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.

Constellation Brands Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020	Feb 28, 2019	Feb 28, 2018	Feb 28, 2017
Net income	1,000)	2,031,800)	21,400)	3,459,100)	2,330,800)	1,539,200)
Unrealized net (gain) loss on securities measured at fair value	1,644,700)	(802,000)	2,126,400)	(1,971,200)	(464,300)	—)
Deferred tax provision (benefit)	84,800)	336,400)	(1,153,700)	426,900)	114,900)	128,700)
Depreciation	337,300)	293,800)	326,500)	333,100)	293,800)	237,500)
Stock-based compensation	44,900)	63,000)	60,400)	64,100)	60,900)	56,100)
Equity in (earnings) losses of equity method investees and related activities, net of distributed earnings	61,600)	673,400)	560,800)	13,500)	(3,600)	—)
Noncash lease expense	81,900)	83,300)	88,300)	—)	—)	—)
Impairment and amortization of intangible assets	5,100)	11,300)	16,700)	114,000)	92,700)	56,400)
Amortization of debt issuance costs and loss on extinguishment of debt	39,900)	24,300)	16,100)	29,400)	108,700)	12,700)
Net gain on sale of unconsolidated investment	(51,000)	—)	(400)	(99,800)	—)	—)
Impairment of brewery construction in progress	665,900)	—)	—)	—)	—)	—)
Impairment of assets held for sale	—)	24,000)	449,700)	—)	—)	—)
Gain on sale of business	(1,700)	(14,200)	(74,100)	—)	—)	(262,400)
Loss on inventory and related contracts associated with business optimization	—)	25,800)	123,000)	—)	59,000)	—)
Loss on settlement of treasury lock contracts	—)	(29,300)	—)	—)	—)	—)
Net income tax benefit related to the Tax Cuts and Jobs Act	—)	—)	—)	(37,600)	(363,000)	—)
Accounts receivable	(114,000)	59,600)	(22,000)	(71,900)	(34,100)	(49,400)
Inventories	(261,300)	193,700)	(29,500)	(61,900)	(123,800)	(151,000)
Prepaid expenses and other current assets	(113,200)	65,700)	8,100)	(103,000)	(111,500)	(71,600)
Accounts payable	213,700)	(95,700)	16,800)	21,400)	12,800)	115,900)
Deferred revenue	118,000)	—)	1,400)	—)	—)	—)
Other accrued expenses and liabilities	(28,800)	(75,000)	(58,500)	(22,100)	(71,600)	122,200)
Change in operating assets and liabilities, net of effects from purchase and sale of business	(185,600)	148,300)	(83,700)	(237,500)	(328,200)	(33,900)
Other	(23,400)	(63,400)	73,700)	152,300)	29,700)	(38,300)
Adjustments to reconcile net income to net cash provided by operating activities	2,704,400)	774,700)	2,529,700)	(1,212,800)	(399,400)	156,800)
Net cash provided by operating activities	2,705,400)	2,806,500)	2,551,100)	2,246,300)	1,931,400)	1,696,000)
Purchase of property, plant, and equipment	(1,026,800)	(864,600)	(726,500)	(886,300)	(1,057,600)	(907,400)
Purchase of business, net of cash acquired	(53,500)	(19,900)	(36,200)	(45,600)	(150,100)	(1,111,000)
Investments in equity method investees and securities	(36,600)	(222,400)	(48,200)	(4,081,500)	(210,900)	(17,100)
Proceeds from sale of assets	4,100)	18,900)	8,300)	72,300)	5,900)	2,100)
Proceeds from sale of unconsolidated investment	74,400)	—)	1,500)	110,200)	—)	—)
Proceeds from (payments related to) sale of business	4,600)	999,500)	269,700)	—)	(5,000)	575,300)
Other investing activities	(2,000)	600)	400)	(900)	(5,400)	(3,700)
Net cash used in investing activities	(1,035,800)	(87,900)	(531,000)	(4,831,800)	(1,423,100)	(1,461,800)
Proceeds from issuance of long-term debt	995,600)	1,194,700)	1,291,300)	3,657,600)	7,933,400)	1,965,600)
Principal payments of long-term debt	(1,365,300)	(2,721,300)	(2,195,300)	(62,800)	(7,128,700)	(971,800)
Net proceeds from (repayments of) short-term borrowings	323,000)	(238,900)	(552,600)	45,500)	137,200)	197,100)
Dividends paid	(573,000)	(575,000)	(569,200)	(557,700)	(400,100)	(315,100)
Purchase of treasury stock	(1,390,500)	—)	(50,000)	(504,300)	(1,038,500)	(1,122,700)
Proceeds from shares issued under equity compensation plans	177,600)	58,900)	78,200)	63,200)	49,400)	59,700)
Payments of minimum tax withholdings on stock-based payment awards	(9,800)	(7,700)	(14,300)	(13,600)	(31,700)	(64,900)
Payments of debt issuance, debt extinguishment, and other financing costs	(34,600)	(22,300)	(8,200)	(34,600)	(122,200)	(14,100)
Distributions to noncontrolling interests	(52,500)	(35,000)	—)	—)	—)	—)
Payment of contingent consideration	—)	—)	(11,300)	—)	—)	—)
Excess tax benefits from stock-based payment awards	—)	—)	—)	—)	—)	131,400)
Net cash provided by (used in) financing activities	(1,929,500)	(2,346,600)	(2,031,400)	2,593,300)	(601,200)	(134,800)
Effect of exchange rate changes on cash and cash equivalents	(1,300)	7,200)	(900)	(4,500)	5,800)	(5,100)
Net increase (decrease) in cash and cash equivalents	(261,200)	379,200)	(12,200)	3,300)	(87,100)	94,300)
Cash and cash equivalents, beginning of year	460,600)	81,400)	93,600)	90,300)	177,400)	83,100)
Cash and cash equivalents, end of year	199,400)	460,600)	81,400)	93,600)	90,300)	177,400)

Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).

Net Income Trend: The net income exhibited significant volatility over the periods, peaking in the fiscal year ending February 28, 2019, at approximately $3.46 billion, followed by a steep decline to $21.4 million in 2020. It partially recovered to $2.03 billion in 2021, then fell drastically to $1 million in 2022, indicating substantial fluctuations in profitability.
Unrealized Gains/Losses on Securities: This item showed considerable variability, with unrealized losses recorded in 2018 and 2019, transitioning to unrealized gains and losses thereafter. This volatility, including a notable loss of $1.97 billion in 2019 and a gain of $2.13 billion in 2020, suggests significant market value adjustments in the securities portfolio.
Deferred Tax Provision: Deferred tax provisions generally varied, trending upward from $114.9 million in 2018 to $426.9 million in 2019, then showing a significant benefit (-$1.15 billion) in 2020, followed by moderate provision values in subsequent years. These fluctuations may reflect changes in tax regulations or adjustments in temporary differences.
Depreciation and Stock-Based Compensation: Depreciation expenses increased gradually, from $237.5 million in 2017 to $337.3 million in 2022, representing ongoing capital asset utilization. Stock-based compensation remained relatively stable, peaking at $63 million in 2021 before declining to $44.9 million in 2022.
Equity in Earnings (Losses) of Investees: Reported equity in earnings and losses showed an abrupt increase in 2020 to $560.8 million and sustained positive contributions through 2021, before declining sharply to $61.6 million in 2022. This spike followed by reduction suggests changes in the performance or valuation of equity method investments.
Impairment Charges: Impairments were irregular with a significant impairment of brewery construction in progress of $665.9 million in 2022, and a notable impairment of assets held for sale in 2020 amounting to $449.7 million. These charges likely impacted profitability and asset valuations significantly in those years.
Operating Working Capital: Accounts receivable and inventories experienced fluctuations, with particularly large negative movements in 2022 (-$114 million and -$261 million, respectively). Payables fluctuated widely, with a significant increase to $213.7 million in 2022. Prepaid expenses and accrued liabilities also exhibited volatility, reflecting changing operational cycles or vendor terms.
Cash Flows from Operating Activities: Operating cash flows generally increased over the years, peaking at $2.8 billion in 2021, then slightly declining to $2.7 billion in 2022. This trend indicates generally robust cash generation from operations despite income volatility.
Investing Activities: Investing activities were characterized by large outflows, particularly in 2019 with a cash use of $4.83 billion, driven mainly by investments in equity method investees and securities. Capital expenditure remained consistently high, exceeding $700 million annually, peaking at over $1 billion in 2022. Proceeds from sales were relatively minor and inconsistent.
Financing Activities: Financing cash flows were volatile, with large inflows in 2019 due to significant debt issuance and issuance proceeds from shares under compensation plans. However, other years showed considerable outflows predominantly due to principal repayments of long-term debt, dividend payments, and treasury stock purchases. Notably, treasury stock purchases peaked at $1.39 billion in 2022.
Liquidity and Cash Position: Cash and cash equivalents fluctuated, with a low point at $81.4 million in 2020 and a peak at $460.6 million in 2021 before decreasing to $199.4 million in 2022. The net changes in cash were inconsistent, reflecting the interplay of operating, investing, and financing activities.
Additional Observations: There were irregular and substantial gains and losses from sales of unconsolidated investments and businesses, as well as noteworthy charges related to inventory and contract losses. These contributed to the fluctuations in net income and cash flows. Exchange rate effects on cash were generally minor but variable.

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Constellation Brands Inc. (NYSE:STZ)

Cash Flow Statement