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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- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
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Constellation Brands Inc., consolidated cash flow statement
US$ in thousands
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.