">294 </td><td></td></tr><tr><td colspan="3">Other items (a)</td><td colspan="3"></td><td colspan="2">664 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td><td colspan="3"></td><td colspan="2">(772)</td><td></td></tr><tr><td colspan="3">Originations of loans held-for-sale</td><td colspan="3"></td><td colspan="2">(54)</td><td></td><td colspan="3"></td><td colspan="2">(277)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Proceeds from sales of loans held-for-sale</td><td colspan="3"></td><td colspan="2">59 </td><td></td><td colspan="3"></td><td colspan="2">277 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="3"></td><td colspan="2">(1,244)</td><td></td><td colspan="3"></td><td colspan="2">1,391 </td><td></td><td colspan="3"></td><td colspan="2">1,068 </td><td></td></tr><tr><td colspan="3">Accounts payable & other liabilities</td><td colspan="3"></td><td colspan="2">5,065 </td><td></td><td colspan="3"></td><td colspan="2">8,815 </td><td></td><td colspan="3"></td><td colspan="2">5,389 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="3"></td><td colspan="2">18,559 </td><td></td><td colspan="3"></td><td colspan="2">21,079 </td><td></td><td colspan="3"></td><td colspan="2">14,645 </td><td></td></tr><tr><td colspan="3">Cash Flows from Investing Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Sale of investments</td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td><td colspan="3"></td><td colspan="2">62 </td><td></td></tr><tr><td colspan="3">Maturities and redemptions of investments</td><td colspan="3"></td><td colspan="2">3,888 </td><td></td><td colspan="3"></td><td colspan="2">1,892 </td><td></td><td colspan="3"></td><td colspan="2">20,032 </td><td></td></tr><tr><td colspan="3">Purchase of investments</td><td colspan="3"></td><td colspan="2">(1,572)</td><td></td><td colspan="3"></td><td colspan="2">(4,175)</td><td></td><td colspan="3"></td><td colspan="2">(1,517)</td><td></td></tr><tr><td colspan="3">Net increase in Card Member loans and receivables, and other loans (b)</td><td colspan="3"></td><td colspan="2">(25,124)</td><td></td><td colspan="3"></td><td colspan="2">(29,562)</td><td></td><td colspan="3"></td><td colspan="2">(27,557)</td><td></td></tr><tr><td colspan="3">Purchase of premises and equipment, net of sales: 2023, $2; 2022, $1; 2021, $88</td><td colspan="3"></td><td colspan="2">(1,563)</td><td></td><td colspan="3"></td><td colspan="2">(1,855)</td><td></td><td colspan="3"></td><td colspan="2">(1,550)</td><td></td></tr><tr><td colspan="3">Net (Acquisitions)/dispositions, net of cash acquired</td><td colspan="3"></td><td colspan="2">(64)</td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="3"></td><td colspan="2">(24,433)</td><td></td><td colspan="3"></td><td colspan="2">(33,689)</td><td></td><td colspan="3"></td><td colspan="2">(10,529)</td><td></td></tr><tr><td colspan="3">Cash Flows from Financing Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net increase (decrease) in customer deposits</td><td colspan="3"></td><td colspan="2">18,915 </td><td></td><td colspan="3"></td><td colspan="2">25,902 </td><td></td><td colspan="3"></td><td colspan="2">(2,468)</td><td></td></tr><tr><td colspan="3">Net (decrease) increase in short-term borrowings (b)</td><td colspan="3"></td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(706)</td><td></td><td colspan="3"></td><td colspan="2">461 </td><td></td></tr><tr><td colspan="3">Proceeds from long-term debt</td><td colspan="3"></td><td colspan="2">15,674 </td><td></td><td colspan="3"></td><td colspan="2">23,230 </td><td></td><td colspan="3"></td><td colspan="2">7,788 </td><td></td></tr><tr><td colspan="3">Payments of long-term debt</td><td colspan="3"></td><td colspan="2">(10,703)</td><td></td><td colspan="3"></td><td colspan="2">(18,906)</td><td></td><td colspan="3"></td><td colspan="2">(11,662)</td><td></td></tr><tr><td colspan="3">Issuance of American Express preferred shares</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,584 </td><td></td></tr><tr><td colspan="3">Redemption of American Express preferred shares</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,600)</td><td></td></tr><tr><td colspan="3">Issuance of American Express common shares</td><td colspan="3"></td><td colspan="2">28 </td><td></td><td colspan="3"></td><td colspan="2">56 </td><td></td><td colspan="3"></td><td colspan="2">64 </td><td></td></tr><tr><td colspan="3">Repurchase of American Express common shares and other</td><td colspan="3"></td><td colspan="2">(3,650)</td><td></td><td colspan="3"></td><td colspan="2">(3,502)</td><td></td><td colspan="3"></td><td colspan="2">(7,652)</td><td></td></tr><tr><td colspan="3">Dividends paid</td><td colspan="3"></td><td colspan="2">(1,780)</td><td></td><td colspan="3"></td><td colspan="2">(1,565)</td><td></td><td colspan="3"></td><td colspan="2">(1,448)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="3"></td><td colspan="2">18,379 </td><td></td><td colspan="3"></td><td colspan="2">24,509 </td><td></td><td colspan="3"></td><td colspan="2">(14,933)</td><td></td></tr><tr><td colspan="3">Effect of foreign currency exchange rates on cash and cash equivalents</td><td colspan="3"></td><td colspan="2">177 </td><td></td><td colspan="3"></td><td colspan="2">(13)</td><td></td><td colspan="3"></td><td colspan="2">(120)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash and cash equivalents</td><td colspan="3"></td><td colspan="2">12,682 </td><td></td><td colspan="3"></td><td colspan="2">11,886 </td><td></td><td colspan="3"></td><td colspan="2">(10,937)</td><td></td></tr><tr><td colspan="3">Cash and cash equivalents at beginning of year</td><td colspan="3"></td><td colspan="2">33,914 </td><td></td><td colspan="3"></td><td colspan="2">22,028 </td><td></td><td colspan="3"></td><td colspan="2">32,965 </td><td></td></tr><tr><td colspan="3">Cash and cash equivalents at end of year</td><td colspan="3"></td><td>$</td><td>46,596 </td><td></td><td colspan="3"></td><td>$</td><td>33,914 </td><td></td><td colspan="3"></td><td>$</td><td>22,028 </td><td></td></tr></table>(a)Includes gains and losses on fair value hedges, losses on tax credit investments, net gains and losses on Amex Ventures investments and changes in equity method investments.
(b)Excludes an increase of $117 million related to non-cash activity during 2023.
Net income taxes paid during 2023, 2022 and 2021 were $3.3 billion, $3.0 billion and $1.6 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $6.4 billion, $2.2 billion and $1.1 billion, respectively.
See Notes to Consolidated Financial Statements.
97
, AMERICAN EXPRESS CO 10-K form for the fiscal year ended 2023-12-31, page 98:
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">Total</td><td colspan="3"></td><td colspan="3">Preferred Shares</td><td colspan="3"></td><td colspan="3">Common Shares</td><td colspan="3"></td><td colspan="3">Additional Paid-in Capital</td><td colspan="3"></td><td colspan="3">Accumulated Other Comprehensive Income (Loss)</td><td colspan="3"></td><td colspan="3">Retained Earnings</td></tr><tr><td colspan="3">Balances as of December 31, 2020</td><td colspan="3"></td><td>$</td><td>22,984 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>161 </td><td></td><td colspan="3"></td><td>$</td><td>11,881 </td><td></td><td colspan="3"></td><td>$</td><td>(2,895)</td><td></td><td colspan="3"></td><td>$</td><td>13,837 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="2">8,060 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">8,060 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="3"></td><td colspan="2">(50)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Preferred shares issued</td><td colspan="3"></td><td colspan="2">1,584 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,584 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Redemption of preferred shares</td><td colspan="3"></td><td colspan="2">(1,600)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,584)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16)</td><td></td></tr><tr><td colspan="3">Repurchase of common shares</td><td colspan="3"></td><td colspan="2">(7,598)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(631)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(6,958)</td><td></td></tr><tr><td colspan="3">Other changes, primarily employee plans</td><td colspan="3"></td><td colspan="2">227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">245 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19)</td><td></td></tr><tr><td colspan="3">Cash dividends declared preferred Series B, $36,419.41 per share</td><td colspan="3"></td><td colspan="2">(27)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(27)</td><td></td></tr><tr><td colspan="3">Cash dividends declared preferred Series C, $26,317.47 per share</td><td colspan="3"></td><td colspan="2">(23)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(23)</td><td></td></tr><tr><td colspan="3">Cash dividends declared preferred Series D, $13,213.89 per share</td><td colspan="3"></td><td colspan="2">(21)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Cash dividends declared common, $1.72 per share</td><td colspan="3"></td><td colspan="2">(1,359)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,359)</td><td></td></tr><tr><td colspan="3">Balances as of December 31, 2021</td><td colspan="3"></td><td colspan="2">22,177 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">153 </td><td></td><td colspan="3"></td><td colspan="2">11,495 </td><td></td><td colspan="3"></td><td colspan="2">(2,945)</td><td></td><td colspan="3"></td><td colspan="2">13,474 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="2">7,514 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">7,514 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Repurchase of common shares</td><td colspan="3"></td><td colspan="2">(3,332)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">(302)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,026)</td><td></td></tr><tr><td colspan="3">Other changes, primarily employee plans</td><td colspan="3"></td><td colspan="2">242 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">300 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared preferred Series D, $35,993.05 per share</td><td colspan="3"></td><td colspan="2">(57)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(57)</td><td></td></tr><tr><td colspan="3">Cash dividends declared common, $2.08 per share</td><td colspan="3"></td><td colspan="2">(1,568)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,568)</td><td></td></tr><tr><td colspan="3">Balances as of December 31, 2022</td><td colspan="3"></td><td colspan="2">24,711 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">149 </td><td></td><td colspan="3"></td><td colspan="2">11,493 </td><td></td><td colspan="3"></td><td colspan="2">(3,210)</td><td></td><td colspan="3"></td><td colspan="2">16,279 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="2">8,374 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">8,374 </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Repurchase of common shares</td><td colspan="3"></td><td colspan="2">(3,519)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">(334)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,181)</td><td></td></tr><tr><td colspan="3">Other changes, primarily employee plans</td><td colspan="3"></td><td colspan="2">181 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">213 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(32)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared preferred Series D, $35,993.05 per share</td><td colspan="3"></td><td colspan="2">(58)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="3">Cash dividends declared common, $2.40 per share</td><td colspan="3"></td><td colspan="2">(1,770)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,770)</td><td></td></tr><tr><td colspan="3">Balances as of December 31, 2023</td><td colspan="3"></td><td>$</td><td>28,057 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>145 </td><td></td><td colspan="3"></td><td>$</td><td>11,372 </td><td></td><td colspan="3"></td><td>$</td><td>(3,072)</td><td></td><td colspan="3"></td><td>$</td><td>19,612 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
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Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-85-
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Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-86-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 87:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Comprehensive Income
(dollars in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss), net of tax</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Unrealized gains (losses) on available-for-sale investment securities, net of tax</td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">(250)</td><td></td><td colspan="3"></td><td colspan="2">(170)</td><td></td></tr><tr><td colspan="3">Unrealized gains (losses) on cash flow hedges, net of tax</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td></tr><tr><td colspan="3">Unrealized pension and post-retirement plan gains, net of tax</td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">114 </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td>$</td><td>3,054 </td><td></td><td colspan="3"></td><td>$</td><td>4,129 </td><td></td><td colspan="3"></td><td>$</td><td>5,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-87-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 88:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Changes in Stockholders' Equity
(dollars in millions, shares in thousands)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9" rowspan="2">Preferred Stock</td><td colspan="3"></td><td colspan="9" rowspan="2">Common Stock</td><td colspan="3"></td><td colspan="3" rowspan="3">AdditionalPaid-inCapital</td><td colspan="3"></td><td colspan="3" rowspan="3">RetainedEarnings</td><td colspan="3"></td><td colspan="3" rowspan="3">Accumulated Other Comprehensive Income (Loss)</td><td colspan="3"></td><td colspan="3" rowspan="3">TreasuryStock</td><td colspan="3"></td><td colspan="3" rowspan="3">TotalStockholders'Equity</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> </td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2020</td><td colspan="2">11 </td><td></td><td colspan="3"></td><td>$</td><td>1,056 </td><td></td><td colspan="3"></td><td colspan="2">567,898 </td><td></td><td colspan="3"></td><td>$</td><td>6 </td><td></td><td colspan="3"></td><td>$</td><td>4,257 </td><td></td><td colspan="3"></td><td>$</td><td>19,754 </td><td></td><td colspan="3"></td><td>$</td><td>45 </td><td></td><td colspan="3"></td><td>$</td><td>(14,435)</td><td></td><td colspan="3"></td><td>$</td><td>10,683 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">5,422 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">5,422 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss </td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td></tr><tr><td colspan="3">Purchases of treasury stock</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,260)</td><td></td><td colspan="3"></td><td colspan="2">(2,260)</td><td></td></tr><tr><td colspan="3">Common stock issued under employee benefit plans</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">88 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td></tr><tr><td colspan="3">Common stock issued and stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">845 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">103 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">103 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dividends - common stock ($1.88 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(569)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(569)</td><td></td></tr><tr><td colspan="3">Dividends - Series C preferred stock ($5,500 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Dividends - Series D preferred stock ($7,674 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(38)</td><td></td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">568,831 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">4,369 </td><td></td><td colspan="3"></td><td colspan="2">24,538 </td><td></td><td colspan="3"></td><td colspan="2">(94)</td><td></td><td colspan="3"></td><td colspan="2">(16,695)</td><td></td><td colspan="3"></td><td colspan="2">13,180 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,374 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,374 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss </td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td></tr><tr><td colspan="3">Purchases of treasury stock</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,359)</td><td></td><td colspan="3"></td><td colspan="2">(2,359)</td><td></td></tr><tr><td colspan="3">Common stock issued under employee benefit plans</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td></tr><tr><td colspan="3">Common stock issued and stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">89 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dividends - common stock ($2.30 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(643)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(643)</td><td></td></tr><tr><td colspan="3">Dividends - Series C preferred stock ($5,500 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Dividends - Series D preferred stock ($6,125 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">569,689 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Cumulative effect of ASU No. 2022-02 adoption</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,940 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,940 </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">114 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">114 </td><td></td></tr><tr><td colspan="3">Purchases of treasury stock</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,956)</td><td></td><td colspan="3"></td><td colspan="2">(1,956)</td><td></td></tr><tr><td colspan="3">Common stock issued under employee benefit plans</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td></tr><tr><td colspan="3">Common stock issued and stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,031 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">74 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dividends - common stock ($2.70 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(689)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(689)</td><td></td></tr><tr><td colspan="3">Dividends - Series C preferred stock ($5,500 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Dividends - Series D preferred stock ($6,125 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Balance at December 31, 2023</td><td colspan="2">11 </td><td></td><td colspan="3"></td><td>$</td><td>1,056 </td><td></td><td colspan="3"></td><td colspan="2">570,838 </td><td></td><td colspan="3"></td><td>$</td><td>6 </td><td></td><td colspan="3"></td><td>$</td><td>4,553 </td><td></td><td colspan="3"></td><td>$</td><td>30,448 </td><td></td><td colspan="3"></td><td>$</td><td>(225)</td><td></td><td colspan="3"></td><td>$</td><td>(21,010)</td><td></td><td colspan="3"></td><td>$</td><td>14,828 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-88-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 89:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Cash Flows
(dollars in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash flows provided by operating activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Deferred income taxes</td><td colspan="2">(626)</td><td></td><td colspan="3"></td><td colspan="2">(433)</td><td></td><td colspan="3"></td><td colspan="2">318 </td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">458 </td><td></td><td colspan="3"></td><td colspan="2">561 </td><td></td><td colspan="3"></td><td colspan="2">531 </td><td></td></tr><tr><td colspan="3">Amortization of deferred revenues</td><td colspan="2">(468)</td><td></td><td colspan="3"></td><td colspan="2">(365)</td><td></td><td colspan="3"></td><td colspan="2">(295)</td><td></td></tr><tr><td colspan="3">Net losses (gains) on investments and other assets</td><td colspan="2">50 </td><td></td><td colspan="3"></td><td colspan="2">261 </td><td></td><td colspan="3"></td><td colspan="2">(382)</td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">110 </td><td></td><td colspan="3"></td><td colspan="2">125 </td><td></td><td colspan="3"></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="3">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Increase in other assets</td><td colspan="2">(658)</td><td></td><td colspan="3"></td><td colspan="2">(846)</td><td></td><td colspan="3"></td><td colspan="2">(496)</td><td></td></tr><tr><td colspan="3">Increase in accrued expenses and other liabilities</td><td colspan="2">739 </td><td></td><td colspan="3"></td><td colspan="2">1,104 </td><td></td><td colspan="3"></td><td colspan="2">446 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">8,563 </td><td></td><td colspan="3"></td><td colspan="2">7,140 </td><td></td><td colspan="3"></td><td colspan="2">6,019 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash flows provided by (used for) investing activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Maturities of other short-term investments</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,200 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Maturities of available-for-sale investment securities</td><td colspan="2">1,831 </td><td></td><td colspan="3"></td><td colspan="2">2,084 </td><td></td><td colspan="3"></td><td colspan="2">2,727 </td><td></td></tr><tr><td colspan="3">Purchases of available-for-sale investment securities</td><td colspan="2">(2,996)</td><td></td><td colspan="3"></td><td colspan="2">(7,682)</td><td></td><td colspan="3"></td><td colspan="2">(9)</td><td></td></tr><tr><td colspan="3">Maturities of held-to-maturity investment securities</td><td colspan="2">16 </td><td></td><td colspan="3"></td><td colspan="2">32 </td><td></td><td colspan="3"></td><td colspan="2">82 </td><td></td></tr><tr><td colspan="3">Purchases of held-to-maturity investment securities</td><td colspan="2">(49)</td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net change in principal on loans originated for investment</td><td colspan="2">(19,934)</td><td></td><td colspan="3"></td><td colspan="2">(19,961)</td><td></td><td colspan="3"></td><td colspan="2">(4,574)</td><td></td></tr><tr><td colspan="3">Proceeds from the sale of available for sale securities</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td></tr><tr><td colspan="3">Proceeds from the sale of other investments</td><td colspan="2">44 </td><td></td><td colspan="3"></td><td colspan="2">336 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Purchases of other investments</td><td colspan="2">(100)</td><td></td><td colspan="3"></td><td colspan="2">(169)</td><td></td><td colspan="3"></td><td colspan="2">(170)</td><td></td></tr><tr><td colspan="3">Proceeds from sale of premises and equipment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Purchases of premises and equipment</td><td colspan="2">(303)</td><td></td><td colspan="3"></td><td colspan="2">(236)</td><td></td><td colspan="3"></td><td colspan="2">(194)</td><td></td></tr><tr><td colspan="3">Net cash (used for) provided by investing activities</td><td colspan="2">(21,491)</td><td></td><td colspan="3"></td><td colspan="2">(25,637)</td><td></td><td colspan="3"></td><td colspan="2">40 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash flows (used for) provided by financing activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net change in short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">(1,750)</td><td></td><td colspan="3"></td><td colspan="2">1,750 </td><td></td></tr><tr><td colspan="3">Net change in deposits</td><td colspan="2">17,250 </td><td></td><td colspan="3"></td><td colspan="2">19,208 </td><td></td><td colspan="3"></td><td colspan="2">(4,533)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of securitized debt</td><td colspan="2">2,230 </td><td></td><td colspan="3"></td><td colspan="2">5,620 </td><td></td><td colspan="3"></td><td colspan="2">1,727 </td><td></td></tr><tr><td colspan="3">Maturities and repayment of securitized debt</td><td colspan="2">(1,494)</td><td></td><td colspan="3"></td><td colspan="2">(4,395)</td><td></td><td colspan="3"></td><td colspan="2">(3,451)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of other long-term borrowings</td><td colspan="2">2,041 </td><td></td><td colspan="3"></td><td colspan="2">1,265 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Maturities and repayments of other long-term borrowings</td><td colspan="2">(2,340)</td><td></td><td colspan="3"></td><td colspan="2">(834)</td><td></td><td colspan="3"></td><td colspan="2">(922)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of common stock</td><td colspan="2">12 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dividends paid on common and preferred stock</td><td colspan="2">(752)</td><td></td><td colspan="3"></td><td colspan="2">(703)</td><td></td><td colspan="3"></td><td colspan="2">(636)</td><td></td></tr><tr><td colspan="3">Purchases of treasury stock</td><td colspan="2">(1,938)</td><td></td><td colspan="3"></td><td colspan="2">(2,359)</td><td></td><td colspan="3"></td><td colspan="2">(2,260)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used for) financing activities</td><td colspan="2">15,759 </td><td></td><td colspan="3"></td><td colspan="2">16,062 </td><td></td><td colspan="3"></td><td colspan="2">(8,316)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash, cash equivalents and restricted cash</td><td colspan="2">2,831 </td><td></td><td colspan="3"></td><td colspan="2">(2,435)</td><td></td><td colspan="3"></td><td colspan="2">(2,257)</td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, at the beginning of the period</td><td colspan="2">8,897 </td><td></td><td colspan="3"></td><td colspan="2">11,332 </td><td></td><td colspan="3"></td><td colspan="2">13,589 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, at the end of the period</td><td>$</td><td>11,728 </td><td></td><td colspan="3"></td><td>$</td><td>8,897 </td><td></td><td colspan="3"></td><td>$</td><td>11,332 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Reconciliation of cash, cash equivalents and restricted cash</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td><td colspan="3"></td><td>$</td><td>8,750 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">2,582 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, at the end of the period</td><td>$</td><td>11,728 </td><td></td><td colspan="3"></td><td>$</td><td>8,897 </td><td></td><td colspan="3"></td><td>$</td><td>11,332 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Supplemental disclosures of cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid during the period for:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense</td><td>$</td><td>4,508 </td><td></td><td colspan="3"></td><td>$</td><td>1,666 </td><td></td><td colspan="3"></td><td>$</td><td>1,077 </td><td></td></tr><tr><td colspan="3">Income taxes, net of income tax refunds</td><td>$</td><td>1,605 </td><td></td><td colspan="3"></td><td>$</td><td>1,865 </td><td></td><td colspan="3"></td><td>$</td><td>1,305 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-89-
|
CONSOLIDATED STATEMENTS OF INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Non-interest revenues</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount revenue</td><td colspan="3"></td><td>$</td><td>33,416 </td><td></td><td colspan="3"></td><td>$</td><td>30,739 </td><td></td><td colspan="3"></td><td>$</td><td>24,563 </td><td></td></tr><tr><td colspan="3">Net card fees</td><td colspan="3"></td><td colspan="2">7,255 </td><td></td><td colspan="3"></td><td colspan="2">6,070 </td><td></td><td colspan="3"></td><td colspan="2">5,195 </td><td></td></tr><tr><td colspan="3">Service fees and other revenue</td><td colspan="3"></td><td colspan="2">5,005 </td><td></td><td colspan="3"></td><td colspan="2">4,521 </td><td></td><td colspan="3"></td><td colspan="2">3,316 </td><td></td></tr><tr><td colspan="3">Processed revenue</td><td colspan="3"></td><td colspan="2">1,705 </td><td></td><td colspan="3"></td><td colspan="2">1,637 </td><td></td><td colspan="3"></td><td colspan="2">1,556 </td><td></td></tr><tr><td colspan="3">Total non-interest revenues</td><td colspan="3"></td><td colspan="2">47,381 </td><td></td><td colspan="3"></td><td colspan="2">42,967 </td><td></td><td colspan="3"></td><td colspan="2">34,630 </td><td></td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest on loans</td><td colspan="3"></td><td colspan="2">17,697 </td><td></td><td colspan="3"></td><td colspan="2">11,967 </td><td></td><td colspan="3"></td><td colspan="2">8,850 </td><td></td></tr><tr><td colspan="3">Interest and dividends on investment securities</td><td colspan="3"></td><td colspan="2">128 </td><td></td><td colspan="3"></td><td colspan="2">96 </td><td></td><td colspan="3"></td><td colspan="2">83 </td><td></td></tr><tr><td colspan="3">Deposits with banks and other</td><td colspan="3"></td><td colspan="2">2,158 </td><td></td><td colspan="3"></td><td colspan="2">595 </td><td></td><td colspan="3"></td><td colspan="2">100 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="3"></td><td colspan="2">19,983 </td><td></td><td colspan="3"></td><td colspan="2">12,658 </td><td></td><td colspan="3"></td><td colspan="2">9,033 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="2">4,865 </td><td></td><td colspan="3"></td><td colspan="2">1,527 </td><td></td><td colspan="3"></td><td colspan="2">458 </td><td></td></tr><tr><td colspan="3">Long-term debt and other</td><td colspan="3"></td><td colspan="2">1,984 </td><td></td><td colspan="3"></td><td colspan="2">1,236 </td><td></td><td colspan="3"></td><td colspan="2">825 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="3"></td><td colspan="2">6,849 </td><td></td><td colspan="3"></td><td colspan="2">2,763 </td><td></td><td colspan="3"></td><td colspan="2">1,283 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="3"></td><td colspan="2">13,134 </td><td></td><td colspan="3"></td><td colspan="2">9,895 </td><td></td><td colspan="3"></td><td colspan="2">7,750 </td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense</td><td colspan="3"></td><td colspan="2">60,515 </td><td></td><td colspan="3"></td><td colspan="2">52,862 </td><td></td><td colspan="3"></td><td colspan="2">42,380 </td><td></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member receivables</td><td colspan="3"></td><td colspan="2">880 </td><td></td><td colspan="3"></td><td colspan="2">627 </td><td></td><td colspan="3"></td><td colspan="2">(73)</td><td></td></tr><tr><td colspan="3">Card Member loans</td><td colspan="3"></td><td colspan="2">3,839 </td><td></td><td colspan="3"></td><td colspan="2">1,514 </td><td></td><td colspan="3"></td><td colspan="2">(1,155)</td><td></td></tr><tr><td colspan="3">Other</td><td colspan="3"></td><td colspan="2">204 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">(191)</td><td></td></tr><tr><td colspan="3">Total provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Total revenues net of interest expense after provisions for credit losses</td><td colspan="3"></td><td colspan="2">55,592 </td><td></td><td colspan="3"></td><td colspan="2">50,680 </td><td></td><td colspan="3"></td><td colspan="2">43,799 </td><td></td></tr><tr><td colspan="3">Expenses</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member rewards</td><td colspan="3"></td><td colspan="2">15,367 </td><td></td><td colspan="3"></td><td colspan="2">14,002 </td><td></td><td colspan="3"></td><td colspan="2">11,007 </td><td></td></tr><tr><td colspan="3">Business development</td><td colspan="3"></td><td colspan="2">5,657 </td><td></td><td colspan="3"></td><td colspan="2">4,943 </td><td></td><td colspan="3"></td><td colspan="2">3,762 </td><td></td></tr><tr><td colspan="3">Card Member services</td><td colspan="3"></td><td colspan="2">3,968 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">1,993 </td><td></td></tr><tr><td colspan="3">Marketing</td><td colspan="3"></td><td colspan="2">5,213 </td><td></td><td colspan="3"></td><td colspan="2">5,458 </td><td></td><td colspan="3"></td><td colspan="2">5,291 </td><td></td></tr><tr><td colspan="3">Salaries and employee benefits</td><td colspan="3"></td><td colspan="2">8,067 </td><td></td><td colspan="3"></td><td colspan="2">7,252 </td><td></td><td colspan="3"></td><td colspan="2">6,240 </td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="3"></td><td colspan="2">6,807 </td><td></td><td colspan="3"></td><td colspan="2">6,481 </td><td></td><td colspan="3"></td><td colspan="2">4,817 </td><td></td></tr><tr><td colspan="3">Total expenses</td><td colspan="3"></td><td colspan="2">45,079 </td><td></td><td colspan="3"></td><td colspan="2">41,095 </td><td></td><td colspan="3"></td><td colspan="2">33,110 </td><td></td></tr><tr><td colspan="3">Pretax income</td><td colspan="3"></td><td colspan="2">10,513 </td><td></td><td colspan="3"></td><td colspan="2">9,585 </td><td></td><td colspan="3"></td><td colspan="2">10,689 </td><td></td></tr><tr><td colspan="3">Income tax provision</td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">2,071 </td><td></td><td colspan="3"></td><td colspan="2">2,629 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Earnings per Common Share - (Note 21)(a)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td>$</td><td>11.23 </td><td></td><td colspan="3"></td><td>$</td><td>9.86 </td><td></td><td colspan="3"></td><td>$</td><td>10.04 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td>$</td><td>11.21 </td><td></td><td colspan="3"></td><td>$</td><td>9.85 </td><td></td><td colspan="3"></td><td>$</td><td>10.02 </td><td></td></tr><tr><td colspan="3">Average common shares outstanding for earnings per common share:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Basic</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">789 </td><td></td></tr><tr><td colspan="3">Diluted</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">752 </td><td></td><td colspan="3"></td><td colspan="2">790 </td><td></td></tr></table>(a)Represents net income less (i) earnings allocated to participating share awards of $64 million, $57 million and $56 million for the years ended December 31, 2023, 2022 and 2021, respectively, (ii) dividends on preferred shares of $58 million, $57 million and $71 million for the years ended December 31, 2023, 2022 and 2021, respectively, and (iii) equity-related adjustments of $16 million related to the redemption of preferred shares for the year ended December 31, 2021.
See Notes to Consolidated Financial Statements.
94
,
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Year Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss):</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net unrealized debt securities gains (losses), net of tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(87)</td><td></td><td colspan="3"></td><td colspan="2">(42)</td><td></td></tr><tr><td colspan="3">Foreign currency translation adjustments, net of hedges and tax</td><td colspan="3"></td><td colspan="2"> </td><td></td><td colspan="3"></td><td colspan="2">(230)</td><td></td><td colspan="3"></td><td colspan="2">(163)</td><td></td></tr><tr><td colspan="3">Net unrealized pension and other postretirement benefits, net of tax</td><td colspan="3"></td><td colspan="2">37 </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td><td colspan="3"></td><td colspan="2">155 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td colspan="3"></td><td>$</td><td>8,512 </td><td></td><td colspan="3"></td><td>$</td><td>7,249 </td><td></td><td colspan="3"></td><td>$</td><td>8,010 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
95
,
CONSOLIDATED BALANCE SHEETS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">December 31 (Millions, except share data)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and due from banks (includes restricted cash of consolidated variable interest entities: 2023, nil; 2022, $5)</td><td colspan="3"></td><td>$</td><td>7,118 </td><td></td><td colspan="3"></td><td>$</td><td>5,510 </td><td></td></tr><tr><td colspan="3">Interest-bearing deposits in other banks (includes securities purchased under resale agreements: 2023, nil; 2022, $318)</td><td colspan="3"></td><td colspan="2">39,312 </td><td></td><td colspan="3"></td><td colspan="2">28,097 </td><td></td></tr><tr><td colspan="3">Short-term investment securities (includes restricted investments of consolidated variable interest entities: 2023, $66; 2022, $54)</td><td colspan="3"></td><td colspan="2">166 </td><td></td><td colspan="3"></td><td colspan="2">307 </td><td></td></tr><tr><td colspan="3">Total cash and cash equivalents (includes restricted cash: 2023, $514; 2022, $544)</td><td colspan="3"></td><td colspan="2">46,596 </td><td></td><td colspan="3"></td><td colspan="2">33,914 </td><td></td></tr><tr><td colspan="3">Card Member receivables (includes gross receivables available to settle obligations of a consolidated variable interest entity: 2023, $4,587; 2022, $5,193), less reserves for credit losses: 2023, $174; 2022, $229</td><td colspan="3"></td><td colspan="2">60,237 </td><td></td><td colspan="3"></td><td colspan="2">57,384 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Card Member loans (includes gross loans available to settle obligations of a consolidated variable interest entity: 2023, $28,590; 2022, $28,461), less reserves for credit losses: 2023, $5,118; 2022, $3,747</td><td colspan="3"></td><td colspan="2">120,877 </td><td></td><td colspan="3"></td><td colspan="2">104,217 </td><td></td></tr><tr><td colspan="3">Other loans, less reserves for credit losses: 2023, $126; 2022, $59</td><td colspan="3"></td><td colspan="2">6,960 </td><td></td><td colspan="3"></td><td colspan="2">5,357 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="3"></td><td colspan="2">2,186 </td><td></td><td colspan="3"></td><td colspan="2">4,578 </td><td></td></tr><tr><td colspan="3">Premises and equipment, less accumulated depreciation and amortization: 2023, $9,911; 2022, $9,850</td><td colspan="3"></td><td colspan="2">5,138 </td><td></td><td colspan="3"></td><td colspan="2">5,215 </td><td></td></tr><tr><td colspan="3">Other assets, less reserves for credit losses: 2023, $27; 2022, $22</td><td colspan="3"></td><td colspan="2">19,114 </td><td></td><td colspan="3"></td><td colspan="2">17,689 </td><td></td></tr><tr><td colspan="3">Total assets</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr><tr><td colspan="3">Liabilities and Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Customer deposits</td><td colspan="3"></td><td>$</td><td>129,144 </td><td></td><td colspan="3"></td><td>$</td><td>110,239 </td><td></td></tr><tr><td colspan="3">Accounts payable</td><td colspan="3"></td><td colspan="2">13,109 </td><td></td><td colspan="3"></td><td colspan="2">12,133 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="3"></td><td colspan="2">1,293 </td><td></td><td colspan="3"></td><td colspan="2">1,348 </td><td></td></tr><tr><td colspan="3">Long-term debt (includes debt issued by consolidated variable interest entities: 2023, $13,426; 2022, $12,662)</td><td colspan="3"></td><td colspan="2">47,866 </td><td></td><td colspan="3"></td><td colspan="2">42,573 </td><td></td></tr><tr><td colspan="3">Other liabilities</td><td colspan="3"></td><td colspan="2">41,639 </td><td></td><td colspan="3"></td><td colspan="2">37,350 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="3"></td><td>$</td><td>233,051 </td><td></td><td colspan="3"></td><td>$</td><td>203,643 </td><td></td></tr><tr><td colspan="3">Contingencies and Commitments (Note 12)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Shareholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Preferred shares, $1.662/3 par value, authorized 20 million shares; issued and outstanding 1,600 shares as of December 31, 2023 and 2022 (Note 16)</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Common shares, $0.20 par value, authorized 3.6 billion shares; issued and outstanding 723 million shares as of December 31, 2023 and 743 million shares as of December 31, 2022 </td><td colspan="3"></td><td colspan="2">145 </td><td></td><td colspan="3"></td><td colspan="2">149 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="3"></td><td colspan="2">11,372 </td><td></td><td colspan="3"></td><td colspan="2">11,493 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="3"></td><td colspan="2">19,612 </td><td></td><td colspan="3"></td><td colspan="2">16,279 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive income (loss)</td><td colspan="3"></td><td colspan="2">(3,072)</td><td></td><td colspan="3"></td><td colspan="2">(3,210)</td><td></td></tr><tr><td colspan="3">Total shareholders' equity</td><td colspan="3"></td><td colspan="2">28,057 </td><td></td><td colspan="3"></td><td colspan="2">24,711 </td><td></td></tr><tr><td colspan="3">Total liabilities and shareholders' equity</td><td colspan="3"></td><td>$</td><td>261,108 </td><td></td><td colspan="3"></td><td>$</td><td>228,354 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
96
,
CONSOLIDATED STATEMENTS OF CASH FLOWS
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">Years Ended December 31 (Millions)</td><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash Flows from Operating Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td>$</td><td>8,374 </td><td></td><td colspan="3"></td><td>$</td><td>7,514 </td><td></td><td colspan="3"></td><td>$</td><td>8,060 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provisions for credit losses</td><td colspan="3"></td><td colspan="2">4,923 </td><td></td><td colspan="3"></td><td colspan="2">2,182 </td><td></td><td colspan="3"></td><td colspan="2">(1,419)</td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="3"></td><td colspan="2">1,651 </td><td></td><td colspan="3"></td><td colspan="2">1,626 </td><td></td><td colspan="3"></td><td colspan="2">1,695 </td><td></td></tr><tr><td colspan="3">Stock-based compensation</td><td colspan="3"></td><td colspan="2">450 </td><td></td><td colspan="3"></td><td colspan="2">375 </td><td></td><td colspan="3"></td><td colspan="2">330 </td><td></td></tr><tr><td colspan="3">Deferred taxes</td><td colspan="3"></td><td colspan="2">(1,329)</td><td></td><td colspan="3"></td><td colspan="2">(1,189)</td><td></td><td colspan="3"></td><td colspan="2">294 </td><td></td></tr><tr><td colspan="3">Other items (a)</td><td colspan="3"></td><td colspan="2">664 </td><td></td><td colspan="3"></td><td colspan="2">365 </td><td></td><td colspan="3"></td><td colspan="2">(772)</td><td></td></tr><tr><td colspan="3">Originations of loans held-for-sale</td><td colspan="3"></td><td colspan="2">(54)</td><td></td><td colspan="3"></td><td colspan="2">(277)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Proceeds from sales of loans held-for-sale</td><td colspan="3"></td><td colspan="2">59 </td><td></td><td colspan="3"></td><td colspan="2">277 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="3"></td><td colspan="2">(1,244)</td><td></td><td colspan="3"></td><td colspan="2">1,391 </td><td></td><td colspan="3"></td><td colspan="2">1,068 </td><td></td></tr><tr><td colspan="3">Accounts payable & other liabilities</td><td colspan="3"></td><td colspan="2">5,065 </td><td></td><td colspan="3"></td><td colspan="2">8,815 </td><td></td><td colspan="3"></td><td colspan="2">5,389 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="3"></td><td colspan="2">18,559 </td><td></td><td colspan="3"></td><td colspan="2">21,079 </td><td></td><td colspan="3"></td><td colspan="2">14,645 </td><td></td></tr><tr><td colspan="3">Cash Flows from Investing Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Sale of investments</td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">26 </td><td></td><td colspan="3"></td><td colspan="2">62 </td><td></td></tr><tr><td colspan="3">Maturities and redemptions of investments</td><td colspan="3"></td><td colspan="2">3,888 </td><td></td><td colspan="3"></td><td colspan="2">1,892 </td><td></td><td colspan="3"></td><td colspan="2">20,032 </td><td></td></tr><tr><td colspan="3">Purchase of investments</td><td colspan="3"></td><td colspan="2">(1,572)</td><td></td><td colspan="3"></td><td colspan="2">(4,175)</td><td></td><td colspan="3"></td><td colspan="2">(1,517)</td><td></td></tr><tr><td colspan="3">Net increase in Card Member loans and receivables, and other loans (b)</td><td colspan="3"></td><td colspan="2">(25,124)</td><td></td><td colspan="3"></td><td colspan="2">(29,562)</td><td></td><td colspan="3"></td><td colspan="2">(27,557)</td><td></td></tr><tr><td colspan="3">Purchase of premises and equipment, net of sales: 2023, $2; 2022, $1; 2021, $88</td><td colspan="3"></td><td colspan="2">(1,563)</td><td></td><td colspan="3"></td><td colspan="2">(1,855)</td><td></td><td colspan="3"></td><td colspan="2">(1,550)</td><td></td></tr><tr><td colspan="3">Net (Acquisitions)/dispositions, net of cash acquired</td><td colspan="3"></td><td colspan="2">(64)</td><td></td><td colspan="3"></td><td colspan="2">(15)</td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net cash used in investing activities</td><td colspan="3"></td><td colspan="2">(24,433)</td><td></td><td colspan="3"></td><td colspan="2">(33,689)</td><td></td><td colspan="3"></td><td colspan="2">(10,529)</td><td></td></tr><tr><td colspan="3">Cash Flows from Financing Activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net increase (decrease) in customer deposits</td><td colspan="3"></td><td colspan="2">18,915 </td><td></td><td colspan="3"></td><td colspan="2">25,902 </td><td></td><td colspan="3"></td><td colspan="2">(2,468)</td><td></td></tr><tr><td colspan="3">Net (decrease) increase in short-term borrowings (b)</td><td colspan="3"></td><td colspan="2">(105)</td><td></td><td colspan="3"></td><td colspan="2">(706)</td><td></td><td colspan="3"></td><td colspan="2">461 </td><td></td></tr><tr><td colspan="3">Proceeds from long-term debt</td><td colspan="3"></td><td colspan="2">15,674 </td><td></td><td colspan="3"></td><td colspan="2">23,230 </td><td></td><td colspan="3"></td><td colspan="2">7,788 </td><td></td></tr><tr><td colspan="3">Payments of long-term debt</td><td colspan="3"></td><td colspan="2">(10,703)</td><td></td><td colspan="3"></td><td colspan="2">(18,906)</td><td></td><td colspan="3"></td><td colspan="2">(11,662)</td><td></td></tr><tr><td colspan="3">Issuance of American Express preferred shares</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,584 </td><td></td></tr><tr><td colspan="3">Redemption of American Express preferred shares</td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,600)</td><td></td></tr><tr><td colspan="3">Issuance of American Express common shares</td><td colspan="3"></td><td colspan="2">28 </td><td></td><td colspan="3"></td><td colspan="2">56 </td><td></td><td colspan="3"></td><td colspan="2">64 </td><td></td></tr><tr><td colspan="3">Repurchase of American Express common shares and other</td><td colspan="3"></td><td colspan="2">(3,650)</td><td></td><td colspan="3"></td><td colspan="2">(3,502)</td><td></td><td colspan="3"></td><td colspan="2">(7,652)</td><td></td></tr><tr><td colspan="3">Dividends paid</td><td colspan="3"></td><td colspan="2">(1,780)</td><td></td><td colspan="3"></td><td colspan="2">(1,565)</td><td></td><td colspan="3"></td><td colspan="2">(1,448)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used in) financing activities</td><td colspan="3"></td><td colspan="2">18,379 </td><td></td><td colspan="3"></td><td colspan="2">24,509 </td><td></td><td colspan="3"></td><td colspan="2">(14,933)</td><td></td></tr><tr><td colspan="3">Effect of foreign currency exchange rates on cash and cash equivalents</td><td colspan="3"></td><td colspan="2">177 </td><td></td><td colspan="3"></td><td colspan="2">(13)</td><td></td><td colspan="3"></td><td colspan="2">(120)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash and cash equivalents</td><td colspan="3"></td><td colspan="2">12,682 </td><td></td><td colspan="3"></td><td colspan="2">11,886 </td><td></td><td colspan="3"></td><td colspan="2">(10,937)</td><td></td></tr><tr><td colspan="3">Cash and cash equivalents at beginning of year</td><td colspan="3"></td><td colspan="2">33,914 </td><td></td><td colspan="3"></td><td colspan="2">22,028 </td><td></td><td colspan="3"></td><td colspan="2">32,965 </td><td></td></tr><tr><td colspan="3">Cash and cash equivalents at end of year</td><td colspan="3"></td><td>$</td><td>46,596 </td><td></td><td colspan="3"></td><td>$</td><td>33,914 </td><td></td><td colspan="3"></td><td>$</td><td>22,028 </td><td></td></tr></table>(a)Includes gains and losses on fair value hedges, losses on tax credit investments, net gains and losses on Amex Ventures investments and changes in equity method investments.
(b)Excludes an increase of $117 million related to non-cash activity during 2023.
Net income taxes paid during 2023, 2022 and 2021 were $3.3 billion, $3.0 billion and $1.6 billion, respectively, and interest paid primarily related to Debt and Customer deposits for the same periods were $6.4 billion, $2.2 billion and $1.1 billion, respectively.
See Notes to Consolidated Financial Statements.
97
,
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">(Millions, except per share amounts)</td><td colspan="3"></td><td colspan="3">Total</td><td colspan="3"></td><td colspan="3">Preferred Shares</td><td colspan="3"></td><td colspan="3">Common Shares</td><td colspan="3"></td><td colspan="3">Additional Paid-in Capital</td><td colspan="3"></td><td colspan="3">Accumulated Other Comprehensive Income (Loss)</td><td colspan="3"></td><td colspan="3">Retained Earnings</td></tr><tr><td colspan="3">Balances as of December 31, 2020</td><td colspan="3"></td><td>$</td><td>22,984 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>161 </td><td></td><td colspan="3"></td><td>$</td><td>11,881 </td><td></td><td colspan="3"></td><td>$</td><td>(2,895)</td><td></td><td colspan="3"></td><td>$</td><td>13,837 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="2">8,060 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">8,060 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="3"></td><td colspan="2">(50)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Preferred shares issued</td><td colspan="3"></td><td colspan="2">1,584 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,584 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Redemption of preferred shares</td><td colspan="3"></td><td colspan="2">(1,600)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,584)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(16)</td><td></td></tr><tr><td colspan="3">Repurchase of common shares</td><td colspan="3"></td><td colspan="2">(7,598)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(631)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(6,958)</td><td></td></tr><tr><td colspan="3">Other changes, primarily employee plans</td><td colspan="3"></td><td colspan="2">227 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td><td colspan="3"></td><td colspan="2">245 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(19)</td><td></td></tr><tr><td colspan="3">Cash dividends declared preferred Series B, $36,419.41 per share</td><td colspan="3"></td><td colspan="2">(27)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(27)</td><td></td></tr><tr><td colspan="3">Cash dividends declared preferred Series C, $26,317.47 per share</td><td colspan="3"></td><td colspan="2">(23)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(23)</td><td></td></tr><tr><td colspan="3">Cash dividends declared preferred Series D, $13,213.89 per share</td><td colspan="3"></td><td colspan="2">(21)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(21)</td><td></td></tr><tr><td colspan="3">Cash dividends declared common, $1.72 per share</td><td colspan="3"></td><td colspan="2">(1,359)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,359)</td><td></td></tr><tr><td colspan="3">Balances as of December 31, 2021</td><td colspan="3"></td><td colspan="2">22,177 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">153 </td><td></td><td colspan="3"></td><td colspan="2">11,495 </td><td></td><td colspan="3"></td><td colspan="2">(2,945)</td><td></td><td colspan="3"></td><td colspan="2">13,474 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="2">7,514 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">7,514 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss</td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(265)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Repurchase of common shares</td><td colspan="3"></td><td colspan="2">(3,332)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">(302)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,026)</td><td></td></tr><tr><td colspan="3">Other changes, primarily employee plans</td><td colspan="3"></td><td colspan="2">242 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">300 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared preferred Series D, $35,993.05 per share</td><td colspan="3"></td><td colspan="2">(57)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(57)</td><td></td></tr><tr><td colspan="3">Cash dividends declared common, $2.08 per share</td><td colspan="3"></td><td colspan="2">(1,568)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,568)</td><td></td></tr><tr><td colspan="3">Balances as of December 31, 2022</td><td colspan="3"></td><td colspan="2">24,711 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">149 </td><td></td><td colspan="3"></td><td colspan="2">11,493 </td><td></td><td colspan="3"></td><td colspan="2">(3,210)</td><td></td><td colspan="3"></td><td colspan="2">16,279 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="3"></td><td colspan="2">8,374 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">8,374 </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">138 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Repurchase of common shares</td><td colspan="3"></td><td colspan="2">(3,519)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(4)</td><td></td><td colspan="3"></td><td colspan="2">(334)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(3,181)</td><td></td></tr><tr><td colspan="3">Other changes, primarily employee plans</td><td colspan="3"></td><td colspan="2">181 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">213 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(32)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash dividends declared preferred Series D, $35,993.05 per share</td><td colspan="3"></td><td colspan="2">(58)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(58)</td><td></td></tr><tr><td colspan="3">Cash dividends declared common, $2.40 per share</td><td colspan="3"></td><td colspan="2">(1,770)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,770)</td><td></td></tr><tr><td colspan="3">Balances as of December 31, 2023</td><td colspan="3"></td><td>$</td><td>28,057 </td><td></td><td colspan="3"></td><td>$</td><td>- </td><td></td><td colspan="3"></td><td>$</td><td>145 </td><td></td><td colspan="3"></td><td>$</td><td>11,372 </td><td></td><td colspan="3"></td><td>$</td><td>(3,072)</td><td></td><td colspan="3"></td><td>$</td><td>19,612 </td><td></td></tr></table>
See Notes to Consolidated Financial Statements.
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Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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Consolidated Statements of Comprehensive Income
(dollars in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss), net of tax</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Unrealized gains (losses) on available-for-sale investment securities, net of tax</td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">(250)</td><td></td><td colspan="3"></td><td colspan="2">(170)</td><td></td></tr><tr><td colspan="3">Unrealized gains (losses) on cash flow hedges, net of tax</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">(5)</td><td></td><td colspan="3"></td><td colspan="2">3 </td><td></td></tr><tr><td colspan="3">Unrealized pension and post-retirement plan gains, net of tax</td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td></tr><tr><td colspan="3">Other comprehensive income (loss)</td><td colspan="2">114 </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td></tr><tr><td colspan="3">Comprehensive income</td><td>$</td><td>3,054 </td><td></td><td colspan="3"></td><td>$</td><td>4,129 </td><td></td><td colspan="3"></td><td>$</td><td>5,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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Consolidated Statements of Changes in Stockholders' Equity
(dollars in millions, shares in thousands)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="9" rowspan="2">Preferred Stock</td><td colspan="3"></td><td colspan="9" rowspan="2">Common Stock</td><td colspan="3"></td><td colspan="3" rowspan="3">AdditionalPaid-inCapital</td><td colspan="3"></td><td colspan="3" rowspan="3">RetainedEarnings</td><td colspan="3"></td><td colspan="3" rowspan="3">Accumulated Other Comprehensive Income (Loss)</td><td colspan="3"></td><td colspan="3" rowspan="3">TreasuryStock</td><td colspan="3"></td><td colspan="3" rowspan="3">TotalStockholders'Equity</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"> </td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3">Shares</td><td colspan="3"></td><td colspan="3">Amount</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2020</td><td colspan="2">11 </td><td></td><td colspan="3"></td><td>$</td><td>1,056 </td><td></td><td colspan="3"></td><td colspan="2">567,898 </td><td></td><td colspan="3"></td><td>$</td><td>6 </td><td></td><td colspan="3"></td><td>$</td><td>4,257 </td><td></td><td colspan="3"></td><td>$</td><td>19,754 </td><td></td><td colspan="3"></td><td>$</td><td>45 </td><td></td><td colspan="3"></td><td>$</td><td>(14,435)</td><td></td><td colspan="3"></td><td>$</td><td>10,683 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">5,422 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">5,422 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss </td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(139)</td><td></td></tr><tr><td colspan="3">Purchases of treasury stock</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,260)</td><td></td><td colspan="3"></td><td colspan="2">(2,260)</td><td></td></tr><tr><td colspan="3">Common stock issued under employee benefit plans</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">88 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td></tr><tr><td colspan="3">Common stock issued and stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">845 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">103 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">103 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dividends - common stock ($1.88 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(569)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(569)</td><td></td></tr><tr><td colspan="3">Dividends - Series C preferred stock ($5,500 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Dividends - Series D preferred stock ($7,674 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(38)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(38)</td><td></td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">568,831 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">4,369 </td><td></td><td colspan="3"></td><td colspan="2">24,538 </td><td></td><td colspan="3"></td><td colspan="2">(94)</td><td></td><td colspan="3"></td><td colspan="2">(16,695)</td><td></td><td colspan="3"></td><td colspan="2">13,180 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,374 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">4,374 </td><td></td></tr><tr><td colspan="3">Other comprehensive loss </td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(245)</td><td></td></tr><tr><td colspan="3">Purchases of treasury stock</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,359)</td><td></td><td colspan="3"></td><td colspan="2">(2,359)</td><td></td></tr><tr><td colspan="3">Common stock issued under employee benefit plans</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">107 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td></tr><tr><td colspan="3">Common stock issued and stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">751 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">89 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dividends - common stock ($2.30 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(643)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(643)</td><td></td></tr><tr><td colspan="3">Dividends - Series C preferred stock ($5,500 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Dividends - Series D preferred stock ($6,125 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">569,689 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Cumulative effect of ASU No. 2022-02 adoption</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">52 </td><td></td></tr><tr><td colspan="3">Net income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,940 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,940 </td><td></td></tr><tr><td colspan="3">Other comprehensive income</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">114 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">114 </td><td></td></tr><tr><td colspan="3">Purchases of treasury stock</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,956)</td><td></td><td colspan="3"></td><td colspan="2">(1,956)</td><td></td></tr><tr><td colspan="3">Common stock issued under employee benefit plans</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">11 </td><td></td></tr><tr><td colspan="3">Common stock issued and stock-based compensation expense</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">1,031 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">74 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dividends - common stock ($2.70 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(689)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(689)</td><td></td></tr><tr><td colspan="3">Dividends - Series C preferred stock ($5,500 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Dividends - Series D preferred stock ($6,125 per share)</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(31)</td><td></td></tr><tr><td colspan="3">Balance at December 31, 2023</td><td colspan="2">11 </td><td></td><td colspan="3"></td><td>$</td><td>1,056 </td><td></td><td colspan="3"></td><td colspan="2">570,838 </td><td></td><td colspan="3"></td><td>$</td><td>6 </td><td></td><td colspan="3"></td><td>$</td><td>4,553 </td><td></td><td colspan="3"></td><td>$</td><td>30,448 </td><td></td><td colspan="3"></td><td>$</td><td>(225)</td><td></td><td colspan="3"></td><td>$</td><td>(21,010)</td><td></td><td colspan="3"></td><td>$</td><td>14,828 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-88-
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Cash Flows
(dollars in millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Cash flows provided by operating activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Adjustments to reconcile net income to net cash provided by operating activities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Deferred income taxes</td><td colspan="2">(626)</td><td></td><td colspan="3"></td><td colspan="2">(433)</td><td></td><td colspan="3"></td><td colspan="2">318 </td><td></td></tr><tr><td colspan="3">Depreciation and amortization</td><td colspan="2">458 </td><td></td><td colspan="3"></td><td colspan="2">561 </td><td></td><td colspan="3"></td><td colspan="2">531 </td><td></td></tr><tr><td colspan="3">Amortization of deferred revenues</td><td colspan="2">(468)</td><td></td><td colspan="3"></td><td colspan="2">(365)</td><td></td><td colspan="3"></td><td colspan="2">(295)</td><td></td></tr><tr><td colspan="3">Net losses (gains) on investments and other assets</td><td colspan="2">50 </td><td></td><td colspan="3"></td><td colspan="2">261 </td><td></td><td colspan="3"></td><td colspan="2">(382)</td><td></td></tr><tr><td colspan="3">Other, net</td><td colspan="2">110 </td><td></td><td colspan="3"></td><td colspan="2">125 </td><td></td><td colspan="3"></td><td colspan="2">257 </td><td></td></tr><tr><td colspan="3">Changes in assets and liabilities:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Increase in other assets</td><td colspan="2">(658)</td><td></td><td colspan="3"></td><td colspan="2">(846)</td><td></td><td colspan="3"></td><td colspan="2">(496)</td><td></td></tr><tr><td colspan="3">Increase in accrued expenses and other liabilities</td><td colspan="2">739 </td><td></td><td colspan="3"></td><td colspan="2">1,104 </td><td></td><td colspan="3"></td><td colspan="2">446 </td><td></td></tr><tr><td colspan="3">Net cash provided by operating activities</td><td colspan="2">8,563 </td><td></td><td colspan="3"></td><td colspan="2">7,140 </td><td></td><td colspan="3"></td><td colspan="2">6,019 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash flows provided by (used for) investing activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Maturities of other short-term investments</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">2,200 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Maturities of available-for-sale investment securities</td><td colspan="2">1,831 </td><td></td><td colspan="3"></td><td colspan="2">2,084 </td><td></td><td colspan="3"></td><td colspan="2">2,727 </td><td></td></tr><tr><td colspan="3">Purchases of available-for-sale investment securities</td><td colspan="2">(2,996)</td><td></td><td colspan="3"></td><td colspan="2">(7,682)</td><td></td><td colspan="3"></td><td colspan="2">(9)</td><td></td></tr><tr><td colspan="3">Maturities of held-to-maturity investment securities</td><td colspan="2">16 </td><td></td><td colspan="3"></td><td colspan="2">32 </td><td></td><td colspan="3"></td><td colspan="2">82 </td><td></td></tr><tr><td colspan="3">Purchases of held-to-maturity investment securities</td><td colspan="2">(49)</td><td></td><td colspan="3"></td><td colspan="2">(50)</td><td></td><td colspan="3"></td><td colspan="2">(28)</td><td></td></tr><tr><td colspan="3">Net change in principal on loans originated for investment</td><td colspan="2">(19,934)</td><td></td><td colspan="3"></td><td colspan="2">(19,961)</td><td></td><td colspan="3"></td><td colspan="2">(4,574)</td><td></td></tr><tr><td colspan="3">Proceeds from the sale of available for sale securities</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">5 </td><td></td></tr><tr><td colspan="3">Proceeds from the sale of other investments</td><td colspan="2">44 </td><td></td><td colspan="3"></td><td colspan="2">336 </td><td></td><td colspan="3"></td><td colspan="2">1 </td><td></td></tr><tr><td colspan="3">Purchases of other investments</td><td colspan="2">(100)</td><td></td><td colspan="3"></td><td colspan="2">(169)</td><td></td><td colspan="3"></td><td colspan="2">(170)</td><td></td></tr><tr><td colspan="3">Proceeds from sale of premises and equipment</td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Purchases of premises and equipment</td><td colspan="2">(303)</td><td></td><td colspan="3"></td><td colspan="2">(236)</td><td></td><td colspan="3"></td><td colspan="2">(194)</td><td></td></tr><tr><td colspan="3">Net cash (used for) provided by investing activities</td><td colspan="2">(21,491)</td><td></td><td colspan="3"></td><td colspan="2">(25,637)</td><td></td><td colspan="3"></td><td colspan="2">40 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash flows (used for) provided by financing activities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Net change in short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">(1,750)</td><td></td><td colspan="3"></td><td colspan="2">1,750 </td><td></td></tr><tr><td colspan="3">Net change in deposits</td><td colspan="2">17,250 </td><td></td><td colspan="3"></td><td colspan="2">19,208 </td><td></td><td colspan="3"></td><td colspan="2">(4,533)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of securitized debt</td><td colspan="2">2,230 </td><td></td><td colspan="3"></td><td colspan="2">5,620 </td><td></td><td colspan="3"></td><td colspan="2">1,727 </td><td></td></tr><tr><td colspan="3">Maturities and repayment of securitized debt</td><td colspan="2">(1,494)</td><td></td><td colspan="3"></td><td colspan="2">(4,395)</td><td></td><td colspan="3"></td><td colspan="2">(3,451)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of other long-term borrowings</td><td colspan="2">2,041 </td><td></td><td colspan="3"></td><td colspan="2">1,265 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Maturities and repayments of other long-term borrowings</td><td colspan="2">(2,340)</td><td></td><td colspan="3"></td><td colspan="2">(834)</td><td></td><td colspan="3"></td><td colspan="2">(922)</td><td></td></tr><tr><td colspan="3">Proceeds from issuance of common stock</td><td colspan="2">12 </td><td></td><td colspan="3"></td><td colspan="2">10 </td><td></td><td colspan="3"></td><td colspan="2">9 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Dividends paid on common and preferred stock</td><td colspan="2">(752)</td><td></td><td colspan="3"></td><td colspan="2">(703)</td><td></td><td colspan="3"></td><td colspan="2">(636)</td><td></td></tr><tr><td colspan="3">Purchases of treasury stock</td><td colspan="2">(1,938)</td><td></td><td colspan="3"></td><td colspan="2">(2,359)</td><td></td><td colspan="3"></td><td colspan="2">(2,260)</td><td></td></tr><tr><td colspan="3">Net cash provided by (used for) financing activities</td><td colspan="2">15,759 </td><td></td><td colspan="3"></td><td colspan="2">16,062 </td><td></td><td colspan="3"></td><td colspan="2">(8,316)</td><td></td></tr><tr><td colspan="3">Net increase (decrease) in cash, cash equivalents and restricted cash</td><td colspan="2">2,831 </td><td></td><td colspan="3"></td><td colspan="2">(2,435)</td><td></td><td colspan="3"></td><td colspan="2">(2,257)</td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, at the beginning of the period</td><td colspan="2">8,897 </td><td></td><td colspan="3"></td><td colspan="2">11,332 </td><td></td><td colspan="3"></td><td colspan="2">13,589 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, at the end of the period</td><td>$</td><td>11,728 </td><td></td><td colspan="3"></td><td>$</td><td>8,897 </td><td></td><td colspan="3"></td><td>$</td><td>11,332 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Reconciliation of cash, cash equivalents and restricted cash</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td><td colspan="3"></td><td>$</td><td>8,750 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td><td colspan="3"></td><td colspan="2">2,582 </td><td></td></tr><tr><td colspan="3">Cash, cash equivalents and restricted cash, at the end of the period</td><td>$</td><td>11,728 </td><td></td><td colspan="3"></td><td>$</td><td>8,897 </td><td></td><td colspan="3"></td><td>$</td><td>11,332 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Supplemental disclosures of cash flow information:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash paid during the period for:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest expense</td><td>$</td><td>4,508 </td><td></td><td colspan="3"></td><td>$</td><td>1,666 </td><td></td><td colspan="3"></td><td>$</td><td>1,077 </td><td></td></tr><tr><td colspan="3">Income taxes, net of income tax refunds</td><td>$</td><td>1,605 </td><td></td><td colspan="3"></td><td>$</td><td>1,865 </td><td></td><td colspan="3"></td><td>$</td><td>1,305 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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q_com025
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Analyze Apple's Net sales trens and % rate change from 2020 to 2022?
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Apple's revenue showed significant growth from 2020 to 2022. In 2020, Apple’s revenue was approximately $274.5 billion. This increased to around $365.817 billion in 2021, reflecting a growth rate of about 33.3%, largely driven by strong demand across all product categories, especially the iPhone 12. In 2022, Apple's revenue further increased to approximately $394.328 billion, showing a growth rate of about 7.8%. The slower growth in 2022 compared to 2021 can be attributed to factors such as supply chain constraints and market saturation in certain regions.
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Comparison
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21
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0000320193-22-000108
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Apple Inc. 10-K form for the fiscal year ended 2022-09-24, page 21:
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
| | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------|:-------|:--------|:-------|:----|:-----|:---|:-------|:---|:--------|:---|:---|:---|:-------|:---|:--------|
| 1 | | 2022 | | Change | | 2021 | | Change | | 2020 | | | | | | |
| 2 | Net sales by category: | | | | | | | | | | | | | | | |
| 3 | iPhone (1) | $ | 205,489 | | | 7 | % | | $ | 191,973 | | | 39 | % | $ | 137,781 |
| 4 | Mac (1) | 40,177 | | | 14 | % | | 35,190 | | | 23 | % | | 28,622 | | |
| 5 | iPad (1) | 29,292 | | | (8) | % | | 31,862 | | | 34 | % | | 23,724 | | |
| 6 | Wearables, Home and Accessories (1)(2) | 41,241 | | | 7 | % | | 38,367 | | | 25 | % | | 30,620 | | |
| 7 | Services (3) | 78,129 | | | 14 | % | | 68,425 | | | 27 | % | | 53,768 | | |
| 8 | Total net sales | $ | 394,328 | | | 8 | % | | $ | 365,817 | | | 33 | % | $ | 274,515 |
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
| | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------|:-------|:--------|:-------|:----|:-----|:---|:-------|:---|:--------|:---|:---|:---|:-------|:---|:--------|
| 1 | | 2022 | | Change | | 2021 | | Change | | 2020 | | | | | | |
| 2 | Net sales by category: | | | | | | | | | | | | | | | |
| 3 | iPhone (1) | $ | 205,489 | | | 7 | % | | $ | 191,973 | | | 39 | % | $ | 137,781 |
| 4 | Mac (1) | 40,177 | | | 14 | % | | 35,190 | | | 23 | % | | 28,622 | | |
| 5 | iPad (1) | 29,292 | | | (8) | % | | 31,862 | | | 34 | % | | 23,724 | | |
| 6 | Wearables, Home and Accessories (1)(2) | 41,241 | | | 7 | % | | 38,367 | | | 25 | % | | 30,620 | | |
| 7 | Services (3) | 78,129 | | | 14 | % | | 68,425 | | | 27 | % | | 53,768 | | |
| 8 | Total net sales | $ | 394,328 | | | 8 | % | | $ | 365,817 | | | 33 | % | $ | 274,515 |
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Apple Inc. 10-K form for the fiscal year ended 2022-09-24, page 21:
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2020</td></tr><tr><td colspan="3">Net sales by category:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">iPhone (1)</td><td>$</td><td>205,489 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td>$</td><td>191,973 </td><td></td><td colspan="3"></td><td colspan="2">39 </td><td>%</td><td colspan="3"></td><td>$</td><td>137,781 </td><td></td></tr><tr><td colspan="3">Mac (1)</td><td colspan="2">40,177 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">35,190 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td><td colspan="3"></td><td colspan="2">28,622 </td><td></td></tr><tr><td colspan="3">iPad (1)</td><td colspan="2">29,292 </td><td></td><td colspan="3"></td><td colspan="2">(8)</td><td>%</td><td colspan="3"></td><td colspan="2">31,862 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td>%</td><td colspan="3"></td><td colspan="2">23,724 </td><td></td></tr><tr><td colspan="3">Wearables, Home and Accessories (1)(2)</td><td colspan="2">41,241 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td colspan="2">38,367 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td><td colspan="3"></td><td colspan="2">30,620 </td><td></td></tr><tr><td colspan="3">Services (3)</td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">68,425 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td><td colspan="3"></td><td colspan="2">53,768 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td>$</td><td>394,328 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>365,817 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td>%</td><td colspan="3"></td><td>$</td><td>274,515 </td><td></td></tr></table>
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2020</td></tr><tr><td colspan="3">Net sales by category:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">iPhone (1)</td><td>$</td><td>205,489 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td>$</td><td>191,973 </td><td></td><td colspan="3"></td><td colspan="2">39 </td><td>%</td><td colspan="3"></td><td>$</td><td>137,781 </td><td></td></tr><tr><td colspan="3">Mac (1)</td><td colspan="2">40,177 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">35,190 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td><td colspan="3"></td><td colspan="2">28,622 </td><td></td></tr><tr><td colspan="3">iPad (1)</td><td colspan="2">29,292 </td><td></td><td colspan="3"></td><td colspan="2">(8)</td><td>%</td><td colspan="3"></td><td colspan="2">31,862 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td>%</td><td colspan="3"></td><td colspan="2">23,724 </td><td></td></tr><tr><td colspan="3">Wearables, Home and Accessories (1)(2)</td><td colspan="2">41,241 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td colspan="2">38,367 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td><td colspan="3"></td><td colspan="2">30,620 </td><td></td></tr><tr><td colspan="3">Services (3)</td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">68,425 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td><td colspan="3"></td><td colspan="2">53,768 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td>$</td><td>394,328 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>365,817 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td>%</td><td colspan="3"></td><td>$</td><td>274,515 </td><td></td></tr></table>
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
q_com026
|
Compare the year-over-year growth in iPhone sales between 2020 and 2021
|
The iPhone segment experienced substantial growth between 2020 and 2021. In 2020, iPhone revenue was approximately $137.8 billion. This increased to around $191.9 billion in 2021, reflecting a year-over-year growth of about 39.2%. The growth was primarily driven by the successful launch of the iPhone 12 series, which introduced 5G capabilities. The strong demand for the iPhone 12 in the holiday quarter of 2021 significantly boosted the segment's revenue.
|
Comparison
|
21
|
0000320193-22-000108
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Apple Inc. 10-K form for the fiscal year ended 2022-09-24, page 21:
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
| | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------|:-------|:--------|:-------|:----|:-----|:---|:-------|:---|:--------|:---|:---|:---|:-------|:---|:--------|
| 1 | | 2022 | | Change | | 2021 | | Change | | 2020 | | | | | | |
| 2 | Net sales by category: | | | | | | | | | | | | | | | |
| 3 | iPhone (1) | $ | 205,489 | | | 7 | % | | $ | 191,973 | | | 39 | % | $ | 137,781 |
| 4 | Mac (1) | 40,177 | | | 14 | % | | 35,190 | | | 23 | % | | 28,622 | | |
| 5 | iPad (1) | 29,292 | | | (8) | % | | 31,862 | | | 34 | % | | 23,724 | | |
| 6 | Wearables, Home and Accessories (1)(2) | 41,241 | | | 7 | % | | 38,367 | | | 25 | % | | 30,620 | | |
| 7 | Services (3) | 78,129 | | | 14 | % | | 68,425 | | | 27 | % | | 53,768 | | |
| 8 | Total net sales | $ | 394,328 | | | 8 | % | | $ | 365,817 | | | 33 | % | $ | 274,515 |
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
| | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------|:-------|:--------|:-------|:----|:-----|:---|:-------|:---|:--------|:---|:---|:---|:-------|:---|:--------|
| 1 | | 2022 | | Change | | 2021 | | Change | | 2020 | | | | | | |
| 2 | Net sales by category: | | | | | | | | | | | | | | | |
| 3 | iPhone (1) | $ | 205,489 | | | 7 | % | | $ | 191,973 | | | 39 | % | $ | 137,781 |
| 4 | Mac (1) | 40,177 | | | 14 | % | | 35,190 | | | 23 | % | | 28,622 | | |
| 5 | iPad (1) | 29,292 | | | (8) | % | | 31,862 | | | 34 | % | | 23,724 | | |
| 6 | Wearables, Home and Accessories (1)(2) | 41,241 | | | 7 | % | | 38,367 | | | 25 | % | | 30,620 | | |
| 7 | Services (3) | 78,129 | | | 14 | % | | 68,425 | | | 27 | % | | 53,768 | | |
| 8 | Total net sales | $ | 394,328 | | | 8 | % | | $ | 365,817 | | | 33 | % | $ | 274,515 |
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Apple Inc. 10-K form for the fiscal year ended 2022-09-24, page 21:
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2020</td></tr><tr><td colspan="3">Net sales by category:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">iPhone (1)</td><td>$</td><td>205,489 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td>$</td><td>191,973 </td><td></td><td colspan="3"></td><td colspan="2">39 </td><td>%</td><td colspan="3"></td><td>$</td><td>137,781 </td><td></td></tr><tr><td colspan="3">Mac (1)</td><td colspan="2">40,177 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">35,190 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td><td colspan="3"></td><td colspan="2">28,622 </td><td></td></tr><tr><td colspan="3">iPad (1)</td><td colspan="2">29,292 </td><td></td><td colspan="3"></td><td colspan="2">(8)</td><td>%</td><td colspan="3"></td><td colspan="2">31,862 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td>%</td><td colspan="3"></td><td colspan="2">23,724 </td><td></td></tr><tr><td colspan="3">Wearables, Home and Accessories (1)(2)</td><td colspan="2">41,241 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td colspan="2">38,367 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td><td colspan="3"></td><td colspan="2">30,620 </td><td></td></tr><tr><td colspan="3">Services (3)</td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">68,425 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td><td colspan="3"></td><td colspan="2">53,768 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td>$</td><td>394,328 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>365,817 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td>%</td><td colspan="3"></td><td>$</td><td>274,515 </td><td></td></tr></table>
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2020</td></tr><tr><td colspan="3">Net sales by category:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">iPhone (1)</td><td>$</td><td>205,489 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td>$</td><td>191,973 </td><td></td><td colspan="3"></td><td colspan="2">39 </td><td>%</td><td colspan="3"></td><td>$</td><td>137,781 </td><td></td></tr><tr><td colspan="3">Mac (1)</td><td colspan="2">40,177 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">35,190 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td><td colspan="3"></td><td colspan="2">28,622 </td><td></td></tr><tr><td colspan="3">iPad (1)</td><td colspan="2">29,292 </td><td></td><td colspan="3"></td><td colspan="2">(8)</td><td>%</td><td colspan="3"></td><td colspan="2">31,862 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td>%</td><td colspan="3"></td><td colspan="2">23,724 </td><td></td></tr><tr><td colspan="3">Wearables, Home and Accessories (1)(2)</td><td colspan="2">41,241 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td colspan="2">38,367 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td><td colspan="3"></td><td colspan="2">30,620 </td><td></td></tr><tr><td colspan="3">Services (3)</td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">68,425 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td><td colspan="3"></td><td colspan="2">53,768 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td>$</td><td>394,328 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>365,817 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td>%</td><td colspan="3"></td><td>$</td><td>274,515 </td><td></td></tr></table>
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
q_com027
|
What was the trend in Apple's Services revenue over the past three years (2020-2022)?
|
Apple's Services segment has shown consistent growth over the past three years. In 2020, Services revenue was approximately $53.7 billion. This grew to $68.4 billion in 2021, and further to about $78.1 billion in 2022. The growth rates were approximately 27.4% from 2020 to 2021 and 14.2% from 2021 to 2022. The Services segment, which includes the App Store, Apple Music, and iCloud, has become increasingly important for Apple's overall revenue, reflecting a shift towards more recurring revenue streams.
|
Comparison
|
21
|
0000320193-22-000108
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Apple Inc. 10-K form for the fiscal year ended 2022-09-24, page 21:
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
| | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------|:-------|:--------|:-------|:----|:-----|:---|:-------|:---|:--------|:---|:---|:---|:-------|:---|:--------|
| 1 | | 2022 | | Change | | 2021 | | Change | | 2020 | | | | | | |
| 2 | Net sales by category: | | | | | | | | | | | | | | | |
| 3 | iPhone (1) | $ | 205,489 | | | 7 | % | | $ | 191,973 | | | 39 | % | $ | 137,781 |
| 4 | Mac (1) | 40,177 | | | 14 | % | | 35,190 | | | 23 | % | | 28,622 | | |
| 5 | iPad (1) | 29,292 | | | (8) | % | | 31,862 | | | 34 | % | | 23,724 | | |
| 6 | Wearables, Home and Accessories (1)(2) | 41,241 | | | 7 | % | | 38,367 | | | 25 | % | | 30,620 | | |
| 7 | Services (3) | 78,129 | | | 14 | % | | 68,425 | | | 27 | % | | 53,768 | | |
| 8 | Total net sales | $ | 394,328 | | | 8 | % | | $ | 365,817 | | | 33 | % | $ | 274,515 |
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
| | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------|:-------|:--------|:-------|:----|:-----|:---|:-------|:---|:--------|:---|:---|:---|:-------|:---|:--------|
| 1 | | 2022 | | Change | | 2021 | | Change | | 2020 | | | | | | |
| 2 | Net sales by category: | | | | | | | | | | | | | | | |
| 3 | iPhone (1) | $ | 205,489 | | | 7 | % | | $ | 191,973 | | | 39 | % | $ | 137,781 |
| 4 | Mac (1) | 40,177 | | | 14 | % | | 35,190 | | | 23 | % | | 28,622 | | |
| 5 | iPad (1) | 29,292 | | | (8) | % | | 31,862 | | | 34 | % | | 23,724 | | |
| 6 | Wearables, Home and Accessories (1)(2) | 41,241 | | | 7 | % | | 38,367 | | | 25 | % | | 30,620 | | |
| 7 | Services (3) | 78,129 | | | 14 | % | | 68,425 | | | 27 | % | | 53,768 | | |
| 8 | Total net sales | $ | 394,328 | | | 8 | % | | $ | 365,817 | | | 33 | % | $ | 274,515 |
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Apple Inc. 10-K form for the fiscal year ended 2022-09-24, page 21:
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2020</td></tr><tr><td colspan="3">Net sales by category:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">iPhone (1)</td><td>$</td><td>205,489 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td>$</td><td>191,973 </td><td></td><td colspan="3"></td><td colspan="2">39 </td><td>%</td><td colspan="3"></td><td>$</td><td>137,781 </td><td></td></tr><tr><td colspan="3">Mac (1)</td><td colspan="2">40,177 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">35,190 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td><td colspan="3"></td><td colspan="2">28,622 </td><td></td></tr><tr><td colspan="3">iPad (1)</td><td colspan="2">29,292 </td><td></td><td colspan="3"></td><td colspan="2">(8)</td><td>%</td><td colspan="3"></td><td colspan="2">31,862 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td>%</td><td colspan="3"></td><td colspan="2">23,724 </td><td></td></tr><tr><td colspan="3">Wearables, Home and Accessories (1)(2)</td><td colspan="2">41,241 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td colspan="2">38,367 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td><td colspan="3"></td><td colspan="2">30,620 </td><td></td></tr><tr><td colspan="3">Services (3)</td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">68,425 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td><td colspan="3"></td><td colspan="2">53,768 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td>$</td><td>394,328 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>365,817 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td>%</td><td colspan="3"></td><td>$</td><td>274,515 </td><td></td></tr></table>
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2020</td></tr><tr><td colspan="3">Net sales by category:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">iPhone (1)</td><td>$</td><td>205,489 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td>$</td><td>191,973 </td><td></td><td colspan="3"></td><td colspan="2">39 </td><td>%</td><td colspan="3"></td><td>$</td><td>137,781 </td><td></td></tr><tr><td colspan="3">Mac (1)</td><td colspan="2">40,177 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">35,190 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td><td colspan="3"></td><td colspan="2">28,622 </td><td></td></tr><tr><td colspan="3">iPad (1)</td><td colspan="2">29,292 </td><td></td><td colspan="3"></td><td colspan="2">(8)</td><td>%</td><td colspan="3"></td><td colspan="2">31,862 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td>%</td><td colspan="3"></td><td colspan="2">23,724 </td><td></td></tr><tr><td colspan="3">Wearables, Home and Accessories (1)(2)</td><td colspan="2">41,241 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td colspan="2">38,367 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td><td colspan="3"></td><td colspan="2">30,620 </td><td></td></tr><tr><td colspan="3">Services (3)</td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">68,425 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td><td colspan="3"></td><td colspan="2">53,768 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td>$</td><td>394,328 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>365,817 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td>%</td><td colspan="3"></td><td>$</td><td>274,515 </td><td></td></tr></table>
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
q_com028
|
Which segment of Apple's business contributed the most to its total revenue in 2022?
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In 2022, the iPhone segment continued to contribute the most to Apple’s total revenue. The iPhone accounted for approximately $205.5 billion, or about 52.1% of Apple's total revenue. The iPhone’s strong performance was driven by the continued popularity of the iPhone latest series.
|
Comparison
|
21
|
0000320193-22-000108
|
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Apple Inc. 10-K form for the fiscal year ended 2022-09-24, page 21:
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
| | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------|:-------|:--------|:-------|:----|:-----|:---|:-------|:---|:--------|:---|:---|:---|:-------|:---|:--------|
| 1 | | 2022 | | Change | | 2021 | | Change | | 2020 | | | | | | |
| 2 | Net sales by category: | | | | | | | | | | | | | | | |
| 3 | iPhone (1) | $ | 205,489 | | | 7 | % | | $ | 191,973 | | | 39 | % | $ | 137,781 |
| 4 | Mac (1) | 40,177 | | | 14 | % | | 35,190 | | | 23 | % | | 28,622 | | |
| 5 | iPad (1) | 29,292 | | | (8) | % | | 31,862 | | | 34 | % | | 23,724 | | |
| 6 | Wearables, Home and Accessories (1)(2) | 41,241 | | | 7 | % | | 38,367 | | | 25 | % | | 30,620 | | |
| 7 | Services (3) | 78,129 | | | 14 | % | | 68,425 | | | 27 | % | | 53,768 | | |
| 8 | Total net sales | $ | 394,328 | | | 8 | % | | $ | 365,817 | | | 33 | % | $ | 274,515 |
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
| | | | | | | | | | | | | | | | | |
|---:|:---------------------------------------|:-------|:--------|:-------|:----|:-----|:---|:-------|:---|:--------|:---|:---|:---|:-------|:---|:--------|
| 1 | | 2022 | | Change | | 2021 | | Change | | 2020 | | | | | | |
| 2 | Net sales by category: | | | | | | | | | | | | | | | |
| 3 | iPhone (1) | $ | 205,489 | | | 7 | % | | $ | 191,973 | | | 39 | % | $ | 137,781 |
| 4 | Mac (1) | 40,177 | | | 14 | % | | 35,190 | | | 23 | % | | 28,622 | | |
| 5 | iPad (1) | 29,292 | | | (8) | % | | 31,862 | | | 34 | % | | 23,724 | | |
| 6 | Wearables, Home and Accessories (1)(2) | 41,241 | | | 7 | % | | 38,367 | | | 25 | % | | 30,620 | | |
| 7 | Services (3) | 78,129 | | | 14 | % | | 68,425 | | | 27 | % | | 53,768 | | |
| 8 | Total net sales | $ | 394,328 | | | 8 | % | | $ | 365,817 | | | 33 | % | $ | 274,515 |
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Apple Inc. 10-K form for the fiscal year ended 2022-09-24, page 21:
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2020</td></tr><tr><td colspan="3">Net sales by category:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">iPhone (1)</td><td>$</td><td>205,489 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td>$</td><td>191,973 </td><td></td><td colspan="3"></td><td colspan="2">39 </td><td>%</td><td colspan="3"></td><td>$</td><td>137,781 </td><td></td></tr><tr><td colspan="3">Mac (1)</td><td colspan="2">40,177 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">35,190 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td><td colspan="3"></td><td colspan="2">28,622 </td><td></td></tr><tr><td colspan="3">iPad (1)</td><td colspan="2">29,292 </td><td></td><td colspan="3"></td><td colspan="2">(8)</td><td>%</td><td colspan="3"></td><td colspan="2">31,862 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td>%</td><td colspan="3"></td><td colspan="2">23,724 </td><td></td></tr><tr><td colspan="3">Wearables, Home and Accessories (1)(2)</td><td colspan="2">41,241 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td colspan="2">38,367 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td><td colspan="3"></td><td colspan="2">30,620 </td><td></td></tr><tr><td colspan="3">Services (3)</td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">68,425 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td><td colspan="3"></td><td colspan="2">53,768 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td>$</td><td>394,328 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>365,817 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td>%</td><td colspan="3"></td><td>$</td><td>274,515 </td><td></td></tr></table>
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Products and Services Performance
The following table shows net sales by category for 2022, 2021 and 2020 (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2021</td><td colspan="3"></td><td colspan="3">Change</td><td colspan="3"></td><td colspan="3">2020</td></tr><tr><td colspan="3">Net sales by category:</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">iPhone (1)</td><td>$</td><td>205,489 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td>$</td><td>191,973 </td><td></td><td colspan="3"></td><td colspan="2">39 </td><td>%</td><td colspan="3"></td><td>$</td><td>137,781 </td><td></td></tr><tr><td colspan="3">Mac (1)</td><td colspan="2">40,177 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">35,190 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td>%</td><td colspan="3"></td><td colspan="2">28,622 </td><td></td></tr><tr><td colspan="3">iPad (1)</td><td colspan="2">29,292 </td><td></td><td colspan="3"></td><td colspan="2">(8)</td><td>%</td><td colspan="3"></td><td colspan="2">31,862 </td><td></td><td colspan="3"></td><td colspan="2">34 </td><td>%</td><td colspan="3"></td><td colspan="2">23,724 </td><td></td></tr><tr><td colspan="3">Wearables, Home and Accessories (1)(2)</td><td colspan="2">41,241 </td><td></td><td colspan="3"></td><td colspan="2">7 </td><td>%</td><td colspan="3"></td><td colspan="2">38,367 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td>%</td><td colspan="3"></td><td colspan="2">30,620 </td><td></td></tr><tr><td colspan="3">Services (3)</td><td colspan="2">78,129 </td><td></td><td colspan="3"></td><td colspan="2">14 </td><td>%</td><td colspan="3"></td><td colspan="2">68,425 </td><td></td><td colspan="3"></td><td colspan="2">27 </td><td>%</td><td colspan="3"></td><td colspan="2">53,768 </td><td></td></tr><tr><td colspan="3">Total net sales</td><td>$</td><td>394,328 </td><td></td><td colspan="3"></td><td colspan="2">8 </td><td>%</td><td colspan="3"></td><td>$</td><td>365,817 </td><td></td><td colspan="3"></td><td colspan="2">33 </td><td>%</td><td colspan="3"></td><td>$</td><td>274,515 </td><td></td></tr></table>
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories.
(3)Services net sales include sales from the Company's advertising, AppleCare, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
iPhone
iPhone net sales increased during 2022 compared to 2021 due primarily to higher net sales from the Company's new iPhone models released since the beginning of the fourth quarter of 2021.
Mac
Mac net sales increased during 2022 compared to 2021 due primarily to higher net sales of laptops.
iPad
iPad net sales decreased during 2022 compared to 2021 due primarily to lower net sales of iPad Pro.
Wearables, Home and Accessories
Wearables, Home and Accessories net sales increased during 2022 compared to 2021 due primarily to higher net sales of Apple Watch and AirPods.
Services
Services net sales increased during 2022 compared to 2021 due primarily to higher net sales from advertising, cloud services and the App Store.
Apple Inc. | 2022 Form 10-K | 21
|
Subsets and Splits
Random 30 Questions & Answers
Outputs 30 randomly selected questions along with their ground truth answers, providing a basic overview of the dataset content without revealing deeper insights.