2017.16, 2018,21, 2020, the Company had 9280 common stockholders of record. The Company has not declared or paid any dividends on its common stock in its past three fiscal years.years and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay cash dividends will be made at the discretion of the Board of Directors and will depend on restrictions and other factors the Board of Directors may deem relevant. The Company has not made any sales of unregistered equity securities in the years ended December 31, 2017, 20162019, 2018 or 2015.
2014
LABORATORY ANALYTICAL INSTRUMENTS AND S&P 500 INDEX
AND S&P HEALTH CARE INDEX
| 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |||||||||||||||||||
WATERS CORPORATION | $ | 100.00 | $ | 114.78 | $ | 129.38 | $ | 154.48 | $ | 154.26 | $ | 221.75 | ||||||||||||
NYSE MARKET INDEX | $ | 100.00 | $ | 126.28 | $ | 134.81 | $ | 129.29 | $ | 144.73 | $ | 171.83 | ||||||||||||
SIC CODE INDEX | $ | 100.00 | $ | 142.80 | $ | 182.12 | $ | 202.31 | $ | 186.41 | $ | 285.16 | ||||||||||||
S&P 500 INDEX | $ | 100.00 | $ | 132.39 | $ | 150.51 | $ | 152.59 | $ | 170.84 | $ | 208.14 | ||||||||||||
Market for Registrant’s Common Equity
The quarterly range
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||
WATERS CORPORATION | $ | 100.00 | $ | 119.39 | $ | 119.22 | $ | 171.39 | $ | 167.36 | $ | 207.28 | |||||||||||||
NYSE MARKET INDEX | $ | 100.00 | $ | 95.91 | $ | 107.36 | $ | 127.46 | $ | 116.06 | $ | 145.66 | |||||||||||||
SIC CODE INDEX | $ | 100.00 | $ | 111.14 | $ | 102.42 | $ | 156.71 | $ | 165.13 | $ | 205.80 | |||||||||||||
S&P 500 INDEX | $ | 100.00 | $ | 101.38 | $ | 113.51 | $ | 138.29 | $ | 132.23 | $ | 173.86 | |||||||||||||
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs (2) | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs (2) | ||||||||||||
October 1 to October 28, 2017 | — | $ | — | — | $ | 885,182 | ||||||||||
October 28 to November 25, 2017 | 260 | $ | 196.20 | 260 | $ | 834,170 | ||||||||||
November 26 to December 31, 2017 | 182 | $ | 196.65 | 171 | $ | 800,462 | ||||||||||
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Total | 442 | $ | 196.39 | 431 | $ | 800,462 | ||||||||||
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Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs (2) | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs (2) | ||||||||||||
September 29, 2019 to October 26, 2019 | 646 | $ | 217.06 | 646 | $ | 2,112,901 | ||||||||||
October 27, 2019 to November 23, 2019 | 797 | $ | 214.93 | 797 | $ | 1,941,602 | ||||||||||
November 24, 2019 to December 31, 2019 | 1,092 | $ | 228.96 | 1,092 | $ | 1,691,643 | ||||||||||
Total | 2,535 | $ | 221.52 | 2,535 | $ | 1,691,643 | ||||||||||
| (1) | The |
| (2) | In two-year period. This new program replaced the remaining amounts available under thepre-existing authorization. |
| Item 6: | Selected Financial Data |
In thousands, except per share and employees data STATEMENT OF OPERATIONS DATA: Net sales Income from operations before income taxes Net income* Net income per basic common share* Weighted-average number of basic common shares Net income per diluted common share* Weighted-average number of diluted common shares and equivalents BALANCE SHEET AND OTHER DATA: Cash, cash equivalents and investments Working capital, including current maturities of debt** Total assets** Long-term debt** Stockholders’ equity Employees2015, 2014 and 2013.2015. The Company’s financial statements as of December 31, 20172019 and 2016,2018, and for each of the three years in the period ended December 31, 20172019 are included in Part II, Item 8, Financial Statements and Supplementary Data, in Part II of this Form 2017 2016 2015 2014 2013 $ 2,309,078 $ 2,167,423 $ 2,042,332 $ 1,989,344 $ 1,904,218 $ 641,097 $ 600,114 $ 541,919 $ 490,740 $ 490,105 $ 20,311 $ 521,503 $ 469,053 $ 431,620 $ 450,003 $ 0.25 $ 6.46 $ 5.70 $ 5.12 $ 5.27 79,793 80,786 82,336 84,358 85,426 $ 0.25 $ 6.41 $ 5.65 $ 5.07 $ 5.20 80,604 81,417 83,087 85,151 86,546 $ 3,393,701 $ 2,813,032 $ 2,399,263 $ 2,055,388 $ 1,803,670 $ 3,663,977 $ 3,115,124 $ 2,649,457 $ 2,236,558 $ 2,038,100 $ 5,324,354 $ 4,662,059 $ 4,268,677 $ 3,874,690 $ 3,580,106 $ 1,897,501 $ 1,701,966 $ 1,493,027 $ 1,237,463 $ 1,188,162 $ 2,233,788 $ 2,301,949 $ 2,058,851 $ 1,894,666 $ 1,763,173 7,020 6,899 6,594 6,161 5,965
and employees data $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ ) $ $ $ $ * The provision for income taxes for 2017 includes a $550 million estimate for the impact of the enactment of the 2017 Tax Act, which was signed into law on December 22, 2017. The $550 million income tax provision reduced net income per share by $6.82. The $550 million income tax provision primarily consists of an estimated Transition Taxtransition tax, as well as estimated income tax provisions for state and withholding taxes and a provision associated with the remeasurement of the Company’s deferred tax assets and liabilities from 35% to the new U.S. corporate income tax rate of 21%.iswas not permitted. In 2019, 2018 and 2017, the Company recognized an excess tax benefit, which decreased income tax expense by $9 million, $9 million and $20 million, respectively, and added $0.14, $0.11 and $0.24, respectively, to net income per diluted share.
| ** | In right-of-use asset as of December 31, 2019. The adoption of this standard did not have |
Item 7: | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Revenues: Product sales Service sales Total net sales Costs and operating expenses: Cost of sales Selling and administrative expenses Research and development expenses Litigation provisions Purchased intangibles amortization Acquiredin-process research and development Operating income Operating income as a % of sales Interest expense, net Income before income taxes Provision for income taxes Net income Net income per diluted common share®®®2017, 20162019, 2018 and 20152017 (dollars in thousands, except per share data): Year Ended December 31, % change 2017 2016 2015 2017 vs.
2016 2016 vs.
2015 $ 1,552,349 $ 1,460,296 $ 1,385,256 6 % 5 % 756,729 707,127 657,076 7 % 8 % 2,309,078 2,167,423 2,042,332 7 % 6 % 947,067 891,453 842,672 6 % 6 % 544,703 513,031 495,747 6 % 3 % 132,593 125,187 118,545 6 % 6 % 11,114 3,524 3,939 215 % (11 %) 6,743 9,889 10,123 (32 %) (2 %) 5,000 — 3,855 — (100 %) 661,858 624,339 567,451 6 % 10 % 28.7 % 28.8 % 27.8 % (20,761 ) (24,225 ) (25,532 ) (14 %) (5 %) 641,097 600,114 541,919 7 % 11 % 620,786 78,611 72,866 690 % 8 % $ 20,311 $ 521,503 $ 469,053 (96 %) 11 % $ 0.25 $ 6.41 $ 5.65 (96 %) 13 % In 2017, the
2018
2017 $ $ $ %) % % % %) % % % %) % % % ) % %) %) %) % % % % ) ) ) ** ** ) ) ) % %) %) % %) %) $ $ $ ** $ $ $ % **
Recurring revenues were impacted by foreign currency, which decreased sales by 2% in 2019 and increased sales by 2% in 2018.
sales growth in 2017. Asia’s sales growth was a result of the double-digit sales growth in China and India on strong demand for our products and services in those countries and in spite of lower customer demand in IndiaChina for our instrument systems as a result of changes in the second half of 2017 resulting from the implementation of the new Goodsgovernmental policy and Services Tax system.
In 2016, the Company’s sales grew 6% as compared to 2015, with stronglower sales in our pharmaceuticalLatin America. Despite the sales declines in China and industrial markets, including balance across all product classes. The effect of foreign currency translation increased sales by 1% in 2017 and decreased sales by 1% in 2016 across all products and services. Recent acquisitions had a minimal impact on sales growth in both 2017 and 2016.
Sales to pharmaceutical customers grew 7% and 9% in 2017 and 2016, respectively. These increases were driven byLatin America, the increasing need for global access to prescription drugs and the testing of newer and more complex biologic drugs. Geographically,drugs increased in the growth within our pharmaceutical market in 2017 was driven by double-digit growth in China, India and Europe, while sales growth in 2016 was driven by double-digit growth in China and Japan.
rest of the world.
effect of foreign currency translation.
The provision for income taxes for 2017 includes a $550 million estimate for the impact of the enactment of the legislation informally referred to as the Tax Cuts and Jobs Act (the “2017 Tax Act”), which was signed into law on December 22, 2017. The 2017 Tax Act changed the U.S. tax system to a territorial system, including base broadening measures requiring the taxation of the Company’s historical unremitted foreign earnings through a deemed repatriation, which resulted inCompany incurred a $550 million income tax provision that reduced net income per share by $6.82 for the twelve months ended December 31, 2017, as well as eliminating or reducing certain domestic deductions and credits and limiting the deductibility of interest expense and executive compensation. The $550 million income tax provision primarily consists of an estimated Transition Toll Tax (“Transition Tax”) of $490 million, as well as estimated income tax provisions for state and withholding taxes of $40 million and a $20 million provision associated with the remeasurement of the Company’s deferred tax assets and liabilities
from 35%related to the new U.S. corporate income tax rate of 21%. The Transition Tax will be paid over an eight-year period, starting in 2018, and will not accrue interest. As a result of the 2017 Tax Cuts and Jobs Act the Company was able to gain access to its cash and investment balances held outside the U.S. in a tax efficient manner that can be used for any general corporate purposes in the U.S. Going forward, the Company estimates that its effective income tax rate will increase approximately one to three percentage points in the future. The final impact of the (“2017 Tax Act may differ from these estimates due to, among other things, changes in interpretations, analysis and assumptions made byAct”) which reduced the Company, additional guidance that may be issued by the U.S. Department of the Treasury, and tax planning actions that the Company may undertake.
In the first quarter of 2017, the Company adopted a new accounting standard that requires the excess tax benefit or deficiency on stock-based compensation to be included in the statement of operations as a component of the provision for income taxes, whereas previously it was recognized in equity. As a result, the Company recorded a tax benefit on stock-based compensation in 2017 that decreased income tax expense by $20 million and added $0.24 to net income per diluted share respectively. Additionally, this standard requiredby $6.82, and excluding the Company to present2017 Tax Act income tax provision, the Company’s effective tax benefitrate in the consolidated statements of cash flows as an operating activity, whereas in the past this tax benefit was reflected as a financing activity. All prior periods presented in the cash flow2017 would have been adjusted accordingly.
11.0%.
In November 2017, the Company entered into a new credit agreement (the “2017 Credit Agreement”) that provides for a $1.5 billion revolving facility and a $300 million term loan. The revolving facility and term loan both mature on November 30, 2022 and require no scheduled prepayments before that date. The Company used $1.3 billionremaining life of the proceeds from the 2017 Credit Agreementpatent. DESI is a mass spectrometry imaging technique that is used to repay the outstanding amounts under the Company’s existing multi-borrower credit agreement dated June 2013 (the “2013 Credit Agreement”), which was terminated early without penalty. develop medical therapies.
Year Ended December 31, | % change | |||||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
Asia: | ||||||||||||||||||||
China | $ | 439,557 | $ | 443,321 | $ | 387,059 | (1 | %) | 15 | % | ||||||||||
Japan | 180,707 | 173,357 | 167,258 | 4 | % | 4 | % | |||||||||||||
Asia Other | 318,848 | 305,613 | 308,300 | 4 | % | (1 | %) | |||||||||||||
Total Asia | 939,112 | 922,291 | 862,617 | 2 | % | 7 | % | |||||||||||||
Americas: | ||||||||||||||||||||
United States | 692,277 | 683,596 | 669,274 | 1 | % | 2 | % | |||||||||||||
Americas Other | 137,964 | 151,581 | 140,715 | (9 | %) | 8 | % | |||||||||||||
Total Americas | 830,241 | 835,177 | 809,989 | (1 | %) | 3 | % | |||||||||||||
Europe | 637,243 | 662,461 | 636,472 | (4 | %) | 4 | % | |||||||||||||
Total net sales | $ | 2,406,596 | $ | 2,419,929 | $ | 2,309,078 | (1 | %) | 5 | % | ||||||||||
| Year Ended December 31, | % change | |||||||||||||||||||
| 2017 | 2016 | 2015 | 2017 vs. 2016 | 2016 vs. 2015 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
United States | $ | 669,274 | $ | 665,280 | $ | 656,361 | 1 | % | 1 | % | ||||||||||
Europe | 636,472 | 577,257 | 555,886 | 10 | % | 4 | % | |||||||||||||
Asia: | ||||||||||||||||||||
China | 387,059 | 331,354 | 278,600 | 17 | % | 19 | % | |||||||||||||
Japan | 167,258 | 167,977 | 145,184 | — | 16 | % | ||||||||||||||
Asia Other | 308,300 | 283,653 | 272,179 | 9 | % | 4 | % | |||||||||||||
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Total Asia | 862,617 | 782,984 | 695,963 | 10 | % | 13 | % | |||||||||||||
Other | 140,715 | 141,902 | 134,122 | (1 | %) | 6 | % | |||||||||||||
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Total net sales | $ | 2,309,078 | $ | 2,167,423 | $ | 2,042,332 | 7 | % | 6 | % | ||||||||||
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In 2017, thepharmaceutical markets. The 4% increase in sales in Japan was driven by instrument systems, primarily to pharmaceutical and academic and governmental customers, as well as foreign currency translation, which increased Japan’s sales by 2% in 2019. Sales growth in Asia Other was due primarily to pharmaceutical and academic and governmental customer classes in 2019. Sales in the U.S. increased by 1% despite large pharmaceutical customers slowing capital spending on our instrument systems. Sales declines in the rest of the Americas and Europe were broad-based across all product and customer classes due to macroeconomic conditions and political instability, except in Europe where sales to academic and governmental customers grew 8%. Sales in Europe were also negatively impacted by the effect of foreign currency translation, which decreased sales 4% in 2019.
In 2016, sales growth in the U.S. was driven by increases in recurring revenues, which were offset by declines in instrument systems sales. U.S. sales increased to pharmaceutical customers but declined tonon-pharmaceuticalend-markets. Europe’s sales in 2016 were also driven by recurring revenues and primarily due to increases to pharmaceutical and industrial customers. China achieved strong sales growth in all product and customer classes in 2016, with double-digit growth inLC-MS instrument systems and precision chemistry consumables as well as double-digit growth to pharmaceutical customers. Japan’s increase in sales in 2016 was largely driven by the benefit of foreign currency translation, which increased sales by 12%. The increase in sales in the rest of Asia in 2016 was driven byLC-MS instrument systems and precision chemistry consumables sales to pharmaceutical and industrial customers. Sales to the rest of Asia decreased 6% due to the negative effect of foreign currency translation.TA instruments. Sales in the rest of the worldAmericas had double-digit sales growth for instrument systems and double-digit sales growth for pharmaceutical customers, which was offset by a decline in 2016sales to industrial customers.
Year Ended December 31, | % change | |||||||||||||||||||
2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||
Pharmaceutical | $ | 1,365,275 | $ | 1,365,731 | $ | 1,294,668 | — | 5 | % | |||||||||||
Industrial | 719,377 | 737,144 | 721,088 | (2 | %) | 2 | % | |||||||||||||
Academic and governmental | 321,944 | 317,054 | 293,322 | 2 | % | 8 | % | |||||||||||||
Total net sales | $ | 2,406,596 | $ | 2,419,929 | $ | 2,309,078 | (1 | %) | 5 | % | ||||||||||
| Year Ended December 31, | % change | |||||||||||||||||||||||||||||||
| 2017 | % of Total | 2016 | % of Total | 2015 | % of Total | 2017 vs. 2016 | 2016 vs. 2015 | |||||||||||||||||||||||||
Waters instrument systems | $ | 988,750 | 48 | % | $ | 943,218 | 49 | % | $ | 895,626 | 50 | % | 5 | % | 5 | % | ||||||||||||||||
Chemistry consumables | 372,157 | 18 | % | 345,413 | 18 | % | 317,941 | 17 | % | 8 | % | 9 | % | |||||||||||||||||||
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Total Waters product sales | 1,360,907 | 66 | % | 1,288,631 | 67 | % | 1,213,567 | 67 | % | 6 | % | 6 | % | |||||||||||||||||||
Waters service | 686,656 | 34 | % | 639,432 | 33 | % | 593,301 | 33 | % | 7 | % | 8 | % | |||||||||||||||||||
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Total Waters net sales | $ | 2,047,563 | 100 | % | $ | 1,928,063 | 100 | % | $ | 1,806,868 | 100 | % | 6 | % | 7 | % | ||||||||||||||||
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The increase in Waters instrument system sales (LC and MS technology-based) in both 2017 and 2016 is primarily attributable to higher sales ofLC-MS systems that incorporate the Company’s tandem quadrupole technologies.
Year Ended December 31, | % change | |||||||||||||||||||||||||||||||
2019 | % of Total | 2018 | % of Total | 2017 | % of Total | 2019 vs. 2018 | 2018 vs. 2017 | |||||||||||||||||||||||||
Waters instrument systems | $ | 963,871 | 45 | % | $ | 1,000,625 | 47 | % | $ | 988,750 | 48 | % | (4 | %) | 1 | % | ||||||||||||||||
Chemistry consumables | 412,018 | 19 | % | 400,287 | 18 | % | 372,157 | 18 | % | 3 | % | 8 | % | |||||||||||||||||||
Total Waters product sales | 1,375,889 | 64 | % | 1,400,912 | 65 | % | 1,360,907 | 66 | % | (2 | %) | 3 | % | |||||||||||||||||||
Waters service | 761,594 | 36 | % | 738,433 | 35 | % | 686,656 | 34 | % | 3 | % | 8 | % | |||||||||||||||||||
Total Waters net sales | $ | 2,137,483 | 100 | % | $ | 2,139,345 | 100 | % | $ | 2,047,563 | 100 | % | — | 4 | % | |||||||||||||||||
2018.
In 2016, Waters sales increased 2% in the U.S., 4% in Europe, 14% in Asia and 5% in the rest of the world. Waters sales increased 21% in China and were broad-based across all product and customer classes. Waters sales in Japan increased 15%, primarily due to the benefiteffect of foreign currency translation whichincreasing sales 2%. Sales in Asia Other declined 2% in 2018, primarily due to lower customer demand in India and a negative 2% impact of foreign currency translation. In the Americas, U.S. sales increased sales by 12%. Waters sales1% in the rest of Asia increased 6% and were driven by product sales to pharmaceutical and industrial customers, offset by weakness within governmental and academic markets.
2018.
| Year Ended December 31, | % change | |||||||||||||||||||||||||||||||
| 2017 | % of Total | 2016 | % of Total | 2015 | % of Total | 2017 vs. 2016 | 2016 vs. 2015 | |||||||||||||||||||||||||
TA instrument systems | $ | 191,442 | 73 | % | $ | 171,665 | 72 | % | $ | 171,689 | 73 | % | 12 | % | — | |||||||||||||||||
TA service | 70,073 | 27 | % | 67,695 | 28 | % | 63,775 | 27 | % | 4 | % | 6 | % | |||||||||||||||||||
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Total TA net sales | $ | 261,515 | 100 | % | $ | 239,360 | 100 | % | $ | 235,464 | 100 | % | 9 | % | 2 | % | ||||||||||||||||
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TA
Year Ended December 31, | % change | |||||||||||||||||||||||||||||||
2019 | % of Total | 2018 | % of Total | 2017 | % of Total | 2019 vs. 2018 | 2018 vs. 2017 | |||||||||||||||||||||||||
TA instrument systems | $ | 191,300 | 71 | % | $ | 204,081 | 73 | % | $ | 191,442 | 73 | % | (6 | %) | 7 | % | ||||||||||||||||
TA service | 77,813 | 29 | % | 76,503 | 27 | % | 70,073 | 27 | % | 2 | % | 9 | % | |||||||||||||||||||
Total TA net sales | $ | 269,113 | 100 | % | $ | 280,584 | 100 | % | $ | 261,515 | 100 | % | (4 | %) | 7 | % | ||||||||||||||||
India and 8% sales growth in China, which was offset by declines in Japan.
The increase in cost
operations.
2020.
2018.
costs in 2018.
Litigation Provision
In 2017, the Company incurred a $11 million litigation provision related to the issuance of a verdict in a German patent litigation case. In addition, the Company recorded $4 million of litigation settlement provisions and related costs in both 2016 and 2015.
balances, being somewhat offset by the additional interest income from the
a tax benefit of $9 million on stock-based compensation.
The Company’s effective tax rates were 96.8%, 13.1% and 13.4% in 2017, 2016 and 2015, respectively. The provisionyears, or for income taxes for 2017 includes a $550 million estimate for the impact of the enactment of the 2017 Tax Act. Excluding the $550 million income tax expense for the 2017 Tax Act, the effective tax rate in 2017 would have been 11.0% and this effective income tax rate includes a $20 million or (3.1 percentage point) reduction in the income tax expense as a result of the adoption of new accounting guidance related to stock-based compensation. See Note 2 for further information regarding the adoption of this standard.
The 2017 Tax Act changed the U.S. tax system to a territorial system, including base broadening measures requiring the taxation of the Company’s historical unremitted foreign earnings through a deemed repatriation, which resulted in a $550 million income tax provision that reduced net income per share by $6.82 for the twelve months ended December 31, 2017, as well as eliminating or reducing certain domestic deductions and credits and limiting the deductibility of interest expense and executive compensation. The $550 million income tax provision primarily consists of an estimated Transition Tax of $490 million, as well as estimated income tax provisions for state and withholding taxes of $40 million and a $20 million provision associated with the remeasurement of the Company’s deferred tax assets and liabilities from 35% to the new U.S. corporate income tax rate of 21%. The Transition Tax will be paid over an eight-year period, starting in 2018, and will not accrue interest. The final impact of the 2017 Tax Act may differ from these estimates due to, among other things, changes in interpretations, analysis and assumptions made by the Company, additional guidance that may be issued by the U.S. Department of the Treasury, and tax planning actions that the Company may undertake.
The income tax provision for 2016 included a $3 million tax benefit related to a release of a valuation allowance on certain net operating loss carryforwards. In 2015, the income tax provision included a $3 million tax benefit related to the completion of tax audit examinations. The remaining differences between effective tax rates can primarily be attributed to differences in the proportionate amounts ofpre-tax income recognized in jurisdictions with different effective tax rates.
| Year Ended December 31, | ||||||||||||
| 2017 | 2016 | 2015 | ||||||||||
Net income | $ | 20,311 | $ | 521,503 | $ | 469,053 | ||||||
Depreciation and amortization | 106,002 | 96,449 | 89,987 | |||||||||
Stock-based compensation | 39,436 | 40,998 | 33,368 | |||||||||
Deferred income taxes | 45,510 | 1,204 | 6,581 | |||||||||
Excess tax benefit related to stock option plans | — | 13,844 | 12,955 | |||||||||
Gain on sale of assets | — | (1,500 | ) | (1,377 | ) | |||||||
In-process research and development and othernon-cash charges | 5,000 | — | 4,638 | |||||||||
Change in accounts receivable | (24,013 | ) | (31,721 | ) | (49,888 | ) | ||||||
Change in inventories | 731 | (20,147 | ) | (19,967 | ) | |||||||
Change in accounts payable and other current liabilities | 3,175 | 6,842 | 27,451 | |||||||||
Change in deferred revenue and customer advances | 10,386 | 9,974 | 16,172 | |||||||||
Effect of the 2017 Tax Act | 530,383 | — | — | |||||||||
Other changes | (39,281 | ) | 5,474 | (15,725 | ) | |||||||
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Net cash provided by operating activities | 697,640 | 642,920 | 573,248 | |||||||||
Net cash used in investing activities | (535,752 | ) | (487,918 | ) | (399,739 | ) | ||||||
Net cash used in financing activities | (63,869 | ) | (115,701 | ) | (82,549 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 38,669 | (21,335 | ) | (25,472 | ) | |||||||
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Increase in cash and cash equivalents | $ | 136,688 | $ | 17,966 | $ | 65,488 | ||||||
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Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Net income | $ | 592,198 | $ | 593,794 | $ | 20,311 | ||||||
Depreciation and amortization | 105,296 | 108,408 | 106,002 | |||||||||
Stock-based compensation | 38,577 | 37,541 | 39,436 | |||||||||
Deferred income taxes | 9,620 | 2,405 | 45,510 | |||||||||
In-process research and development and othernon-cash charges | — | — | 5,000 | |||||||||
Change in accounts receivable | (22,195 | ) | (47,921 | ) | (24,013 | ) | ||||||
Change in inventories | (31,854 | ) | (25,396 | ) | 731 | |||||||
Change in accounts payable and other current liabilities | 9,784 | (81,663 | ) | 3,175 | ||||||||
Change in deferred revenue and customer advances | 12,189 | 2,721 | 10,386 | |||||||||
Effect of the 2017 Tax Cuts and Jobs Act | (3,229 | ) | (6,059 | ) | 530,383 | |||||||
Other changes | (67,299 | ) | 20,616 | (39,281 | ) | |||||||
Net cash provided by operating activities | 643,087 | 604,446 | 697,640 | |||||||||
Net cash provided by (used in) investing activities | 768,802 | 1,683,302 | (535,752 | ) | ||||||||
Net cash used in financing activities | (1,872,678 | ) | (2,119,522 | ) | (63,869 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 224 | (14,265 | ) | 38,669 | ||||||||
(Decrease) increase in cash and cash equivalents | $ | (460,565 | ) | $ | 153,961 | $ | 136,688 | |||||
In addition, as a result of the adoption of a new accounting standard related to stock-based compensation,in 2018, the Company reclassified $14made $11 million of contributions to certain defined benefit pension plans.