Johnson Controls 2013 Annual Report Download - page 41

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41
and Power Solutions businesses, partially offset by dividends paid by affiliates and the acquisitions of the controlling interest in
formerly unconsolidated Automotive Experience Seating affiliates.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital
September 30,
2013 September 30,
2012(in millions) Change
Current assets $ 13,698 $ 12,743
Current liabilities (12,117)(10,855)
1,581 1,888 -16%
Less: Cash 1,055 265
Add: Short-term debt 119 323
Add: Current portion of long-term debt 819 424
Less: Assets held for sale 804 —
Add: Liabilities held for sale 402 —
Working capital $ 1,062 $ 2,370 -55%
Accounts receivable 7,206 7,308 -1%
Inventories 2,325 2,343 -1%
Accounts payable 6,318 6,114 3%
• The Company defines working capital as current assets less current liabilities, excluding cash, short-term debt, the current
portion of long-term debt, and assets and liabilities held for sale. Management believes that this measure of working capital,
which excludes financing-related items, provides a more useful measurement of the Company’s operating performance.
• The decrease in working capital at September 30, 2013 as compared to September 30, 2012 was primarily due to a decrease
in other current assets related to income taxes, an increase in reserves due to restructuring activities, higher accounts payable
due to timing of supplier payments and lower accounts receivable due to improved collections and timing of customer
receipts.
• The Company’s days sales in accounts receivable at September 30, 2013 were 51, lower than 55 at the comparable period
ended September 30, 2012. There has been no significant adverse change in the level of overdue receivables or changes
in revenue recognition methods.
• The Company’s inventory turns for the year ended September 30, 2013 were slightly lower than the comparable period
ended September 30, 2012 primarily due to higher inventory production to meet higher sales levels.
• Days in accounts payable at September 30, 2013 were 72, consistent with the comparable period ended September 30,
2012.