Name: Johnson Controls International plc (NYSE:JCI) | 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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Johnson Controls International plc, consolidated cash flow statement

US$ in millions

12 months ended:	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018
Net income attributable to Johnson Controls	1,849)	1,532)	1,513)	631)	1,100)	2,162)
Income attributable to noncontrolling interests	184)	191)	233)	164)	189)	221)
Net income	2,033)	1,723)	1,746)	795)	1,289)	2,383)
Depreciation and amortization	848)	830)	845)	822)	825)	1,085)
Pension and postretirement benefit (income) expense	61)	(216)	(551)	118)	515)	(156)
Pension and postretirement contributions	(57)	(96)	(68)	(61)	(53)	(57)
Equity in earnings of partially-owned affiliates, net of dividends received	(98)	30)	(117)	(36)	(34)	(166)
Deferred income taxes	(676)	(141)	36)	(537)	612)	(636)
Non-cash restructuring and impairment charges	827)	555)	98)	582)	235)	42)
Gain on Scott Safety business divestiture	—)	—)	—)	—)	—)	(114)
Equity-based compensation expense	111)	102)	76)	74)	95)	115)
Other, net	(123)	(58)	(85)	(90)	29)	(48)
Accounts receivable	(168)	(427)	(143)	534)	(312)	(513)
Inventories	(81)	(773)	(219)	45)	(72)	(92)
Other assets	(216)	(362)	(164)	(52)	(99)	26)
Restructuring reserves	59)	(7)	(44)	(29)	(121)	(8)
Accounts payable and accrued liabilities	(222)	1,270)	813)	(717)	56)	15)
Accrued income taxes	(77)	(440)	328)	1,031)	(1,222)	637)
Changes in assets and liabilities, excluding acquisitions and divestitures	(705)	(739)	571)	812)	(1,770)	65)
Adjustments to reconcile net income to cash provided by operating activities	188)	267)	805)	1,684)	454)	130)
Cash provided by operating activities from continuing operations	2,221)	1,990)	2,551)	2,479)	1,743)	2,513)
Capital expenditures	(539)	(592)	(552)	(443)	(586)	(1,030)
Sale of property, plant and equipment	32)	127)	124)	127)	27)	48)
Acquisition of businesses, net of cash acquired	(726)	(269)	(725)	(77)	(25)	(21)
Other, net	49)	41)	63)	135)	51)	2,218)
Cash (used) provided by investing activities from continuing operations	(1,184)	(693)	(1,090)	(258)	(533)	1,215)
Net proceeds (payments) from borrowings with maturities less than three months	(51)	379)	(18)	(33)	(1,296)	107)
Proceeds from debt	1,173)	1,771)	734)	1,804)	—)	1,136)
Repayments of debt	(1,555)	(184)	(744)	(1,386)	(2,333)	(3,729)
Stock repurchases and retirements	(625)	(1,441)	(1,307)	(2,204)	(5,983)	(300)
Payment of cash dividends	(980)	(916)	(762)	(790)	(920)	(954)
Proceeds from the exercise of stock options	42)	17)	178)	75)	171)	66)
Dividends paid to noncontrolling interests	(149)	(121)	(142)	(114)	(132)	(46)
Employee equity-based compensation withholding taxes	(37)	(51)	(33)	(34)	(31)	(43)
Other, net	8)	30)	(37)	(142)	5)	11)
Cash used by financing activities from continuing operations	(2,174)	(516)	(2,131)	(2,824)	(10,519)	(3,752)
Cash used by operating activities	—)	(4)	(64)	(260)	(541)	—)
Cash provided by investing activities	—)	—)	—)	—)	12,611)	—)
Cash used by financing activities	—)	—)	—)	(113)	(35)	—)
Cash provided (used) by discontinued operations	—)	(4)	(64)	(373)	12,035)	—)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(5)	(53)	116)	115)	(120)	(106)
Change in cash, cash equivalents and restricted cash held for sale	—)	—)	—)	—)	15)	9)
Increase (decrease) in cash, cash equivalents and restricted cash	(1,142)	724)	(618)	(861)	2,621)	(121)
Cash, cash equivalents and restricted cash at beginning of period	2,066)	1,342)	1,960)	2,821)	200)	321)
Cash, cash equivalents and restricted cash at end of period	924)	2,066)	1,342)	1,960)	2,821)	200)

Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).

The cash flow profile from 2018 to 2023 reveals a company maintaining strong operating cash generation despite significant volatility in net income and periodic restructuring charges. While net income experienced a notable decline reaching a trough in 2020, cash provided by operating activities from continuing operations remained resilient, consistently exceeding 1.7 billion USD annually. This divergence suggests that non-cash adjustments, particularly depreciation and restructuring charges, significantly buffer the company's liquidity position.

Operating Cash Flow and Earnings Quality: Net income attributable to the company showed a volatile trajectory, dropping from 2.16 billion USD in 2018 to 631 million USD in 2020, before recovering to 1.85 billion USD by 2023. However, cash provided by operating activities remained more stable, ranging between 1.74 billion USD and 2.55 billion USD. A recurring pattern of non-cash restructuring and impairment charges is evident, with substantial peaks in 2020 (582 million USD), 2022 (555 million USD), and 2023 (827 million USD), indicating ongoing portfolio adjustments or asset revaluations that impact reported earnings without depleting cash reserves.
Investment Strategy and Capital Expenditure: Capital expenditures have trended downward from 1.03 billion USD in 2018 to a stabilized range between 443 million USD and 592 million USD from 2019 to 2023. The company's investing activities shifted from a net inflow in 2018, driven by substantial other net inflows, to consistent net outflows. Strategic acquisitions became more prominent in the later years, with significant cash outlays of 725 million USD in 2021 and 726 million USD in 2023, signaling a pivot toward inorganic growth.
Financing and Capital Allocation: The financing activities are characterized by a strong commitment to shareholder returns and active debt management. Dividend payments have remained steady, slightly increasing from 954 million USD in 2018 to 980 million USD in 2023. Stock repurchases exhibited extreme volatility, peaking at 5.98 billion USD in 2019 before moderating to 625 million USD by 2023. Debt levels are managed through a cycle of issuance and repayment; for instance, a significant debt repayment of 3.73 billion USD in 2018 was followed by periodic proceeds from debt, such as 1.77 billion USD in 2022 and 1.17 billion USD in 2023.
Working Capital and Liquidity Dynamics: Working capital movements have been erratic, particularly regarding accounts payable and accrued liabilities, which saw a sharp decrease of 717 million USD in 2020 followed by a surge of 1.27 billion USD in 2022. Inventory levels also showed a significant cash drain in 2022 (773 million USD), reflecting potential supply chain adjustments. Despite these fluctuations and a net decrease in cash in 2023, the company ended the period with 924 million USD in cash and restricted cash, reflecting a balanced approach to operational funding and strategic spending.

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