Johnson Controls International plc (NYSE:JCI)

The financial data exhibits several notable trends and fluctuations over the six-year period ending September 30, 2023.

Goodwill

There is a general decline in goodwill values from 19,473 million USD in 2018 to a low of 17,328 million USD in 2022, followed by a slight recovery to 17,936 million USD in 2023. This downward trend suggests possible impairment or divestitures over time, partially offset by acquisition activity or reassessments in the most recent year.

Technology

Technology assets display a mostly positive trajectory, starting at 1,334 million USD in 2018 and increasing gradually to 1,575 million USD by 2023, with a peak in 2021 at 1,464 million USD followed by a growth in 2023. This could indicate continued investments or capitalizations in technology-related intangible assets.

Customer Relationships

Customer relationships values fluctuate throughout the period, initially decreasing from 3,078 million USD in 2018 to 2,722 million USD in 2019, rebounding to 3,097 million USD in 2021, and then declining again to 2,742 million USD in 2022, before recovering to 3,047 million USD in 2023. These oscillations may reflect changes in customer contract valuations or shifts in market dynamics.

Miscellaneous Definite-Lived Intangible Assets (Gross)

This category steadily rises from 496 million USD in 2018 to 889 million USD in 2023, indicating an increasing recognition or acquisition of diverse intangible assets.

Definite-Lived Intangible Assets, Gross Carrying Amount

There is a moderate increase from 4,908 million USD in 2018 to 5,511 million USD in 2023, peaking in 2021 at 5,311 million USD, suggesting growth in tangible intangible asset bases over time despite some fluctuations.

Accumulated Amortization

Accumulated amortization exhibits a consistent increase in accumulated charges, from -1,130 million USD in 2018 to -2,737 million USD in 2023, reflecting ongoing amortization expenses reducing the net value of definite-lived assets.

Definite-Lived Intangible Assets, Net

The net balance declines overall from 3,778 million USD in 2018 to 2,774 million USD in 2023, with fluctuations that mirror the interplay between gross carrying amounts and accumulated amortization. This reduction highlights the impact of amortization outpacing new acquisitions or capitalizations in some years.

Trademarks/Tradenames

Values gradually decrease from 2,448 million USD in 2018 to 2,114 million USD in 2023, indicating a slight downward adjustment or amortization of these intangible assets over the period.

Miscellaneous Indefinite-lived Intangible Assets

The recorded numbers show a decline from 122 million USD in 2018 to zero or missing data after 2021, which could indicate reclassification or disposal, although data gaps restrict full interpretation.

Indefinite-lived Intangible Assets

There is a downward trend from 2,570 million USD in 2018 to 2,114 million USD in 2023. Fluctuations in this category suggest asset impairments or revaluation adjustments impacting indefinite-lived intangible assets.

Intangible Assets

Intangible assets overall reduce from 6,348 million USD in 2018 to 4,888 million USD in 2023, with some recovery attempts visible after 2021. This decline reflects the combined effect of amortization, impairments, and possibly sales or write-downs.

Goodwill and Other Intangible Assets

The combined total mirrors the trends in individual categories, declining from 25,821 million USD in 2018 to 21,969 million USD in 2022, then registering a modest rebound to 22,824 million USD in 2023. This pattern is consistent with underlying goodwill and intangible asset movements, indicating overall contraction with some recent stabilization.

In summary, the data shows a general contraction in goodwill and total intangible assets over the period with intermittent recoveries. Definite-lived assets grow in gross value but decline net of amortization, reflecting ongoing costs and asset usage. Indefinite-lived assets steadily decrease, likely due to impairment or market revaluation. The overall trends indicate active asset management, including amortization, impairment, and selective acquisitions or disposals.

The financial data exhibits several notable trends over the six-year period from 2018 to 2023. A comparison between reported and goodwill adjusted figures reveals significant differences in asset base, shareholders' equity, and net income.

Total Assets

Reported total assets show a declining trend from 48,797 million USD in 2018 to a low of 40,815 million USD in 2020, followed by a gradual recovery reaching 42,242 million USD by 2023. In contrast, adjusted total assets, which exclude goodwill, decline more sharply from 29,324 million USD in 2018 to 22,883 million USD in 2020, with a slight recovery to 24,306 million USD by 2023. The adjusted figures consistently remain significantly lower than the reported ones, indicating substantial goodwill or intangible assets within the balance sheet.

Shareholders’ Equity Attributable to Johnson Controls

Reported shareholders' equity decreases steadily from 21,164 million USD in 2018 to 16,545 million USD in 2023, with a notable dip between 2019 and 2022. This decline could reflect distribution of dividends, share buybacks, or net losses impacting equity. The adjusted shareholders' equity demonstrates a more pronounced negative trend, starting from a positive 1,691 million USD in 2018 to increasingly negative values, reaching -1,391 million USD in 2023. The negative adjusted equity suggests that when goodwill is removed, liabilities and other adjustments outweigh tangible equity, potentially signaling underlying asset impairment or financial pressure.

Net Income Attributable to Johnson Controls

Reported net income shows volatility, peaking at 5,674 million USD in 2019, sharply declining to 631 million USD in 2020, then recovering to 1,849 million USD by 2023. The adjusted net income follows a similar pattern but with less severe fluctuations in later years, starting at the same 2,162 million USD in 2018, matching the 2019 peak, but exhibiting higher resilience in subsequent years, increasing to 2,033 million USD in 2023. This suggests that the adjustments stabilize earnings figures by removing non-recurring or goodwill-related accounting effects, providing a smoother income trend.

Overall, the data indicates that the company experienced asset base contraction and equity pressures over the period, especially when goodwill adjustments are considered. The fluctuations in net income, particularly the large peak in 2019 followed by a trough in 2020, may reflect macroeconomic impacts or specific operational challenges. The increasing negative trend in adjusted shareholders' equity calls for attention to asset quality and liability management, while the adjusted net income suggests improving profitability dynamics in recent years.

The financial data reveals notable fluctuations and trends across profitability, efficiency, and leverage metrics over the examined periods.

Profitability Margins

The reported net profit margin exhibited significant variability, starting at 6.89% in 2018 and peaking sharply at 23.67% in 2019, before declining to 2.83% in 2020. Subsequent years saw a moderate recovery, stabilizing around the 6-7% range by 2023, ending at 6.9%. The adjusted net profit margin follows a similar pattern but reflects somewhat higher margins post-2020, with a gentle upward trend reaching 7.59% in 2023. This implies adjustments, potentially excluding goodwill effects, yield a more optimistic outlook on profitability in recent years.

Asset Turnover Ratios

The reported total asset turnover declined from 0.64 in 2018 to a low of 0.55 in 2020, before recovering slowly to 0.63 by 2023. The adjusted total asset turnover is consistently higher than the reported counterpart, starting at 1.07 in 2018 and only slightly decreasing to 0.98 in 2020. From 2021 onwards, it marginally improved, reaching 1.10 in 2023. This indicates that when adjustments are made, the company’s asset utilization efficiency remains robust and has gradually improved post-pandemic years.

Financial Leverage

The reported financial leverage ratio shows moderate fluctuations: a decrease from 2.31 in 2018 to 2.14 in 2019, followed by a gradual increase peaking at 2.59 in 2022, with a slight decline to 2.55 in 2023. The adjusted financial leverage data is only available for the first two years and shows significantly higher values (17.34 in 2018 and 15.18 in 2019), suggesting substantial differences in balance sheet structure when goodwill adjustments are considered. The absence of later adjusted data limits the full trend analysis for leverage under the adjusted basis.

Return on Equity (ROE)

The reported ROE closely mirrors the net profit margin trend, rising sharply to 28.71% in 2019 before declining significantly to 3.62% in 2020. Afterwards, ROE recovered gradually to 11.18% in 2023. The adjusted ROE, available only for 2018 and 2019, shows extraordinarily high values (127.85% and 357.3%), indicating that excluding goodwill significantly magnifies equity returns in those years, possibly due to a very reduced equity base after adjustments.

Return on Assets (ROA)

The reported ROA follows a trend similar to net profit margin and ROE, with highs in 2019 (13.42%) and lows in 2020 (1.55%), then a gradual recovery to 4.38% by 2023. The adjusted ROA depicts higher returns throughout all available years, rising steadily from 7.37% in 2018 to 8.36% in 2023, demonstrating better asset profitability when goodwill is adjusted out.

Overall, the data suggests that reported profitability and returns experienced marked volatility around 2019-2020, with a dip in 2020 likely reflecting external disruptions. Adjusted figures consistently indicate stronger performance metrics, notably better asset turnover and returns, highlighting the impact of goodwill adjustments. Financial leverage remains relatively stable on a reported basis but differs significantly when adjusted, though limited later-year adjusted data constrains a comprehensive assessment. The recent years show a trend toward gradual improvement and stabilization in profitability and efficiency metrics post-2020 downturn.

The financial data reveals notable fluctuations and general trends in both reported and adjusted net income, as well as corresponding profit margins over the six-year period examined.

Reported Net Income

There is a significant increase from 2,162 million US dollars in 2018 to a peak of 5,674 million in 2019. This is followed by a sharp decline to 631 million in 2020. Subsequently, the reported net income rises again to 1,637 million in 2021, slightly decreases to 1,532 million in 2022, and increases once more to 1,849 million in 2023. Overall, the data indicates high volatility, particularly around 2020.

Adjusted Net Income

The adjusted net income mirrors the pattern of the reported net income but with less severe fluctuations. Starting at 2,162 million in 2018, it peaks at 5,674 million in 2019, then declines to 1,055 million in 2020, which is notably higher than the reported figure for the same year. From 2020 onwards, the adjusted net income grows steadily, reaching 2,033 million in 2023. This suggests that adjustments, likely related to goodwill or other accounting considerations, smooth out some volatility in profitability.

Reported Net Profit Margin

The reported net profit margin shows a significant spike to 23.67% in 2019 from 6.89% in 2018, followed by a dramatic fall to 2.83% in 2020. After this low point, the margin recovers somewhat to 6.92% in 2021 but then slightly declines to 6.06% in 2022 before rising again to 6.9% in 2023. The sharp rise and fall in 2019 and 2020 indicate exceptional conditions impacting profitability during these years.

Adjusted Net Profit Margin

The adjusted net profit margin also peaks at 23.67% in 2019 but experiences a less drastic drop to 4.73% in 2020, higher than the reported margin for the same period. In subsequent years, the adjusted margin shows a consistent increasing trend: 6.92% in 2021, rising to 7.28% in 2022, and reaching 7.59% in 2023. This upward trajectory post-2020 suggests improving underlying operational profitability when adjustments are accounted for.

In summary, the data indicates that 2019 was an exceptional year with unusually high profitability, followed by a significant contraction in 2020. The adjusted figures demonstrate less volatility and a steadier recovery from 2020 onwards. The progressively increasing adjusted net profit margins in recent years suggest strengthening profitability, potentially reflecting effective management actions or favorable market conditions when accounting for goodwill adjustments.

The analysis of the financial data over the examined periods reveals distinct trends in the reported and goodwill-adjusted figures.

Total Assets

The reported total assets exhibit a downward trend from 48,797 million US dollars in 2018 to 40,815 million in 2020, followed by a modest recovery, reaching approximately 42,242 million by 2023. This indicates an initial contraction in asset base with stabilization and slight growth in recent years.

The adjusted total assets, which exclude goodwill, also show a similar downward movement from 29,324 million in 2018 to 22,883 million in 2020. However, unlike the reported figures, the adjusted assets begin a more consistent increase starting in 2021, reaching 24,306 million by 2023. This suggests an acceleration in the expansion or revaluation of tangible and other non-goodwill assets after 2020.

Total Asset Turnover

The reported total asset turnover ratio declined from 0.64 in 2018 to its lowest point of 0.55 in 2020, indicating a decrease in efficiency in generating revenue from reported assets during that interval. From 2021 onwards, there is a gradual improvement, reaching 0.63 in 2023, which approaches the earlier efficiency levels but does not fully restore them to the 2018 rate.

In contrast, the adjusted total asset turnover ratio started at a higher level of 1.07 in 2018 and declined to 0.98 by 2020. Post-2020, this ratio steadily improves to 1.10 by 2023, surpassing the initial 2018 figure. This trend implies enhanced operational efficiency when goodwill adjustments are considered, reflecting improved utilization of the core assets excluding goodwill.

Overall, the data illustrate a period of contraction in asset base and asset turnover efficiency up to 2020, followed by recovery and improvement, particularly when adjusted for goodwill. The adjusted metrics suggest a more positive performance trend in asset utilization efficiency compared to the reported figures, which may highlight the influence and volatility associated with goodwill on the financial metrics.

The analysis of the reported and goodwill adjusted financial data indicates several notable trends over the period from 2018 to 2023.

Total Assets

Reported total assets demonstrate a decline from US$48,797 million in 2018 to US$42,242 million in 2023, showing a general downward trend with some fluctuations around 2020 and 2021 where the assets slightly increased before stabilizing. Adjusted total assets, which exclude goodwill effects, also exhibit a declining trend from US$29,324 million in 2018 to US$24,306 million in 2023, with a more consistent reduction over the years.

Shareholders’ Equity Attributable to Johnson Controls

Reported shareholders' equity decreased from US$21,164 million in 2018 to US$16,545 million in 2023. This steady reduction indicates a contraction in net assets attributable to shareholders over the period. In contrast, the adjusted shareholders’ equity, which accounts for goodwill adjustments, starts significantly lower at US$1,691 million in 2018 and turns negative from 2020 onwards, further declining to negative US$1,391 million in 2023. This negative adjusted equity suggests that goodwill and other adjustments have significantly impacted the net asset position when excluding intangible assets.

Financial Leverage

Reported financial leverage ratios have slightly increased from 2.31 in 2018 to a peak of 2.59 in 2022, before slightly decreasing to 2.55 in 2023. This indicates a mild increase in the use of debt relative to equity over the period. Adjusted financial leverage was notably high at 17.34 in 2018 but decreased to 15.18 in 2019. No data is available beyond 2019 for adjusted leverage, limiting analysis for more recent years. The high adjusted leverage ratios reflect the impact of reduced adjusted equity, magnifying the leverage effect.

Overall, the data reveals a consistent contraction in asset and equity values, particularly when adjusting for goodwill. The company appears to have increased its reported financial leverage slightly, while adjusted leverage remains very elevated, reflecting significant intangible asset adjustments. These trends may suggest a cautious approach to asset management and capital structure, with potential implications for financial stability and risk exposure due to the negative adjusted equity.

Net Income Trends

The reported net income attributable to the company exhibited significant volatility over the analyzed period. It rose sharply from $2,162 million in 2018 to a peak of $5,674 million in 2019, then dropped substantially to $631 million in 2020. Subsequently, it recovered to $1,637 million in 2021 and maintained relatively stable levels around $1,532 million and $1,849 million in 2022 and 2023, respectively. Adjusted net income followed a similar pattern but with less pronounced declines, decreasing to $1,055 million in 2020 before gradually increasing through 2023 to $2,033 million, surpassing the reported figures in the latter years.

Shareholders’ Equity Trends

Reported shareholders’ equity attributable to the company showed a decreasing trend from $21,164 million in 2018 to $16,545 million in 2023, with a notable decline through the middle years and minor fluctuations towards the end. Adjusted shareholders’ equity exhibited a starkly different pattern, starting at $1,691 million in 2018 but declining into negative territory from 2020 onward, reaching negative $1,391 million in 2023. This indicates that when adjustments for goodwill are considered, the equity base appears to be considerably weaker and deteriorating over time.

Return on Equity (ROE) Analysis

The reported ROE showed a strong spike in 2019 at 28.71%, followed by a drop to 3.62% in 2020. It then recovered to around 9-11% in the subsequent years, suggesting a return to stable profitability relative to equity after the 2020 downturn. Adjusted ROE figures were significantly higher for 2018 and 2019, at 127.85% and 357.3% respectively, but data for later years is missing. The exceptionally high adjusted ROE in the early years likely reflects the very low or negative adjusted equity base, which inflates the ratio.

Overall Insights

The company experienced fluctuations in profitability and equity levels throughout the period. The divergence between reported and adjusted equity and related metrics highlights the impact of goodwill adjustments, signaling that the underlying equity position may be substantially weaker than reported. The adjusted figures’ negative equity and missing adjusted ROE beyond 2019 suggest a possible impairment or ongoing accounting adjustments impacting the company's financial health assessment. Profitability showed recovery post-2020, but the adjusted metrics imply potential risks in the equity base that warrant further investigation.

The financial data reveals notable fluctuations in the company’s profitability and asset base over the six-year period, particularly when contrasting reported figures with goodwill-adjusted figures. Several trends and insights emerge from the analysis of net income, total assets, and return on assets (ROA).

Net Income Trends

The reported net income attributable to the company exhibits significant volatility. Starting at $2.16 billion in 2018, it peaked sharply at $5.67 billion in 2019, followed by a steep decline to $631 million in 2020. A recovery is visible afterwards, with net income increasing to $1.64 billion in 2021, slightly declining to $1.53 billion in 2022, and then rising again to $1.85 billion in 2023.

The adjusted net income, which accounts for goodwill adjustments, follows a similar pattern but displays less pronounced volatility in 2020, with a higher income figure of $1.06 billion compared to the reported figure. This suggests that goodwill adjustments have a material impact on the comparability of net income during that year and generally result in more stable profitability measures. Adjusted net income continues to grow post-2020, reaching $2.03 billion by 2023, indicating improved underlying operational performance.

Total Assets Trends

The reported total assets decreased substantially from $48.8 billion in 2018 to $42.3 billion in 2019 and continued a downward trend to approximately $40.8 billion in 2020. The asset base slightly recovered and stabilized around $42 billion in the subsequent years through 2023.

In contrast, the adjusted total assets, which exclude goodwill effects, are significantly lower in magnitude and exhibit a similar downward trajectory from $29.3 billion in 2018 to $24.1 billion in 2019, further declining to $22.9 billion in 2020. A gradual recovery trend is also evident thereafter, with adjusted assets at $24.3 billion in 2023. This divergence between reported and adjusted assets highlights the substantial impact of goodwill on the company's balance sheet.

Return on Assets (ROA) Analysis

Reported ROA figures demonstrate a sharp increase in 2019, reaching 13.42% from 4.43% in 2018, followed by a substantial drop to 1.55% in 2020. This mirrors the volatility seen in net income and asset values. From 2021 onwards, the reported ROA returns to more moderate and stable levels between 3.6% and 4.4%.

The adjusted ROA percentage is consistently higher than the reported ROA, reflecting the lower asset base calculated after goodwill adjustments. Adjusted ROA peaks at 23.53% in 2019, drops significantly to 4.61% in 2020, and then shows a steady improvement reaching 8.36% in 2023. This pattern indicates that, despite fluctuations in reported performance, the underlying operational efficiency measured on an adjusted basis has improved gradually since 2020.

In summary, the analysis reveals that the company experiences significant impact from goodwill adjustments on both its asset base and profitability metrics. The year 2019 stands out as an exceptional peak in net income and ROA, followed by a sharp decline in 2020 likely influenced by extraordinary factors. Adjusted figures, which remove goodwill, provide a smoother and arguably more accurate reflection of underlying operational performance, indicating steady recovery and improvement in profitability and asset utilization in recent years.