Meritor Acquisition and 2022 Financial Results
Table of Contents
LIQUIDITY AND CAPITAL RESOURCES
Key Working Capital and Balance Sheet Data
We fund our working capital with cash from operations and short-term borrowings, including commercial paper, when necessary. Various assets and liabilities, including short-
term debt, can fluctuate significantly from month to month depending on short-term liquidity needs. As a result, working capital is a prime focus of management's attention.
Working capital and balance sheet measures are provided in the following table:
Cash Flows
Dollars in millions
Working capital (1)
Current ratio
Accounts and notes receivable, net
Days' sales in receivables
Inventories
Inventory turnover
Accounts payable (principally trade)
Days' payable outstanding
Total debt
Total debt as a percent of total capital
(1) Working capital includes cash and cash equivalents.
Cash and cash equivalents were impacted as follows:
In millions
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
2022 vs. 2021
December 31,
2022
December 31,
2021
$
3,030
$
1.27
5,225
1.74
S
5,202
$
3,990
60
59
$
5,603
4,355
4.2
4.6
$
4,252
$
3,021
60
57
S
7,855
$
4,159
44.1 %
31.5 %
Years ended December 31,
Change
2022
2021
2020
2022 vs. 2021
2021 vs. 2020
1,962 $
(4,172)
1,669
50
2,256 $
(873)
(2,227)
2,722
$
(294) $
(466)
(719)
(3,299)
(154)
280
3,896
(2,507)
35
(11)
15
46
$
(491) $
(809)
$
2,272
$
318
$
(3,081)
Net cash provided by operating activities decreased $294 million, primarily due to higher working capital requirements of $646 million, partially offset by lower equity
earnings, net of dividends of $147 million and Russian suspension costs of $111 million. The higher working capital requirements resulted in a cash outflow of $1.0 billion
compared to a cash outflow of $359 million in the comparable period in 2021, mainly due to decreased accrued expenses (as a result of lower variable compensation accruals in
2022) and higher accounts receivable due to increased sales, partially offset by a lower spend in inventories and favorable changes in accounts payable.
Net cash used in investing activities increased $3.3 billion, principally due to $3.2 billion of acquisitions, net of cash acquired for Meritor, Jacobs Vehicle Systems, Siemens
CVP and Westport JV. See NOTE 2, "ACQUISITIONS," to our Consolidated Financial Statements for additional information.
Net cash provided by financing activities increased $3.9 billion, primarily due to higher net borrowings of commercial paper of $2.3 billion, increased proceeds from borrowings
of $2.0 billion (principally our $2.0 billion term loan) and lower repurchases of common stock of $1.0 billion, partially offset by higher payments on borrowings and finance
lease obligations of $1.5 billion ($0.9 billion of which relates to debt assumed in the Meritor acquisition that was retired during the third quarter of 2022 and $450 million of
term loan payments in the fourth quarter of 2022).
The effect of exchange rate changes on cash and cash equivalents increased $15 million, primarily due to favorable fluctuations in the British pound, partially offset by
unfavorable fluctuations in the Chinese renminbi.
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