Name: Walgreens Boots Alliance Inc. (NASDAQ:WBA) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Walgreens Boots Alliance Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Net earnings	3,962)	5,031)	4,101)	4,191)	4,279)	2,031)
Depreciation and amortization	2,038)	1,770)	1,654)	1,718)	1,742)	1,316)
Change in fair value of warrants and related amortization	—)	—)	—)	516)	(779)	(385)
Loss on exercise of call option	—)	—)	—)	—)	—)	866)
Gain on previously held equity interest	—)	(337)	—)	—)	(563)	—)
Deferred income taxes	100)	(322)	(434)	(442)	(32)	177)
Stock compensation expense	119)	130)	91)	115)	109)	114)
Equity earnings from equity method investments	(187)	(244)	(143)	(81)	(339)	(619)
Other	302)	296)	364)	148)	752)	183)
Accounts receivable, net	(789)	(391)	(153)	115)	(338)	(616)
Inventories	141)	331)	98)	(644)	719)	860)
Other current assets	(112)	(22)	—)	66)	22)	(10)
Trade accounts payable	954)	1,323)	1,690)	1,572)	268)	(339)
Accrued expenses and other liabilities	(374)	281)	(128)	313)	170)	195)
Income taxes	(406)	694)	44)	202)	(335)	17)
Other non-current assets and liabilities	(154)	(275)	67)	58)	(11)	103)
Changes in operating assets and liabilities	(740)	1,941)	1,618)	1,682)	495)	210)
Adjustments to reconcile net earnings to net cash provided by operating activities	1,632)	3,234)	3,150)	3,656)	1,385)	1,862)
Net cash provided by operating activities	5,594)	8,265)	7,251)	7,847)	5,664)	3,893)
Additions to property, plant and equipment	(1,702)	(1,367)	(1,351)	(1,325)	(1,251)	(1,106)
Proceeds from sale leaseback transactions	3)	—)	444)	60)	867)	67)
Proceeds from sale of businesses	—)	—)	—)	74)	814)	93)
Proceeds from sale of other assets	117)	655)	59)	155)	184)	139)
Alliance Boots acquisition, net of cash acquired	—)	—)	—)	—)	(4,461)	—)
Business, investment and asset acquisitions, net of cash acquired	(741)	(4,793)	(88)	(126)	(371)	(344)
Investment in AmerisourceBergen	—)	—)	—)	(2,360)	—)	(493)
Other	16)	4)	93)	5)	(58)	(87)
Net cash used for investing activities	(2,307)	(5,501)	(843)	(3,517)	(4,276)	(1,731)
Net change in short-term debt with maturities of 3 months or less	536)	586)	33)	29)	(226)	—)
Proceeds from debt	12,433)	5,900)	—)	5,991)	12,285)	—)
Payments of debt	(10,461)	(4,890)	(6,196)	(791)	(10,472)	(550)
Proceeds from finance leases	—)	—)	—)	—)	—)	268)
Stock purchases	(4,160)	(5,228)	(5,220)	(1,152)	(1,226)	(705)
Proceeds related to employee stock plans	174)	174)	217)	235)	503)	612)
Cash dividends paid	(1,643)	(1,739)	(1,723)	(1,563)	(1,384)	(1,199)
Other	74)	(98)	(45)	(143)	(395)	(48)
Net cash provided by (used for) financing activities	(3,047)	(5,295)	(12,934)	2,606)	(915)	(1,622)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(8)	15)	20)	(129)	(119)	—)
Net increase (decrease) in cash, cash equivalents, and restricted cash	232)	(2,516)	(6,506)	6,807)	354)	540)
Cash, cash equivalents and restricted cash at beginning of period	975)	3,301)	9,807)	3,000)	2,646)	2,106)
Cash, cash equivalents and restricted cash at end of period	1,207)	785)	3,301)	9,807)	3,000)	2,646)

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

The cash flow profile from 2014 to 2019 reveals a period of significant strategic expansion and aggressive capital return to shareholders, funded by a combination of operating cash flows and substantial debt issuance. While operating cash flows grew steadily for much of the period, a notable decline occurred in 2019, coinciding with increased outflows in operating assets.

Operating Cash Flow Analysis: Net cash provided by operating activities demonstrated a strong upward trajectory between 2014 and 2018, rising from 3,893 million USD to a peak of 8,265 million USD. This growth was supported by stable net earnings and increasing depreciation and amortization expenses. However, 2019 marked a significant reversal, with operating cash flow dropping to 5,594 million USD. This decline was primarily driven by a shift in working capital, specifically a negative change in operating assets and liabilities of 740 million USD, contrasted with positive contributions in previous years.
Investing Activities and Capital Expenditure: Investing activities remained consistently negative throughout the period, reflecting a heavy investment in growth and infrastructure. Capital expenditures for property, plant, and equipment grew steadily from 1,106 million USD in 2014 to 1,702 million USD in 2019. Strategic acquisitions caused periodic spikes in cash outflows, most notably the 4,461 million USD spent on the Alliance Boots acquisition in 2015 and 4,793 million USD for business and asset acquisitions in 2018. The company also made a substantial investment in AmerisourceBergen totaling 2,360 million USD in 2016.
Financing Strategies and Shareholder Distributions: Financing activities were characterized by high volatility and a strong commitment to shareholder returns. Cash dividends were increased consistently from 1,199 million USD in 2014 to a peak of 1,739 million USD in 2018. Stock repurchases were aggressively pursued, particularly between 2017 and 2019, with annual outflows exceeding 4,000 million USD in each of those years. To fund these distributions and acquisitions, the company relied heavily on debt markets, evidenced by large proceeds from debt in 2015 (12,285 million USD) and 2019 (12,433 million USD), which were often offset by subsequent large-scale debt repayments.
Liquidity and Cash Position: The company's cash position experienced extreme fluctuations. A liquidity peak occurred in 2016 with 9,807 million USD in cash and equivalents, largely due to financing inflows. This position was rapidly depleted by 2018, when cash reserves fell to 785 million USD, reflecting the impact of heavy share repurchases and asset acquisitions. By the end of 2019, the cash balance recovered slightly to 1,207 million USD, supported by a new wave of debt issuance.

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