Right-of-use assets recognized upon the adoption of ASC 842

ARISTA NETWORKS, INC. Consolidated Statements of Cash Flows (In thousands)  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Year Ended December 31, |
|  |  | 2021 |  | 2020 |  | 2019 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |
| Net income  |  | $ | 840,854  |  |  | $ | 634,557  |  |  | $ | 859,867  |  |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |
| Depreciation, amortization and other |  | 50,334  |  |  | 44,590  |  |  | 32,849  |  |
| Noncash lease expense |  | 17,112  |  |  | 16,970  |  |  | 16,179  |  |
| Stock-based compensation  |  | 186,875  |  |  | 137,042  |  |  | 101,280  |  |
| Deferred income taxes  |  | (99,290) |  |  | (9,144) |  |  | (75,741) |  |
| (Gain) loss on investments in privately-held companies, net |  | —  |  |  | (4,164) |  |  | (5,427) |  |
| (Gain) loss on sale of marketable securities  |  | —  |  |  | (9,432) |  |  | —  |  |
| Amortization (accretion) of investment premiums (discounts) |  | 26,847  |  |  | 10,381  |  |  | (6,771) |  |
| Changes in operating assets and liabilities: |  |  |  |  |  |  |
| Accounts receivable, net  |  | (126,969) |  |  | 10,673  |  |  | (60,210) |  |
| Inventories  |  | (170,449) |  |  | (235,318) |  |  | 20,927  |  |
| Prepaid expenses and other current assets  |  | (134,814) |  |  | 13,846  |  |  | 54,259  |  |
| Other assets |  | (4,220) |  |  | 4,965  |  |  | (8,112) |  |
| Accounts payable  |  | 66,681  |  |  | 41,161  |  |  | (1,937) |  |
| Accrued liabilities  |  | 83,524  |  |  | 2,728  |  |  | 16,366  |  |
| Deferred revenue  |  | 278,485  |  |  | 50,352  |  |  | (11,939) |  |
| Income taxes payable  |  | 6,223  |  |  | 8,805  |  |  | 23,523  |  |
| Other liabilities |  | (5,337) |  |  | 17,102  |  |  | 7,921  |  |
| Net cash provided by operating activities |  | 1,015,856  |  |  | 735,114  |  |  | 963,034  |  |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |
| Proceeds from maturities of marketable securities |  | 1,455,465  |  |  | 1,545,689  |  |  | 1,208,717  |  |
| Purchases of marketable securities |  | (2,317,264) |  |  | (2,688,064) |  |  | (1,503,893) |  |
| Business combinations, net of cash acquired |  | —  |  |  | (227,420) |  |  | (1,365) |  |
| Purchases of property, equipment and intangible assets |  | (64,736) |  |  | (15,384) |  |  | (15,751) |  |
| Escrow receipts from past business acquisitions  |  | 1,299  |  |  | —  |  |  | —  |  |
|  |  |  |  |  |  |  |
| Investments and notes receivable in privately-held companies |  | (19,933) |  |  | 3,399  |  |  | 28,220  |  |
| Proceeds from sale of marketable securities  |  | 19,607  |  |  | 772,978  |  |  | —  |  |
| Net cash used in investing activities  |  | (925,562) |  |  | (608,802) |  |  | (284,072) |  |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
| Proceeds from issuance of common stock under equity plans  |  | 67,245  |  |  | 57,556  |  |  | 57,378  |  |
| Tax withholding paid on behalf of employees for net share settlement |  | (16,482) |  |  | (8,722) |  |  | (9,200) |  |
| Repurchase of common stock |  | (411,645) |  |  | (395,173) |  |  | (266,142) |  |
| Net cash used in financing activities  |  | (360,882) |  |  | (346,339) |  |  | (217,964) |  |
| Effect of exchange rate changes |  | (1,816) |  |  | 1,966  |  |  | 353  |  |
| NET INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |  | (272,404) |  |  | (218,061) |  |  | 461,351  |  |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH —Beginning of period |  | 897,454  |  |  | 1,115,515  |  |  | 654,164  |  |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period  |  | $ | 625,050  |  |  | $ | 897,454  |  |  | $ | 1,115,515  |  |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |  |  |  |  |  |  |
| Cash paid for income taxes, net of refunds  |  | $ | 189,774  |  |  | $ | 82,601  |  |  | $ | 32,832  |  |
|  |  |  |  |  |  |  |
| SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: |  |  |  |  |  |  |
| Right-of-use assets recognized upon the adoption of ASC 842 |  | $ | —  |  |  | $ | —  |  |  | $ | 93,207  |  |
| Right-of-use assets obtained in exchange for new operating lease liabilities |  | 5,005  |  |  | 6,627  |  |  | 10,948  |  |
| Property and equipment included in accounts payable and accrued liabilities |  | 3,497  |  |  | 1,565  |  |  | 2,120  |  |
| Vesting of early exercised stock options and restricted stock awards |  | —  |  |  | 164  |  |  | 276  |  |

The accompanying notes are an integral part of these consolidated financial statements.71
