Name: Air Products & Chemicals Inc. (NYSE:APD) | 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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Air Products & Chemicals Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015
Net income	1,931,100)	1,809,400)	1,532,900)	3,021,200)	661,500)	1,317,600)
Net income attributable to noncontrolling interests	(44,400)	(49,400)	(35,100)	(20,800)	(30,400)	(39,700)
Net income attributable to Air Products	1,886,700)	1,760,000)	1,497,800)	3,000,400)	631,100)	1,277,900)
(Income) loss from discontinued operations	14,300)	—)	(42,200)	(1,866,000)	884,200)	—)
Income from continuing operations attributable to Air Products	1,901,000)	1,760,000)	1,455,600)	1,134,400)	1,515,300)	1,277,900)
Depreciation and amortization	1,185,000)	1,082,800)	970,700)	865,800)	925,900)	936,400)
Deferred income taxes	165,000)	57,600)	(55,400)	(38,000)	62,900)	2,900)
Loss on extinguishment of debt	—)	—)	—)	—)	6,900)	16,600)
Tax reform repatriation	—)	49,400)	240,600)	—)	—)	—)
Facility closure	—)	29,000)	—)	—)	—)	—)
Gain on previously held equity interest	—)	—)	—)	—)	—)	(17,900)
Undistributed earnings of unconsolidated affiliates	(161,900)	(75,800)	(52,300)	(60,100)	(51,800)	(102,600)
Gain on sale of assets and investments	(45,800)	(24,200)	(6,900)	(24,300)	(10,000)	(30,100)
Share-based compensation	53,500)	41,200)	38,800)	39,900)	37,600)	45,700)
Noncurrent lease receivables	91,600)	94,600)	97,400)	92,200)	85,500)	(9,500)
Goodwill and intangible asset impairment charge	—)	—)	—)	162,100)	—)	—)
Equity method investment impairment charge	—)	—)	—)	79,500)	—)	—)
Write-down of long-lived assets associated with cost reduction actions	—)	—)	—)	69,200)	—)	47,400)
Other adjustments	116,400)	(19,400)	131,600)	165,400)	155,200)	52,200)
Trade receivables	43,200)	(69,000)	(42,800)	(73,600)	(61,700)	(29,700)
Inventories	(5,200)	(3,000)	(64,200)	6,400)	32,900)	8,300)
Other receivables	84,400)	79,800)	128,300)	105,400)	9,100)	86,700)
Payables and accrued liabilities	(31,900)	(41,800)	(277,700)	163,800)	57,000)	157,800)
Other working capital	(130,600)	8,700)	(9,000)	(154,000)	(57,400)	(4,300)
Working capital changes that provided (used) cash, excluding effects of acquisitions	(40,100)	(25,300)	(265,400)	48,000)	(20,100)	218,800)
Adjustments to reconcile income to cash provided by operating activities	1,363,700)	1,209,900)	1,099,100)	1,399,700)	1,192,100)	1,159,900)
Cash provided by operating activities	3,264,700)	2,969,900)	2,554,700)	2,534,100)	2,707,400)	2,437,800)
Additions to plant and equipment, including long-term deposits	(2,509,000)	(1,989,700)	(1,568,400)	(1,039,700)	(1,055,800)	(1,614,800)
Acquisitions, less cash acquired	(183,300)	(123,200)	(345,400)	(8,200)	—)	(34,500)
Investment in and advances to unconsolidated affiliates	(24,400)	(15,700)	—)	(8,100)	—)	(4,300)
Proceeds from sale of assets and investments	80,300)	11,100)	48,800)	42,500)	85,500)	55,300)
Purchases of investments	(2,865,500)	(172,100)	(530,300)	(2,692,600)	—)	—)
Proceeds from investments	1,938,000)	190,500)	748,200)	2,290,700)	—)	—)
Other investing activities	3,900)	(14,300)	(2,000)	(2,300)	(1,700)	(1,400)
Cash used for investing activities	(3,560,000)	(2,113,400)	(1,649,100)	(1,417,700)	(972,000)	(1,599,700)
Long-term debt proceeds	4,895,800)	—)	500)	2,400)	948,700)	338,800)
Payments on long-term debt	(406,600)	(428,600)	(418,700)	(483,900)	(485,000)	(708,700)
Net increase (decrease) in commercial paper and short-term borrowings	(54,900)	3,900)	(78,500)	(798,600)	(144,200)	284,000)
Dividends paid to shareholders	(1,103,600)	(994,000)	(897,800)	(787,900)	(721,200)	(677,500)
Proceeds from stock option exercises	34,100)	68,100)	76,200)	68,400)	141,300)	121,300)
Excess tax benefit from share-based compensation	—)	—)	—)	—)	33,200)	31,900)
Payment for subsidiary shares to noncontrolling interests	—)	—)	—)	—)	—)	(278,400)
Other financing activities	(80,100)	(19,900)	(41,500)	(41,300)	(43,900)	(56,800)
Cash provided by (used for) financing activities	3,284,700)	(1,370,500)	(1,359,800)	(2,040,900)	(271,100)	(945,400)
Cash used for operating activities	—)	—)	(12,800)	(966,200)	(79,900)	—)
Cash (used for) provided by investing activities	—)	—)	18,600)	3,750,600)	(97,000)	—)
Cash provided by financing activities	—)	—)	—)	69,500)	—)	—)
Cash provided by (used for) discontinued operations	—)	—)	5,800)	2,853,900)	(176,900)	—)
Effect of exchange rate changes on cash	14,900)	(28,600)	(33,900)	13,400)	7,500)	(22,900)
Increase (decrease) in cash and cash items	3,004,300)	(542,600)	(482,300)	1,942,800)	1,294,900)	(130,200)
Cash and cash items, beginning of year	2,248,700)	2,791,300)	3,273,600)	1,330,800)	206,400)	336,600)
Cash and cash items, end of period	5,253,000)	2,248,700)	2,791,300)	3,273,600)	1,501,300)	206,400)

Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30).

The analysis of the cash flow statements from 2015 to 2020 reveals a company with strong, growing operational cash generation, aggressive capital reinvestment, and a strategic shift in financing towards the end of the period.

Operating Cash Flow Trends

Cash provided by operating activities demonstrates a consistent upward trajectory, increasing from US$ 2.44 billion in 2015 to US$ 3.26 billion in 2020. This growth occurred despite significant volatility in net income, which peaked in 2017 at US$ 3.02 billion before stabilizing between US$ 1.5 billion and US$ 1.9 billion from 2018 to 2020. The quality of earnings is supported by substantial non-cash charges, specifically depreciation and amortization, which grew steadily from US$ 936.4 million in 2015 to US$ 1.19 billion in 2020.

Investing Activities and Capital Expenditure: There is a clear trend of increasing investment in long-term infrastructure. Additions to plant and equipment grew from US$ 1.61 billion in 2015 to US$ 2.51 billion in 2020, indicating a sustained expansion of production capacity. Investing activities were also characterized by significant volatility in investment portfolios, notably in 2017 and 2020, where large-scale purchases of investments were partially offset by corresponding proceeds, suggesting active treasury management or strategic divestments.
Financing Activities and Shareholder Returns: A disciplined and progressive dividend policy is evident, with annual payments to shareholders increasing every year from US$ 677.5 million in 2015 to US$ 1.10 billion in 2020. Financing activities were primarily cash-outflows until 2020, as the company balanced dividend payments and debt repayments. However, 2020 marked a significant pivot, with long-term debt proceeds surging to US$ 4.90 billion, resulting in a net cash inflow from financing activities of US$ 3.28 billion for that year.
Liquidity and Cash Position: The overall liquidity position strengthened considerably over the six-year period. The ending cash and cash items balance rose from US$ 206.4 million in 2016 to US$ 5.25 billion by September 30, 2020. This accumulation of liquidity is attributed to the combination of strong operating cash flows and the substantial debt issuance in 2020, providing the company with a significant capital buffer.

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