CORK, Ireland, July 31, 2019 /PRNewswire/ -- Johnson Controls
International plc (NYSE: JCI) today reported fiscal third quarter
2019 GAAP earnings per share ("EPS") from continuing operations,
including special items, of $0.16.
Excluding special items, adjusted EPS from continuing
operations was $0.65, up 20% versus
the prior year period (see attached footnotes for non-GAAP
reconciliation).
Sales of $6.5 billion increased 3%
compared to the prior year. Excluding the impacts of M&A
and foreign currency, sales grew 6% organically.
GAAP earnings before interest and taxes ("EBIT") was
$583 million and EBIT margin was
9.0%. Adjusted EBIT was $809 million
and adjusted EBIT margin was 12.5%, up 50 basis points over the
prior year. Excluding the impact of M&A and foreign
currency, underlying adjusted EBIT grew 11% versus the prior year
and margin increased 60 basis points.
"We delivered another strong quarter of organic revenue, order
and backlog growth as well as solid free cash flow. These
results reflect the continued emphasis on driving underlying
fundamentals with a focus on new product development, talent
management and enhanced commercial excellence across the
organization," said George Oliver,
chairman and CEO. "We are pleased with the execution of our
capital deployment actions related to the proceeds from the Power
Solutions sale, which has positioned us to tighten our EPS guidance
to the high end of the previous range," Oliver
added.
Income and EPS amounts attributable to Johnson Controls
ordinary shareholders
($ millions, except per-share
amounts)
The financial highlights presented in the tables below are in
accordance with GAAP, unless otherwise indicated. All comparisons
are to the fiscal third quarter of 2018. The results of Power
Solutions are reported as discontinued operations in all periods
presented.
Organic sales growth, organic EBITA growth, adjusted segment
EBITA, adjusted EBIT, adjusted EPS from continuing operations and
adjusted free cash flow are non-GAAP financial measures. For a
reconciliation of these non-GAAP measures and detail of the special
items, refer to the attached footnotes. A slide presentation
to accompany the results can be found in the Investor Relations
section of Johnson Controls' website at
http://investors.johnsoncontrols.com.
|
GAAP
|
GAAP
|
|
Adjusted
|
Adjusted
|
|
|
Q3
2018
|
Q3
2019
|
|
Q3
2018
|
Q3
2019
|
Change
|
Sales
|
$6,282
|
$6,451
|
|
$6,282
|
$6,451
|
+3%
|
Segment
EBITA
|
942
|
832
|
|
954
|
992
|
+4%
|
EBIT
|
702
|
583
|
|
753
|
809
|
+7%
|
Net income
from
continuing
operations
|
474
|
141
|
|
506
|
565
|
+12%
|
Diluted EPS from
continuing operations
|
$0.51
|
$0.16
|
|
$0.54
|
$0.65
|
+20%
|
BUSINESS RESULTS
Building Solutions North America
|
GAAP
|
GAAP
|
|
Adjusted
|
Adjusted
|
|
|
Q3
2018
|
Q3
2019
|
|
Q3
2018
|
Q3
2019
|
Change
|
Sales
|
$2,246
|
$2,327
|
|
$2,246
|
$2,327
|
4%
|
Segment
EBITA
|
$314
|
$300
|
|
$318
|
$310
|
(3%)
|
Segment EBITA margin
%
|
14.0%
|
12.9%
|
|
14.2%
|
13.3%
|
(90bps)
|
Sales in the quarter of $2.3
billion increased 4% versus the prior year. Excluding
M&A and foreign currency, organic sales also increased 4%
versus the prior year driven by strong growth in HVAC &
Controls and, to a lesser extent, growth in Fire & Security.
This was partially offset by a decline in Performance Solutions due
to the timing of projects.
Orders in the quarter, excluding M&A and adjusted for
foreign currency, increased 6% year-over-year. Backlog at the
end of the quarter of $5.7 billion
increased 6% year-over-year, excluding M&A and adjusted for
foreign currency.
Adjusted segment EBITA was $310
million, down 3% versus the prior year. Adjusted segment
EBITA margin of 13.3% declined 90 basis points versus the prior
year as favorable volume leverage as well as cost synergies and
productivity savings, were more than offset by unfavorable mix and
run-rate salesforce additions.
Building Solutions EMEA/LA (Europe, Middle
East, Africa/Latin America)
|
GAAP
|
GAAP
|
|
Adjusted
|
Adjusted
|
|
|
Q3
2018
|
Q3
2019
|
|
Q3
2018
|
Q3
2019
|
Change
|
Sales
|
$926
|
$922
|
|
$926
|
$922
|
(0%)
|
Segment
EBITA
|
$96
|
$101
|
|
$98
|
$103
|
5%
|
Segment EBITA margin
%
|
10.4%
|
11.0%
|
|
10.6%
|
11.2%
|
60bps
|
Sales in the quarter of $922
million declined slightly versus the prior year.
Excluding M&A and foreign currency, organic sales grew 6%
versus the prior year driven by strong growth in project
installations. Growth was positive across most regions, led by
strength in HVAC, Fire & Security and Industrial Refrigeration
in Europe and Latin America.
Orders in the quarter, excluding M&A and adjusted for
foreign currency, increased 8% year-over-year. Backlog at the
end of the quarter of $1.7 billion
increased 11% year-over-year, excluding M&A and adjusted for
foreign currency.
Adjusted segment EBITA was $103
million, up 5% versus the prior year. Adjusted segment EBITA
margin of 11.2% expanded 60 basis points over the prior year,
including a 30 basis point headwind related to foreign
currency. Adjusting for foreign currency, the underlying
margin improved 90 basis points driven by favorable volume as well
as the benefit from cost synergies and productivity savings,
partially offset by run-rate salesforce additions.
Building Solutions Asia Pacific
|
GAAP
|
GAAP
|
|
Adjusted
|
Adjusted
|
|
|
Q3
2018
|
Q3
2019
|
|
Q3
2018
|
Q3
2019
|
Change
|
Sales
|
$681
|
$691
|
|
$681
|
$691
|
1%
|
Segment
EBITA
|
$97
|
$98
|
|
$97
|
$98
|
1%
|
Segment EBITA margin
%
|
14.2%
|
14.2%
|
|
14.2%
|
14.2%
|
Flat
|
Sales in the quarter of $691
million increased 1% versus the prior year. Excluding
M&A and foreign currency, organic sales increased 6% versus the
prior year driven primarily by strong growth in project
installations and solid growth in China.
Orders in the quarter, excluding M&A and adjusted for
foreign currency, increased 1% year-over-year. Backlog at the
end of the quarter of $1.6 billion
increased 7% year-over-year, excluding M&A and adjusted for
foreign currency.
Adjusted segment EBITA was $98
million, up 1% versus the prior year. Adjusted segment EBITA
margin of 14.2% was flat versus the prior year as favorable volume
was offset by unfavorable mix, run-rate salesforce additions and
expected underlying margin pressure.
Global Products
|
GAAP
|
GAAP
|
|
Adjusted
|
Adjusted
|
|
|
Q3
2018
|
Q3
2019
|
|
Q3
2018
|
Q3
2019
|
Change
|
Sales
|
$2,429
|
$2,511
|
|
$2,429
|
$2,511
|
3%
|
Segment
EBITA
|
$435
|
$333
|
|
$441
|
$481
|
9%
|
Segment EBITA margin
%
|
17.9%
|
13.3%
|
|
18.2%
|
19.2%
|
100bps
|
Sales in the quarter of $2.5
billion increased 3% versus the prior year. Excluding
M&A and foreign currency, organic sales increased 7% versus the
prior year with solid growth across Building Management Systems,
HVAC & Refrigeration Equipment, and Specialty
Products.
Adjusted segment EBITA was $481
million, up 9% versus the prior year. Adjusted segment EBITA
margin of 19.2% expanded 100 basis points over the prior year. This
increase was driven by favorable volume and mix, positive
price/cost as well as the benefit of cost synergies and
productivity savings, partially offset by ongoing product
investments.
Corporate
|
GAAP
|
GAAP
|
|
Adjusted
|
Adjusted
|
|
|
Q3
2018
|
Q3
2019
|
|
Q3
2018
|
Q3
2019
|
Change
|
Corporate
expense
|
($142)
|
$70
|
|
($103)
|
($90)
|
(13%)
|
Adjusted Corporate expense was $90
million in the quarter, a decrease of 13% compared to the
prior year, driven primarily by continued cost synergies and
productivity
savings.
OTHER ITEMS
- For the quarter, cash provided by operating activities from
continuing operations was $0.6
billion and capital expenditures were $0.1 billion, resulting in free cash flow from
continuing operations of $0.5
billion. Adjusted free cash flow was $0.6 billion, which excludes net cash outflows of
$0.1 billion primarily related to
integration costs.
- Year-to-date, cash provided by operating activities from
continuing operations was $0.7
billion and capital expenditures were $0.4 billion, resulting in a free cash flow from
continuing operations of $0.3
billion. Adjusted free cash flow was $0.6 billion, which excludes net cash outflows of
$0.3 billion primarily related to
restructuring and integration costs.
- During the quarter, the Company repurchased approximately 105
million shares for $4.1 billion,
including the completion of the share tender on June 5, 2019. Year-to-date, the Company
repurchased approximately 135 million shares for $5.1 billion, representing ~14% of shares
outstanding.
- During the quarter, the Company repaid $5.1 billion of short and long-term debt,
including the completion of the $1.5
billion debt tender on May 30,
2019. As a result of the tender, the Company recorded a net
pre-tax charge of $60 million as a
loss on the early extinguishment of debt. During the quarter, the
Company also repaid all outstanding financial obligations under the
Tyco International Holding S.Ã .r.l (TSarl) term loan, revolving
credit facility and TSarl other indebtedness.
- Due to favorable resolution in the quarter, the Company
released an indemnification reserve of $226
million related to a post-sale tax contingency for a
previously divested Tyco business.
- The Company recorded a $235
million non-cash asset impairment charge in the quarter
related to the disposition of a non-core business now reported as
held for sale.
- The Company recorded a charge in the amount of $140 million related to environmental remediation
costs associated with its facilities in Marinette, Wisconsin.
- The Company recorded a discrete period tax charge of
$226 million related primarily to
newly enacted regulations related to U.S. Tax Reform in the
quarter.
- In connection with the sale of Power Solutions, the Company
recorded a pre-tax gain of $5.2
billion which is reported in discontinued operations.
About Johnson Controls:
Johnson Controls is a global leader creating a safe, comfortable
and sustainable world. Our 105,000 employees create intelligent
buildings, efficient energy solutions and integrated infrastructure
that work seamlessly together to deliver on the promise of smart
cities and communities in 150 countries. Our commitment to
sustainability dates back to our roots in 1885, with the invention
of the first electric room thermostat. We are committed to helping
our customers win everywhere, every day and creating greater value
for all of our stakeholders through our strategic focus on
buildings. For additional information, please visit
http://www.johnsoncontrols.com or follow us @johnsoncontrols
on Twitter.
Johnson Controls International plc
Cautionary Statement Regarding Forward-Looking
Statements
Johnson Controls International plc has made statements in this
communication that are forward-looking and therefore are
subject to risks and uncertainties. All statements in this document
other than statements of historical fact are, or could
be, "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. In this
communication, statements regarding
Johnson Controls' future financial position, sales,
costs, earnings, cash flows, other measures of results of
operations, synergies and integration opportunities,
capital expenditures and debt levels are
forward-looking statements. Words such as "may," "will," "expect,"
"intend," "estimate," "anticipate," "believe," "should,"
"forecast," "project" or "plan" and terms of similar
meaning are also generally intended to identify forward-looking
statements. However, the absence of these words does not mean
that a statement is not forward-looking. Johnson Controls
cautions that these statements are subject to numerous important
risks, uncertainties, assumptions and other factors, some of which
are beyond Johnson Controls' control, that could cause
Johnson Controls' actual results to differ
materially from those expressed or implied by such forward-looking
statements, including, among others, risks related
to: any delay or inability of Johnson Controls to
realize the expected benefits and synergies of recent
portfolio transactions such as the merger with Tyco and the
spin-off of Adient, changes in tax laws (including but
not limited to the recently enacted Tax Cuts and Jobs Act),
regulations, rates, policies or interpretations, the loss of key
senior management, the tax treatment of recent portfolio
transactions, significant transaction costs and/or
unknown liabilities associated with such transactions, the
outcome of actual or potential litigation relating
to such transactions, the risk that disruptions
from recent transactions will harm Johnson Controls'
business, the strength of the U.S. or other economies,
changes to laws or policies governing foreign trade, including
increased tariffs or trade restrictions, mix and schedules, energy
and commodity prices, the availability of raw materials and
component products, currency rates and cancellation of or changes
to commercial arrangements, and with respect to the disposition of
the Power Solutions business, whether the strategic benefits of the
Power Solutions transaction can be achieved. A detailed discussion
of risks related to Johnson Controls' business is included in the
section entitled "Risk Factors" in Johnson Controls' Annual Report
on Form 10-K for the 2018 fiscal year filed with the SEC on
November 20, 2018, and its Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2019 filed with the SEC on May 3, 2019, which are available at www.sec.gov
and www.johnsoncontrols.com under the "Investors" tab.
Shareholders, potential investors and others should consider these
factors in evaluating the forward-looking statements and should not
place undue reliance on such statements. The forward-looking
statements included in this communication are made only
as of the date of this document, unless otherwise specified, and,
except as required by law, Johnson Controls assumes no obligation,
and disclaims any obligation, to update such statements to reflect
events or circumstances occurring after the date of this
communication.
Non-GAAP Financial Information
The Company's press release contains financial information
regarding adjusted earnings per share, which is a non-GAAP
performance measure. The adjusting items include net mark-to-market
adjustments, transaction/integration costs, restructuring and
impairment costs, Scott Safety gain on sale, tax indemnification
reserve release, environmental reserve, loss on extinguishment of
debt, Power Solutions gain on sale (net of transaction and other
costs), the impact of ceasing the depreciation/amortization expense
for the Power Solutions business as the business is held for sale
and discrete tax items. Financial information regarding organic
sales, adjusted segment EBITA, adjusted organic segment EBITA,
adjusted segment EBITA margin, adjusted free cash flow, adjusted
free cash flow conversion and net debt are also presented, which
are non-GAAP performance measures. Adjusted segment EBITA excludes
special items such as transaction/integration costs, environmental
reserve and Scott Safety gain on sale because these costs are not
considered to be directly related to the underlying operating
performance of its business units. Management believes that,
when considered together with unadjusted amounts, these non-GAAP
measures are useful to investors in understanding
period-over-period operating results and business trends of the
Company. Management may also use these metrics as guides in
forecasting, budgeting and long-term planning processes and for
compensation purposes. These metrics should be considered in
addition to, and not as replacements for, the most comparable GAAP
measure.
CONTACT:
|
Investors:
|
|
Antonella
Franzen
|
|
(609)
720-4665
|
|
|
|
Ryan
Edelman
|
|
(609)
720-4545
|
|
|
|
Media:
|
|
Fraser
Engerman
|
|
(414)
524-2733
|
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(in millions, except
per share data; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
Net sales
|
|
$ 6,451
|
|
|
$ 6,282
|
Cost of
sales
|
|
4,307
|
|
|
4,194
|
Gross
profit
|
|
2,144
|
|
|
2,088
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(1,388)
|
|
|
(1,441)
|
Restructuring and
impairment costs
|
(235)
|
|
|
-
|
Net financing
charges
|
(119)
|
|
|
(95)
|
Equity
income
|
62
|
|
|
55
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
464
|
|
|
607
|
|
|
|
|
|
|
Income tax
provision
|
239
|
|
|
61
|
|
|
|
|
|
|
Income from
continuing operations
|
225
|
|
|
546
|
|
|
|
|
|
|
Income from
discontinued operations, net of tax
|
4,051
|
|
|
258
|
|
|
|
|
|
|
Net income
|
|
4,276
|
|
|
804
|
|
|
|
|
|
|
Less: Income from
continuing operations attributable to noncontrolling
interests
|
84
|
|
|
72
|
|
|
|
|
|
|
Less: Income from
discontinued operations attributable to noncontrolling
interests
|
-
|
|
|
9
|
|
|
|
|
|
|
Net income
attributable to JCI
|
$ 4,192
|
|
|
$
723
|
|
|
|
|
|
|
Income from
continuing operations
|
$
141
|
|
|
$
474
|
Income from
discontinued operations
|
4,051
|
|
|
249
|
|
|
|
|
|
|
Net income
attributable to JCI
|
$ 4,192
|
|
|
$
723
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
$
0.16
|
|
|
$
0.51
|
Diluted earnings per
share from discontinued operations
|
4.63
|
|
|
0.27
|
Diluted earnings per
share
|
$
4.79
|
|
|
$
0.78
|
|
|
|
|
|
|
Diluted weighted
average shares
|
875.2
|
|
|
930.7
|
Shares outstanding at
period end
|
795.7
|
|
|
924.9
|
|
|
|
|
|
|
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(in millions, except
per share data; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30,
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
Net sales
|
$
17,694
|
|
|
$
17,217
|
Cost of
sales
|
11,981
|
|
|
11,607
|
Gross
profit
|
|
5,713
|
|
|
5,610
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(4,284)
|
|
|
(4,250)
|
Restructuring and
impairment costs
|
(235)
|
|
|
(154)
|
Net financing
charges
|
(302)
|
|
|
(304)
|
Equity
income
|
137
|
|
|
129
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
1,029
|
|
|
1,031
|
|
|
|
|
|
|
Income tax
provision
|
394
|
|
|
314
|
|
|
|
|
|
|
Income from
continuing operations
|
635
|
|
|
717
|
|
|
|
|
|
|
Income from
discontinued operations, net of tax
|
4,598
|
|
|
841
|
|
|
|
|
|
|
Net
income
|
5,233
|
|
|
1,558
|
|
|
|
|
|
|
Less: Income from
continuing operations attributable to noncontrolling
interests
|
147
|
|
|
134
|
|
|
|
|
|
|
Less: Income from
discontinued operations attributable to noncontrolling
interests
|
24
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to JCI
|
$
5,062
|
|
|
$
1,391
|
|
|
|
|
|
|
Income from
continuing operations
|
$
488
|
|
|
$
583
|
Income from
discontinued operations
|
4,574
|
|
|
808
|
|
|
|
|
|
|
Net income
attributable to JCI
|
$
5,062
|
|
|
$
1,391
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
$
0.54
|
|
|
$
0.63
|
Diluted earnings per
share from discontinued operations
|
5.07
|
|
|
0.87
|
Diluted earnings per
share *
|
$
5.61
|
|
|
$
1.49
|
|
|
|
|
|
|
Diluted weighted
average shares
|
902.2
|
|
|
932.1
|
Shares outstanding at
period end
|
795.7
|
|
|
924.9
|
|
|
|
|
|
|
* May not sum due to
rounding.
|
|
|
|
|
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
3,685
|
|
$
185
|
Accounts receivable -
net
|
6,033
|
|
5,622
|
Inventories
|
2,050
|
|
1,819
|
Assets held for
sale
|
95
|
|
3,015
|
Other current
assets
|
1,179
|
|
1,182
|
|
Current
assets
|
13,042
|
|
11,823
|
|
|
|
|
|
Property, plant and
equipment - net
|
3,282
|
|
3,300
|
Goodwill
|
|
18,312
|
|
18,381
|
Other intangible
assets - net
|
5,739
|
|
6,187
|
Investments in
partially-owned affiliates
|
848
|
|
848
|
Noncurrent assets
held for sale
|
59
|
|
5,188
|
Other noncurrent
assets
|
1,787
|
|
3,070
|
|
Total
assets
|
$
43,069
|
|
$
48,797
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
521
|
|
$
1,307
|
Accounts payable and
accrued expenses
|
4,452
|
|
4,428
|
Liabilities held for
sale
|
46
|
|
1,791
|
Other current
liabilities
|
4,223
|
|
3,724
|
|
Current
liabilities
|
9,242
|
|
11,250
|
|
|
|
|
|
Long-term
debt
|
6,804
|
|
9,623
|
Other noncurrent
liabilities
|
5,614
|
|
5,259
|
Noncurrent
liabilities held for sale
|
-
|
|
207
|
Shareholders' equity
attributable to JCI
|
20,363
|
|
21,164
|
Noncontrolling
interests
|
1,046
|
|
1,294
|
|
Total liabilities and
equity
|
$
43,069
|
|
$
48,797
|
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
2019
|
|
|
2018
|
Operating
Activities
|
|
|
|
|
Net income
attributable to JCI from continuing operations
|
$
141
|
|
|
$
474
|
Income from
continuing operations attributable to noncontrolling
interests
|
84
|
|
|
72
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
225
|
|
|
546
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income from continuing operations to cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
203
|
|
|
227
|
|
|
Pension and
postretirement benefit income
|
(28)
|
|
|
(36)
|
|
|
Pension and
postretirement contributions
|
(14)
|
|
|
(17)
|
|
|
Equity in earnings of
partially-owned affiliates, net of dividends received
|
73
|
|
|
(25)
|
|
|
Deferred income
taxes
|
(121)
|
|
|
1
|
|
|
Non-cash
restructuring and impairment costs
|
235
|
|
|
-
|
|
|
Other -
net
|
75
|
|
|
33
|
|
|
Changes in assets and
liabilities, excluding acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(355)
|
|
|
(347)
|
|
|
|
|
Inventories
|
32
|
|
|
(2)
|
|
|
|
|
Other
assets
|
(33)
|
|
|
(71)
|
|
|
|
|
Restructuring
reserves
|
(25)
|
|
|
(49)
|
|
|
|
|
Accounts payable and
accrued liabilities
|
(19)
|
|
|
321
|
|
|
|
|
Accrued income
taxes
|
360
|
|
|
(24)
|
|
|
|
|
|
Cash provided by
operating activities from continuing operations
|
608
|
|
|
557
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Capital
expenditures
|
(123)
|
|
|
(201)
|
Acquisition of
businesses, net of cash acquired
|
(3)
|
|
|
(9)
|
Business
divestitures, net of cash divested
|
6
|
|
|
(13)
|
Other -
net
|
16
|
|
|
13
|
|
|
|
|
|
Cash used in
investing activities from continuing operations
|
(104)
|
|
|
(210)
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Increase (decrease)
in short and long-term debt - net
|
(5,163)
|
|
|
34
|
Stock
repurchases
|
(4,122)
|
|
|
(56)
|
Payment of cash
dividends
|
(233)
|
|
|
(241)
|
Proceeds from the
exercise of stock options
|
60
|
|
|
3
|
Employee equity-based
compensation withholdings
|
(3)
|
|
|
(2)
|
|
|
|
|
|
Cash used in
financing activities from continuing operations
|
(9,461)
|
|
|
(262)
|
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
(385)
|
|
|
170
|
Net cash provided by
(used in) investing activities
|
12,733
|
|
|
(84)
|
Net cash used in
financing activities
|
(7)
|
|
|
(12)
|
|
|
|
|
|
Net cash flows
provided by discontinued operations
|
12,341
|
|
|
74
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
14
|
|
|
(145)
|
Changes in cash held
for sale
|
45
|
|
|
8
|
Increase in cash,
cash equivalents and restricted cash
|
$
3,443
|
|
|
$
22
|
|
|
|
|
|
|
|
|
|
|
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30,
|
|
|
|
|
|
|
2019
|
|
|
2018
|
Operating
Activities
|
|
|
|
|
Net income
attributable to JCI from continuing operations
|
$
488
|
|
|
$
583
|
Income from
continuing operations attributable to noncontrolling
interests
|
147
|
|
|
134
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
635
|
|
|
717
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income from continuing operations to cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
625
|
|
|
649
|
|
|
Pension and
postretirement benefit income
|
(85)
|
|
|
(108)
|
|
|
Pension and
postretirement contributions
|
(51)
|
|
|
(53)
|
|
|
Equity in earnings of
partially-owned affiliates, net of dividends received
|
6
|
|
|
(84)
|
|
|
Deferred income
taxes
|
382
|
|
|
(78)
|
|
|
Non-cash
restructuring and impairment costs
|
235
|
|
|
28
|
|
|
Gain on Scott Safety
business divestiture
|
-
|
|
|
(114)
|
|
|
Other -
net
|
108
|
|
|
71
|
|
|
Changes in assets and
liabilities, excluding acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(494)
|
|
|
(454)
|
|
|
|
|
Inventories
|
(289)
|
|
|
(211)
|
|
|
|
|
Other
assets
|
(62)
|
|
|
(245)
|
|
|
|
|
Restructuring
reserves
|
(84)
|
|
|
(55)
|
|
|
|
|
Accounts payable and
accrued liabilities
|
(36)
|
|
|
268
|
|
|
|
|
Accrued income
taxes
|
(179)
|
|
|
366
|
|
|
|
|
|
Cash provided by
operating activities from continuing operations
|
711
|
|
|
697
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Capital
expenditures
|
(401)
|
|
|
(481)
|
Acquisition of
businesses, net of cash acquired
|
(16)
|
|
|
(24)
|
Business
divestitures, net of cash divested
|
12
|
|
|
2,101
|
Other -
net
|
42
|
|
|
5
|
|
|
|
|
|
Cash provided by
(used in) investing activities from continuing
operations
|
(363)
|
|
|
1,601
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Increase (decrease)
in short and long-term debt - net
|
(3,619)
|
|
|
(1,510)
|
Debt financing
costs
|
-
|
|
|
(4)
|
Stock
repurchases
|
(5,122)
|
|
|
(255)
|
Payment of cash
dividends
|
(712)
|
|
|
(714)
|
Dividends paid to
noncontrolling interests
|
(132)
|
|
|
(43)
|
Proceeds from the
exercise of stock options
|
111
|
|
|
39
|
Employee equity-based
compensation withholdings
|
(26)
|
|
|
(38)
|
|
|
|
|
|
Cash used in
financing activities from continuing operations
|
(9,500)
|
|
|
(2,525)
|
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations
|
|
|
|
|
Net cash provided by
operating activities
|
117
|
|
|
567
|
Net cash provided by
(used in) investing activities
|
12,580
|
|
|
(312)
|
Net cash (used in)
financing activities
|
(35)
|
|
|
(3)
|
|
|
|
|
|
Net cash flows
provided by discontinued operations
|
12,662
|
|
|
252
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(24)
|
|
|
(84)
|
Changes in cash held
for sale
|
15
|
|
|
13
|
Increase
(decrease) in cash, cash equivalents and restricted
cash
|
$
3,501
|
|
|
$
(46)
|
FOOTNOTES
|
1.
Financial Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company evaluates
the performance of its business units primarily on segment earnings
before interest, taxes and amortization (EBITA), which represents
income from continuing operations before income taxes and
noncontrolling interests, excluding general corporate expenses,
intangible asset amortization, net financing charges, restructuring
and impairment costs, and the net mark-to-market adjustments
related to restricted asbestos investments and pension and
postretirement plans. In the first quarter of fiscal 2019, the
Company began reporting the Power Solutions business as a
discontinued operation, which required retrospective application to
previously reported financial information. As a result, the
financial results shown below are for continuing operations and
exclude the Power Solutions business.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions;
unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Nine Months Ended
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
Adjusted
Non-GAAP
|
|
Actual
|
|
Adjusted
Non-GAAP
|
|
Actual
|
|
Adjusted
Non-GAAP
|
|
Actual
|
|
Adjusted
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
North America
|
|
|
$
2,327
|
|
$
2,327
|
|
$
2,246
|
|
$
2,246
|
|
$
6,630
|
|
$
6,630
|
|
$
6,355
|
|
$
6,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
|
|
922
|
|
922
|
|
926
|
|
926
|
|
2,707
|
|
2,707
|
|
2,748
|
|
2,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
Asia Pacific
|
|
|
691
|
|
691
|
|
681
|
|
681
|
|
1,932
|
|
1,932
|
|
1,864
|
|
1,864
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
Products
|
|
|
2,511
|
|
2,511
|
|
2,429
|
|
2,429
|
|
6,425
|
|
6,425
|
|
6,250
|
|
6,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
6,451
|
|
$
6,451
|
|
$
6,282
|
|
$
6,282
|
|
$ 17,694
|
|
$ 17,694
|
|
$ 17,217
|
|
$ 17,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
North America
|
|
|
$
300
|
|
$
310
|
|
$
314
|
|
$
318
|
|
$
807
|
|
$
822
|
|
$
780
|
|
$
798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
|
|
101
|
|
103
|
|
96
|
|
98
|
|
258
|
|
261
|
|
242
|
|
247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
Asia Pacific
|
|
|
98
|
|
98
|
|
97
|
|
97
|
|
240
|
|
240
|
|
242
|
|
242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
Products
|
|
|
333
|
|
481
|
|
435
|
|
441
|
|
774
|
|
930
|
|
949
|
|
856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA
|
|
|
832
|
|
992
|
|
942
|
|
954
|
|
2,079
|
|
2,253
|
|
2,213
|
|
2,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses
(2)
|
|
|
70
|
|
(90)
|
|
(142)
|
|
(103)
|
|
(233)
|
|
(287)
|
|
(442)
|
|
(321)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
|
|
(93)
|
|
(93)
|
|
(98)
|
|
(98)
|
|
(288)
|
|
(288)
|
|
(282)
|
|
(282)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net mark-to-market
adjustments (3)
|
|
|
9
|
|
-
|
|
-
|
|
-
|
|
8
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
impairment costs (4)
|
|
|
(235)
|
|
-
|
|
-
|
|
-
|
|
(235)
|
|
-
|
|
(154)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (5)
|
|
|
583
|
|
809
|
|
702
|
|
753
|
|
1,331
|
|
1,678
|
|
1,335
|
|
1,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT margin
|
|
|
9.0%
|
|
12.5%
|
|
11.2%
|
|
12.0%
|
|
7.5%
|
|
9.5%
|
|
7.8%
|
|
8.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financing charges
(6)
|
|
|
(119)
|
|
(59)
|
|
(95)
|
|
(95)
|
|
(302)
|
|
(242)
|
|
(304)
|
|
(304)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
|
464
|
|
750
|
|
607
|
|
658
|
|
1,029
|
|
1,436
|
|
1,031
|
|
1,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
(7)
|
|
|
(239)
|
|
(101)
|
|
(61)
|
|
(80)
|
|
(394)
|
|
(194)
|
|
(314)
|
|
(150)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
|
225
|
|
649
|
|
546
|
|
578
|
|
635
|
|
1,242
|
|
717
|
|
1,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
noncontrolling
interests
|
|
|
(84)
|
|
(84)
|
|
(72)
|
|
(72)
|
|
(147)
|
|
(147)
|
|
(134)
|
|
(134)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to JCI
|
|
$
141
|
|
$
565
|
|
$
474
|
|
$
506
|
|
$
488
|
|
$
1,095
|
|
$
583
|
|
$
952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company's
press release contains financial information regarding adjusted
segment EBITA and adjusted segment EBITA margins, which are
non-GAAP performance measures. The Company's definition of adjusted
segment EBITA excludes special items because these costs are not
considered to be directly related to the underlying operating
performance of its businesses. Management believes these non-GAAP
measures are useful to investors in understanding the ongoing
operations and business trends of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is the
three months ended June 30, 2019 and 2018 reconciliation of segment
EBITA and segment EBITA margin as reported to adjusted segment
EBITA and adjusted segment EBITA margin (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Building
Solutions
North America
|
|
Building
Solutions
EMEA/LA
|
|
Building
Solutions
Asia Pacific
|
|
Global
Products
|
|
Consolidated
JCI plc
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA as
reported
|
$
300
|
|
$
314
|
|
$
101
|
|
$
96
|
|
$
98
|
|
$
97
|
|
$
333
|
|
$
435
|
|
$
832
|
|
$
942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA margin
as reported
|
12.9%
|
|
14.0%
|
|
11.0%
|
|
10.4%
|
|
14.2%
|
|
14.2%
|
|
13.3%
|
|
17.9%
|
|
12.9%
|
|
15.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integration
costs
|
10
|
|
4
|
|
2
|
|
2
|
|
-
|
|
-
|
|
8
|
|
6
|
|
20
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental
reserve (8)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
140
|
|
-
|
|
140
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA
|
$
310
|
|
$
318
|
|
$
103
|
|
$
98
|
|
$
98
|
|
$
97
|
|
$
481
|
|
$
441
|
|
$
992
|
|
$
954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA margin
|
13.3%
|
|
14.2%
|
|
11.2%
|
|
10.6%
|
|
14.2%
|
|
14.2%
|
|
19.2%
|
|
18.2%
|
|
15.4%
|
|
15.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is the
nine months ended June 30, 2019 and 2018 reconciliation of segment
EBITA and segment EBITA margin as reported to adjusted segment
EBITA and adjusted segment EBITA margin (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Building
Solutions
North America
|
|
Building
Solutions
EMEA/LA
|
|
Building
Solutions
Asia Pacific
|
|
Global
Products
|
|
Consolidated
JCI plc
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA as
reported
|
$
807
|
|
$
780
|
|
$
258
|
|
$
242
|
|
$
240
|
|
$
242
|
|
$
774
|
|
$
949
|
|
$
2,079
|
|
$
2,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA margin
as reported
|
12.2%
|
|
12.3%
|
|
9.5%
|
|
8.8%
|
|
12.4%
|
|
13.0%
|
|
12.0%
|
|
15.2%
|
|
11.7%
|
|
12.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integration
costs
|
15
|
|
18
|
|
3
|
|
5
|
|
-
|
|
-
|
|
16
|
|
21
|
|
34
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Safety
gain on sale
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(114)
|
|
-
|
|
(114)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental
reserve (8)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
140
|
|
-
|
|
140
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA
|
$
822
|
|
$
798
|
|
$
261
|
|
$
247
|
|
$
240
|
|
$
242
|
|
$
930
|
|
$
856
|
|
$
2,253
|
|
$
2,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA margin
|
12.4%
|
|
12.6%
|
|
9.6%
|
|
9.0%
|
|
12.4%
|
|
13.0%
|
|
14.5%
|
|
13.7%
|
|
12.7%
|
|
12.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Adjusted
Corporate expenses for the three months ended June 30, 2019
excludes $226 million of income as a result of a tax
indemnification reserve release, partially offset by $63 million of
integration costs and $3 million of transaction costs. Adjusted
Corporate expenses for the nine months ended June 30, 2019 excludes
$226 million of income as a result of a tax indemnification reserve
release, $165 million of integration costs and $7 million of
transaction costs. Adjusted Corporate expenses for the three months
ended June 30, 2018 excludes $37 million of integration costs and
$2 million of transaction costs. Adjusted Corporate expenses
for the nine months ended June 30, 2018 excludes $111 million of
integration costs and $10 million of transaction costs.
|
|
|
|
(3) On October 1,
2018, the Company adopted Accounting Standards Update (ASU) No.
2016-01, "Financial Instruments - Overall (Subtopic 825-10):
Recognition and Measurement of Financial Assets and Financial
Liabilities." ASU No. 2016-01 amends certain aspects of
recognition, measurement, presentation and disclosure of financial
instruments, including marketable securities. The new standard
requires the mark-to-market of marketable securities investments
previously recorded within accumulated other comprehensive income
on the statement of financial position be recorded in the statement
of income on a prospective basis beginning as of the adoption date.
The three months ended June 30, 2019 exclude the net mark-to-market
adjustments on restricted investments of $9 million. The nine
months ended June 30, 2019 exclude the net mark-to-market
adjustments on restricted investments of $8 million. As these
restricted investments do not relate to the underlying operating
performance of its businesses, the Company's definition of adjusted
segment EBITA and adjusted EBIT excludes the mark-to-market
adjustments effective October 1, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Restructuring and
impairment costs for the three and nine months ended June 30, 2019
of $235 million are excluded from the adjusted non-GAAP results.
Restructuring and impairment costs for the nine months ended June
30, 2018 of $154 million are excluded from the adjusted non-GAAP
results. The restructuring actions and impairment costs for the
three and nine months ended June 30, 2019 result from the
impairment of a Global Products business classified as held for
sale. The restructuring and impairment costs for the nine
months ended June 30, 2018 are related primarily to related
primarily to workforce reductions, plant closures and asset
impairments in the Building Technologies & Solutions business
and at Corporate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Management
defines earnings before interest and taxes (EBIT) as income from
continuing operations before net financing charges, income taxes
and noncontrolling interests.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) Adjusted net
financing charges for the three and nine months ended June 30, 2019
exclude a loss on debt extinguishment of $60 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) Adjusted income
tax provision for the three months ended June 30, 2019 excludes tax
provisions primarily related to new U.S. tax regulations of $226
million and net mark-to-market adjustments of $2 million, partially
offset by the tax benefits related to restructuring and impairment
charges of $53 million, an environmental reserve of $28 million and
integration costs of $9 million. Adjusted income tax
provision for the nine months ended June 30, 2019 excludes tax
provisions primarily related to new U.S. tax regulations of $226
million, valuation allowance adjustments of $76 million as a result
of changes in U.S. tax law and net mark-to-market adjustments of $2
million, partially offset by the tax benefits related to
restructuring and impairment charges of $53 million, an
environmental reserve of $28 million, integration costs of $22
million and transaction costs of $1 million. Adjusted income
tax provision for the three months ended June 30, 2018 excludes the
tax benefits of the impact of the third quarter fiscal 2018
effective tax rate change of $13 million and integration costs of
$6 million. Adjusted income tax provision for the nine months
ended June 30, 2018 excludes the net tax provision related to the
U.S. Tax Reform legislation of $204 million and the Scott Safety
gain on sale of $30 million, partially offset by the tax benefits
for tax audit settlements of $25 million, restructuring and
impairment costs of $23 million, integration costs of $21 million
and transaction costs of $1 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8) An environmental
charge for the three and nine months ended June 30, 2019 of $140
million is excluded from the adjusted non-GAAP results. The
$140 million is related to remediation efforts to be undertaken to
address contamination at our facilities in Marinette,
Wisconsin. A substantial portion of the reserve relates to
the remediation of fire-fighting foams containing PFAS compounds at
or near our Fire Technology Center in Marinette.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
Diluted Earnings Per Share Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's press
release contains financial information regarding adjusted earnings
per share, which is a non-GAAP performance measure. The adjusting
items include transaction/integration costs, gain on sale of the
Scott Safety business, net mark-to-market adjustments,
restructuring and impairment costs, tax indemnification reserve
release, environmental reserve, loss on extinguishment of debt,
gain on sale of Power Solutions business, net of transaction and
other costs, impact of ceasing the depreciation / amortization
expense for the Power Solutions business as the business is held
for sale and discrete tax items. The Company excludes these items
because they are not considered to be directly related to the
underlying operating performance of the Company. Management
believes these non-GAAP measures are useful to investors in
understanding the ongoing operations and business trends of the
Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of
diluted earnings per share as reported to adjusted diluted earnings
per share for the respective periods is shown below
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable
to JCI plc
|
|
Net Income
Attributable
to JCI plc from
Continuing Operations
|
|
Net Income
Attributable
to JCI plc
|
|
Net Income
Attributable
to JCI plc
from
Continuing
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share as
reported for JCI plc
|
$
4.79
|
|
$
0.78
|
|
$
0.16
|
|
$
0.51
|
|
$
5.61
|
|
$
1.49
|
|
$
0.54
|
|
$
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction
costs
|
-
|
|
-
|
|
-
|
|
-
|
|
0.01
|
|
0.01
|
|
0.01
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integration
costs
|
0.09
|
|
0.05
|
|
0.09
|
|
0.05
|
|
0.22
|
|
0.17
|
|
0.22
|
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
(0.01)
|
|
(0.01)
|
|
(0.01)
|
|
(0.01)
|
|
(0.02)
|
|
(0.02)
|
|
(0.02)
|
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Safety
gain on sale
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(0.12)
|
|
-
|
|
(0.12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
0.03
|
|
-
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
mark-to-market adjustments
|
(0.01)
|
|
-
|
|
(0.01)
|
|
-
|
|
(0.01)
|
|
-
|
|
(0.01)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
and impairment costs
|
0.27
|
|
-
|
|
0.27
|
|
-
|
|
0.26
|
|
0.17
|
|
0.26
|
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
(0.06)
|
|
-
|
|
(0.06)
|
|
-
|
|
(0.06)
|
|
(0.03)
|
|
(0.06)
|
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
indemnification reserve release
|
(0.26)
|
|
-
|
|
(0.26)
|
|
-
|
|
(0.25)
|
|
-
|
|
(0.25)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental
reserve
|
0.16
|
|
-
|
|
0.16
|
|
-
|
|
0.16
|
|
-
|
|
0.16
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
(0.03)
|
|
-
|
|
(0.03)
|
|
-
|
|
(0.03)
|
|
-
|
|
(0.03)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt
|
0.07
|
|
-
|
|
0.07
|
|
-
|
|
0.07
|
|
-
|
|
0.07
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Solutions gain on
sale, net of transaction and other costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6.00)
|
|
-
|
|
-
|
|
-
|
|
(5.77)
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
1.43
|
|
-
|
|
-
|
|
-
|
|
1.39
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cease of Power
Solutions depreciation / amortization expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.02)
|
|
-
|
|
-
|
|
-
|
|
(0.13)
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
0.01
|
|
-
|
|
-
|
|
-
|
|
0.03
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discrete tax
items
|
0.26
|
|
(0.01)
|
|
0.26
|
|
(0.01)
|
|
0.42
|
|
0.19
|
|
0.33
|
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share for JCI plc*
|
$
0.69
|
|
$
0.81
|
|
$
0.65
|
|
$
0.54
|
|
$
1.89
|
|
$
1.89
|
|
$
1.21
|
|
$
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* May not sum due to
rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
reconciles the denominators used to calculate basic and diluted
earnings per share for JCI plc (in millions;
unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding for JCI plc
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
870.9
|
|
925.6
|
|
898.4
|
|
926.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options,
unvested restricted stock and unvested performance share
awards
|
4.3
|
|
5.1
|
|
3.8
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
875.2
|
|
930.7
|
|
902.2
|
|
932.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has
presented forward-looking statements regarding adjusted EPS from
continuing operations, organic net sales growth, organic adjusted
EBITA growth, organic adjusted EBIT growth, adjusted segment EBITA
margin, adjusted EBIT margin and adjusted free cash flow conversion
for the full fiscal year of 2019, which are non-GAAP financial
measures. These non-GAAP financial measures are derived by
excluding certain amounts, expenses, income or cash flows from the
corresponding financial measures determined in accordance with
GAAP. The determination of the amounts that are excluded from these
non-GAAP financial measures are a matter of management judgment and
depends upon, among other factors, the nature of the underlying
expense or income amounts recognized in a given period, including
but not limited to the high variability of the net mark-to-market
adjustments and the effect of foreign currency exchange
fluctuations. Our fiscal 2019 outlook for organic net sales and
adjusted EBITA and EBIT growth also excludes the effect of
acquisitions, divestitures and foreign currency. We are unable to
present a quantitative reconciliation of the aforementioned
forward-looking non-GAAP financial measures to their most directly
comparable forward-looking GAAP financial measures because such
information is not available and management cannot reliably predict
all of the necessary components of such GAAP measures without
unreasonable effort or expense. The unavailable information could
have a significant impact on the Company's full year 2019 GAAP
financial results.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
Organic Growth Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
changes in net sales for the three months ended June 30, 2019
versus the three months ended June 30, 2018, including organic
growth, is shown below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Net Sales for the
Three Months Ended
June 30, 2018
|
|
Base Year Adjustments
-
Acquisitions and Divestitures
|
|
Adjusted Base Net
Sales for the Three Months Ended
June 30, 2018
|
|
Foreign
Currency
|
|
Organic
Growth
|
|
Net Sales for the
Three Months Ended
June 30 , 2019
|
|
|
|
|
|
|
|
Building Solutions
North America
|
$
2,246
|
|
$
-
|
|
-
|
|
$
2,246
|
|
$
(7)
|
|
-
|
|
$
88
|
|
4%
|
|
$
2,327
|
|
4%
|
|
|
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
926
|
|
(1)
|
|
-
|
|
925
|
|
(54)
|
|
-6%
|
|
51
|
|
6%
|
|
922
|
|
0%
|
|
|
|
|
|
|
|
|
|
Building Solutions
Asia Pacific
|
681
|
|
1
|
|
-
|
|
682
|
|
(31)
|
|
-5%
|
|
40
|
|
6%
|
|
691
|
|
1%
|
|
|
|
|
|
|
|
|
|
Total field
|
3,853
|
|
-
|
|
-
|
|
3,853
|
|
(92)
|
|
-2%
|
|
179
|
|
5%
|
|
3,940
|
|
2%
|
|
|
|
|
|
|
|
|
|
Global
Products
|
2,429
|
|
(39)
|
|
-2%
|
|
2,390
|
|
(49)
|
|
-2%
|
|
170
|
|
7%
|
|
2,511
|
|
5%
|
|
|
|
|
|
|
|
|
|
Total net sales
|
$
6,282
|
|
$
(39)
|
|
-1%
|
|
$
6,243
|
|
$
(141)
|
|
-2%
|
|
$
349
|
|
6%
|
|
$
6,451
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
changes in net sales for the nine months ended June 30, 2019 versus
the nine months ended June 30, 2018, including organic growth, is
shown below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Net Sales for the
Nine Months Ended
June 30, 2018
|
|
Base Year Adjustments
-
Acquisitions and Divestitures
|
|
Adjusted Base Net
Sales for the
Nine Months Ended
June 30, 2018
|
|
Foreign
Currency
|
|
Organic
Growth
|
|
Net Sales for the
Nine Months Ended
June 30, 2019
|
|
|
|
|
|
|
|
Building Solutions
North America
|
$
6,355
|
|
$
-
|
|
-
|
|
$
6,355
|
|
$
(25)
|
|
-
|
|
$
300
|
|
5%
|
|
$
6,630
|
|
4%
|
|
|
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
2,748
|
|
1
|
|
-
|
|
2,749
|
|
(166)
|
|
-6%
|
|
124
|
|
5%
|
|
2,707
|
|
-2%
|
|
|
|
|
|
|
|
|
|
Building Solutions
Asia Pacific
|
1,864
|
|
1
|
|
-
|
|
1,865
|
|
(75)
|
|
-4%
|
|
142
|
|
8%
|
|
1,932
|
|
4%
|
|
|
|
|
|
|
|
|
|
Total field
|
10,967
|
|
2
|
|
-
|
|
10,969
|
|
(266)
|
|
-2%
|
|
566
|
|
5%
|
|
11,269
|
|
3%
|
|
|
|
|
|
|
|
|
|
Global
Products
|
6,250
|
|
(126)
|
|
-2%
|
|
6,124
|
|
(140)
|
|
-2%
|
|
441
|
|
7%
|
|
6,425
|
|
5%
|
|
|
|
|
|
|
|
|
|
Total net sales
|
$
17,217
|
|
$
(124)
|
|
-1%
|
|
$
17,093
|
|
$
(406)
|
|
-2%
|
|
$
1,007
|
|
6%
|
|
$17,694
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
changes in segment EBITA and EBIT for the three months ended June
30, 2019 versus the three months ended June 30, 2018, including
organic growth, is shown below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Adjusted Segment
EBITA / EBIT for the Three Months Ended
June 30, 2018
|
|
Base Year Adjustments
-
Acquisitions and Divestitures
|
|
Adjusted Base
Segment
EBITA / EBIT for the Three Months Ended
June 30, 2018
|
|
Foreign
Currency
|
|
Organic
Growth
|
|
Adjusted Segment
EBITA / EBIT for
the Three
Months Ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
Building Solutions
North America
|
$
318
|
|
$
-
|
|
-
|
|
$
318
|
|
$
-
|
|
-
|
|
$
(8)
|
|
-3%
|
|
$
310
|
|
-3%
|
|
|
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
98
|
|
-
|
|
-
|
|
98
|
|
(9)
|
|
-9%
|
|
14
|
|
14%
|
|
103
|
|
5%
|
|
|
|
|
|
|
|
|
|
Building Solutions
Asia Pacific
|
97
|
|
-
|
|
-
|
|
97
|
|
(3)
|
|
-3%
|
|
4
|
|
4%
|
|
98
|
|
1%
|
|
|
|
|
|
|
|
|
|
Total field
|
513
|
|
-
|
|
-
|
|
513
|
|
(12)
|
|
-2%
|
|
10
|
|
2%
|
|
511
|
|
0%
|
|
|
|
|
|
|
|
|
|
Global
Products
|
441
|
|
(4)
|
|
-1%
|
|
437
|
|
(9)
|
|
-2%
|
|
53
|
|
12%
|
|
481
|
|
10%
|
|
|
|
|
|
|
|
|
|
Total adjusted segment EBITA
|
954
|
|
(4)
|
|
-
|
|
950
|
|
$
(21)
|
|
-2%
|
|
$
63
|
|
7%
|
|
992
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
expenses
|
(103)
|
|
-
|
|
|
|
(103)
|
|
|
|
|
|
|
|
|
|
(90)
|
|
13%
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
(98)
|
|
-
|
|
|
|
(98)
|
|
|
|
|
|
|
|
|
|
(93)
|
|
5%
|
|
|
|
|
|
|
|
|
|
Total adjusted EBIT
|
$
753
|
|
$
(4)
|
|
|
|
$
749
|
|
|
|
|
|
|
|
|
|
$
809
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
changes in segment EBITA and EBIT for the nine months ended June
30, 2019 versus the nine months ended June 30, 2018, including
organic growth, is shown below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Adjusted Segment
EBITA / EBIT for the Nine Months Ended
June 30, 2018
|
|
Base Year Adjustments
-
Acquisitions and Divestitures
|
|
Adjusted Base
Segment
EBITA / EBIT for the Nine Months Ended
June 30, 2018
|
|
Foreign
Currency
|
|
Organic
Growth
|
|
Adjusted Segment
EBITA / EBIT for
the Nine Months Ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
Building Solutions
North America
|
$
798
|
|
$
-
|
|
-
|
|
$
798
|
|
$
(2)
|
|
-
|
|
$
26
|
|
3%
|
|
$
822
|
|
3%
|
|
|
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
247
|
|
1
|
|
-
|
|
248
|
|
(26)
|
|
-10%
|
|
39
|
|
16%
|
|
261
|
|
5%
|
|
|
|
|
|
|
|
|
|
Building Solutions
Asia Pacific
|
242
|
|
-
|
|
-
|
|
242
|
|
(7)
|
|
-3%
|
|
5
|
|
2%
|
|
240
|
|
-1%
|
|
|
|
|
|
|
|
|
|
Total field
|
1,287
|
|
1
|
|
-
|
|
1,288
|
|
(35)
|
|
-3%
|
|
70
|
|
5%
|
|
1,323
|
|
3%
|
|
|
|
|
|
|
|
|
|
Global
Products
|
856
|
|
(16)
|
|
-2%
|
|
840
|
|
(19)
|
|
-2%
|
|
109
|
|
13%
|
|
930
|
|
11%
|
|
|
|
|
|
|
|
|
|
Total adjusted segment EBITA
|
2,143
|
|
(15)
|
|
-1%
|
|
2,128
|
|
$
(54)
|
|
-3%
|
|
$
179
|
|
8%
|
|
2,253
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
expenses
|
(321)
|
|
-
|
|
|
|
(321)
|
|
|
|
|
|
|
|
|
|
(287)
|
|
11%
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
(282)
|
|
2
|
|
|
|
(280)
|
|
|
|
|
|
|
|
|
|
(288)
|
|
-3%
|
|
|
|
|
|
|
|
|
|
Total adjusted EBIT
|
$
1,540
|
|
$
(13)
|
|
|
|
$
1,527
|
|
|
|
|
|
|
|
|
|
$
1,678
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
Adjusted Free Cash Flow Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's press
release contains financial information regarding free cash flow,
adjusted free cash flow and adjusted free cash flow conversion,
which are non-GAAP performance measures. Free cash flow is defined
as cash provided by operating activities less capital expenditures.
Adjusted free cash flow excludes special items, as included in the
table below, because these cash flows are not considered to be
directly related to its underlying businesses. Adjusted free cash
flow conversion is defined as adjusted free cash flow divided by
adjusted net income. Management believes these non-GAAP measures
are useful to investors in understanding the strength of the
Company and its ability to generate cash.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is the
three months and nine months ended June 30, 2019 and 2018
reconciliation of free cash flow, adjusted free cash flow and
adjusted free cash flow conversion for continuing operations
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
billions)
|
Three Months
Ended
June 30,
2019
|
|
Three Months
Ended
June 30, 2018
|
|
Nine Months
Ended
June 30,
2019
|
|
Nine Months
Ended
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities from continuing operations
|
$
0.6
|
|
$
0.6
|
|
$
0.7
|
|
$
0.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(0.1)
|
|
(0.2)
|
|
(0.4)
|
|
(0.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported free cash
flow
|
0.5
|
|
0.4
|
|
0.3
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction/integration costs
|
0.1
|
|
0.1
|
|
0.2
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
payments
|
-
|
|
-
|
|
0.1
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring
tax payments, net of refunds
|
-
|
|
-
|
|
-
|
|
(0.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
adjusting items
|
0.1
|
|
0.1
|
|
0.3
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow
|
$
0.6
|
|
$
0.5
|
|
$
0.6
|
|
$
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
from continuing operations attributable to JCI
|
$
0.6
|
|
$
0.5
|
|
$
1.1
|
|
$
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow conversion
|
|
|
100%
|
|
|
|
100%
|
|
|
|
55%
|
|
|
|
50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Net
Debt to Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company provides
financial information regarding net debt as a percentage of total
capitalization, which is a non-GAAP performance measure. The
Company believes the percentage of total net debt to total
capitalization is useful to understanding the Company's financial
condition as it provides a review of the extent to which the
Company relies on external debt financing for its funding and is a
measure of risk to its shareholders. The following is the June 30,
2019 and September 30, 2018 calculation of net debt as a percentage
of total capitalization (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
June 30,
2019
|
|
September 30,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
521
|
|
$
1,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
6,804
|
|
9,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
7,325
|
|
10,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: cash and cash
equivalents
|
3,685
|
|
185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net
debt
|
3,640
|
|
10,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
attributable to JCI
|
20,363
|
|
21,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
capitalization
|
$
24,003
|
|
$
31,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net debt as a %
of total capitalization
|
15.2%
|
|
33.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
Divestitures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On November 13, 2018,
the Company entered into a definitive agreement to sell its Power
Solutions business to BCP Acquisitions LLC for approximately $13.2
billion. BCP Acquisitions LLC is a newly-formed entity controlled
by investment funds managed by Brookfield Capital Partners LLC. The
transaction closed on April 30, 2019 with net cash proceeds of
$11.6 billion after tax and transaction-related expenses, and the
Company recorded a gain, net of transaction and other costs, of
$5.2 billion ($4.0 billion after tax).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On March 16, 2017,
the Company announced that it signed a definitive agreement to sell
its Scott Safety business to 3M for approximately $2.0
billion. The transaction closed on October 4, 2017. Net cash
proceeds from the transaction approximated $1.9 billion and the
Company recorded a net gain of $114 million ($84 million after
tax). Scott Safety is a leader in the design, manufacture and sale
of high performance respiratory protection, gas and flame
detection, thermal imaging and other critical products for fire
services, law enforcement, industrial, oil and gas, chemical, armed
forces, and homeland defense end markets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.
Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's
effective tax rate from continuing operations before consideration
of transaction/integration costs, gain on sale of the Scott Safety
business, net mark-to-market adjustments, environmental reserve,
tax indemnification reserve release, restructuring and impairment
costs, loss on extinguishment of debt, and discrete tax items for
the three and nine months ending June 30, 2019 is 13.5%, and for
the three and nine months ending June 30, 2018 is approximately
12.2% and 12.1%, respectively.
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8.
Restructuring and Impairment Costs
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The three and nine
months ended June 30,2019 include restructuring and impairment
costs of $235 million related to the impairment of a Global
Products business classified as held for sale. The nine months
ended June 30, 2018 include restructuring and impairment costs of
$154 million related primarily to workforce reductions, plant
closures and asset impairments in the Building Technologies &
Solutions business and at Corporate.
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View original
content:http://www.prnewswire.com/news-releases/johnson-controls-reports-strong-organic-revenue-and-earnings-growth-in-fiscal-q3-tightens-fiscal-2019-eps-guidance-to-high-end-of-previous-range-300893751.html
SOURCE Johnson Controls