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.

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).

Net Earnings: Net earnings exhibited growth from 2014 to 2018, peaking at $5,031 million in 2018, followed by a decline to $3,962 million in 2019. This fluctuation indicates variability in profitability over the years.
Depreciation and Amortization: Depreciation and amortization expenses increased gradually from $1,316 million in 2014 to $2,038 million in 2019, suggesting ongoing investment in capital assets and possibly changes in asset base or amortization policies.
Change in Fair Value of Warrants and Related Amortization: This item showed volatile values, with negative impacts in 2014 and 2015, followed by a positive gain in 2016, and no data thereafter, indicating sporadic effects from warrant valuation adjustments.
Loss on Exercise of Call Option and Gain on Previously Held Equity Interest: A notable loss on exercise of call option was registered only in 2014 ($866 million), with a gain on previously held equity interest recorded as negative adjustments in 2015 and 2018, implying one-time or irregular events affecting earnings.
Deferred Income Taxes: Deferred income taxes fluctuated, showing positive ($177 million) and negative values (as low as -$442 million), ending with a positive $100 million in 2019, reflecting changing tax obligations or timing differences in recognition.
Stock Compensation Expense: Stock compensation expenses remained relatively stable, ranging from $91 million to $130 million, indicating consistent compensation practices through equity.
Equity Earnings from Equity Method Investments: Equity earnings were consistently negative throughout the period, although the magnitude decreased from -$619 million in 2014 to -$187 million in 2019, suggesting ongoing losses or write-downs on investments accounted for under the equity method.
Working Capital Changes: Significant volatility occurred in accounts receivable, inventories, and trade accounts payable. Accounts receivable changes swung from negative to positive and back, ending at -$789 million in 2019, indicating fluctuations in cash collection. Inventories showed both positive and negative adjustments, with a notable negative movement in 2016 (-$644 million) and small positive changes afterwards. Trade accounts payable increased sharply in 2016 and 2017, then declined but remained positive, highlighting changes in vendor payment timing or purchasing volume.
Changes in Operating Assets and Liabilities: These changes were markedly positive from 2014 to 2018, peaking near $1,941 million in 2018; however, in 2019, there was a reversal to -$740 million, indicating a drawdown in working capital or changes in operational cash flow dynamics.
Net Cash Provided by Operating Activities: Operating cash flow increased steadily from $3,893 million in 2014 to a high of $8,265 million in 2018 but declined to $5,594 million in 2019, consistent with the decline observed in net earnings and working capital changes.
Investing Activities: Capital expenditures (additions to property, plant, and equipment) steadily increased, reaching a maximum of $1,702 million in 2019, signaling expansion or maintenance of the asset base. Proceeds from various asset sales showed inconsistency, with large inflows in some years, such as 2015 and 2018, but limited in others. Notably, 2015 reflected a substantial acquisition impact (Alliance Boots acquisition) totaling -$4,461 million, influencing cash used in investing activities, which was large and negative in 2015 (-$4,276 million) and 2018 (-$5,501 million), followed by a lower outflow in 2019 (-$2,307 million).
Financing Activities: Financing cash flows were erratic, with a significant cash outflow in 2017 (-$12,934 million) likely linked to debt repayment cycles or share repurchases. Debt proceeds spiked in 2015 and 2019, partially offset by large debt repayments each year. Stock repurchases were substantial and consistent, peaking at -$5,228 million in 2018, indicating active shareholder return initiatives. Dividends increased gradually until 2018, with a slight reduction in 2019. Overall, net financing activities showed significant fluctuations, reflecting a dynamic capital structure management.
Cash Position: Cash and cash equivalents fluctuated significantly, driven by operating, investing, and financing cash flows. Notably, a large increase in cash (over $6 billion) occurred in 2016, followed by sharp decreases in 2017 and 2018, before modest recovery in 2019. This pattern indicates variability in liquidity management and possible strategic cash usage.

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Walgreens Boots Alliance Inc. (NASDAQ:WBA)

Cash Flow Statement