Name: Constellation Brands Inc. (NYSE:STZ) | 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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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).

The financial profile is characterized by a significant divergence between reported net income and net cash provided by operating activities. While net income exhibited extreme volatility—peaking at $3.46 billion in 2019 before dropping to $21.4 million in 2020 and $1 million in 2022—the net cash provided by operating activities demonstrated a consistent upward trajectory. Operating cash flows grew steadily from $1.696 billion in 2017 to a peak of $2.806 billion in 2021, indicating that the core business generates stable cash regardless of accounting-driven fluctuations in net profit.

Operating Cash Flow and Adjustments: The disparity between net income and operating cash flow is primarily driven by non-cash adjustments. Significant volatility is observed in unrealized gains and losses on securities, with a notable gain of $2.13 billion in 2020 and $1.64 billion in 2022. Additionally, the 2022 fiscal year was heavily impacted by a $665.9 million impairment of brewery construction in progress, which significantly reduced net income but did not deplete cash reserves.
Capital Expenditure and Investing Trends: Investment in property, plant, and equipment has remained aggressive and relatively stable, ranging between $726.5 million and $1.03 billion annually. A major strategic shift occurred in 2019, marked by a substantial cash outflow of $4.08 billion for investments in equity method investees and securities, which resulted in a total net cash use in investing activities of $4.83 billion for that year.
Financing Strategy and Debt Management: The company employs an active debt management strategy characterized by large-scale issuances and repayments. A peak in debt issuance occurred in 2018 at $7.93 billion, which was largely offset by principal payments of $7.13 billion in the same period. Financing activities have shifted from net inflows in 2019 to consistent net outflows from 2020 through 2022, reflecting a phase of debt reduction and shareholder returns.
Shareholder Distributions: A consistent commitment to returning value to shareholders is evident through both dividends and share repurchases. Dividends paid have increased steadily from $315.1 million in 2017 to $573 million in 2022. Treasury stock purchases have been episodic but significant, with a major buyback of $1.39 billion in 2022 following a period of reduced activity in 2020 and 2021.
Liquidity Position: Cash and cash equivalents have fluctuated considerably, ending the 2022 period at $199.4 million. The volatility in the ending cash balance is primarily the result of large, non-recurring financing activities and strategic investments rather than a deficiency in operational cash generation.

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