Johnson Controls International plc (NYSE:JCI)

An analysis of the current asset position between September 30, 2018, and September 30, 2023, reveals a pattern of volatility characterized by two distinct peaks and a significant trough. The total current assets reached a period high of 12,393 million US dollars in 2019, followed by a substantial contraction to 9,998 million US dollars by 2021. A partial recovery occurred in 2022, reaching 11,685 million US dollars, before retreating to 10,737 million US dollars in 2023.

Current Asset Trends

The trajectory of current assets shows a non-linear progression. A growth phase occurred between 2018 and 2019, followed by a sharp decline of approximately 18.9% between 2019 and 2020. This contraction stabilized in 2021, after which a recovery phase saw assets increase by approximately 16.9% in 2022, though this gain was partially reversed in the final year of the period.

Adjustment Variance Analysis

Adjusted current assets consistently exceed reported current assets throughout the entire observation period. The variance between reported and adjusted values was most pronounced in 2018 and 2019, where the difference remained above 170 million US dollars. A narrowing of this gap is observable in the latter years, with the adjustment decreasing to 62 million US dollars in 2022 and 90 million US dollars in 2023.

Comparative Volatility

The adjusted current assets mirror the fluctuations of the standard current assets almost exactly in terms of direction and timing. The correlation suggests that the adjustments applied are independent of the primary drivers causing the volatility in the base current asset figures, as the adjusted values follow the same cyclical peaks and troughs seen in the reported totals.

Total assets experienced a significant contraction between September 30, 2018, and September 30, 2019, decreasing from US$ 48,797 million to US$ 42,287 million. Following this sharp decline, total asset values stabilized, maintaining a narrow range between approximately US$ 40.8 billion and US$ 42.2 billion from 2020 through 2023.

Asset Value Trends

A primary downward shift occurred between 2018 and 2019, representing a reduction of approximately 13.3% in total assets. From 2020 onward, a marginal recovery trend is observed, with total assets rising from US$ 40,815 million in 2020 to US$ 42,242 million by 2023.

Adjusted Asset Variance

The relationship between total assets and adjusted total assets fluctuates over the observed period. In 2018, the adjustment was minimal, with adjusted assets being US$ 318 million lower than reported assets. In 2019, a reversal occurred where adjusted total assets exceeded reported total assets by US$ 706 million.

Adjustment Divergence Pattern

Starting in 2020, a consistent pattern emerged where adjusted total assets remained lower than reported total assets. This divergence widened progressively over time; the variance increased from US$ 689 million in 2020 to US$ 1,409 million in 2023, indicating a growing gap between the reported asset base and the adjusted figures used for analysis.

An analysis of the financial obligations from September 30, 2018, to September 30, 2023, reveals a fluctuating trend in both current and adjusted current liabilities. The values exhibit a notable decline during the first three years of the period, followed by a significant rebound and subsequent stabilization.

Trend in Current Liabilities

Current liabilities decreased from US$ 11,250 million in 2018 to a low of US$ 8,248 million in 2020. This was followed by a sharp increase over the next two years, peaking at US$ 11,239 million in 2022, before experiencing a slight contraction to US$ 11,084 million by September 30, 2023.

Trend in Adjusted Current Liabilities

Adjusted current liabilities followed a nearly identical trajectory, falling from US$ 9,597 million in 2018 to US$ 6,669 million in 2020. A subsequent upward trend saw these liabilities reach US$ 9,389 million in 2022, with a moderate decrease to US$ 8,983 million in 2023.

Analysis of the Adjustment Variance

A consistent gap exists between the reported current liabilities and the adjusted figures throughout the analyzed period. This variance has demonstrated a general expansion over time. In 2018, the difference was US$ 1,653 million, which remained relatively stable through 2020. However, the gap widened significantly in the later years, reaching US$ 2,101 million by 2023, indicating that a larger proportion of current liabilities is being adjusted in more recent fiscal years.

Analysis of the liability structure from 2018 to 2023 reveals a period of initial contraction followed by a multi-year recovery and a recent minor decline. A consistent variance is maintained between reported total liabilities and adjusted total liabilities throughout the observed period.

Liability Volume Trends

Total liabilities experienced a significant reduction between September 30, 2018, and September 30, 2019, decreasing from US$ 26,339 million to US$ 21,458 million. This was followed by a steady upward trajectory over the next three years, peaking at US$ 24,756 million in 2022, before a slight correction to US$ 24,548 million in 2023.

Adjusted Liability Trajectory

Adjusted total liabilities mirrored the general trend of the total liabilities but remained consistently lower. After a sharp decline to US$ 20,353 million in 2019, the adjusted figures remained nearly flat in 2020 before rising to a peak of US$ 22,406 million in 2022 and concluding at US$ 22,036 million in 2023.

Variance and Adjustment Analysis

The magnitude of the adjustment between total and adjusted liabilities has grown progressively. The difference was US$ 1,320 million in 2018 and expanded to US$ 2,512 million by 2023. This indicates that the items being adjusted out of the total liability figure have increased in scale, representing a larger portion of the total liability balance in the later years of the analysis compared to the baseline year.

The financial data indicates a general contraction in equity positions between 2018 and 2023. Both shareholders' equity attributable to the company and adjusted total equity exhibit a primary downward trajectory, characterized by significant decreases in the early part of the period and marginal volatility in the later years.

Shareholders’ Equity Attributable to Johnson Controls

A consistent downward trend is observed from 2018 to 2022, with the value declining from US$ 21,164 million to US$ 16,268 million. The most pronounced reduction occurred between 2019 and 2020, during which equity decreased by US$ 2,319 million. A slight recovery was noted in 2021 and again in 2023, with the latter closing at US$ 16,545 million, representing an overall decrease of approximately 21.8% over the six-year timeframe.

Adjusted Total Equity Trends

Adjusted total equity mirrors the trajectory of the attributable equity, beginning at US$ 23,460 million in 2018 and concluding at US$ 18,797 million in 2023. Similar to the attributable equity, a substantial decline occurred between 2019 and 2020, where the balance dropped by US$ 2,832 million. The total reduction for this metric over the period is approximately 19.9%.

Variance Analysis Between Equity Metrics

A persistent positive variance exists between adjusted total equity and shareholders' equity attributable to the company. This gap fluctuated between a high of US$ 2,874 million in 2019 and a low of US$ 2,252 million in 2023. The high degree of correlation between the two metrics suggests that the factors influencing the reduction in equity affected both the attributable and total adjusted balances in a similar proportion.

An analysis of the capitalization structure from 2018 to 2023 reveals a general contraction in both reported and adjusted capital bases, characterized by a significant reduction in the initial years followed by a period of relative stabilization.

Debt Obligations and Adjustments

Reported debt experienced a substantial decrease between 2018 and 2019, falling from 10,995 million to 7,219 million. Following this decline, a moderate upward trend occurred, with reported debt reaching 8,848 million by 2023. A consistent positive adjustment is applied to these figures; the adjusted total debt remains higher than reported debt across all periods, with the variance increasing from approximately 1,096 million in 2018 to 1,404 million in 2023.

Equity Trends and Adjustments

Shareholders' equity attributable to the company demonstrates a long-term downward trajectory, declining from 21,164 million in 2018 to 16,545 million in 2023. Adjusted equity mirrors this decline but remains consistently higher than the reported figures. The adjustment to equity has fluctuated over the period, showing a peak variance in 2019 and 2021 before narrowing to 2,252 million by 2023.

Total Capitalization Patterns

Total reported capital declined sharply from 32,159 million in 2018 to 25,266 million in 2020, after which it remained nearly flat, ending at 25,393 million in 2023. The adjusted total capital follows a parallel trend, moving from 35,551 million in 2018 to 29,049 million in 2023. The gap between reported and adjusted total capital indicates that the additive adjustments to both debt and equity have remained significant and relatively stable over the six-year duration.

An analysis of revenue trends from 2018 to 2023 reveals a period of significant volatility followed by a sustained recovery phase. Net sales experienced a sharp contraction between September 2018 and September 2020, falling from 31,400 million US$ to a low of 22,317 million US$. Following this decline, a consistent upward trajectory was established, with net sales increasing annually from 2021 through 2023, ending the period at 26,793 million US$.

Revenue Recovery Pattern

Following the trough in 2020, net sales demonstrated steady growth, increasing by approximately 6% in 2021, 7% in 2022, and 6% in 2023. This indicates a stabilized growth trend following the initial decline observed in the first three years of the period.

Variance in Adjusted Net Sales

Adjusted net sales consistently exceeded reported net sales throughout the entire six-year period. While the variance remained relatively small in proportion to total revenue, the absolute difference between the two metrics expanded over time, increasing from a gap of 47 million US$ in 2018 to 192 million US$ by 2023.

Metric Correlation

A near-perfect positive correlation is observed between net sales and adjusted net sales. Both metrics follow an identical directional path, suggesting that the adjustments made to the revenue figures do not alter the underlying performance trend but instead provide a slightly higher baseline for financial evaluation.

An analysis of income trends from 2018 to 2023 reveals substantial volatility in both net income attributable to the company and its adjusted net income. The period is marked by significant divergences between reported figures and adjusted metrics, indicating the impact of substantial non-recurring items and accounting adjustments.

Reported Net Income Volatility

Net income attributable to the company experienced a sharp peak in 2019, reaching 5,674 million USD, followed by a severe contraction to 631 million USD in 2020. Subsequent years showed a recovery trend, with figures stabilizing between 1,532 million USD and 1,849 million USD from 2021 through 2023.

Analysis of Income Adjustments

Significant variances between reported and adjusted net income are observable, particularly in 2019 and 2021. In 2019, reported net income was substantially higher than adjusted net income (5,674 million USD versus 1,494 million USD), suggesting the realization of large one-time gains. Conversely, in 2021, adjusted net income of 2,261 million USD exceeded reported net income of 1,637 million USD, indicating the exclusion of significant non-recurring charges or losses from the adjusted figure.

Recent Performance Trends

Between 2022 and 2023, a synchronized recovery is observed in both metrics. Adjusted net income rose from 924 million USD to 1,520 million USD, while reported net income increased from 1,532 million USD to 1,849 million USD. This suggests a reduction in the volatility of non-recurring items compared to the 2019-2021 period.