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.

AutoZone Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019	Aug 25, 2018
Net income	2,528,426)	2,429,604)	2,170,314)	1,732,972)	1,617,221)	1,337,536)
Depreciation and amortization of property and equipment	497,577)	442,223)	407,683)	397,466)	369,957)	345,084)
Other non-cash charges	44,000)	15,000)	—)	—)	—)	—)
Amortization of debt origination fees	9,264)	11,276)	12,858)	10,730)	8,162)	8,393)
Deferred income taxes	(25,707)	185,594)	(34,432)	51,077)	35,051)	(124,261)
Share-based compensation expense	93,087)	70,612)	56,112)	44,835)	43,255)	43,674)
Pension plan contributions	—)	—)	—)	—)	—)	(11,596)
Pension termination charges (refund)	—)	—)	—)	—)	(6,796)	130,263)
Asset impairment	—)	—)	—)	—)	—)	193,162)
Accounts receivable	(6,674)	(125,732)	(11,039)	(58,564)	(48,512)	7,534)
Merchandise inventories	(89,180)	(1,005,686)	(138,517)	(184,174)	(394,147)	(188,782)
Accounts payable and accrued expenses	(183,679)	1,224,692)	1,029,912)	531,131)	464,176)	319,609)
Income taxes	92,832)	(10,517)	29,467)	90,172)	(10,489)	(6,438)
Other, net	(19,158)	(25,931)	(3,815)	104,463)	50,635)	26,114)
Changes in operating assets and liabilities	(205,859)	56,826)	906,008)	483,028)	61,663)	158,037)
Adjustments to reconcile net income to net cash provided by operating activities	412,362)	781,531)	1,348,229)	987,136)	511,292)	742,756)
Net cash provided by operating activities	2,940,788)	3,211,135)	3,518,543)	2,720,108)	2,128,513)	2,080,292)
Capital expenditures	(796,657)	(672,391)	(621,767)	(457,736)	(496,050)	(521,788)
Proceeds from sale of assets	—)	—)	—)	—)	—)	35,279)
Purchase of marketable debt securities	(66,917)	(56,040)	(63,676)	(90,949)	(55,538)	(104,536)
Proceeds from sale of marketable debt securities	58,357)	53,882)	95,393)	84,237)	53,140)	69,644)
Investment in tax credit equity investments	(98,003)	(31,537)	(41,712)	(45,190)	—)	—)
Proceeds (payments) from disposal of capital assets and other, net	27,042)	57,987)	29,984)	11,763)	6,602)	(459)
Net cash used in investing activities	(876,178)	(648,099)	(601,778)	(497,875)	(491,846)	(521,860)
Net proceeds from (payments of) commercial paper	606,200)	603,400)	—)	(1,030,000)	(295,300)	170,200)
Proceeds from issuance of debt	1,750,000)	750,000)	—)	1,850,000)	750,000)	—)
Repayment of debt	(800,000)	(500,000)	(250,000)	(500,000)	(250,000)	(250,000)
Net proceeds from sale of common stock	182,494)	113,934)	187,757)	68,392)	188,819)	89,715)
Purchase of treasury stock	(3,699,552)	(4,359,991)	(3,378,321)	(930,903)	(2,004,896)	(1,592,013)
Repayment of principal portion of finance lease liabilities	(81,055)	(67,182)	(59,853)	(52,158)	(53,307)	(49,004)
Other, net	(18,169)	(10,658)	—)	(48,967)	(9,404)	(1,052)
Net cash used in financing activities	(2,060,082)	(3,470,497)	(3,500,417)	(643,636)	(1,674,088)	(1,632,154)
Effect of exchange rate changes on cash	8,146)	506)	4,172)	(4,082)	(4,103)	(1,724)
Net increase (decrease) in cash and cash equivalents	12,674)	(906,955)	(579,480)	1,574,515)	(41,524)	(75,446)
Cash and cash equivalents at beginning of period	264,380)	1,171,335)	1,750,815)	176,300)	217,824)	293,270)
Cash and cash equivalents at end of period	277,054)	264,380)	1,171,335)	1,750,815)	176,300)	217,824)

Based on: 10-K (reporting date: 2023-08-26), 10-K (reporting date: 2022-08-27), 10-K (reporting date: 2021-08-28), 10-K (reporting date: 2020-08-29), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-25).

Net Income: Net income shows a consistent upward trend from 2018 to 2023, increasing from approximately $1.34 billion to $2.53 billion. The growth reflects improved profitability each year, with a notable jump between 2020 and 2021.
Depreciation and Amortization of Property and Equipment: This expense has steadily increased over the years, rising from approximately $345 million in 2018 to about $498 million in 2023, indicating ongoing investment in fixed assets and their aging.
Other Non-Cash Charges: Reported only in the last two years, these charges increased from $15 million in 2022 to $44 million in 2023, suggesting new or growing non-cash adjustments in the recent periods.
Amortization of Debt Origination Fees: Fluctuations are observed with values ranging between $8.2 million and $12.9 million, generally displaying small variation without a clear upward or downward trend.
Deferred Income Taxes: The data demonstrates volatility with both positive and negative values across years, indicating fluctuating deferred tax assets and liabilities that do not follow a stable pattern.
Share-Based Compensation Expense: There is a gradual increase over time, from $44 million in 2018 to $93 million in 2023, implying a rise in equity-based employee compensation programs.
Accounts Receivable: Values are negative and mostly declining until 2022, then a significant reduction in negative value in 2023. This suggests increased collections or tighter credit policies in recent years.
Merchandise Inventories: The pattern is inconsistent, with a notably large negative value in 2022 (about -$1 billion) compared to other years, potentially reflective of inventory management challenges or changes in purchasing strategy.
Accounts Payable and Accrued Expenses: Generally positive and growing through 2022, indicating increased liabilities or delayed payments, but displays a sharp negative value in 2023, which may reflect accelerated payments or changes in vendor terms.
Income Taxes: Fluctuates between negative and positive values, without consistent directional movement, suggesting variable income tax payments or refunds over the periods.
Other, Net: Demonstrates variability with both positive and negative figures, lacking a stable trend, possibly reflecting miscellaneous non-recurring items or adjustments.
Changes in Operating Assets and Liabilities: Substantial fluctuations occur, particularly significant positive changes in 2020 and 2021, followed by declines in later years. This indicates uneven movements in working capital components affecting operating cash flow.
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: There is a general positive trend until 2021 with subsequent slowdowns, reflecting varied non-cash adjustments over time contributing to operating cash flow.
Net Cash Provided by Operating Activities: Growing from about $2.1 billion in 2018 to a peak near $3.5 billion in 2021, followed by slight declines in recent years, indicating robust but slightly decelerating cash generation from operations.
Capital Expenditures: Capital spending shows an increasing trend from around $522 million to nearly $797 million in 2023, highlighting ongoing investment in long-term assets.
Investment Activities: Net cash used in investing activities increased in magnitude, indicating higher investment outflows, potentially due to capital expenditures and investments in tax credit equity, which although fluctuating, show significant cash outflows in later years.
Financing Activities: Net cash used in financing activities fluctuated markedly, with significant outflows in most years but a decline in outflows by 2023. Notable are the large purchases of treasury stock consistently over the periods, partially offset by debt issuances and proceeds from sale of stock.
Cash Position: Cash and cash equivalents show volatility, with significant increases and decreases over the years. After peaking in 2020, cash levels dropped substantially in the following years but saw a modest increase by 2023, reflecting the combined effects of operating, investing, and financing activities.

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AutoZone Inc. (NYSE:AZO)

Cash Flow Statement