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.

Builders FirstSource Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income	2,749,369)	1,725,416)	313,537)	221,809)	205,191)
Depreciation and amortization	497,140)	547,352)	116,566)	100,038)	97,906)
Amortization of debt discount, premium and issuance costs	4,837)	3,869)	3,508)	3,880)	4,642)
(Gain) loss on extinguishment of debt	27,387)	3,027)	6,700)	8,189)	(3,170)
Deferred income taxes	(92,461)	(34,573)	16,614)	50,994)	51,823)
Stock-based compensation expense	31,337)	31,486)	17,022)	12,239)	14,420)
Bad debt expense	38,921)	20,451)	4,720)	—)	—)
Net gain on sales of assets and asset impairments	(1,965)	(32,421)	(1,067)	(949)	(1,393)
Receivables	381,223)	(474,362)	(251,632)	45,687)	(9,221)
Inventories	271,889)	(282,165)	(220,101)	44,202)	(5,425)
Contract assets	24,051)	(103,326)	(12,631)	(2,898)	—)
Other current assets	15,173)	(33,489)	(19,743)	4,674)	(10,356)
Other assets and liabilities	15,189)	(1,155)	50,370)	1,611)	5,637)
Accounts payable	(314,004)	191,885)	160,947)	4,070)	(89,392)
Accrued liabilities	(15,766)	91,419)	55,361)	7,004)	22,168)
Contract liabilities	(33,089)	90,135)	19,896)	3,496)	—)
Changes in assets and liabilities, net of assets acquired and liabilities assumed	344,666)	(521,058)	(217,533)	107,846)	(86,589)
Adjustments to reconcile net income to net cash provided by operating activities	849,862)	18,133)	(53,470)	282,237)	77,639)
Net cash provided by operating activities	3,599,231)	1,743,549)	260,067)	504,046)	282,830)
Cash used for acquisitions, net of cash acquired	(628,014)	(1,206,471)	(32,643)	(92,855)	—)
Proceeds from divestiture of business	—)	76,162)	—)	—)	—)
Purchases of property, plant and equipment	(340,152)	(227,891)	(112,082)	(112,870)	(101,411)
Proceeds from sale of property, plant and equipment	10,687)	13,560)	8,500)	6,545)	4,753)
Net cash used in investing activities	(957,479)	(1,344,640)	(136,225)	(199,180)	(96,658)
Borrowings under revolving credit facility	5,881,000)	3,125,000)	891,000)	1,040,000)	1,662,000)
Repayments under revolving credit facility	(6,205,000)	(2,612,000)	(843,000)	(1,192,000)	(1,833,000)
Proceeds from long-term debt and other loans	1,001,500)	1,000,000)	895,625)	478,375)	3,818)
Repayments of long-term debt and other loans	(616,222)	(554,677)	(618,542)	(610,834)	(65,312)
Payments of debt extinguishment costs	(20,672)	(4,950)	(22,686)	(2,301)	(134)
Payments of loan costs	(16,797)	(19,450)	(13,800)	(8,618)	—)
Exercise of stock options	589)	726)	1,424)	4,873)	3,945)
Repurchase of common stock	(2,628,308)	(1,714,761)	(4,153)	(10,392)	(4,895)
Net cash provided by (used in) financing activities	(2,603,910)	(780,112)	285,868)	(300,897)	(233,578)
Net change in cash and cash equivalents	37,842)	(381,203)	409,710)	3,969)	(47,406)
Cash and cash equivalents at beginning of period	42,603)	423,806)	14,096)	10,127)	57,533)
Cash and cash equivalents at end of period	80,445)	42,603)	423,806)	14,096)	10,127)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Net Income: Net income shows a significant upward trend over the five-year period, rising from $205 million in 2018 to nearly $2.75 billion in 2022. The most notable increase occurred between 2020 and 2021, where net income surged more than fivefold, indicating improved profitability or extraordinary gains during that fiscal year.
Depreciation and Amortization: Depreciation and amortization expense remained relatively stable from 2018 through 2020, fluctuating slightly between $98 million and $116 million. However, in 2021, this expense increased dramatically to over $547 million, maintaining a similar level in 2022, which may reflect significant capital expenditures or changes in asset base amortization.
Debt-Related Expenses: Amortization of debt discount, premium, and issuance costs stayed relatively constant around $3,500 to $4,800 thousand annually. However, there was a fluctuating gain/loss on the extinguishment of debt, with a loss of approximately $3 million in 2018 transitioning to positive charges in subsequent years, peaking at $27 million in 2022.
Deferred Income Taxes: Deferred income taxes decreased substantially, moving from a positive balance in 2018 to negative figures in 2021 and 2022, reaching nearly -$92 million in 2022, which may signify changes in tax positions or timing differences impacting the tax expense.
Stock-Based Compensation and Bad Debt Expense: Stock-based compensation increased gradually from $14 million in 2018 to approximately $31 million by 2022. Bad debt expense was introduced in 2020 at $4.7 million and escalated significantly to nearly $39 million by 2022, suggesting rising credit losses or conservative provisioning.
Asset Sales and Impairments: The company experienced losses on asset sales and impairments, particularly sharp in 2021 with approximately $32 million, though this reversed somewhat to smaller losses in 2022.
Changes in Working Capital Items: Receivables, inventories, contract assets, and other current assets exhibited volatile changes, with significant declines in 2020 and 2021, followed by substantial recoveries in 2022. Accounts payable and accrued liabilities also fluctuated, shifting from negative changes in 2018 to positive adjustments in 2020 and 2021, then sharply reversing in 2022. Overall, net changes in assets and liabilities reflected this volatility, with significant negative movement in 2020 and 2021 contrasted by a strong positive change in 2022.
Operating Cash Flow: Net cash provided by operating activities increased markedly over the period, rising from approximately $283 million in 2018 to roughly $3.6 billion in 2022. This growth aligns with the trends in net income and adjustments related to depreciation and working capital.
Investing Activities: Cash used in investing activities saw increasing outflows, peaking in 2021 at over $1.3 billion, largely driven by acquisitions and increased purchases of property, plant, and equipment. Although 2022 showed a reduction in cash used for acquisitions and capital expenditures, the outflow remained substantial at nearly $1 billion.
Financing Activities: Financing cash flows fluctuated, with outflows in 2018 and 2019, a positive inflow in 2020, and significant outflows again in 2021 and 2022. Notably, repayments and borrowings under the revolving credit facility increased sharply in 2021 and 2022, with repayments exceeding borrowings by a large margin in 2022. The company repurchased common stock at a very high level in 2021 and 2022, contributing to increased cash outflows.
Cash Position: Cash and cash equivalents at year-end increased substantially in 2020 to nearly $424 million but dropped sharply in 2021 to around $43 million, before partly rebounding to approximately $80 million in 2022. Net changes in cash reflect these variations.

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Builders FirstSource Inc. (NYSE:BLDR)

Cash Flow Statement