Risk Factors Update Summary
- Intensified inflation in certain markets may accelerate, impacting our products, with potential continued acceleration in 2024.
- Increased geopolitical instability poses risks to operations, including volatile commodity markets and supply chain disruptions.
- Failure to meet sustainability goals could result in litigation, regulatory actions, and increased risk of market backlash.
- Heightened security risks from conflicts may impact employee safety, infrastructure, and result in business disruptions.
- Evolving sustainability goals face risks from anti-ESG sentiment, regulatory scrutiny, and increased compliance costs.
- Challenges integrating acquired businesses may lead to unforeseen liabilities, costs, and hinder expected benefits.
- Concerns about environmental impact and climate change regulations may affect operations and financial performance.
Full Text Changes in Most Recent 10-K
Intended use: review the highlighted statements. These are additions to the risk factors disclosure in the most recent 10-K filing compared to the previous 10-K filing. Deleted and moved text is less important and is shown for context.
To view the full company filings, click on the following link to be taken to the SEC EDGAR database landing page for the company: https://www.sec.gov/edgar/browse/?CIK=21344&owner=exclude
Days Sales Outstanding (DSO) (hover/click for more information)
**Click to collapse**
Days Sales Outstanding, commonly known as DSO, is a measure of the average number of days that a company takes to collect payment after a sale has been made. It's a financial indicator that illustrates how well a company manages its accounts receivables and how efficiently it collects cash from customers.
DSO is calculated by dividing the total accounts receivable during a certain period by the total net credit sales for the same period, and then multiplying the result by the number of days in the period. A low DSO value means that it takes a company fewer days to collect its accounts receivable, which is generally positive as it could mean a healthier cash flow. A high DSO number shows that a company is selling its product to customers on credit and taking longer to collect payment, which could be a sign of cash flow problems. An increasing DSO could indicate several issues requiring further investigation.
However, DSO can be influenced by a company's industry and business practices. For instance, if a company operates in an industry where long payment terms are the norm, it may have a high DSO. In some cases, companies may have a high DSO because they are extending more credit to their customers to boost sales. Therefore, it's crucial to compare DSO with competitors in the same industry.
Selling accounts receivable will artificially lower DSO. We provide the DSO and Adjusted DSO data below to give a clearer picture of the company's financial health. Keep in mind that this is only one aspect of an entire financial analysis and should not be used in isolation when making investment decisions.
- Red: The most recent DSO has been adjusted for selling accounts receivable and is more than 10% higher than the previous DSO.
- Light Red: The most recent DSO is adjusted for selling accounts receivable, or more than 10% higher than the previous 3-period average DSO.
- Yellow: The most recent DSO is more than 5% higher than the previous DSO.
- Green: No alarms were triggered for the company.
DSO Data
***This tool is in beta mode and data validation is still in progress.***
| Item (Click to expand row) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|
| Revenues ($ millions) | 34,300 | 37,266 | 33,014 | 38,655 | 43,004 | 45,754 |
| Accounts Receivable ($ millions) | 3,685 | 3,971 | 3,144 | 3,512 | 3,487 | 3,410 |
| DSO | 39.2 | 38.9 | 34.9 | 33.2 | 29.6 | 27.2 |
| Accounts Receivable Sold ($ millions) | N/A | N/A | 185 | 6,266 | 10,709 | 17,704 |
| Adjusted Accounts Receivable ($ millions) | N/A | N/A | 3,329 | 9,778 | 14,196 | 21,114 |
| Adjusted DSO | N/A | N/A | 36.9 | 92.6 | 120.8 | 168.9 |
Text from Filings Related to Selling Accounts Receivable
2024-02-20
The Company has a trade accounts receivable factoring program in certain countries. Under this program, we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions. The Company sold $17,704 million and $10,709 million of trade accounts receivables under this program during the years ended December 31, 2023 and 2022, respectively. The costs of factoring such receivables were $83 million and $27 million for the years ended December 31, 2023 and 2022, respectively. The cash received from the financial institutions is classified within the operating activities section in our consolidated statement of cash flows.
The Company has a trade accounts receivable factoring program in certain countries. Under this program, we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions. The Company sold $ 17,704 million and $ 10,709 million of trade accounts receivables under this program during the years ended December 31, 2023 and 2022, respectively. The costs of factoring such receivables were $ 83 million and $ 27 million for the years ended December 31, 2023 and 2022, respectively. The Company accounts for this program as a sale, and accordingly, the trade receivables sold are excluded from the line item trade accounts receivable in our consolidated balance sheet. The cash received from the financial institutions is classified within the operating activities section in our consolidated statement of cash flows.
Our current payment terms with the majority of our suppliers are 120 days. Two global financial institutions offer a voluntary supply chain finance (“SCF”) program, which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them. The SCF program is available to suppliers of goods and services included in cost of goods sold and selling, general and administrative expenses in our consolidated statement of income. The Company and our suppliers agree on contractual terms for the goods and services we procure, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program. The suppliers sell goods or services, as applicable, to the Company and issue the associated invoices to the Company based on the agreed-upon contractual terms. Then, if they are participating in the SCF program, our suppliers, at their sole discretion, determine which invoices, if any, they want to sell to the financial institutions. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. We have no economic interest in a supplier’s decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program. Accordingly, amounts due to our suppliers that elected to participate in the SCF program are included in the line item accounts payable and accrued expenses in our consolidated balance sheet. All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected within the operating activities section of our consolidated statement of cash flows. As of December 31, 2023 and 2022, the amount of obligations outstanding that the Company has confirmed as valid to the financial institutions under the SCF program was $ 1,421 million and $ 1,351 million, respectively.
2023-02-21
The Company has a trade accounts receivable factoring program in certain countries. Under this program, we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions. The Company sold $10,709 million and $6,266 million of trade accounts receivables under this program during the years ended December 31, 2022 and 2021, respectively. The costs of factoring such receivables were $27 million and $5 million for the years ended December 31, 2022 and 2021, respectively. The cash received from the financial institutions is classified within the operating activities section in our consolidated statement of cash flows.
The Company has a trade accounts receivable factoring program in certain countries. Under this program, we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions. The Company sold $ 10,709 million and $ 6,266 million of trade accounts receivables under this program during the years ended December 31, 2022 and 2021, respectively. The costs of factoring such receivables were $ 27 million and $ 5 million for the years ended December 31, 2022 and 2021, respectively. The Company accounts for this program as a sale, and accordingly, the trade receivables sold are excluded from the line item trade accounts receivable in our consolidated balance sheet. The cash received from the financial institutions is classified within the operating activities section in our consolidated statement of cash flows.
As part of our continued efforts to improve our working capital efficiency, we have worked with our suppliers over the past several years to revisit terms and conditions, including the extension of payment terms. Our current payment terms with the majority of our suppliers are 120 days. Additionally, two global financial institutions offer a voluntary supply chain finance (“SCF”) program which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them. The SCF program is available to suppliers of goods and services included in cost of goods sold as well as suppliers of goods and services included in selling, general and administrative expenses in our consolidated statement of income. The Company and our suppliers agree on contractual terms for the goods and services we procure, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program. The suppliers sell goods or services, as applicable, to the Company and issue the associated invoices to the Company based on the agreed-upon contractual terms. Then, if they are participating in the SCF program, our suppliers, at their sole discretion, determine which invoices, if any, they want to sell to the financial institutions. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. We have no economic interest in a supplier’s decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program. Accordingly, amounts due to our suppliers that elected to participate in the SCF program are included in the line item accounts payable and accrued expenses in our consolidated balance sheet. All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected within the operating activities section of our consolidated statement of cash flows. We have been informed by the financial institutions that as of December 31, 2022 and 2021, suppliers had elected to sell $1,234 million and $882 million, respectively, of our outstanding payment obligations to the financial institutions. The amounts settled through the SCF program were $4,724 million and $3,237 million during the years ended December 31, 2022 and 2021, respectively. We do not believe there is a risk that our payment terms will be shortened in the near future.
2022-02-22
In the fourth quarter of 2020, the Company started a trade accounts receivable factoring program in certain countries. Under this program we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions. The Company sold $6,266 million and $185 million of trade accounts receivables under this program during the years ended December 31, 2021 and 2020, respectively, and the costs of factoring such receivables were not material. The cash received from the financial institutions is classified within the operating activities section in our consolidated statement of cash flows.
In the fourth quarter of 2020, the Company started a trade accounts receivable factoring program in certain countries. Under this program we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions. The Company sold $ 6,266 million and $ 185 million of trade accounts receivables under this program during the years ended December 31, 2021 and 2020, respectively, and the costs of factoring such receivables were not material. The Company accounts for this program as a sale, and accordingly, the trade receivables sold are excluded from trade accounts receivable on our consolidated balance sheet. The cash received from the financial institutions is classified within the operating activities section in our consolidated statement of cash flows.
2021-02-25
In the fourth quarter of 2020, the Company started a trade accounts receivable factoring program in certain countries. Under this program we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables and remit those payments to the financial institutions. The Company sold $185 million of trade accounts receivables under this program during the year ended December 31, 2020, and the costs of factoring such receivables were not material. The Company classifies the cash received from the financial institutions within the operating activities section in the consolidated statement of cash flows.
In the fourth quarter of 2020, the Company started a trade accounts receivable factoring program in certain countries. Under this program we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables and remit those payments to the financial institutions. The Company sold $ 185 million of trade accounts receivables under this program during the year ended December 31, 2020, and the costs of factoring such receivables were not material. The Company accounts for this program as a sale, and accordingly, the trade receivables sold are excluded from trade accounts receivable on our consolidated balance sheet. The cash received from the financial institutions is classified within the operating activities section in the consolidated statement of cash flows.
As part of our continued efforts to improve our working capital efficiency, we have worked with our suppliers over the past several years to revisit terms and conditions, including the extension of payment terms. Our current payment terms with the majority of our suppliers are 120 days. Additionally, two global financial institutions offer a voluntary supply chain finance ("SCF") program which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them. The SCF program is available to suppliers of goods and services included in cost of goods sold as well as suppliers of goods and services included in selling, general and administrative expenses in our consolidated statement of income. The Company and our suppliers agree on the contractual terms for the goods and services we procure, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program. The suppliers sell goods or services, as applicable, to the Company and issue the associated invoices to the Company based on the agreed-upon contractual terms. Then, if they are participating in the SCF program, our suppliers, at their sole discretion, determine which invoices, if any, they want to sell to the financial institutions. Our suppliers' voluntary inclusion of invoices in the SCF program has no bearing on our payment terms. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. We have no economic interest in a supplier's decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program. Accordingly, amounts due to our suppliers that elected to participate in the SCF program are included in the line item accounts payable and accrued expenses in our consolidated balance sheet. All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected in the line item cash flows from operating activities in our consolidated statement of cash flows. We have been informed by the financial institutions that as of December 31, 2020 and 2019, suppliers had elected to sell $703 million and $784 million, respectively, of our outstanding payment obligations to the financial institutions. The amount settled through the SCF program was $2,810 million and $2,883 million during the years ended December 31, 2020 and 2019, respectively.
Free Cash Flow (FCF, gray bars), Net Income (blue line) and Adjusted Free Cash Flow are used to validate reported financial performance. Adjusted Free Cash Flow provides a more accurate measure of cash generated from normal operating activities.
- Dotted line indicates the beginning of sales of Accounts Receivable included in FCF adjustment. Selling Receivables data is only pulled for the past 6 years. If the red dotted line appears on todays date (right end of the graph) that indicates that we did not find sales of accounts receivable for the company.
- Cash generated from selling accounts receivable is subtracted from Free Cash Flow. See "DSO" tab for data.
- Stock-Based Compensation, if paired with Share Buybacks, is removed from Free Cash Flow. GAAP treats such transactions as financing expenses. Adjusted Free Cash Flow effectively treats this as a normal operating use of cash for employee compensation. The adjustment is the minimum of Stock-Based Compensation and Share Buybacks
- Gross capex (rather than net capex) is used to exclude one time items that would reduce capex and increase fcf. For companies with regular asset sales, net capex should be evaluated.
Click any value in the table below to view the endpoint the company used to report each data point. We aim to flag year-to-year changes that could indicate more or less aggressive accounting practices. Clicking the row label in the "Item" column will expand the entire row.
Net Income and Adjusted Free Cash Flow Data
| Item (Click to expand row) | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Income ($ millions) | 5,981 | 5,807 | 6,824 | 11,787 | 8,584 | 9,019 | 8,584 | 7,098 | 7,351 | 6,527 | 1,248 | 6,434 | 8,920 | 7,747 | 9,771 | 9,542 | 10,714 |
| Cash Flow from Operations ($ millions) | 7,150 | 7,571 | 8,186 | 9,532 | 9,474 | 10,645 | 10,542 | 10,615 | 10,528 | 8,792 | 7,041 | 7,627 | 10,471 | 9,844 | 12,625 | 11,018 | 11,599 |
| Capital Expenditures ($ millions) | 1,648 | 1,968 | 1,993 | 2,215 | 2,920 | 2,780 | 2,550 | 2,406 | 2,553 | 2,262 | 1,750 | 1,548 | 2,054 | 1,177 | 1,367 | 1,484 | 1,852 |
| Free Cash Flow ($ millions) | 5,502 | 5,603 | 6,193 | 7,317 | 6,554 | 7,865 | 7,992 | 8,209 | 7,975 | 6,530 | 5,291 | 6,079 | 8,417 | 8,667 | 11,258 | 9,534 | 9,747 |
| Stock-Based Compensation ($ millions) | 313 | 266 | 241 | 380 | 354 | 259 | 227 | 209 | 236 | 258 | 219 | 225 | 201 | 126 | 337 | 356 | 254 |
| Total Buybacks ($ millions) | 1,838 | 1,079 | 1,518 | 2,961 | 4,513 | 4,559 | 4,832 | 4,162 | 3,564 | 3,681 | 3,682 | 1,912 | 1,103 | 118 | 111 | 1,418 | 2,289 |
| Accounts Receivable Sold ($millions) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 185 | 6,266 | 10,709 | 17,704 |
| Adjusted Free Cash Flow ($ millions) | 5,189 | 5,337 | 5,952 | 6,937 | 6,200 | 7,606 | 7,765 | 8,000 | 7,739 | 6,272 | 5,072 | 5,854 | 8,216 | 8,364 | 5,066 | 4,735 | 2,498 |