| Indirect Cash Flow |
Indirect Cash Flow Adjustments to reconcile consolidated net income to net cash provided by operating activities are summarized below (in thousands):
| | | | | | | | | | | | | | | | | | | Years Ended December 31, | | 2025 | | 2024 | | 2023 | | Cash flow from operating activities: | | | | | | | Consolidated net income | $ | 1,324,192 | | | $ | 1,330,813 | | | $ | 1,700,088 | | | Adjustments to reconcile consolidated net income to net cash provided by operating activities: | | | | | | | Income from financial royalty assets | (2,261,152) | | | (2,149,422) | | | (2,197,754) | | | Provision for changes in expected cash flows from financial royalty assets | (295,838) | | | 732,461 | | | 560,656 | | | Provision for credit losses on unfunded commitments | 89,032 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | Share-based compensation | 289,894 | | | 2,344 | | | 2,357 | | | | | | | | | Amortization of debt discount and issuance costs | 22,440 | | | 19,562 | | | 20,499 | | | | | | | | | Losses on derivative financial instruments | — | | | 6,000 | | | 2,290 | | | Losses/(gains) on equity securities | 21,852 | | | (39,549) | | | (87,139) | | | Equity in earnings of equity method investees | (29,089) | | | (29,611) | | | (28,882) | | | | | | | | | | | | | | | Distributions from equity method investees | 13,396 | | | 13,396 | | | 18,823 | | | Amortization of prepaid expenses | 6,197 | | | — | | | — | | | | | | | | | Gains on available for sale debt securities | (45,859) | | | (154,906) | | | (230,840) | | | Depreciation | 3,852 | | | — | | | — | | | | | | | | | | | | | | | Other | 13,307 | | | 1,105 | | | 20,912 | | | Changes in operating assets and liabilities: | | | | | | | Cash collected on financial royalty assets | 3,354,750 | | | 2,983,410 | | | 3,201,410 | | | | | | | | | | | | | | | | | | | | | Other royalty income receivable | (2,360) | | | (4,551) | | | (1,521) | | | Other current assets | (7,723) | | | 13,844 | | | 3,147 | | | Other assets | 276 | | | — | | | — | | | Accounts payable and accrued liabilities | (13,928) | | | (2,290) | | | 6,236 | | | Interest payable | 8,934 | | | 46,380 | | | (2,480) | | | | | | | | | Other liabilities | (2,350) | | | — | | | — | | | Net cash provided by operating activities | $ | 2,489,823 | | | $ | 2,768,986 | | | $ | 2,987,802 | |
Non-cash investing and financing activities are summarized below (in thousands):
| | | | | | | | | | | | | | | | | | | Years Ended December 31, | | 2025 | | 2024 | | 2023 | Milestone payable - Trelegy(1) | $ | 50,000 | | | $ | 50,000 | | | $ | — | | Milestone payable - Erleada(1) | — | | | 18,600 | | | — | | Purchase of non-controlling interest in RPCT(2) | — | | | — | | | 11,375 | |
(1)Related to the achievement of sales-based milestones that were not paid as of December 31, 2025 and 2024. (2)Related to the purchase of the remaining interest in RPCT held by RPSFT that was not paid as of December 31, 2023. Refer to Note 5-Shareholders’ Equity for additional discussion.
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