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.

Estée Lauder Cos. Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Net earnings	1,010)	2,408)	2,875)	696)	1,794)	1,117)
Depreciation and amortization	744)	727)	651)	611)	557)	531)
Deferred income taxes	(186)	(149)	(230)	(143)	(66)	175)
Non-cash stock-based compensation	267)	331)	327)	213)	243)	236)
Net loss on disposal of property, plant and equipment	13)	8)	23)	20)	17)	15)
Non-cash restructuring and other charges	36)	14)	76)	20)	—)	1)
Pension and post-retirement benefit expense	53)	78)	95)	82)	72)	73)
Pension and post-retirement benefit contributions	(49)	(56)	(59)	(73)	(53)	(85)
Goodwill, other intangible and long-lived asset impairments	207)	241)	188)	1,426)	90)	—)
Changes in fair value of contingent consideration	—)	—)	(2)	(17)	(37)	(43)
Gain on liquidation of an investment in a foreign subsidiary, net	—)	—)	—)	—)	(71)	—)
Gain on previously held equity method investment	—)	(1)	(847)	(534)	—)	—)
Other non-cash items	(8)	(7)	(20)	(10)	(27)	(22)
(Increase) decrease in accounts receivable, net	185)	(10)	(398)	625)	(169)	(105)
(Increase) decrease in inventory and promotional merchandise	(64)	(602)	(140)	(3)	(375)	(147)
(Increase) decrease in other assets, net	26)	(101)	13)	(212)	(62)	12)
Increase (decrease) in accounts payable	(333)	210)	440)	(308)	319)	349)
Increase (decrease) in other accrued and noncurrent liabilities	(129)	1)	695)	(169)	285)	466)
Increase (decrease) in operating lease assets and liabilities, net	(41)	(52)	(56)	56)	—)	—)
Changes in operating assets and liabilities	(356)	(554)	554)	(11)	(2)	575)
Adjustments to reconcile net earnings to net cash flows from operating activities	721)	632)	756)	1,584)	723)	1,456)
Net cash flows provided by operating activities	1,731)	3,040)	3,631)	2,280)	2,517)	2,573)
Capital expenditures	(1,003)	(1,040)	(637)	(623)	(744)	(629)
Proceeds from purchase price refund	—)	—)	32)	—)	—)	—)
Payments for acquired businesses, net of cash acquired	—)	(3)	(1,065)	(1,047)	—)	(11)
Purchases of other intangible assets	(2,286)	—)	—)	—)	—)	—)
Proceeds from the disposition of investments	—)	—)	—)	—)	1,229)	749)
Purchases of investments	(8)	(10)	(42)	(5)	(14)	(478)
Proceeds from sale of property, plant and equipment	—)	—)	—)	—)	2)	—)
Settlement of net investment hedges	80)	108)	(152)	(23)	—)	—)
Net cash flows (used for) provided by investing activities	(3,217)	(945)	(1,864)	(1,698)	473)	(369)
Proceeds (repayments) of current debt, net	983)	(4)	(744)	755)	(171)	(8)
Proceeds from issuance of long-term debt, net	1,995)	—)	596)	2,481)	—)	—)
Debt issuance costs	(15)	(1)	(4)	(18)	—)	—)
Repayments and redemptions of long-term debt	(265)	(18)	(459)	(513)	(1)	(2)
Net proceeds from stock-based compensation transactions	88)	151)	215)	180)	192)	182)
Payment for acquisition of noncontrolling interest	—)	(15)	—)	—)	—)	—)
Payments to acquire treasury stock	(271)	(2,309)	(733)	(893)	(1,555)	(759)
Dividends paid to stockholders	(925)	(840)	(753)	(503)	(609)	(546)
Payments to noncontrolling interest holders for dividends	—)	—)	(8)	(10)	(6)	(4)
Payments of contingent consideration	—)	—)	(2)	(18)	(23)	(35)
Net cash flows provided by (used for) financing activities	1,590)	(3,036)	(1,892)	1,461)	(2,173)	(1,172)
Effect of exchange rate changes on Cash and cash equivalents	(32)	(60)	61)	(8)	(11)	13)
Net increase (decrease) in Cash and cash equivalents	72)	(1,001)	(64)	2,035)	806)	1,045)
Cash and cash equivalents at beginning of year	3,957)	4,958)	5,022)	2,987)	2,181)	1,136)
Cash and cash equivalents at end of year	4,029)	3,957)	4,958)	5,022)	2,987)	2,181)

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

Net Earnings: Net earnings demonstrated volatility from 2018 to 2023, with a peak in 2021 at $2,875 million, followed by a decline to $1,010 million in 2023. A notable decline occurred in 2020, coinciding with a significant decrease to $696 million.
Depreciation and Amortization: Depreciation and amortization expenses showed a steady upward trend, increasing from $531 million in 2018 to $744 million in 2023, indicating continual investment in long-term assets.
Deferred Income Taxes: Deferred income taxes fluctuated notably, starting positive at $175 million in 2018, then becoming negative from 2019 onwards, reaching -$186 million in 2023, suggesting changes in tax timing differences or tax strategies.
Non-Cash Stock-Based Compensation: This expense slightly increased from $236 million in 2018 to peaks near $330 million in 2021 and 2022, followed by a decrease to $267 million in 2023, reflecting variability in stock-based employee incentives.
Impairments and Other Charges: Goodwill and intangible asset impairments surged significantly in 2020 to $1,426 million, decreasing in subsequent years but remaining elevated compared to 2018 and 2019. Non-cash restructuring charges also peaked in 2021 before fluctuating. These suggest episodic write-downs and restructuring activities during the period.
Working Capital Movements: Changes in accounts receivable and inventory showed variability, with an unusual increase in accounts receivable in 2020 and a substantial decrease in inventory in 2022. Accounts payable fluctuations also varied, with increases in some years and decreases in others, implying dynamic management of short-term operating assets and liabilities.
Cash Flows from Operating Activities: Net cash provided by operating activities remained strong and generally steady, peaking at $3,631 million in 2021. The figure dropped to $1,731 million in 2023, indicating some weakening in cash generation capability despite fluctuating earnings.
Investing Activities: Cash flows from investing activities showed large outflows in 2020, 2021, and especially in 2023 with -$3,217 million, linked primarily to significant purchases of intangible assets and acquisition expenditures. Capital expenditures were substantial throughout, peaking in 2022 at over $1 billion.
Financing Activities: Financing activities displayed considerable variability. Net cash used in financing was significant in most years, indicative of stock repurchases and dividend payments. There was a notable issuance of long-term debt in 2020 and 2023, partially offset by repayments. Stock repurchases peaked in 2022 at more than $2 billion but decreased sharply in 2023, reflecting adjustments in capital return strategies.
Cash and Cash Equivalents: Cash and cash equivalents grew substantially from 2018 through 2020 but declined thereafter, consistent with financing and investing activity trends. The ending balance in 2023 stood slightly above the prior year at $4,029 million.
Overall Observations: The data reflects a company facing volatility in profitability and non-operating charges, especially large impairments in 2020. Operating cash flow remains a solid strength, supporting considerable capital investments and returning capital to shareholders through dividends and repurchases. Recent years suggest strategic shifts, particularly in 2022 and 2023, with increased investing outflows and a reduction in stock buybacks. Debt issuance activity also indicates changes in financing structure. The fluctuations warrant close monitoring of asset impairments and working capital management.

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Estée Lauder Cos. Inc. (NYSE:EL)

Cash Flow Statement