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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Ireland
|
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98-0390500
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(Jurisdiction of Incorporation)
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(I.R.S. Employer Identification No.)
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One Albert Quay
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Cork, Ireland
|
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(Address of principal executive offices)
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Class
|
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Ordinary Shares Outstanding at December 31, 2017
|
Ordinary Shares, $0.01 par value per share
|
|
926,105,380
|
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Page
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Part I. Financial Information
|
|
|
|
Item 1. Financial Statements (unaudited)
|
|
|
|
Consolidated Statements of Financial Position at December 31, 2017 and September 30, 2017
|
|
|
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Consolidated Statements of Income for the Three Month Periods Ended December 31, 2017 and 2016
|
|
|
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Consolidated Statements of Comprehensive Income (Loss) for the Three Month Periods Ended December 31, 2017 and 2016
|
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|
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Consolidated Statements of Cash Flows for the Three Month Periods Ended December 31, 2017 and 2016
|
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Notes to Consolidated Financial Statements
|
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|
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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Item 4. Controls and Procedures
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Part II. Other Information
|
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|
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Item 1. Legal Proceedings
|
|
|
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Item 1A. Risk Factors
|
|
|
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
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|
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Item 6. Exhibits
|
|
|
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Signatures
|
Johnson Controls International plc
Consolidated Statements of Financial Position
(in millions, except par value; unaudited)
|
|||||||
|
|
|
|
||||
|
December 31, 2017
|
|
September 30, 2017
|
||||
Assets
|
|
|
|
||||
|
|
|
|
||||
Cash and cash equivalents
|
$
|
552
|
|
|
$
|
321
|
|
Accounts receivable - net
|
6,731
|
|
|
6,666
|
|
||
Inventories
|
3,459
|
|
|
3,209
|
|
||
Assets held for sale
|
40
|
|
|
189
|
|
||
Other current assets
|
1,647
|
|
|
1,907
|
|
||
Current assets
|
12,429
|
|
|
12,292
|
|
||
|
|
|
|
||||
Property, plant and equipment - net
|
6,105
|
|
|
6,121
|
|
||
Goodwill
|
19,717
|
|
|
19,688
|
|
||
Other intangible assets - net
|
6,657
|
|
|
6,741
|
|
||
Investments in partially-owned affiliates
|
1,219
|
|
|
1,191
|
|
||
Noncurrent assets held for sale
|
—
|
|
|
1,920
|
|
||
Other noncurrent assets
|
3,640
|
|
|
3,931
|
|
||
Total assets
|
$
|
49,767
|
|
|
$
|
51,884
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
|
|
|
|
||||
Short-term debt
|
$
|
1,514
|
|
|
$
|
1,214
|
|
Current portion of long-term debt
|
91
|
|
|
394
|
|
||
Accounts payable
|
4,020
|
|
|
4,271
|
|
||
Accrued compensation and benefits
|
883
|
|
|
1,071
|
|
||
Deferred revenue
|
1,368
|
|
|
1,279
|
|
||
Liabilities held for sale
|
—
|
|
|
72
|
|
||
Other current liabilities
|
3,370
|
|
|
3,553
|
|
||
Current liabilities
|
11,246
|
|
|
11,854
|
|
||
|
|
|
|
||||
Long-term debt
|
10,895
|
|
|
11,964
|
|
||
Pension and postretirement benefits
|
896
|
|
|
947
|
|
||
Noncurrent liabilities held for sale
|
—
|
|
|
173
|
|
||
Other noncurrent liabilities
|
5,004
|
|
|
5,368
|
|
||
Long-term liabilities
|
16,795
|
|
|
18,452
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 21)
|
|
|
|
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interests
|
226
|
|
|
211
|
|
||
|
|
|
|
||||
Ordinary shares, $0.01 par value
|
9
|
|
|
9
|
|
||
Ordinary A shares, €1.00 par value
|
—
|
|
|
—
|
|
||
Preferred shares, $0.01 par value
|
—
|
|
|
—
|
|
||
Ordinary shares held in treasury, at cost
|
(885
|
)
|
|
(710
|
)
|
||
Capital in excess of par value
|
16,427
|
|
|
16,390
|
|
||
Retained earnings
|
5,398
|
|
|
5,231
|
|
||
Accumulated other comprehensive loss
|
(414
|
)
|
|
(473
|
)
|
||
Shareholders’ equity attributable to Johnson Controls
|
20,535
|
|
|
20,447
|
|
||
Noncontrolling interests
|
965
|
|
|
920
|
|
||
Total equity
|
21,500
|
|
|
21,367
|
|
||
Total liabilities and equity
|
$
|
49,767
|
|
|
$
|
51,884
|
|
Johnson Controls International plc
Consolidated Statements of Income
(in millions, except per share data; unaudited)
|
|||||||
|
|
|
|
||||
|
Three Months Ended
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Net sales
|
|
|
|
||||
Products and systems*
|
$
|
5,946
|
|
|
$
|
5,585
|
|
Services*
|
1,489
|
|
|
1,501
|
|
||
|
7,435
|
|
|
7,086
|
|
||
Cost of sales
|
|
|
|
||||
Products and systems*
|
4,449
|
|
|
4,063
|
|
||
Services*
|
817
|
|
|
909
|
|
||
|
5,266
|
|
|
4,972
|
|
||
|
|
|
|
||||
Gross profit
|
2,169
|
|
|
2,114
|
|
||
|
|
|
|
||||
Selling, general and administrative expenses
|
(1,417
|
)
|
|
(1,570
|
)
|
||
Restructuring and impairment costs
|
(158
|
)
|
|
(78
|
)
|
||
Net financing charges
|
(116
|
)
|
|
(136
|
)
|
||
Equity income
|
60
|
|
|
55
|
|
||
|
|
|
|
||||
Income from continuing operations before income taxes
|
538
|
|
|
385
|
|
||
|
|
|
|
||||
Income tax provision (benefit)
|
267
|
|
|
(27
|
)
|
||
|
|
|
|
||||
Income from continuing operations
|
271
|
|
|
412
|
|
||
|
|
|
|
||||
Loss from discontinued operations, net of tax (Note 4)
|
—
|
|
|
(34
|
)
|
||
|
|
|
|
||||
Net income
|
271
|
|
|
378
|
|
||
|
|
|
|
||||
Income from continuing operations attributable to noncontrolling interests
|
41
|
|
|
40
|
|
||
|
|
|
|
||||
Income from discontinued operations attributable to noncontrolling interests
|
—
|
|
|
9
|
|
||
|
|
|
|
||||
Net income attributable to Johnson Controls
|
$
|
230
|
|
|
$
|
329
|
|
|
|
|
|
||||
Amounts attributable to Johnson Controls ordinary shareholders:
|
|
|
|
||||
Income from continuing operations
|
$
|
230
|
|
|
$
|
372
|
|
Loss from discontinued operations
|
—
|
|
|
(43
|
)
|
||
Net income
|
$
|
230
|
|
|
$
|
329
|
|
|
|
|
|
||||
Basic earnings (loss) per share attributable to Johnson Controls
|
|
|
|
||||
Continuing operations
|
$
|
0.25
|
|
|
$
|
0.40
|
|
Discontinued operations
|
0.00
|
|
|
(0.05
|
)
|
||
Net income
|
$
|
0.25
|
|
|
$
|
0.35
|
|
|
|
|
|
||||
Diluted earnings (loss) per share attributable to Johnson Controls
|
|
|
|
||||
Continuing operations
|
$
|
0.25
|
|
|
$
|
0.39
|
|
Discontinued operations
|
0.00
|
|
|
(0.05
|
)
|
||
Net income **
|
$
|
0.25
|
|
|
$
|
0.35
|
|
*
|
Products and systems consist of Building Technologies & Solutions and Power Solutions products and systems. Services are Building Technologies & Solutions technical services.
|
**
|
Certain items do not sum due to rounding.
|
Johnson Controls International plc
Consolidated Statements of Comprehensive Income (Loss)
(in millions; unaudited)
|
|||||||
|
|
|
|
||||
|
Three Months Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net income
|
$
|
271
|
|
|
$
|
378
|
|
|
|
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
79
|
|
|
(703
|
)
|
||
Realized and unrealized gains (losses) on derivatives
|
(1
|
)
|
|
4
|
|
||
Realized and unrealized losses on marketable securities
|
—
|
|
|
(2
|
)
|
||
|
|
|
|
||||
Other comprehensive income (loss)
|
78
|
|
|
(701
|
)
|
||
|
|
|
|
||||
Total comprehensive income (loss)
|
349
|
|
|
(323
|
)
|
||
|
|
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
60
|
|
|
9
|
|
||
|
|
|
|
||||
Comprehensive income (loss) attributable to Johnson Controls
|
$
|
289
|
|
|
$
|
(332
|
)
|
|
Three Months Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Operating Activities
|
|
|
|
||||
Net income attributable to Johnson Controls
|
$
|
230
|
|
|
$
|
329
|
|
Income from continuing operations attributable to noncontrolling interests
|
41
|
|
|
40
|
|
||
Income from discontinued operations attributable to noncontrolling interests
|
—
|
|
|
9
|
|
||
Net income
|
271
|
|
|
378
|
|
||
Adjustments to reconcile net income to cash used by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
272
|
|
|
346
|
|
||
Pension and postretirement benefit income
|
(36
|
)
|
|
(155
|
)
|
||
Pension and postretirement contributions
|
(24
|
)
|
|
(247
|
)
|
||
Equity in earnings of partially-owned affiliates, net of dividends received
|
(36
|
)
|
|
(64
|
)
|
||
Deferred income taxes
|
(79
|
)
|
|
580
|
|
||
Non-cash restructuring and impairment charges
|
30
|
|
|
16
|
|
||
Gain on divestitures
|
(114
|
)
|
|
—
|
|
||
Equity-based compensation
|
30
|
|
|
37
|
|
||
Other
|
(13
|
)
|
|
—
|
|
||
Changes in assets and liabilities, excluding acquisitions and divestitures:
|
|
|
|
||||
Accounts receivable
|
(30
|
)
|
|
37
|
|
||
Inventories
|
(233
|
)
|
|
(142
|
)
|
||
Other assets
|
64
|
|
|
(87
|
)
|
||
Restructuring reserves
|
93
|
|
|
20
|
|
||
Accounts payable and accrued liabilities
|
(623
|
)
|
|
(796
|
)
|
||
Accrued income taxes
|
299
|
|
|
(1,808
|
)
|
||
Cash used by operating activities
|
(129
|
)
|
|
(1,885
|
)
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(230
|
)
|
|
(371
|
)
|
||
Sale of property, plant and equipment
|
5
|
|
|
2
|
|
||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(3
|
)
|
||
Business divestitures
|
2,011
|
|
|
47
|
|
||
Changes in long-term investments
|
(12
|
)
|
|
(6
|
)
|
||
Cash provided (used) by investing activities
|
1,774
|
|
|
(331
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
||||
Increase in short-term debt - net
|
304
|
|
|
1,312
|
|
||
Increase in long-term debt
|
885
|
|
|
7
|
|
||
Repayment of long-term debt
|
(2,234
|
)
|
|
(763
|
)
|
||
Debt financing costs
|
(4
|
)
|
|
(6
|
)
|
||
Stock repurchases
|
(150
|
)
|
|
—
|
|
||
Payment of cash dividends
|
(232
|
)
|
|
—
|
|
||
Proceeds from the exercise of stock options
|
16
|
|
|
29
|
|
||
Employee equity-based compensation withholding taxes
|
(25
|
)
|
|
(25
|
)
|
||
Dividends paid to noncontrolling interests
|
—
|
|
|
(31
|
)
|
||
Dividend from Adient spin-off
|
—
|
|
|
2,050
|
|
||
Cash transferred to Adient related to spin-off
|
—
|
|
|
(564
|
)
|
||
Cash paid related to prior acquisitions
|
—
|
|
|
(45
|
)
|
||
Cash provided (used) by financing activities
|
(1,440
|
)
|
|
1,964
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
17
|
|
|
(55
|
)
|
||
Change in cash held for sale
|
9
|
|
|
105
|
|
||
Increase (decrease) in cash and cash equivalents
|
231
|
|
|
(202
|
)
|
||
Cash and cash equivalents at beginning of period
|
321
|
|
|
579
|
|
||
Cash and cash equivalents at end of period
|
$
|
552
|
|
|
$
|
377
|
|
1.
|
Financial Statements
|
|
|
September 30,
2017
|
||
|
|
|
||
Current assets
|
|
$
|
2
|
|
Noncurrent assets
|
|
53
|
|
|
Total assets
|
|
$
|
55
|
|
|
|
|
||
Current liabilities
|
|
$
|
6
|
|
Noncurrent liabilities
|
|
42
|
|
|
Total liabilities
|
|
$
|
48
|
|
2.
|
New Accounting Standards
|
3.
|
Acquisitions and Divestitures
|
4.
|
Discontinued Operations
|
|
Three Months Ended December 31,
|
||
|
2016
|
||
|
|
||
Net sales
|
$
|
1,434
|
|
|
|
||
Income from discontinued operations before income taxes
|
1
|
|
|
Provision for income taxes on discontinued operations
|
35
|
|
|
Income from discontinued operations attributable to noncontrolling interests, net of tax
|
9
|
|
|
Loss from discontinued operations
|
$
|
(43
|
)
|
|
Three Months Ended December 31,
|
||
|
2016
|
||
|
|
||
Depreciation and amortization
|
$
|
29
|
|
Equity in earnings of partially-owned affiliates
|
(31
|
)
|
|
Deferred income taxes
|
562
|
|
|
Equity-based compensation
|
1
|
|
|
Accrued income taxes
|
(808
|
)
|
|
Capital expenditures
|
(91
|
)
|
|
September 30, 2017
|
||
|
|
||
Cash
|
$
|
9
|
|
Accounts receivable - net
|
100
|
|
|
Inventories
|
75
|
|
|
Other current assets
|
5
|
|
|
Assets held for sale
|
$
|
189
|
|
|
|
||
Property, plant and equipment - net
|
$
|
79
|
|
Goodwill
|
1,248
|
|
|
Other intangible assets - net
|
592
|
|
|
Other noncurrent assets
|
1
|
|
|
Noncurrent assets held for sale
|
$
|
1,920
|
|
|
|
||
Accounts payable
|
$
|
37
|
|
Accrued compensation and benefits
|
10
|
|
|
Other current liabilities
|
25
|
|
|
Liabilities held for sale
|
$
|
72
|
|
|
|
||
Other noncurrent liabilities
|
$
|
173
|
|
Noncurrent liabilities held for sale
|
$
|
173
|
|
5.
|
Percentage-of-Completion Contracts
|
6.
|
Inventories
|
|
December 31, 2017
|
|
September 30, 2017
|
||||
|
|
|
|
||||
Raw materials and supplies
|
$
|
1,006
|
|
|
$
|
919
|
|
Work-in-process
|
543
|
|
|
567
|
|
||
Finished goods
|
1,910
|
|
|
1,723
|
|
||
Inventories
|
$
|
3,459
|
|
|
$
|
3,209
|
|
7.
|
Goodwill and Other Intangible Assets
|
|
December 31, 2017
|
|
September 30, 2017
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Amortized intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Technology
|
$
|
1,343
|
|
|
$
|
(174
|
)
|
|
$
|
1,169
|
|
|
$
|
1,328
|
|
|
$
|
(137
|
)
|
|
$
|
1,191
|
|
Customer relationships
|
3,136
|
|
|
(503
|
)
|
|
2,633
|
|
|
3,168
|
|
|
(486
|
)
|
|
2,682
|
|
||||||
Miscellaneous
|
413
|
|
|
(167
|
)
|
|
246
|
|
|
389
|
|
|
(147
|
)
|
|
242
|
|
||||||
Total amortized intangible assets
|
4,892
|
|
|
(844
|
)
|
|
4,048
|
|
|
4,885
|
|
|
(770
|
)
|
|
4,115
|
|
||||||
Unamortized intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks/trade names
|
2,486
|
|
|
—
|
|
|
2,486
|
|
|
2,483
|
|
|
—
|
|
|
2,483
|
|
||||||
Miscellaneous
|
123
|
|
|
—
|
|
|
123
|
|
|
143
|
|
|
—
|
|
|
143
|
|
||||||
|
2,609
|
|
|
—
|
|
|
2,609
|
|
|
2,626
|
|
|
—
|
|
|
2,626
|
|
||||||
Total intangible assets
|
$
|
7,501
|
|
|
$
|
(844
|
)
|
|
$
|
6,657
|
|
|
$
|
7,511
|
|
|
$
|
(770
|
)
|
|
$
|
6,741
|
|
8.
|
Significant Restructuring and Impairment Costs
|
|
Employee Severance and Termination Benefits
|
|
Long-Lived Asset Impairments
|
|
Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Original reserve
|
$
|
125
|
|
|
$
|
30
|
|
|
$
|
3
|
|
|
$
|
158
|
|
Utilized—noncash
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
||||
Balance at December 31, 2017
|
$
|
125
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
128
|
|
|
Employee Severance and Termination Benefits
|
|
Long-Lived Asset Impairments
|
|
Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Original reserve
|
$
|
276
|
|
|
$
|
77
|
|
|
$
|
14
|
|
|
$
|
367
|
|
Utilized—cash
|
(75
|
)
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
||||
Utilized—noncash
|
—
|
|
|
(77
|
)
|
|
(1
|
)
|
|
(78
|
)
|
||||
Adjustment to restructuring reserves
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
Balance at September 30, 2017
|
$
|
226
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
239
|
|
Utilized—cash
|
(26
|
)
|
|
—
|
|
|
(2
|
)
|
|
(28
|
)
|
||||
Balance at December 31, 2017
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
211
|
|
|
Employee Severance and Termination Benefits
|
|
Long-Lived Asset Impairments
|
|
Other
|
|
Currency
Translation |
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Original reserve
|
$
|
368
|
|
|
$
|
190
|
|
|
$
|
62
|
|
|
$
|
—
|
|
|
$
|
620
|
|
Acquired Tyco restructuring
reserves
|
78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|||||
Utilized—cash
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|||||
Utilized—noncash
|
—
|
|
|
(190
|
)
|
|
(32
|
)
|
|
1
|
|
|
(221
|
)
|
|||||
Balance at September 30, 2016
|
$
|
414
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
1
|
|
|
$
|
445
|
|
Adient spin-off impact
|
(194
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
(216
|
)
|
|||||
Utilized—cash
|
(86
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(88
|
)
|
|||||
Utilized—noncash
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Adjustment to restructuring
reserves
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|||||
Transfer to liabilities held for sale
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Adjustment to acquired Tyco
restructuring reserves
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|||||
Balance at September 30, 2017
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
92
|
|
Utilized—cash
|
(5
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Balance at December 31, 2017
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
86
|
|
9.
|
Income Taxes
|
Tax Jurisdiction
|
|
Tax Years Covered
|
|
|
|
Belgium
|
|
2015 - 2016
|
Brazil
|
|
2011 - 2012
|
Canada
|
|
2013 - 2014
|
China
|
|
2008 - 2016
|
France
|
|
2010 - 2016
|
Germany
|
|
2007 - 2015
|
Japan
|
|
2016
|
Spain
|
|
2010 - 2014
|
Switzerland
|
|
2011 - 2014
|
United Kingdom
|
|
2011 - 2014
|
10.
|
Pension and Postretirement Plans
|
|
U.S. Pension Plans
|
||||||
|
Three Months Ended
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Service cost
|
$
|
4
|
|
|
$
|
5
|
|
Interest cost
|
26
|
|
|
28
|
|
||
Expected return on plan assets
|
(57
|
)
|
|
(59
|
)
|
||
Net actuarial gain
|
—
|
|
|
(117
|
)
|
||
Settlement gain
|
—
|
|
|
(8
|
)
|
||
Net periodic benefit credit
|
$
|
(27
|
)
|
|
$
|
(151
|
)
|
|
Non-U.S. Pension Plans
|
||||||
|
Three Months Ended
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Service cost
|
$
|
6
|
|
|
$
|
8
|
|
Interest cost
|
14
|
|
|
12
|
|
||
Expected return on plan assets
|
(29
|
)
|
|
(23
|
)
|
||
Net periodic benefit credit
|
$
|
(9
|
)
|
|
$
|
(3
|
)
|
|
Postretirement Benefits
|
||||||
|
Three Months Ended
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Service cost
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
2
|
|
|
1
|
|
||
Expected return on plan assets
|
(2
|
)
|
|
(3
|
)
|
||
Net periodic benefit credit
|
$
|
—
|
|
|
$
|
(1
|
)
|
11.
|
Debt and Financing Arrangements
|
|
Three Months Ended
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Interest expense, net of capitalized interest costs
|
$
|
114
|
|
|
$
|
110
|
|
Banking fees and bond cost amortization
|
13
|
|
|
30
|
|
||
Interest income
|
(9
|
)
|
|
(7
|
)
|
||
Net foreign exchange results for financing activities
|
(2
|
)
|
|
3
|
|
||
Net financing charges
|
$
|
116
|
|
|
$
|
136
|
|
12.
|
Stock-Based Compensation
|
|
Three Months Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
Number Granted
|
|
Weighted Average Grant Date Fair Value
|
|
Number Granted
|
|
Weighted Average Grant Date Fair Value
|
||||||
|
|
|
|
|
|
|
|
||||||
Stock options
|
1,355,595
|
|
|
$
|
7.05
|
|
|
2,830,826
|
|
|
$
|
7.81
|
|
Stock appreciation rights
|
—
|
|
|
—
|
|
|
15,693
|
|
|
8.28
|
|
||
Restricted stock/units
|
2,051,817
|
|
|
37.36
|
|
|
1,512,544
|
|
|
41.74
|
|
||
Performance shares
|
496,478
|
|
|
36.31
|
|
|
846,725
|
|
|
48.40
|
|
|
Three Months Ended
December 31, |
||
|
2017
|
|
2016
|
Risk-free interest rate
|
1.92%
|
|
1.40%
|
Expected volatility of the Company’s stock
|
21.7%
|
|
21.0%
|
13.
|
Earnings Per Share
|
|
Three Months Ended
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Income Available to Ordinary Shareholders
|
|
|
|
||||
Income from continuing operations
|
$
|
230
|
|
|
$
|
372
|
|
Loss from discontinued operations
|
—
|
|
|
(43
|
)
|
||
Basic and diluted income available to shareholders
|
$
|
230
|
|
|
$
|
329
|
|
|
|
|
|
||||
Weighted Average Shares Outstanding
|
|
|
|
||||
Basic weighted average shares outstanding
|
926.1
|
|
|
937.2
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Stock options, unvested restricted stock and
unvested performance share awards
|
7.2
|
|
|
10.2
|
|
||
Diluted weighted average shares outstanding
|
933.3
|
|
|
947.4
|
|
||
|
|
|
|
||||
Antidilutive Securities
|
|
|
|
||||
Options to purchase shares
|
1.0
|
|
|
0.1
|
|
14.
|
Equity and Noncontrolling Interests
|
|
Three Months Ended December 31, 2017
|
|
Three Months Ended December 31, 2016
|
||||||||||||||||||||
|
Equity
Attributable to
Johnson Controls International plc
|
|
Equity
Attributable to
Noncontrolling
Interests
|
|
Total
Equity
|
|
Equity
Attributable to
Johnson Controls International plc
|
|
Equity
Attributable to
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance, September 30,
|
$
|
20,447
|
|
|
$
|
920
|
|
|
$
|
21,367
|
|
|
$
|
24,118
|
|
|
$
|
972
|
|
|
$
|
25,090
|
|
Total comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
230
|
|
|
28
|
|
|
258
|
|
|
329
|
|
|
36
|
|
|
365
|
|
||||||
Foreign currency translation adjustments
|
58
|
|
|
16
|
|
|
74
|
|
|
(659
|
)
|
|
(35
|
)
|
|
(694
|
)
|
||||||
Realized and unrealized gains on derivatives
|
1
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||
Realized and unrealized losses on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Other comprehensive income (loss)
|
59
|
|
|
17
|
|
|
76
|
|
|
(661
|
)
|
|
(31
|
)
|
|
(692
|
)
|
||||||
Comprehensive income (loss)
|
289
|
|
|
45
|
|
|
334
|
|
|
(332
|
)
|
|
5
|
|
|
(327
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other changes in equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash dividends—ordinary shares
|
(242
|
)
|
|
—
|
|
|
(242
|
)
|
|
(236
|
)
|
|
—
|
|
|
(236
|
)
|
||||||
Repurchases of ordinary shares
|
(150
|
)
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Change in noncontrolling interest share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
||||||
Adoption of ASU 2016-09
|
179
|
|
|
—
|
|
|
179
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Spin-off of Adient
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,020
|
)
|
|
(138
|
)
|
|
(4,158
|
)
|
||||||
Other, including options exercised
|
12
|
|
|
—
|
|
|
12
|
|
|
47
|
|
|
—
|
|
|
47
|
|
||||||
Ending balance, December 31
|
$
|
20,535
|
|
|
$
|
965
|
|
|
$
|
21,500
|
|
|
$
|
19,577
|
|
|
$
|
819
|
|
|
$
|
20,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Beginning balance, September 30
|
$
|
211
|
|
|
$
|
234
|
|
Net income
|
13
|
|
|
13
|
|
||
Foreign currency translation adjustments
|
5
|
|
|
(9
|
)
|
||
Realized and unrealized losses on derivatives
|
(3
|
)
|
|
—
|
|
||
Dividends
|
—
|
|
|
(43
|
)
|
||
Spin-off of Adient
|
—
|
|
|
(36
|
)
|
||
Ending balance, December 31
|
$
|
226
|
|
|
$
|
159
|
|
|
|
|
|
Three Months Ended
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Foreign currency translation adjustments ("CTA")
|
|
|
|
||||
Balance at beginning of period
|
$
|
(481
|
)
|
|
$
|
(1,152
|
)
|
Aggregate adjustment for the period (net of tax effect of $1 and $5)*
|
58
|
|
|
(659
|
)
|
||
Adient spin-off impact (net of tax effect of $0)
|
—
|
|
|
563
|
|
||
Balance at end of period
|
(423
|
)
|
|
(1,248
|
)
|
||
|
|
|
|
||||
Realized and unrealized gains (losses) on derivatives
|
|
|
|
||||
Balance at beginning of period
|
6
|
|
|
4
|
|
||
Current period changes in fair value (net of tax effect of $3 and $4)
|
6
|
|
|
6
|
|
||
Reclassification to income (net of tax effect of $(2) and $(3)) **
|
(5
|
)
|
|
(6
|
)
|
||
Adient spin-off impact (net of tax effect of $0 and $6)
|
—
|
|
|
16
|
|
||
Balance at end of period
|
7
|
|
|
20
|
|
||
|
|
|
|
||||
Realized and unrealized gains (losses) on marketable securities
|
|
|
|
||||
Balance at beginning of period
|
4
|
|
|
(1
|
)
|
||
Current period changes in fair value (net of tax effect of $0)
|
—
|
|
|
(2
|
)
|
||
Balance at end of period
|
4
|
|
|
(3
|
)
|
||
|
|
|
|
||||
Pension and postretirement plans
|
|
|
|
||||
Balance at beginning of period
|
(2
|
)
|
|
(4
|
)
|
||
Adient spin-off impact (net of tax effect of $0)
|
—
|
|
|
2
|
|
||
Balance at end of period
|
(2
|
)
|
|
(2
|
)
|
||
|
|
|
|
||||
Accumulated other comprehensive loss, end of period
|
$
|
(414
|
)
|
|
$
|
(1,233
|
)
|
|
|
|
|
15.
|
Derivative Instruments and Hedging Activities
|
|
|
|
|
Volume Outstanding as of
|
||||
Commodity
|
|
Units
|
|
December 31, 2017
|
|
September 30, 2017
|
||
|
|
|
|
|
|
|
||
Copper
|
|
Metric Tons
|
|
3,765
|
|
|
1,962
|
|
Polypropylene
|
|
Metric Tons
|
|
21,762
|
|
|
19,563
|
|
Lead
|
|
Metric Tons
|
|
13,791
|
|
|
24,705
|
|
Aluminum
|
|
Metric Tons
|
|
5,295
|
|
|
2,169
|
|
Tin
|
|
Metric Tons
|
|
1,655
|
|
|
1,715
|
|
|
Derivatives and Hedging Activities Designated
as Hedging Instruments under ASC 815
|
|
Derivatives and Hedging Activities Not
Designated as Hedging Instruments under ASC 815
|
||||||||||||
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
||||||||
|
2017
|
|
2017
|
|
2017
|
|
2017
|
||||||||
Other current assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
$
|
35
|
|
|
$
|
27
|
|
|
$
|
21
|
|
|
$
|
—
|
|
Commodity derivatives
|
6
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||
Other noncurrent assets
|
|
|
|
|
|
|
|
||||||||
Equity swap
|
—
|
|
|
—
|
|
|
68
|
|
|
55
|
|
||||
Total assets
|
$
|
41
|
|
|
$
|
36
|
|
|
$
|
89
|
|
|
$
|
55
|
|
|
|
|
|
|
|
|
|
||||||||
Other current liabilities
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
$
|
25
|
|
|
$
|
21
|
|
|
$
|
16
|
|
|
$
|
25
|
|
Commodity derivatives
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Long-term debt
|
|
|
|
|
|
|
|
||||||||
Foreign currency denominated debt
|
2,981
|
|
|
2,058
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities
|
$
|
3,007
|
|
|
$
|
2,080
|
|
|
$
|
16
|
|
|
$
|
25
|
|
|
Fair Value of Assets
|
|
Fair Value of Liabilities
|
||||||||||||
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
||||||||
|
2017
|
|
2017
|
|
2017
|
|
2017
|
||||||||
Gross amount recognized
|
$
|
130
|
|
|
$
|
91
|
|
|
$
|
3,023
|
|
|
$
|
2,105
|
|
Gross amount eligible for offsetting
|
(27
|
)
|
|
(16
|
)
|
|
(27
|
)
|
|
(16
|
)
|
||||
Net amount
|
$
|
103
|
|
|
$
|
75
|
|
|
$
|
2,996
|
|
|
$
|
2,089
|
|
Derivatives in ASC 815 Cash Flow Hedging Relationships
|
|
Three Months Ended December 31,
|
||||||
|
2017
|
|
2016
|
|||||
Foreign currency exchange derivatives
|
|
$
|
6
|
|
|
$
|
8
|
|
Commodity derivatives
|
|
3
|
|
|
2
|
|
||
Total
|
|
$
|
9
|
|
|
$
|
10
|
|
Derivatives in ASC 815 Cash Flow
Hedging Relationships
|
|
Location of Gain (Loss) Reclassified
from AOCI into Income
|
|
Three Months Ended December 31,
|
||||||
|
2017
|
|
2016
|
|||||||
Foreign currency exchange derivatives
|
|
Cost of sales
|
|
$
|
2
|
|
|
$
|
8
|
|
Commodity derivatives
|
|
Cost of sales
|
|
5
|
|
|
1
|
|
||
Total
|
|
|
|
$
|
7
|
|
|
$
|
9
|
|
Derivatives in ASC 815 Fair Value
Hedging Relationships
|
|
Location of Gain (Loss)
Recognized in Income on Derivative
|
|
Three Months Ended December 31,
|
||||||
|
2017
|
|
2016
|
|||||||
Interest rate swap
|
|
Net financing charges
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Fixed rate debt swapped to floating
|
|
Net financing charges
|
|
—
|
|
|
2
|
|
||
Total
|
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
Amount of Gain (Loss) Recognized in
Income on Derivative
|
||||||
Derivatives Not Designated as Hedging Instruments under ASC 815
|
|
Location of Gain (Loss)
Recognized in Income on Derivative
|
|
Three Months Ended December 31,
|
||||||
|
2017
|
|
2016
|
|||||||
Foreign currency exchange derivatives
|
|
Cost of sales
|
|
$
|
2
|
|
|
$
|
1
|
|
Foreign currency exchange derivatives
|
|
Net financing charges
|
|
4
|
|
|
4
|
|
||
Foreign currency exchange derivatives
|
|
Income tax provision
|
|
2
|
|
|
(3
|
)
|
||
Foreign currency exchange derivatives
|
|
Income (loss) from discontinued operations
|
|
—
|
|
|
5
|
|
||
Equity swap
|
|
Selling, general and administrative
|
|
(2
|
)
|
|
—
|
|
||
Total
|
|
|
|
$
|
6
|
|
|
$
|
7
|
|
16.
|
Fair Value Measurements
|
|
Fair Value Measurements Using:
|
||||||||||||||
|
Total as of
December 31, 2017
|
|
Quoted Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Other current assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
—
|
|
Commodity derivatives
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Exchange traded funds (fixed income)
1
|
28
|
|
|
28
|
|
|
—
|
|
|
—
|
|
||||
Other noncurrent assets
|
|
|
|
|
|
|
|
||||||||
Investments in marketable common stock
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
96
|
|
|
96
|
|
|
—
|
|
|
—
|
|
||||
Exchange traded funds (fixed income)
1
|
142
|
|
|
142
|
|
|
—
|
|
|
—
|
|
||||
Exchange traded funds (equity)
1
|
113
|
|
|
113
|
|
|
—
|
|
|
—
|
|
||||
Equity swap
|
68
|
|
|
—
|
|
|
68
|
|
|
—
|
|
||||
Total assets
|
$
|
515
|
|
|
$
|
385
|
|
|
$
|
130
|
|
|
$
|
—
|
|
Other current liabilities
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
41
|
|
|
$
|
—
|
|
Commodity derivatives
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total liabilities
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
Fair Value Measurements Using:
|
||||||||||||||
|
Total as of
September 30, 2017
|
|
Quoted Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Other current assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
—
|
|
Commodity derivatives
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Exchange traded funds (fixed income)
1
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||
Other noncurrent assets
|
|
|
|
|
|
|
|
||||||||
Investments in marketable common stock
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
92
|
|
|
92
|
|
|
—
|
|
|
—
|
|
||||
Exchange traded funds (fixed income)
1
|
155
|
|
|
155
|
|
|
—
|
|
|
—
|
|
||||
Exchange traded funds (equity)
1
|
100
|
|
|
100
|
|
|
—
|
|
|
—
|
|
||||
Equity swap
|
55
|
|
|
—
|
|
|
55
|
|
|
—
|
|
||||
Total assets
|
$
|
462
|
|
|
$
|
371
|
|
|
$
|
91
|
|
|
$
|
—
|
|
Other current liabilities
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange derivatives
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
46
|
|
|
$
|
—
|
|
Commodity derivatives
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total liabilities
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
47
|
|
|
$
|
—
|
|
17.
|
Impairment of Long-Lived Assets
|
18.
|
Segment Information
|
•
|
The “Systems and Service North America” segment is now part of the new “Building Solutions North America” reportable segment.
|
•
|
The North America Unitary Products business, Air Distribution Technologies business and refrigeration systems business, as well as HVAC products installed for Marine customers, previously included in the “Products North America” segment, are now part of the new reportable segment “Global Products.” The systems and products installation business for U.S. Navy customers, previously included in the “Products North America” segment, is now part of the new “Building Solutions North America” reportable segment.
|
•
|
The systems and service business within the former “Asia” segment is now part of the new “Building Solutions Asia Pacific” reportable segment. The HVAC products manufacturing business and the Johnson Controls-Hitachi joint venture, previously part of the “Asia” segment, are now part of the new “Global Products” reportable segment.
|
•
|
The systems and service businesses in Europe, the Middle East and Latin America within the former “Rest of World” segment are now part of the new “Building Solutions EMEA/LA” reportable segment. The HVAC products manufacturing businesses, previously part of the “Rest of World” segment, are now part of the new “Global Products” reportable segment.
|
•
|
As the Company has integrated the legacy Tyco business with its legacy Building Efficiency business for segment reporting purposes, Tyco is no longer a separate reportable segment. The Tyco businesses are now included throughout the new reportable segments.
|
•
|
Building Solutions North America designs, sells, installs, and services HVAC and controls systems, integrated electronic security systems (including monitoring), and integrated fire detection and suppression systems for commercial, industrial, retail, small business, institutional and governmental customers in North America. Building Solutions North America also provides energy efficiency solutions and technical services, including inspection, scheduled maintenance, and repair and replacement of mechanical and control systems, to non-residential building and industrial applications in the North American marketplace.
|
•
|
Building Solutions EMEA/LA designs, sells, installs, and services HVAC, controls, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and provides technical services to markets in Europe, the Middle East, Africa and Latin America.
|
•
|
Building Solutions Asia Pacific designs, sells, installs, and services HVAC, controls, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and provides technical services to the Asia Pacific marketplace.
|
•
|
Global Products designs and produces heating and air conditioning for residential and commercial applications, and markets products and refrigeration systems to replacement and new construction market customers globally. The Global Products business also designs, manufactures and sells fire protection and security products, including intrusion security, anti-theft devices, and access control and video management systems, for commercial, industrial, retail, residential, small business, institutional and governmental customers worldwide. Global Products also includes the Johnson Controls-Hitachi joint venture, which was formed October 1, 2015, and included the Scott Safety business, prior to its sale on October 4, 2017.
|
|
Net Sales
|
||||||
|
Three Months Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Building Technologies & Solutions
|
|
|
|
||||
Building Solutions North America
|
$
|
2,012
|
|
|
$
|
1,942
|
|
Building Solutions EMEA/LA
|
915
|
|
|
875
|
|
||
Building Solutions Asia Pacific
|
597
|
|
|
575
|
|
||
Global Products
|
1,781
|
|
|
1,794
|
|
||
|
5,305
|
|
|
5,186
|
|
||
Power Solutions
|
2,130
|
|
|
1,900
|
|
||
|
|
|
|
||||
Total net sales
|
$
|
7,435
|
|
|
$
|
7,086
|
|
|
Segment EBITA
|
||||||
|
Three Months Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Building Technologies & Solutions
|
|
|
|
||||
Building Solutions North America
|
$
|
227
|
|
|
$
|
196
|
|
Building Solutions EMEA/LA
|
69
|
|
|
49
|
|
||
Building Solutions Asia Pacific
|
74
|
|
|
63
|
|
||
Global Products
|
286
|
|
|
127
|
|
||
|
656
|
|
|
435
|
|
||
Power Solutions
|
384
|
|
|
389
|
|
||
|
|
|
|
||||
Total segment EBITA
|
$
|
1,040
|
|
|
$
|
824
|
|
|
|
|
|
||||
Corporate expenses
|
$
|
(134
|
)
|
|
$
|
(193
|
)
|
Amortization of intangible assets
|
(94
|
)
|
|
(149
|
)
|
||
Restructuring and impairment costs
|
(158
|
)
|
|
(78
|
)
|
||
Net mark-to-market adjustments on pension plans
|
—
|
|
|
117
|
|
||
Net financing charges
|
(116
|
)
|
|
(136
|
)
|
||
Income from continuing operations before income taxes
|
$
|
538
|
|
|
$
|
385
|
|
19.
|
Guarantees
|
|
Three Months Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Balance at beginning of period
|
$
|
409
|
|
|
$
|
374
|
|
Accruals for warranties issued during the period
|
84
|
|
|
82
|
|
||
Accruals from acquisition and divestitures
|
—
|
|
|
(1
|
)
|
||
Accruals related to pre-existing warranties
|
(3
|
)
|
|
(6
|
)
|
||
Settlements made (in cash or in kind) during the period
|
(77
|
)
|
|
(73
|
)
|
||
Currency translation
|
2
|
|
|
(6
|
)
|
||
Balance at end of period
|
$
|
415
|
|
|
$
|
370
|
|
20.
|
Tyco International Finance S.A.
|
(in millions)
|
Johnson Controls
International plc
|
|
Tyco Fire & Security Finance SCA
|
|
Tyco International Finance S.A.
|
|
Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,435
|
|
|
$
|
—
|
|
|
$
|
7,435
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
5,266
|
|
|
—
|
|
|
5,266
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
—
|
|
|
—
|
|
|
—
|
|
|
2,169
|
|
|
—
|
|
|
2,169
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative
expenses
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(1,414
|
)
|
|
—
|
|
|
(1,417
|
)
|
||||||
Restructuring and impairment costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(158
|
)
|
|
—
|
|
|
(158
|
)
|
||||||
Net financing charges
|
(50
|
)
|
|
1
|
|
|
(2
|
)
|
|
(65
|
)
|
|
—
|
|
|
(116
|
)
|
||||||
Equity income
|
285
|
|
|
188
|
|
|
142
|
|
|
60
|
|
|
(615
|
)
|
|
60
|
|
||||||
Intercompany interest and fees
|
(2
|
)
|
|
85
|
|
|
(29
|
)
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations before income taxes
|
230
|
|
|
274
|
|
|
111
|
|
|
538
|
|
|
(615
|
)
|
|
538
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax provision
|
—
|
|
|
—
|
|
|
—
|
|
|
267
|
|
|
—
|
|
|
267
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
230
|
|
|
274
|
|
|
111
|
|
|
271
|
|
|
(615
|
)
|
|
271
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations
attributable to noncontrolling
interests
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to
Johnson Controls
|
$
|
230
|
|
|
$
|
274
|
|
|
$
|
111
|
|
|
$
|
230
|
|
|
$
|
(615
|
)
|
|
$
|
230
|
|
(in millions)
|
Johnson Controls
International
plc
|
|
Tyco Fire & Security Finance SCA
|
|
Tyco International Finance S.A.
|
|
Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
230
|
|
|
$
|
274
|
|
|
$
|
111
|
|
|
$
|
271
|
|
|
$
|
(615
|
)
|
|
$
|
271
|
|
Other comprehensive income (loss),
net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation
adjustments
|
58
|
|
|
(7
|
)
|
|
(1
|
)
|
|
53
|
|
|
(24
|
)
|
|
79
|
|
||||||
Realized and unrealized gains
(losses) on derivatives
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Realized and unrealized gains
(losses) on marketable securities
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
59
|
|
|
(7
|
)
|
|
(5
|
)
|
|
56
|
|
|
(25
|
)
|
|
78
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total comprehensive income
|
289
|
|
|
267
|
|
|
106
|
|
|
327
|
|
|
(640
|
)
|
|
349
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income attributable
to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income attributable
to Johnson Controls
|
$
|
289
|
|
|
$
|
267
|
|
|
$
|
106
|
|
|
$
|
267
|
|
|
$
|
(640
|
)
|
|
$
|
289
|
|
(in millions)
|
Johnson Controls
International plc
|
|
Tyco Fire & Security Finance SCA
|
|
Tyco International Finance S.A.
|
|
Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,086
|
|
|
$
|
—
|
|
|
$
|
7,086
|
|
Cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
4,972
|
|
|
—
|
|
|
4,972
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
—
|
|
|
—
|
|
|
—
|
|
|
2,114
|
|
|
—
|
|
|
2,114
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative
expenses
|
(2
|
)
|
|
—
|
|
|
1
|
|
|
(1,569
|
)
|
|
—
|
|
|
(1,570
|
)
|
||||||
Restructuring and impairment costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
—
|
|
|
(78
|
)
|
||||||
Net financing charges
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|
(98
|
)
|
|
—
|
|
|
(136
|
)
|
||||||
Equity income (loss)
|
318
|
|
|
(286
|
)
|
|
(110
|
)
|
|
55
|
|
|
78
|
|
|
55
|
|
||||||
Intercompany interest and fees
|
32
|
|
|
—
|
|
|
17
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing
operations before income taxes
|
329
|
|
|
(286
|
)
|
|
(111
|
)
|
|
375
|
|
|
78
|
|
|
385
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing
operations
|
329
|
|
|
(286
|
)
|
|
(111
|
)
|
|
402
|
|
|
78
|
|
|
412
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from sale of
intercompany investment, net of
tax
|
—
|
|
|
—
|
|
|
(935
|
)
|
|
—
|
|
|
935
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss from discontinued
operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
329
|
|
|
(286
|
)
|
|
(1,046
|
)
|
|
368
|
|
|
1,013
|
|
|
378
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations
attributable to noncontrolling
interests
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||||
Income from discontinued
operations attributable to
noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) attributable to
Johnson Controls
|
$
|
329
|
|
|
$
|
(286
|
)
|
|
$
|
(1,046
|
)
|
|
$
|
319
|
|
|
$
|
1,013
|
|
|
$
|
329
|
|
(in millions)
|
Johnson Controls
International
plc
|
|
Tyco Fire & Security Finance SCA
|
|
Tyco International Finance S.A.
|
|
Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
$
|
329
|
|
|
$
|
(286
|
)
|
|
$
|
(1,046
|
)
|
|
$
|
368
|
|
|
$
|
1,013
|
|
|
$
|
378
|
|
Other comprehensive income (loss),
net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation
adjustments
|
(659
|
)
|
|
—
|
|
|
27
|
|
|
(730
|
)
|
|
659
|
|
|
(703
|
)
|
||||||
Realized and unrealized gains
on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
Realized and unrealized gains
(losses) on marketable securities
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
2
|
|
|
(2
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
(661
|
)
|
|
—
|
|
|
27
|
|
|
(728
|
)
|
|
661
|
|
|
(701
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total comprehensive income (loss)
|
(332
|
)
|
|
(286
|
)
|
|
(1,019
|
)
|
|
(360
|
)
|
|
1,674
|
|
|
(323
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income attributable
to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income (loss) attributable to Johnson Controls
|
$
|
(332
|
)
|
|
$
|
(286
|
)
|
|
$
|
(1,019
|
)
|
|
$
|
(369
|
)
|
|
$
|
1,674
|
|
|
$
|
(332
|
)
|
(in millions)
|
Johnson Controls
International
plc
|
|
Tyco Fire & Security Finance SCA
|
|
Tyco International Finance S.A.
|
|
Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
285
|
|
|
$
|
108
|
|
|
$
|
81
|
|
|
$
|
991
|
|
|
$
|
(913
|
)
|
|
$
|
552
|
|
Accounts receivable - net
|
—
|
|
|
—
|
|
|
—
|
|
|
6,731
|
|
|
—
|
|
|
6,731
|
|
||||||
Inventories
|
—
|
|
|
—
|
|
|
—
|
|
|
3,459
|
|
|
—
|
|
|
3,459
|
|
||||||
Intercompany receivables
|
323
|
|
|
1,824
|
|
|
397
|
|
|
22,957
|
|
|
(25,501
|
)
|
|
—
|
|
||||||
Assets held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||||
Other current assets
|
46
|
|
|
—
|
|
|
1
|
|
|
1,600
|
|
|
—
|
|
|
1,647
|
|
||||||
Current assets
|
654
|
|
|
1,932
|
|
|
479
|
|
|
35,778
|
|
|
(26,414
|
)
|
|
12,429
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property, plant and equipment - net
|
—
|
|
|
—
|
|
|
—
|
|
|
6,105
|
|
|
—
|
|
|
6,105
|
|
||||||
Goodwill
|
243
|
|
|
—
|
|
|
32
|
|
|
19,442
|
|
|
—
|
|
|
19,717
|
|
||||||
Other intangible assets - net
|
—
|
|
|
—
|
|
|
—
|
|
|
6,657
|
|
|
—
|
|
|
6,657
|
|
||||||
Investments in partially-owned
affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
1,219
|
|
|
—
|
|
|
1,219
|
|
||||||
Investments in affiliates
|
38,975
|
|
|
32,053
|
|
|
21,422
|
|
|
—
|
|
|
(92,450
|
)
|
|
—
|
|
||||||
Intercompany loans receivable
|
—
|
|
|
4,140
|
|
|
2,836
|
|
|
9,004
|
|
|
(15,980
|
)
|
|
—
|
|
||||||
Other noncurrent assets
|
68
|
|
|
—
|
|
|
2
|
|
|
3,570
|
|
|
—
|
|
|
3,640
|
|
||||||
Total assets
|
$
|
39,940
|
|
|
$
|
38,125
|
|
|
$
|
24,771
|
|
|
$
|
81,775
|
|
|
$
|
(134,844
|
)
|
|
$
|
49,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Short-term debt
|
$
|
1,820
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
607
|
|
|
$
|
(913
|
)
|
|
$
|
1,514
|
|
Current portion of long-term debt
|
49
|
|
|
—
|
|
|
18
|
|
|
24
|
|
|
—
|
|
|
91
|
|
||||||
Accounts payable
|
1
|
|
|
—
|
|
|
—
|
|
|
4,019
|
|
|
—
|
|
|
4,020
|
|
||||||
Accrued compensation and benefits
|
1
|
|
|
—
|
|
|
—
|
|
|
882
|
|
|
—
|
|
|
883
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
1,368
|
|
|
—
|
|
|
1,368
|
|
||||||
Intercompany payables
|
3,753
|
|
|
18,978
|
|
|
1,958
|
|
|
812
|
|
|
(25,501
|
)
|
|
—
|
|
||||||
Other current liabilities
|
376
|
|
|
1
|
|
|
24
|
|
|
2,969
|
|
|
—
|
|
|
3,370
|
|
||||||
Current liabilities
|
6,000
|
|
|
18,979
|
|
|
2,000
|
|
|
10,681
|
|
|
(26,414
|
)
|
|
11,246
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
8,717
|
|
|
—
|
|
|
153
|
|
|
2,025
|
|
|
—
|
|
|
10,895
|
|
||||||
Pension and postretirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
896
|
|
|
—
|
|
|
896
|
|
||||||
Intercompany loans payable
|
4,688
|
|
|
—
|
|
|
4,316
|
|
|
6,976
|
|
|
(15,980
|
)
|
|
—
|
|
||||||
Other noncurrent liabilities
|
—
|
|
|
—
|
|
|
23
|
|
|
4,981
|
|
|
—
|
|
|
5,004
|
|
||||||
Long-term liabilities
|
13,405
|
|
|
—
|
|
|
4,492
|
|
|
14,878
|
|
|
(15,980
|
)
|
|
16,795
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
226
|
|
|
—
|
|
|
226
|
|
||||||
Ordinary shares
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Ordinary shares held in treasury
|
(885
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(885
|
)
|
||||||
Other shareholders' equity
|
21,411
|
|
|
19,146
|
|
|
18,279
|
|
|
55,025
|
|
|
(92,450
|
)
|
|
21,411
|
|
||||||
Shareholders’ equity attributable to Johnson Controls
|
20,535
|
|
|
19,146
|
|
|
18,279
|
|
|
55,025
|
|
|
(92,450
|
)
|
|
20,535
|
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
965
|
|
|
—
|
|
|
965
|
|
||||||
Total equity
|
20,535
|
|
|
19,146
|
|
|
18,279
|
|
|
55,990
|
|
|
(92,450
|
)
|
|
21,500
|
|
||||||
Total liabilities and equity
|
$
|
39,940
|
|
|
$
|
38,125
|
|
|
$
|
24,771
|
|
|
$
|
81,775
|
|
|
$
|
(134,844
|
)
|
|
$
|
49,767
|
|
(in millions)
|
Johnson Controls
International
plc
|
|
Tyco Fire & Security Finance SCA
|
|
Tyco International Finance S.A.
|
|
Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
107
|
|
|
$
|
382
|
|
|
$
|
718
|
|
|
$
|
(886
|
)
|
|
$
|
321
|
|
Accounts receivable - net
|
—
|
|
|
—
|
|
|
—
|
|
|
6,666
|
|
|
—
|
|
|
6,666
|
|
||||||
Inventories
|
—
|
|
|
—
|
|
|
—
|
|
|
3,209
|
|
|
—
|
|
|
3,209
|
|
||||||
Intercompany receivables
|
1,580
|
|
|
1,732
|
|
|
55
|
|
|
4,470
|
|
|
(7,837
|
)
|
|
—
|
|
||||||
Assets held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
189
|
|
|
—
|
|
|
189
|
|
||||||
Other current assets
|
14
|
|
|
—
|
|
|
1
|
|
|
1,892
|
|
|
—
|
|
|
1,907
|
|
||||||
Current assets
|
$
|
1,594
|
|
|
$
|
1,839
|
|
|
$
|
438
|
|
|
$
|
17,144
|
|
|
$
|
(8,723
|
)
|
|
$
|
12,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property, plant and equipment - net
|
—
|
|
|
—
|
|
|
—
|
|
|
6,121
|
|
|
—
|
|
|
6,121
|
|
||||||
Goodwill
|
243
|
|
|
—
|
|
|
32
|
|
|
19,413
|
|
|
—
|
|
|
19,688
|
|
||||||
Other intangible assets - net
|
—
|
|
|
—
|
|
|
—
|
|
|
6,741
|
|
|
—
|
|
|
6,741
|
|
||||||
Investments in partially-owned affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
1,191
|
|
|
—
|
|
|
1,191
|
|
||||||
Investments in affiliates
|
19,487
|
|
|
31,594
|
|
|
21,132
|
|
|
—
|
|
|
(72,213
|
)
|
|
—
|
|
||||||
Intercompany loans receivable
|
17,908
|
|
|
4,140
|
|
|
2,836
|
|
|
9,004
|
|
|
(33,888
|
)
|
|
—
|
|
||||||
Noncurrent assets held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
1,920
|
|
|
—
|
|
|
1,920
|
|
||||||
Other noncurrent assets
|
56
|
|
|
—
|
|
|
7
|
|
|
3,868
|
|
|
—
|
|
|
3,931
|
|
||||||
Total assets
|
$
|
39,288
|
|
|
$
|
37,573
|
|
|
$
|
24,445
|
|
|
$
|
65,402
|
|
|
$
|
(114,824
|
)
|
|
$
|
51,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Short-term debt
|
$
|
1,476
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
624
|
|
|
$
|
(886
|
)
|
|
$
|
1,214
|
|
Current portion of long-term debt
|
307
|
|
|
—
|
|
|
18
|
|
|
69
|
|
|
—
|
|
|
394
|
|
||||||
Accounts payable
|
—
|
|
|
—
|
|
|
—
|
|
|
4,271
|
|
|
—
|
|
|
4,271
|
|
||||||
Accrued compensation and benefits
|
4
|
|
|
—
|
|
|
—
|
|
|
1,067
|
|
|
—
|
|
|
1,071
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
1,279
|
|
|
—
|
|
|
1,279
|
|
||||||
Liabilities held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
||||||
Intercompany payables
|
4,236
|
|
|
1,055
|
|
|
1,886
|
|
|
660
|
|
|
(7,837
|
)
|
|
—
|
|
||||||
Other current liabilities
|
324
|
|
|
2
|
|
|
24
|
|
|
3,203
|
|
|
—
|
|
|
3,553
|
|
||||||
Current liabilities
|
6,347
|
|
|
1,057
|
|
|
1,928
|
|
|
11,245
|
|
|
(8,723
|
)
|
|
11,854
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
7,806
|
|
|
—
|
|
|
152
|
|
|
4,006
|
|
|
—
|
|
|
11,964
|
|
||||||
Pension and postretirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
947
|
|
|
—
|
|
|
947
|
|
||||||
Intercompany loans payable
|
4,688
|
|
|
17,908
|
|
|
4,316
|
|
|
6,976
|
|
|
(33,888
|
)
|
|
—
|
|
||||||
Noncurrent liabilities held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|
—
|
|
|
173
|
|
||||||
Other noncurrent liabilities
|
—
|
|
|
—
|
|
|
24
|
|
|
5,344
|
|
|
—
|
|
|
5,368
|
|
||||||
Long-term liabilities
|
12,494
|
|
|
17,908
|
|
|
4,492
|
|
|
17,446
|
|
|
(33,888
|
)
|
|
18,452
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
211
|
|
|
—
|
|
|
211
|
|
||||||
Ordinary shares
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Ordinary shares held in treasury
|
(710
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(710
|
)
|
||||||
Other shareholders' equity
|
21,148
|
|
|
18,608
|
|
|
18,025
|
|
|
35,580
|
|
|
(72,213
|
)
|
|
21,148
|
|
||||||
Shareholders’ equity attributable to
Johnson Controls
|
20,447
|
|
|
18,608
|
|
|
18,025
|
|
|
35,580
|
|
|
(72,213
|
)
|
|
20,447
|
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
920
|
|
|
—
|
|
|
920
|
|
||||||
Total equity
|
20,447
|
|
|
18,608
|
|
|
18,025
|
|
|
36,500
|
|
|
(72,213
|
)
|
|
21,367
|
|
||||||
Total liabilities and equity
|
$
|
39,288
|
|
|
$
|
37,573
|
|
|
$
|
24,445
|
|
|
$
|
65,402
|
|
|
$
|
(114,824
|
)
|
|
$
|
51,884
|
|
(in millions)
|
Johnson Controls
International plc
|
|
Tyco Fire & Security Finance SCA
|
|
Tyco International Finance S.A.
|
|
Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided (used) by operating
activities
|
$
|
(135
|
)
|
|
$
|
1
|
|
|
$
|
33
|
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
|
$
|
(129
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
—
|
|
|
(230
|
)
|
|
—
|
|
|
(230
|
)
|
||||||
Sale of property, plant and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||
Business divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
2,011
|
|
|
—
|
|
|
2,011
|
|
||||||
Changes in long-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
||||||
Net change in intercompany loans receivable
|
300
|
|
|
—
|
|
|
(334
|
)
|
|
480
|
|
|
(446
|
)
|
|
—
|
|
||||||
Net cash provided (used) by investing
activities
|
300
|
|
|
—
|
|
|
(334
|
)
|
|
2,254
|
|
|
(446
|
)
|
|
1,774
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Increase (decrease) in short-term debt - net
|
344
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(27
|
)
|
|
304
|
|
||||||
Increase in long-term debt
|
885
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
885
|
|
||||||
Repayment of long-term debt
|
(259
|
)
|
|
—
|
|
|
—
|
|
|
(1,975
|
)
|
|
—
|
|
|
(2,234
|
)
|
||||||
Debt financing costs
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Stock repurchases
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
||||||
Payment of cash dividends
|
(232
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(232
|
)
|
||||||
Proceeds from the exercise of stock options
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||||
Employee equity-based compensation
withholding taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
||||||
Net change in intercompany loans payable
|
(480
|
)
|
|
—
|
|
|
—
|
|
|
34
|
|
|
446
|
|
|
—
|
|
||||||
Net cash provided (used) by financing
activities
|
120
|
|
|
—
|
|
|
—
|
|
|
(1,979
|
)
|
|
419
|
|
|
(1,440
|
)
|
||||||
Effect of exchange rate changes on
cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||||
Change in cash held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
Increase (decrease) in cash and
cash equivalents
|
285
|
|
|
1
|
|
|
(301
|
)
|
|
273
|
|
|
(27
|
)
|
|
231
|
|
||||||
Cash and cash equivalents at
beginning of period
|
—
|
|
|
107
|
|
|
382
|
|
|
718
|
|
|
(886
|
)
|
|
321
|
|
||||||
Cash and cash equivalents at
end of period
|
$
|
285
|
|
|
$
|
108
|
|
|
$
|
81
|
|
|
$
|
991
|
|
|
$
|
(913
|
)
|
|
$
|
552
|
|
(in millions)
|
Johnson Controls
International plc
|
|
Tyco Fire & Security Finance SCA
|
|
Tyco International Finance S.A.
|
|
Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided (used) by operating
activities
|
$
|
211
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
(2,128
|
)
|
|
$
|
—
|
|
|
$
|
(1,885
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
—
|
|
|
(371
|
)
|
|
—
|
|
|
(371
|
)
|
||||||
Sale of property, plant and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
Acquisition of businesses, net of cash
acquired
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
3
|
|
|
—
|
|
|
(3
|
)
|
||||||
Business divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
47
|
|
||||||
Changes in long-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
||||||
Net change in intercompany loans receivable
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||||
Net cash provided (used)
by investing activities
|
—
|
|
|
—
|
|
|
4
|
|
|
(325
|
)
|
|
(10
|
)
|
|
(331
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Increase in short-term debt - net
|
105
|
|
|
—
|
|
|
—
|
|
|
1,460
|
|
|
(253
|
)
|
|
1,312
|
|
||||||
Increase in long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||
Repayment of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(763
|
)
|
|
—
|
|
|
(763
|
)
|
||||||
Debt financing costs
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Proceeds from the exercise of stock options
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||||
Employee equity-based compensation
withholding taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
||||||
Net change in intercompany loans payable
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
10
|
|
|
—
|
|
||||||
Dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
||||||
Dividend from Adient spin-off
|
—
|
|
|
—
|
|
|
—
|
|
|
2,050
|
|
|
—
|
|
|
2,050
|
|
||||||
Cash transferred to Adient related to spin-off
|
—
|
|
|
—
|
|
|
—
|
|
|
(564
|
)
|
|
—
|
|
|
(564
|
)
|
||||||
Cash paid related to prior acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|
(45
|
)
|
||||||
Net cash provided (used) by
financing activities
|
128
|
|
|
—
|
|
|
—
|
|
|
2,079
|
|
|
(243
|
)
|
|
1,964
|
|
||||||
Effect of exchange rate changes on
cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
(55
|
)
|
||||||
Change in cash held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
—
|
|
|
105
|
|
||||||
Increase (decrease) in cash and
cash equivalents
|
339
|
|
|
—
|
|
|
36
|
|
|
(324
|
)
|
|
(253
|
)
|
|
(202
|
)
|
||||||
Cash and cash equivalents at
beginning of period
|
11
|
|
|
—
|
|
|
244
|
|
|
324
|
|
|
—
|
|
|
579
|
|
||||||
Cash and cash equivalents at
end of period
|
$
|
350
|
|
|
$
|
—
|
|
|
$
|
280
|
|
|
$
|
—
|
|
|
$
|
(253
|
)
|
|
$
|
377
|
|
21.
|
Commitments and Contingencies
|
•
|
Eastern District of New York - Green et al. v. The 3M Company et al.,
filed March 27, 2017 in Supreme Court of the State of New York, Suffolk County, prior to removal to federal court.
|
•
|
Southern District of New York - Adamo et al. v. The Port Authority of NY and NJ et al.,
filed August 11, 2017 in Supreme Court of the State of New York, Orange County, prior to removal to federal court.
|
•
|
Southern District of New York - Fogarty et al. v. The Port Authority of NY and NJ et al.,
filed August 11, 2017 in Supreme Court of the State of New York, Orange County, prior to removal to federal court.
|
•
|
Southern District of New York - Miller et al. v. The Port Authority of NY and NJ et al.,
filed August 11, 2017 in Supreme Court of the State of New York, Orange County, prior to removal to federal court.
|
•
|
Supreme Court of the State of New York, Suffolk County - Singer et al. v. The 3M Company et al.,
filed October 10, 2017.
|
•
|
Eastern District of Pennsylvania - Bates et al. v. The 3M Company et al.,
filed September 15, 2016.
|
•
|
Eastern District of Pennsylvania - Grande et al. v. The 3M Company et al.,
filed October 13, 2016.
|
•
|
Eastern District of Pennsylvania - Yockey et al. v. The 3M Company et al.,
filed October 24, 2016.
|
•
|
Eastern District of Pennsylvania - Fearnley et al. v. The 3M Company et al.,
filed December 9, 2016.
|
22.
|
Related Party Transactions
|
|
|
December 31, 2017
|
|
September 30, 2017
|
|
|||
|
|
|
|
|
||||
Receivable from related parties
|
|
$
|
122
|
|
|
$
|
108
|
|
Payable to related parties
|
|
34
|
|
|
50
|
|
|
Three Months Ended
December 31,
|
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Net sales
|
$
|
7,435
|
|
|
$
|
7,086
|
|
|
5
|
%
|
|
Three Months Ended
December 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Cost of sales
|
$
|
5,266
|
|
|
$
|
4,972
|
|
|
6
|
%
|
Gross profit
|
2,169
|
|
|
2,114
|
|
|
3
|
%
|
||
% of sales
|
29.2
|
%
|
|
29.8
|
%
|
|
|
|
Three Months Ended
December 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Selling, general and administrative expenses
|
$
|
1,417
|
|
|
$
|
1,570
|
|
|
-10
|
%
|
% of sales
|
19.1
|
%
|
|
22.2
|
%
|
|
|
|
Three Months Ended
December 31, |
|
|
||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
||||
|
|
|
|
|
|
||||
Restructuring and impairment costs
|
$
|
158
|
|
|
$
|
78
|
|
|
*
|
|
Three Months Ended
December 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Net financing charges
|
$
|
116
|
|
|
$
|
136
|
|
|
-15
|
%
|
|
Three Months Ended
December 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Equity income
|
$
|
60
|
|
|
$
|
55
|
|
|
9
|
%
|
|
Three Months Ended
December 31, |
|
|
||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
||||
|
|
|
|
|
|
||||
Income tax provision (benefit)
|
$
|
267
|
|
|
$
|
(27
|
)
|
|
*
|
Effective tax rate
|
50
|
%
|
|
-7
|
%
|
|
|
|
Three Months Ended
December 31, |
|
|
||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
||||
|
|
|
|
|
|
||||
Loss from discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
(34
|
)
|
|
*
|
|
Three Months Ended
December 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Income from continuing operations attributable to
noncontrolling interests |
$
|
41
|
|
|
$
|
40
|
|
|
3
|
%
|
Income from discontinued operations attributable to
noncontrolling interests
|
—
|
|
|
9
|
|
|
*
|
|
|
Three Months Ended
December 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Net income attributable to Johnson Controls
|
$
|
230
|
|
|
$
|
329
|
|
|
-30
|
%
|
|
Three Months Ended
December 31, |
|
|
||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
||||
|
|
|
|
|
|
||||
Comprehensive income (loss) attributable to
Johnson Controls
|
$
|
289
|
|
|
$
|
(332
|
)
|
|
*
|
|
Three Months Ended
December 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|
|
|
||
Building Solutions North America
|
$
|
2,012
|
|
|
$
|
1,942
|
|
|
4
|
%
|
Building Solutions EMEA/LA
|
915
|
|
|
875
|
|
|
5
|
%
|
||
Building Solutions Asia Pacific
|
597
|
|
|
575
|
|
|
4
|
%
|
||
Global Products
|
1,781
|
|
|
1,794
|
|
|
-1
|
%
|
||
|
$
|
5,305
|
|
|
$
|
5,186
|
|
|
2
|
%
|
•
|
The increase in Building Solutions North America was due to higher volumes ($60 million) and the favorable impact of foreign currency translation ($10 million). The increase in volumes was primarily attributable to higher HVAC and controls sales.
|
•
|
The increase in Building Solutions EMEA/LA was due to the favorable impact of foreign currency translation ($47 million), higher volumes in the Middle East ($20 million), Latin America ($11 million) and in Europe ($2 million), and the impact of prior year nonrecurring purchase accounting adjustments ($3 million), partially offset by lower volumes related to a business divestiture ($43 million).
|
•
|
The increase in Building Solutions Asia Pacific was due to higher service and project installation volumes ($14 million), the favorable impact of foreign currency translation ($14 million) and the impact of prior year nonrecurring purchase accounting adjustments ($1 million), partially offset by lower volumes related to a business divestiture ($7 million).
|
•
|
The decrease in Global Products was due to lower volumes related to business divestitures ($138 million), partially offset by higher volumes ($96 million), the favorable impact of foreign currency translation ($23 million) and the impact of prior year nonrecurring purchase accounting adjustments ($6 million). The increase in volumes was primarily attributable to higher building management, HVAC and refrigeration equipment, and specialty products sales.
|
|
Three Months Ended
December 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Building Solutions North America
|
$
|
227
|
|
|
$
|
196
|
|
|
16
|
%
|
Building Solutions EMEA/LA
|
69
|
|
|
49
|
|
|
41
|
%
|
||
Building Solutions Asia Pacific
|
74
|
|
|
63
|
|
|
17
|
%
|
||
Global Products
|
286
|
|
|
127
|
|
|
*
|
|
||
|
$
|
656
|
|
|
$
|
435
|
|
|
51
|
%
|
•
|
The increase in Building Solutions North America was due to prior year nonrecurring purchase accounting adjustments ($23 million), prior year transaction costs ($10 million), prior year integration costs ($7 million), favorable volumes / mix ($5 million), lower selling, general and administrative expenses ($2 million), and the favorable impact of foreign currency translation ($1 million), partially offset by current year integration costs ($9 million), higher operating costs ($5 million) and incremental investments ($3 million).
|
•
|
The increase in Building Solutions EMEA/LA was due to prior year nonrecurring purchase accounting adjustments ($12 million), higher volumes ($10 million), the favorable impact of foreign currency translation ($4 million), prior year transaction costs ($2 million), prior year integration costs ($2 million) and higher equity income ($1 million), partially offset by higher operating costs ($5 million), higher selling, general and administrative expenses ($2 million), lower income due to a business divestiture ($2 million) and current year integration costs ($2 million).
|
•
|
The increase in Building Solutions Asia Pacific was due to prior year nonrecurring purchase accounting adjustments ($6 million), higher volumes ($3 million), lower selling, general and administrative expenses ($3 million), prior year
|
•
|
The increase in Global Products was due to a gain on business divestiture ($114 million), prior year nonrecurring purchase accounting adjustments ($71 million), favorable volumes / mix ($30 million), higher equity income ($7 million), the favorable impact of foreign currency translation ($5 million), prior year integration costs ($4 million) and prior year transaction costs ($3 million), partially offset by lower income due to business divestitures ($35 million), incremental global product investments ($17 million), higher operating costs ($13 million), current year integration costs ($6 million), and higher selling, general and administrative expenses ($4 million).
|
|
Three Months Ended
December 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Net sales
|
$
|
2,130
|
|
|
$
|
1,900
|
|
|
12
|
%
|
Segment EBITA
|
384
|
|
|
389
|
|
|
-1
|
%
|
•
|
Net sales increased due to the impact of higher lead costs on pricing ($131 million), the favorable impact of foreign currency translation ($78 million), and favorable pricing and product mix ($48 million), partially offset by lower volumes ($27 million). The decrease in volumes was driven by changes in customer demand patterns in Europe and North America,
partially offset by an increase in start-stop battery volumes. Additionally, higher start-stop volumes contributed to favorable product mix.
|
•
|
Segment EBITA decreased due to higher operating costs primarily driven by efforts to satisfy customer demand including higher transportation costs in North America ($25 million), incremental investments ($11 million), lower volumes ($8 million) and lower equity income ($4 million), partially offset by favorable pricing and product mix ($19 million), a current year gain on a business deconsolidation and changes in selling, general and administrative expenses ($13 million), the favorable impact of foreign currency translation ($10 million) and prior year transaction costs ($1 million).
|
|
December 31,
|
|
September 30,
|
|
|
|||||
(in millions)
|
2017
|
|
2017
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Current assets
|
$
|
12,429
|
|
|
$
|
12,292
|
|
|
|
|
Current liabilities
|
(11,246
|
)
|
|
(11,854
|
)
|
|
|
|||
|
1,183
|
|
|
438
|
|
|
*
|
|
||
|
|
|
|
|
|
|||||
Less: Cash
|
(552
|
)
|
|
(321
|
)
|
|
|
|||
Add: Short-term debt
|
1,514
|
|
|
1,214
|
|
|
|
|||
Add: Current portion of long-term debt
|
91
|
|
|
394
|
|
|
|
|||
Less: Assets held for sale
|
(40
|
)
|
|
(189
|
)
|
|
|
|||
Add: Liabilities held for sale
|
—
|
|
|
72
|
|
|
|
|||
Working capital (as defined)
|
$
|
2,196
|
|
|
$
|
1,608
|
|
|
37
|
%
|
|
|
|
|
|
|
|||||
Accounts receivable - net
|
$
|
6,731
|
|
|
$
|
6,666
|
|
|
1
|
%
|
Inventories
|
3,459
|
|
|
3,209
|
|
|
8
|
%
|
||
Accounts payable
|
4,020
|
|
|
4,271
|
|
|
-6
|
%
|
||
|
|
|
|
|
|
|||||
* Measure not meaningful
|
|
|
|
|
|
•
|
The Company defines working capital as current assets less current liabilities, excluding cash, short-term debt, the current portion of long-term debt, and the current portion of assets and liabilities held for sale. Management believes that this measure of working capital, which excludes financing-related items and businesses to be divested, provides a more useful measurement of the Company’s operating performance.
|
•
|
The increase in working capital at
December 31, 2017
as compared to
September 30, 2017
, was primarily due to an increase in inventory to meet anticipated customer demand and a decrease in accounts payable due to timing and mix of supplier payments.
|
•
|
The Company’s days sales in accounts receivable at
December 31, 2017
were 70 days, higher than 65 days at
September 30, 2017
. There have been no changes in revenue recognition methods. There has been no significant adverse changes in the level of overdue receivables or changes in revenue recognition methods.
|
•
|
The Company’s inventory turns for the three months ended
December 31, 2017
were lower than the comparable period ended
September 30, 2017
, primarily due to changes in inventory production levels.
|
•
|
Days in accounts payable at
December 31, 2017
were 72 days, slightly lower than 73 days at the comparable period ended
September 30, 2017
.
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Cash used by operating activities
|
|
$
|
(129
|
)
|
|
$
|
(1,885
|
)
|
Cash provided (used) by investing activities
|
|
1,774
|
|
|
(331
|
)
|
||
Cash provided (used) by financing activities
|
|
(1,440
|
)
|
|
1,964
|
|
||
Capital expenditures
|
|
(230
|
)
|
|
(371
|
)
|
•
|
The decrease in cash used by operating activities for the three months ended
December 31, 2017
was primarily due to higher prior year income tax payments related to the Adient spin-off ($1.2 billion in the first quarter of fiscal 2017) and prior year operating cash outflows in the Automotive Experience business before the Adient spin-off, change in control pension payments and transaction related restructuring payments.
|
•
|
The increase in cash provided by investing activities for the three months ended
December 31, 2017
was primarily due to net cash proceeds received from the Scott Safety divestiture in the current year and a decrease in capital expenditures.
|
•
|
The increase in cash used by financing activities for the three months ended
December 31, 2017
was primarily due to the prior year net dividend proceeds from the Adient spin-off, higher repayments of long-term debt and a prior year increase in short-term debt, partially offset by an increase in long-term debt.
|
•
|
The decrease in capital expenditures for the three months ended
December 31, 2017
primarily relates to lower capital investments in the current year in the Building Technologies & Solutions business and prior year capital investments in the Automotive Experience business before the Adient spin-off.
|
|
December 31,
|
|
September 30,
|
|
|
|||||
(in millions)
|
2017
|
|
2017
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Short-term debt
|
$
|
1,514
|
|
|
$
|
1,214
|
|
|
|
|
Current portion of long-term debt
|
91
|
|
|
394
|
|
|
|
|||
Long-term debt
|
10,895
|
|
|
11,964
|
|
|
|
|||
Total debt
|
12,500
|
|
|
13,572
|
|
|
-8
|
%
|
||
Less: cash and cash equivalents
|
552
|
|
|
321
|
|
|
|
|||
Total net debt
|
11,948
|
|
|
13,251
|
|
|
-10
|
%
|
||
|
|
|
|
|
|
|||||
Shareholders’ equity attributable to Johnson Controls
ordinary shareholders
|
20,535
|
|
|
20,447
|
|
|
0
|
%
|
||
|
|
|
|
|
|
|||||
Total capitalization
|
$
|
32,483
|
|
|
$
|
33,698
|
|
|
-4
|
%
|
|
|
|
|
|
|
|||||
Total net debt as a % of total capitalization
|
36.8
|
%
|
|
39.3
|
%
|
|
|
•
|
Net debt and net debt as a percentage of total capitalization are non-GAAP financial measures. 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 Company believes its capital resources and liquidity position at
December 31, 2017
are adequate to meet projected needs. The Company believes requirements for working capital, capital expenditures, dividends, stock repurchases, minimum pension contributions, debt maturities and any potential acquisitions in the remainder of fiscal 2018 will continue to be funded from operations, supplemented by short- and long-term borrowings, if required. The Company currently manages its short-term
|
•
|
The Company’s debt financial covenant in its revolving credit facility require a minimum consolidated shareholders’ equity attributable to Johnson Controls of at least $3.5 billion at all times. The revolving credit facility also limits the amount of debt secured by liens that may be incurred to a maximum aggregated amount of 10% of consolidated shareholders’ equity attributable to Johnson Controls for liens and pledges. For purposes of calculating these covenants, consolidated shareholders’ equity attributable to Johnson Controls is calculated without giving effect to (i) the application of Accounting Standards Codification ("ASC") 715-60, "Defined Benefit Plans - Other Postretirement," or (ii) the cumulative foreign currency translation adjustment. TSarl's revolving credit facility contains customary terms and conditions, and a financial covenant that limits the ratio of TSarl's debt to earnings before interest, taxes, depreciation, and amortization as adjusted for certain items set forth in the agreement to 3.5x. TSarl's revolving credit facility also limits its ability to incur subsidiary debt or grant liens on its and its subsidiaries' property. As of December 31, 2017, the Company and TSarl were in compliance with all covenants and other requirements set forth in their credit agreements and the indentures, governing their notes, and expect to remain in compliance for the foreseeable future. None of the Company’s or TSarl's debt agreements limit access to stated borrowing levels or require accelerated repayment in the event of a decrease in the respective borrower's credit rating.
|
•
|
The key financial assumptions used in calculating the Company’s pension liability are determined annually, or whenever plan assets and liabilities are re-measured as required under accounting principles generally accepted in the U.S., including the expected rate of return on its plan assets. In fiscal
2018
, the Company believes the long-term rate of return will approximate 7.50%, 5.35% and 5.65% for U.S. pension, non-U.S. pension and postretirement plans, respectively. During the first three months of fiscal
2018
, the Company made approximately $24 million in total pension and postretirement contributions. In total, the Company expects to contribute approximately $100 million in cash to its defined benefit pension plans in fiscal
2018
. The Company expects to contribute $5 million in cash to its postretirement plans in fiscal
2018
.
|
•
|
The Company earns a significant amount of its operating income outside of the parent company. Outside basis differences in consolidated subsidiaries are deemed to be permanently reinvested except in limited circumstances. However, in fiscal 2018, due to U.S. Tax Reform, the Company provided income tax related to the change in the Company’s assertion over the outside basis difference of certain non-U.S. subsidiaries owned directly or indirectly by U.S. subsidiaries. Under U.S. Tax Reform, the U.S. has adopted a territorial tax system that provides an exemption for dividends received by U.S. corporations from 10% or more owned non-U.S. corporations. However, certain non-U.S, U.S. state and withholding taxes may still apply when closing an outside basis difference via distribution or other transactions. The Company currently does not intend nor foresee a need to repatriate undistributed earnings or reduce outside basis differences other than as noted above or in tax efficient manners. The Company expects existing U.S. cash and liquidity to continue to be sufficient to fund the Company’s U.S. operating activities and cash commitments for investing and financing activities for at least the next twelve months and thereafter for the foreseeable future. In the U.S., should the Company require more capital than is generated by its operations, the Company could elect to raise capital in the U.S. through debt or equity issuances. The Company has borrowed funds in the U.S. and continues to have the ability to borrow funds in the U.S. at reasonable interest rates. In addition, the Company expects existing non-U.S. cash, cash equivalents, short-term investments and cash flows from operations to continue to be sufficient to fund the Company’s non-U.S. operating activities and cash commitments for investing activities, such as material capital expenditures, for at least the next twelve months and thereafter for the foreseeable future. Should the Company require more capital at the Luxembourg and Ireland holding and financing entities, other than amounts that can be provided in a tax efficient manner, the Company could also elect to raise capital through debt or equity issuances. These alternatives could result in increased interest expense or other dilution of the Company’s earnings.
|
•
|
To better align its resources with its growth strategies and reduce the cost structure of its global operations in certain underlying markets, the Company committed to a significant restructuring plan in fiscal 2018 and recorded
$158 million
of restructuring and impairment costs in the consolidated statements of income. The restructuring action related to cost reduction initiatives in the Company’s Building Technologies & Solutions and Power Solutions businesses and at Corporate. The costs consist primarily of workforce reductions, plant closures and asset impairments. The Company currently estimates that upon completion of the restructuring action, the fiscal 2018 restructuring plan will reduce annual operating costs by approximately
|
•
|
To better align its resources with its growth strategies and reduce the cost structure of its global operations in certain underlying markets, the Company committed to a significant restructuring plan in fiscal 2017 and recorded $367 million of restructuring and impairment costs in the consolidated statements of income. The restructuring action related to cost reduction initiatives in the Company’s Building Technologies & Solutions and Power Solutions businesses and at Corporate. The costs consist primarily of workforce reductions, plant closures and asset impairments. The Company currently estimates that upon completion of the restructuring action, the fiscal 2017 restructuring plan will reduce annual operating costs by approximately $280 million, which is primarily the result of lower cost of sales and selling, general and administrative expenses due to reduced employee-related costs, depreciation and amortization expense. The Company expects the annual benefit of these actions will be substantially realized in fiscal 2019. For fiscal 2018, the savings, net of execution costs, are expected to be approximately 85% of the expected annual operating cost reduction. The restructuring action is expected to be substantially complete in fiscal 2018. The restructuring plan reserve balance of
$211 million
at
December 31, 2017
is expected to be paid in cash.
|
•
|
To better align its resources with its growth strategies and reduce the cost structure of its global operations to address the softness in certain underlying markets, the Company committed to a significant restructuring plan in fiscal 2016 and recorded
$288 million
of restructuring and impairment costs in the consolidated statements of income. The restructuring action related to cost reduction initiatives in the Company’s Building Technologies & Solutions and Power Solutions businesses and at Corporate. The costs consist primarily of workforce reductions, plant closures, asset impairments and change-in-control payments. The Company currently estimates that upon completion of the restructuring action, the fiscal 2016 restructuring plan will reduce annual operating costs by approximately $135 million, which is primarily the result of lower cost of sales and selling, general and administrative expenses due to reduced employee-related costs, depreciation and amortization expense. The Company expects the annual benefit of these actions will be substantially realized in fiscal 2019. For fiscal 2018, the savings, net of execution costs, are expected to be approximately 75% of the expected annual operating cost reduction. The restructuring action is expected to be substantially complete in fiscal 2018. The restructuring plan reserve balance of
$86 million
at
December 31, 2017
is expected to be paid in cash.
|
•
|
Refer to Note 11, "Debt and Financing Arrangements," of the notes to consolidated financial statements for additional information on items impacting capitalization.
|
Period
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased as
Part of the Publicly
Announced Program
|
|
Approximate Dollar
Value of Shares that
May Yet be
Purchased under the
Programs
|
||||||
10/1/17 - 10/31/17
|
|
|
|
|
|
|
|
||||||
Purchases by Company
|
3,373,100
|
|
|
$
|
41.32
|
|
|
3,373,100
|
|
|
$
|
209,113,204
|
|
11/1/17 - 11/30/17
|
|
|
|
|
|
|
|
||||||
Purchases by Company
|
253,169
|
|
|
41.90
|
|
|
253,169
|
|
|
198,504,294
|
|
||
12/1/17 - 12/31/17
|
|
|
|
|
|
|
|
||||||
Purchases by Company
|
—
|
|
|
—
|
|
|
—
|
|
|
1,198,504,294
|
|
||
10/1/17 - 10/31/17
|
|
|
|
|
|
|
|
||||||
Purchases by affiliated purchaser
|
—
|
|
|
—
|
|
|
—
|
|
|
NA
|
|
||
11/1/17 - 11/30/17
|
|
|
|
|
|
|
|
||||||
Purchases by affiliated purchaser
|
425,000
|
|
|
35.59
|
|
|
—
|
|
|
NA
|
|
||
12/1/17 - 12/31/17
|
|
|
|
|
|
|
|
||||||
Purchases by affiliated purchaser
|
—
|
|
|
—
|
|
|
—
|
|
|
NA
|
|
|
|
JOHNSON CONTROLS INTERNATIONAL PLC
|
|
|
|
||
Date: February 2, 2018
|
|
By:
|
/s/ Brian J. Stief
|
|
|
|
Brian J. Stief
|
|
|
Executive Vice President and
Chief Financial Officer
|
Exhibit No.
|
Description
|
|
|
4.1
|
|
|
|
10.1*
|
|
|
|
10.2*
|
|
|
|
10.3*
|
|
|
|
10.4*
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
101
|
The following materials from Johnson Controls International plc's Quarterly Report on Form 10-Q for the quarter ended December 31, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Position, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.
|
(a)
|
“Award” means this grant of Restricted Shares and/or Restricted Share Units.
|
(b)
|
“Award Notice” means the Award notification delivered or made available to the Participant (in either paper or electronic form).
|
(c)
|
“Cause” means (i) if the Participant is subject to an employment agreement with the Company or a Subsidiary that contains a definition of “cause”, such definition, or (ii) otherwise, any of the following as determined by the Committee: (A) violation of the provisions of any employment agreement, non-competition agreement, confidentiality agreement, or similar agreement with the Company or a Subsidiary, or the Company’s or a Subsidiary’s code of ethics, as then in effect, (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the Company or a Subsidiary, (C) commission of an act of dishonesty or disloyalty involving the Company or a Subsidiary, (D) violation of any federal, state or local law in connection with the Participant’s employment or service, or (E) breach of any fiduciary duty to the Company or a Subsidiary.
|
(d)
|
“Company” means Johnson Controls International plc, an Irish public limited company, or any successor thereto.
|
(e)
|
“Fair Market Value” means, per Share on a particular date, the closing sales price on such date on the New York Stock Exchange, or if no sales of Shares occur on the date in question, on the next preceding date on which there was a sale on such market.
|
(f)
|
“Plan” means the Johnson Controls International plc 2012 Share and Incentive Plan (as amended and restated as of September 2, 2016) and as may be further amended from time to time.
|
(g)
|
“Restriction Period” means the length of time indicated in the Award Notice during which the Award is subject to vesting. During the Restriction Period, the Participant cannot sell, transfer, pledge, assign or otherwise encumber the Restricted Shares or Restricted Share Units (or a portion thereof) subject to this Award.
|
(h)
|
“Restricted Share” means a Share that is subject to a risk of forfeiture and the Restriction Period.
|
(i)
|
“Restricted Share Unit” means the right to receive one Share or a cash payment equal to the Fair Market Value of one Share, that is subject to a risk of forfeiture and the Restriction Period.
|
(j)
|
“Retirement” means termination of employment from the Company and its Subsidiaries (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Subsidiaries (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).
|
(k)
|
“Share” means an ordinary share in the capital of the Company.
|
1.
|
Grant of Award
. Subject to the terms and conditions of the Plan, a copy of which has been delivered to the Participant and made a part of this Award, and to the terms and conditions of this Award Agreement, the Company grants to the Participant an award of Restricted Shares or Restricted Share Units, as specified in the Award Notice, on the date and with respect to the number of Shares specified in the Award Notice.
|
2.
|
Restricted Shares
. If the Award is in the form of Restricted Shares, the Shares are subject to the following terms:
|
a.
|
Restriction Period
.
The Company will hold the Shares in escrow for the Restriction Period. During this period, the Shares shall be subject to forfeiture as provided in Section 4.
|
b.
|
Removal of Restrictions
. Subject to any applicable deferral election under the Johnson Controls International plc Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible) and to Section 4 below, Shares that have not been forfeited shall become available to the Participant after the last day of the Restriction Period upon payment in full of all taxes due with respect to such Shares.
|
c.
|
Voting Rights
. During the Restriction Period, the Participant may exercise full voting rights with respect to the Shares.
|
d.
|
Dividends and Other Distributions
. Any cash dividends or other distributions paid or delivered with respect to Restricted Shares for which the record date occurs on or before the last day of the Restriction Period will be credited to a bookkeeping account for the benefit of the Participant. For U.S. domestic Participants, the account will be converted into and settled in additional Shares issued under the Plan at the end of the applicable Restriction Period; for all other Participants, the account will be paid to the Participant in cash at the end of the applicable Restriction Period. Prior to the end of the Restriction Period, such account will be subject to the same terms and conditions (including risk of forfeiture) as the Restricted Shares to which the dividends or other distributions relate.
|
3.
|
Restricted Share Units.
If the Award is in the form of Restricted Share Units
,
the Restricted Share Units are subject to the following terms:
|
a.
|
Restriction Period
. During the Restriction Period, the Restricted Share Units shall be subject to forfeiture as provided in Section 4.
|
b.
|
Settlement of Restricted Share Units
. Subject to any applicable deferral election under the Johnson Controls International plc Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible) and to Section 4 and Section 5 below, the Restricted Share Units shall be settled by, (a) for U.S. and United Kingdom domestic Participants, the issuance by the Company to the Participant of a number of Shares equal to the number of whole Units that have been earned; or (b) for all other Participants, payment of a cash sum to the Participant by the local entity equal to the Fair Market Value of one Share (determined as of the vesting date) multiplied by the number of whole Units that have been earned. The Shares or the cash payment shall be issued or paid in each case within forty-five (45) days after the last day of the Restriction Period (subject to a six-month delay to the extent required to comply with Code Section 409A).
|
c.
|
Dividend Equivalent Units
. Any cash dividends or other distributions paid or delivered with respect to the Shares for which the record date occurs on or before the last day of the Restriction Period will result in a credit to a bookkeeping account for the benefit of the Participant. The credit will be equal to the dividends or other distributions that would have been paid with respect to the Shares subject to the Restricted Share Units had such Shares been outstanding. For U.S. and United Kingdom domestic Participants, the account will be converted into and settled in additional Shares issued under the Plan at the end of the applicable Restriction Period; for all other Participants, the account will be paid to the Participant in cash or, at the discretion of the Company, converted into and settled in additional Shares issued under the Plan at the end of the applicable Restriction Period. Prior to the end of the Restriction
|
4.
|
Termination of Employment - Risk of Forfeiture.
|
a.
|
Retirement
. If the Participant terminates employment from the Company and its Affiliates due to Retirement at a time when the Participant could not have been terminated for Cause, then the Participant shall become vested in, and the Restriction Period shall lapse with respect to, a pro rata portion of the total number of Restricted Shares or Restricted Share Units subject to this Award. Such pro rata portion that shall vest upon Retirement shall be calculated as follows: (i) the total number of Restricted Shares or Restricted Share Units granted under this Award multiplied by (ii) a fraction, the numerator of which equals the total number of full months that the Participant was employed during the Restriction Period and the denominator of which equals the total number of months in the Restriction Period, less (iii) any Restricted Shares or Restricted Share Units that previously vested in the normal course as of the Participant’s last day of employment. Any Restricted Shares or Restricted Share Units subject to this Award that do not become vested under this paragraph upon the Participant’s Retirement shall automatically be forfeited and returned to the Company as of the date of his Retirement.
|
b.
|
Death
. If the Participant’s employment with the Company and its Affiliates terminates because of death at a time when the Participant could not have been terminated for Cause, then, effective as of the date the Company determines the Participant’s employment terminated due to death (provided such determination is made no later than the end of the calendar year following the calendar year in which death occurs), the Participant shall become fully vested in all of the Restricted Shares or Restricted Share Units subject to this Award and any remaining Restriction Period shall automatically lapse.
|
c.
|
Disability
. If the Participant’s employment with the Company and its Affiliates terminates because of Disability at a time when the Participant could not have been terminated for Cause, then the Participant shall become fully vested in all of the Restricted Shares or Restricted Share Units subject to this Award and any remaining Restriction Period shall automatically lapse as of the date of such termination of employment.
|
d.
|
Divestiture or Outsourcing
. If the Participant’s employment with the Company and its Affiliates terminates as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below), at a time when the Participant could not have been terminated for Cause, then the Participant shall become vested in a pro rata portion of the total number of Restricted Shares or Restricted Share Units subject to this Award. Such pro rata portion that shall vest upon termination shall be calculated as follows: (i) the total number of Restricted Shares or Restricted Share Units granted under this Award multiplied by (ii) a fraction, the numerator of which equals the total number of full months that the Participant was employed during the Restriction Period and the denominator of which equals the total number of months in the Restriction Period, less (iii) any Restricted Shares or Restricted Share Units that previously vested in the normal course as of the Participant’s last day of employment; provided that, if such termination of employment does not constitute a “separation from service” within the meaning of Code Section 409A, then any remaining Restriction Period shall continue with respect to the vested Shares or Restricted Share Units as if the Participant continued in active employment to the extent required for compliance with Code Section 409A. Any Restricted Shares or Restricted Share Units subject to this Award that do not become vested under this paragraph as a result of such Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement shall automatically be forfeited and returned to the Company as of the date of the Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement, as applicable. Notwithstanding the foregoing, the Participant shall not be eligible for such pro rata vesting if (i) the Participant’s termination of employment occurs on or prior to the closing date of such Disposition of Assets or Disposition of a Subsidiary, as applicable, or on such later date as is specifically provided in the applicable transaction agreement or related agreements, or on the effective date of such Outsourcing Agreement applicable to the Participant (the “Applicable Employment Date”), and (ii) the Participant is offered Comparable Employment (as defined below) with the buyer, successor company or outsourcing agent, as applicable, but does not commence such employment on the Applicable Employment Date.
|
e.
|
Other Termination.
If the Participant’s employment terminates for any reason not described above (including for Cause), then any Restricted Shares or any Restricted Share Units (and all deferred dividends paid or credited thereon) still subject to the Restriction Period as of the date of such termination shall automatically be forfeited and returned to the Company. In the event of the Participant’s involuntary termination of employment by the Company or an Affiliate for other than Cause, the Committee may waive the automatic forfeiture of any or all such Restricted Shares or Restricted Share Units (and all deferred dividends or other distribution paid or credited thereon) and may add such new restrictions to such Restricted Shares or Restricted Share Units as it deems appropriate. The Company may suspend payment or delivery of Shares (without liability for interest thereon) pending the Committee’s determination of whether the Participant was or should have been terminated for Cause.
|
5.
|
Withholding
. The Participant agrees to remit to the Company any foreign, Federal, state and/or local taxes (including the Participant’s FICA tax obligation) required by law to be withheld with respect to the issuance of Shares under this Award, the vesting of this Award or the payment of cash under this Award. Notwithstanding anything to the contrary in this Award, if the Company or any Affiliate of the Company is required to withhold any Federal, state or local taxes or other amounts in connection with the Award, then the Company may require the Participant to pay to the Company, in cash, promptly on demand, amounts sufficient to satisfy such tax obligations or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts. Alternatively, the Company can withhold Shares no longer restricted, or can withhold from cash or property, including cash or Shares under this Award, payable or issuable to the Participant, in the amount needed to satisfy any withholding obligations; provided that, to the extent Shares are withheld to satisfy taxes, the amount to be withheld may not exceed the total maximum statutory tax withholding obligations associated with the transaction. Notwithstanding the foregoing, with respect to a Participant who is a Reporting Person, if the payment hereunder is to be made in the form of Shares, then any withholding obligations shall be satisfied by the Company withholding Shares otherwise issuable under this Award unless the Committee approves an alternative method by which the Participant shall pay such withholding taxes.
|
6.
|
No Claim for Forfeiture
. Neither the Award nor any benefit accruing to the Participant from the Award will be considered to be part of the Participant’s normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments. In no event may the Award or any benefit accruing to the Participant from the Award be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate. In consideration of the Award, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from termination of the Participant’s employment by the Company or any Affiliate (for any reason whatsoever and whether or not in breach of local labor laws) and the Participant irrevocably releases the Company and its Affiliates from any such claim that may arise. If, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acknowledging the grant, the Participant shall have been deemed irrevocably to have waived any entitlement to pursue such claim.
|
7.
|
Electronic Delivery
. The Company or its Affiliates may, in its or their sole discretion, decide to deliver any documents related to current or future participation in the Plan or related to this Award by electronic means.
|
8.
|
Securities Compliance.
The Company may place a legend or legends upon the certificates for Shares issued under the Plan and may issue “stop transfer” instructions to its transfer agent in respect of such Shares as it determines to be necessary or appropriate to (a) prevent a violation of, or to obtain an exemption from, the registration requirements of the Securities Act of 1933, as amended, applicable state or other country securities laws or other legal requirements, or (b) implement the provisions of the Plan, this Award or any other agreement between the Company and the Participant with respect to such Shares.
|
9.
|
Successors
. All obligations of the Company under this Award shall be binding on any successor to the Company. The terms of this Award and the Plan shall be binding upon and inure to the benefit of the Participant, and his or her heirs, executors, administrators or legal representatives.
|
10.
|
Legal Compliance
. The granting of this Award and the issuance of Shares under this Award shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
|
11.
|
Governing Law; Arbitration
. This Award, and the interpretation of this Award Agreement, shall be governed by (a) the internal laws of Ireland (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to the validity and authorization of any Shares issued under this Award, and (b) the internal laws of the State of Wisconsin (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to all other matters. Arbitration will be conducted per the provisions in the Plan.
|
12.
|
Data Privacy and Sharing
. As a condition of the granting of the Award, the Participant acknowledges and agrees that it is necessary for some of the Participant’s personal identifiable information to be provided to certain employees of the Company, the third party data processor that administers the Plan and the Company’s designated third party broker in the United States. The Participant specifically consents to all transfers required to be made in accordance with the relevant data protection legislation of the Participant’s home country. By acknowledging the Award, the Participant acknowledges having been informed of the processing of the Participant’s personal identifiable information described in the preceding paragraph and consents to the Company collecting and transferring to the Company's Shareholder Services Department, and its independent benefit plan administrator and third party broker, the Participant’s personal data that are necessary to administer the Award and the Plan. The Participant understands that his or her personal information may be transferred, processed and stored outside of the Participant’s home country in a country that may not have the same data protection laws as his or her home country, for the purposes mentioned in this Award.
|
•
|
the identity and the contact details of the controller (usually the administrator and/or the Company) and, where applicable, of the controller's representative;
|
•
|
that the purposes of the processing of personal data is for the grant, administration and vesting of the Award and the legal basis for the processing is that this is required for the performance of this Award Agreement and for compliance with its terms and the Award or to cover the legitimate interests of the data controller and the data processor;
|
•
|
the recipients or categories of recipients of the personal data, if any;
|
•
|
the controller intends to transfer personal data to a third country or international organization subject to the existence of suitable safeguards;
|
•
|
the period for which the personal data will be stored, or if that is not possible, the criteria used to determine that period;
|
•
|
the right to request from the controller access to and rectification of personal data.t
|
13.
|
Restrictive Covenants.
In consideration for the Participant’s opportunity to earn the benefits provided in this Award Agreement, Participant agrees to be bound by the restrictive covenants in Attachment A. For the sake of clarity, by accepting this Award, Participant agrees to be bound by such restrictive covenants even if Participant ultimately forfeits this Award or otherwise fails to receive any benefits under this Award Agreement.
|
(a)
|
“Award” means this grant of Options and/or an SAR.
|
(b)
|
“Award Notice” means the Award notification delivered or made available to the Participant (in either paper or electronic form).
|
(c)
|
“Cause” means (i) if the Participant is subject to an employment agreement with the Company or a Subsidiary that contains a definition of “cause”, such definition, or (ii) otherwise, any of the following as determined by the Committee: (A) violation of the provisions of any employment agreement, non-competition agreement, confidentiality agreement, or similar agreement with the Company or a Subsidiary, or the Company’s or a Subsidiary’s code of ethics, as then in effect, (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the Company or a Subsidiary, (C) commission of an act of dishonesty or disloyalty involving the Company or a Subsidiary, (D) violation of any federal, state or local law in connection with the Participant’s employment or service, or (E) breach of any fiduciary duty to the Company or a Subsidiary.
|
(d)
|
“Company” means Johnson Controls International plc, an Irish public limited company, or any successor thereto.
|
(e)
|
“Fair Market Value” means, per Share on a particular date, the closing sales price on such date on the New York Stock Exchange, or if no sales of Shares occur on the date in question, on the next preceding date on which there was a sale on such market.
|
(f)
|
“Grant Date” is the date the Award was made to the Participant, as specified in the Award Notice.
|
(g)
|
“Inimical Conduct” means any act or omission that is inimical to the best interests of the Company or any Affiliate as determined by the Committee in its sole discretion, including but not limited to: (i) violation of any employment, noncompete, confidentiality or other agreement in effect with the Company or any Affiliate, (ii) taking any steps or doing anything which would damage or negatively reflect on the reputation of the Company or an Affiliate, or (iii) failure to comply with applicable laws relating to trade secrets, confidential information or unfair competition.
|
(h)
|
“Option” means this nonqualified share option representing the right to purchase Shares at a stated price for a specified period of time.
|
(i)
|
“Plan” means the Johnson Controls International plc 2012 Share and Incentive Plan (as amended and restated as of September 2, 2016) and as may be further amended from time to time.
|
(j)
|
“Retirement” means termination of employment from the Company and its Subsidiaries (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Subsidiaries (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).
|
(k)
|
"SAR” is an Award of Share Appreciation Rights which will be settled in cash. The Participant will receive the economic equivalent of the excess of the Fair Market Value on the exercise date over the Exercise Price.
|
(l)
|
“Share” means an ordinary share in the capital of the Company.
|
(a)
|
Fifty Percent (50%) of the Award shall vest on the second anniversary of the Grant Date.
|
(b)
|
Fifty Percent (50%) of the Award shall vest on the third anniversary of the Grant Date.
|
(a)
|
“Award” means this grant of Performance Units.
|
(b)
|
“Award Notice” means the Award notification delivered or made available to the Participant (in either paper or electronic form).
|
(c)
|
“Cause” means (i) if the Participant is subject to an employment agreement with the Company or a Subsidiary that contains a definition of “cause”, such definition, or (ii) otherwise, any of the following as determined by the Committee: (A) violation of the provisions of any employment agreement, non-competition agreement, confidentiality agreement, or similar agreement with the Company or a Subsidiary, or the Company’s or a Subsidiary’s code of ethics, as then in effect, (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the Company or a Subsidiary, (C) commission of an act of dishonesty or disloyalty involving the Company or a Subsidiary, (D) violation of any federal, state or local law in connection with the Participant’s employment or service, or (E) breach of any fiduciary duty to the Company or a Subsidiary.
|
(d)
|
“Company” means Johnson Controls International plc, an Irish public limited company, or any successor thereto.
|
(e)
|
“Fair Market Value” means, per Share on a particular date, the closing sales price on such date on the New York Stock Exchange, or if no sales of Shares occur on the date in question, on the next preceding date on which there was a sale on such market.
|
(f)
|
“Inimical Conduct” means any act or omission that is inimical to the best interests of the Company or any Affiliate as determined by the Committee in its sole discretion, including but not limited to: (i) violation of any employment, noncompete, confidentiality or other agreement in effect with the Company or any Affiliate, (ii) taking any steps or doing anything which would damage or negatively reflect on the reputation of the Company or an Affiliate, or (iii) failure to comply with applicable laws relating to trade secrets, confidential information or unfair competition.
|
(g)
|
“Performance Unit” or “Unit” means the right to receive one Share or a cash payment equal to the Fair Market Value of one Share, to the extent the Performance Goals specified in the Summary of Terms and Conditions delivered to the Participant are achieved.
|
(h)
|
“Plan” means the Johnson Controls International plc 2012 Share and Incentive Plan (as amended and restated as of September 2, 2016) and as may be further amended from time to time.
|
(i)
|
“Retirement” means termination of employment from the Company and its Subsidiaries (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Subsidiaries (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).
|
(j)
|
“Share” means an ordinary share in the capital of the Company.
|
(b)
|
Death or Disability
. If, prior to the settlement of the Units, the Participant terminates employment from the Company and its Affiliates due to death or Disability at a time when the Participant’s employment could not have been terminated for Cause, then the Participant shall be eligible to earn the Units at the end of the performance period based on actual performance and without pro ration for the number of months of employment during the performance period. Any Units subject to this Award that do not become vested under this paragraph as a result of such termination due to death or Disability and actual performance shall automatically be forfeited and returned to the Company as of the date on which actual performance is determined.
|
(c)
|
Divestiture or Outsourcing
. If the Participant’s employment with the Company and its Affiliates terminates as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below) at a time when the Participant could not have been terminated for Cause, then the Participant shall become vested in a pro rata portion of the target number of Units subject to this Award, which shall be calculated by multiplying the target number of Units times a fraction, the numerator of which is the number of full months of that the Participant was employed during the performance period prior to such Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement and the denominator of which is the total number of full months in the performance period. Any Units subject to this Award that do not become vested under this paragraph as a result of such Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement shall automatically be forfeited and returned to the Company as of the date of the Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement, as applicable. Notwithstanding the foregoing, the Participant shall not be eligible for such pro rata vesting if (i) the Participant’s termination of employment occurs on or prior to the closing date of such Disposition of Assets or Disposition of a Subsidiary, as applicable, or on such later date as is specifically provided in the applicable transaction agreement or related agreements, or on the effective date of such Outsourcing Agreement applicable to the Participant (the “Applicable Employment Date”), and (ii) the Participant is offered Comparable Employment (as defined below) with the buyer, successor company or outsourcing agent, as applicable, but does not commence such employment on the Applicable Employment Date.
|
(d)
|
Other Termination.
If the Participant’s employment terminates for any reason not described above (including for Cause) prior to the settlement of the Units, then this Award shall automatically be forfeited in its entirety immediately upon such termination. The Company may suspend payment or delivery of Shares (without liability for interest thereon) pending the Committee’s determination of whether the Participant was or should have been terminated for Cause or whether the Participant has engaged in Inimical Conduct.
|
•
|
the identity and the contact details of the controller (usually the administrator and/or the Company) and, where applicable, of the controller's representative;
|
•
|
that the purposes of the processing of personal data is for the grant, administration and vesting of the Award and the legal basis for the processing is that this is required for the performance of this Award Agreement and for compliance with its terms and the Award or to cover the legitimate interests of the data controller and the data processor;
|
•
|
the recipients or categories of recipients of the personal data, if any;
|
•
|
the controller intends to transfer personal data to a third country or international organization subject to the existence of suitable safeguards;
|
•
|
the period for which the personal data will be stored, or if that is not possible, the criteria used to determine that period;
|
•
|
the right to request from the controller access to and rectification of personal data.
|
(a)
|
“Award” means this grant of Restricted Shares and/or Restricted Share Units.
|
(b)
|
“Award Notice” means the Award notification delivered or made available to the Participant (in either paper or electronic form).
|
(c)
|
“Cause” means (i) if the Participant is subject to an employment agreement with the Company or a Subsidiary that contains a definition of “cause”, such definition, or (ii) otherwise, any of the following as determined by the Committee: (A) violation of the provisions of any employment agreement, non-competition agreement, confidentiality agreement, or similar agreement with the Company or a Subsidiary, or the Company’s or a Subsidiary’s code of ethics, as then in effect, (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the Company or a Subsidiary, (C) commission of an act of dishonesty or disloyalty involving the Company or a Subsidiary, (D) violation of any federal, state or local law in connection with the Participant’s employment or service, or (E) breach of any fiduciary duty to the Company or a Subsidiary.
|
(d)
|
“Company” means Johnson Controls International plc, an Irish public limited company, or any successor thereto.
|
(e)
|
“Fair Market Value” means, per Share on a particular date, the closing sales price on such date on the New York Stock Exchange, or if no sales of Shares occur on the date in question, on the next preceding date on which there was a sale on such market.
|
(f)
|
“Inimical Conduct” means any act or omission that is inimical to the best interests of the Company or any Affiliate as determined by the Administrator in its sole discretion, including but not limited to: (i) violation of any employment, noncompete, confidentiality or other agreement in effect with the Company or any Affiliate, (ii) taking any steps or doing anything which would damage or negatively reflect on the reputation of the Company or an Affiliate, or (iii) failure to comply with applicable laws relating to trade secrets, confidential information or unfair competition.
|
(g)
|
“Plan” means the Johnson Controls International plc 2012 Share and Incentive Plan (as amended and restated as of September 2, 2016) and as may be further amended from time to time.
|
(h)
|
“Restriction Period” means the length of time indicated in the Award Notice during which the Award is subject to vesting. During the Restriction Period, the Participant cannot sell, transfer, pledge, assign or otherwise encumber the Restricted Shares or Restricted Share Units (or a portion thereof) subject to this Award.
|
(i)
|
“Restricted Share” means a Share that is subject to a risk of forfeiture and the Restriction Period.
|
(j)
|
“Restricted Share Unit” means the right to receive one Share or a payment equal to the Fair Market Value of one Share, that is subject to a risk of forfeiture and the Restriction Period.
|
(k)
|
“Retirement” means termination of employment from the Company and its Subsidiaries (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Subsidiaries (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).
|
(l)
|
“Share” means an ordinary share in the capital of the Company.
|
1.
|
Grant of Award
. Subject to the terms and conditions of the Plan, a copy of which has been delivered to the Participant and made a part of this Award, and to the terms and conditions of this Award Agreement, the Company grants to the Participant an award of Restricted Shares or Restricted Share Units, as specified in the Award Notice, on the date and with respect to the number of Shares specified in the Award Notice.
|
2.
|
Restricted Shares
. If the Award is in the form of Restricted Shares, the Shares are subject to the following terms:
|
a.
|
Restriction Period
.
The Company will hold the Shares in escrow for the Restriction Period. During this period, the Shares shall be subject to forfeiture as provided in Section 4.
|
b.
|
Removal of Restrictions
. Subject to any applicable deferral election under the Johnson Controls International plc Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible) and to Section 4 below, Shares that have not been forfeited shall become available to the Participant after the last day of the Restriction Period upon payment in full of all taxes due with respect to such Shares.
|
c.
|
Voting Rights
. During the Restriction Period, the Participant may exercise full voting rights with respect to the Shares.
|
d.
|
Dividends and Other Distributions
. Any cash dividends or other distributions paid or delivered with respect to Restricted Shares for which the record date occurs on or before the last day of the Restriction Period will be credited to a bookkeeping account for the benefit of the Participant. For U.S. domestic Participants, the account will be converted into and settled in additional Shares issued under the Plan at the end of the applicable Restriction Period; for all other Participants, the account will be paid to the Participant in cash at the end of the applicable Restriction Period. Prior to the end of the Restriction Period, such account will be subject to the same terms and conditions (including risk of forfeiture) as the Restricted Shares to which the dividends or other distributions relate.
|
3.
|
Restricted Share Units.
If the Award is in the form of Restricted Share Units
,
the Restricted Share Units are subject to the following terms:
|
a.
|
Restriction Period
. During the Restriction Period, the Restricted Share Units shall be subject to forfeiture as provided in Section 4.
|
b.
|
Settlement of Restricted Share Units
. Subject to any applicable deferral election under the Johnson Controls International plc Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible) and to Section 4 and Section 5 below, the Restricted Share Units shall be settled by, (a) for U.S. domestic Participants, the issuance by the Company to the Participant of a number of Shares equal to the number of whole Restricted Share Units that have been earned; or (b) for all other Participants, payment of a cash sum to the Participant by the local entity equal to the Fair Market Value of one Share (determined as of the vesting date) multiplied by the number of whole Restricted Share Units that have been earned. The Shares or the cash payment shall be issued or paid in each case within forty-five (45) days after the last day of the Restriction Period (subject to a six-month delay to the extent required to comply with Code Section 409A).
|
c.
|
Dividend Equivalent Units
. Any cash dividends or other distributions paid or delivered with respect to the Shares for which the record date occurs on or before the last day of the Restriction Period will
|
4.
|
Termination of Employment - Risk of Forfeiture.
|
a.
|
Retirement
. If the Participant terminates employment from the Company and its Affiliates due to Retirement on or after the first anniversary of the date on which this Award is granted, and at a time when the Participant could not have been terminated for Cause, then any remaining Restriction Period shall continue as if the Participant continued in active employment. If the Participant engages in Inimical Conduct after his Retirement, as determined by the Committee, any Restricted Stock and/or Restricted Stock Units still subject to a Restriction Period shall automatically be forfeited as of the date of the Committee’s determination.
|
b.
|
Death
. If the Participant’s employment with the Company and its Affiliates terminates because of death at a time when the Participant could not have been terminated for Cause, then, effective as of the date the Company determines the Participant’s employment terminated due to death (provided such determination is made no later than the end of the calendar year following the calendar year in which death occurs), the Participant shall become fully vested in all of the Restricted Shares or Restricted Share Units subject to this Award and any remaining Restriction Period shall automatically lapse.
|
c.
|
Disability
. If the Participant’s employment with the Company and its Affiliates terminates because of Disability at a time when the Participant could not have been terminated for Cause, then the Participant shall become fully vested in all of the Restricted Shares or Restricted Share Units subject to this Award and any remaining Restriction Period shall automatically lapse as of the date of such termination of employment.
|
d.
|
Divestiture or Outsourcing
. If the Participant’s employment with the Company and its Affiliates terminates as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below), at a time when the Participant could not have been terminated for Cause, then the Participant shall become vested in a pro rata portion of the total number of Restricted Shares or Restricted Share Units subject to this Award. Such pro rata portion that shall vest upon termination shall be calculated as follows: (i) the total number of Restricted Shares or Restricted Share Units granted under this Award multiplied by (ii) a fraction, the numerator of which equals the total number of full months that the Participant was employed during the Restriction Period and the denominator of which equals the total number of months in the Restriction Period, less (iii) any Restricted Shares or Restricted Share Units that previously vested in the normal course as of the Participant’s last day of employment; provided that, if such termination of employment does not constitute a “separation from service” within the meaning of Code Section 409A, then any remaining Restriction Period shall continue with respect to the vested Shares or Restricted Share Units as if the Participant continued in active employment to the extent required for compliance with Code Section 409A. Any Restricted Shares or Restricted Share Units subject to this Award that do not become vested under this paragraph as a result of such Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement shall automatically be forfeited and returned to the Company as of the date of the Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement, as applicable. Notwithstanding the foregoing, the Participant shall not be eligible for such pro rata vesting if (i) the Participant’s termination of employment occurs on or prior to the closing date of such Disposition of Assets or Disposition of a Subsidiary, as applicable, or on such later date as is specifically provided in the applicable transaction agreement or related agreements, or on the effective date of such Outsourcing Agreement applicable to the Participant (the “Applicable Employment Date”), and (ii) the Participant is offered Comparable Employment (as defined below) with the buyer, successor company or outsourcing agent, as applicable, but does not commence such employment on the Applicable Employment Date.
|
e.
|
Other Termination.
If the Participant’s employment terminates for any reason not described above (including for Cause), then any Restricted Shares or any Restricted Share Units (and all deferred dividends paid or credited thereon) still subject to the Restriction Period as of the date of such termination shall automatically be forfeited and returned to the Company. In the event of the Participant’s involuntary termination of employment by the Company or an Affiliate for other than Cause, the Committee may waive the automatic forfeiture of any or all such Restricted Shares or Restricted Share Units (and all deferred dividends or other distribution paid or credited thereon) and may add such new restrictions to such Restricted Shares or Restricted Share Units as it deems appropriate. The Company may suspend payment or delivery of Shares (without liability for interest thereon) pending the Committee’s determination of whether the Participant was or should have been terminated for Cause.
|
5.
|
Withholding
. The Participant agrees to remit to the Company any foreign, Federal, state and/or local taxes (including the Participant’s FICA tax obligation) required by law to be withheld with respect to the issuance of Shares under this Award, the vesting of this Award or the payment of cash under this Award. Notwithstanding anything to the contrary in this Award, if the Company or any Affiliate of the Company is required to withhold any Federal, state or local taxes or other amounts in connection with the Award, then the Company may require the Participant to pay to the Company, in cash, promptly on demand, amounts sufficient to satisfy such tax obligations or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts. Alternatively, the Company can withhold Shares no longer restricted, or can withhold from cash or property, including cash or Shares under this Award, payable or issuable to the Participant, in the amount needed to satisfy any withholding obligations; provided that, to the extent Shares are withheld to satisfy taxes, the amount to be withheld may not exceed the total maximum statutory tax withholding obligations associated with the transaction. Notwithstanding the foregoing, with respect to a Participant who is a Reporting Person, if the payment hereunder is to be made in the form of Shares, then any withholding obligations shall be satisfied by the Company withholding Shares otherwise issuable under this Award unless the Committee approves an alternative method by which the Participant shall pay such withholding taxes.
|
6.
|
No Claim for Forfeiture
. Neither the Award nor any benefit accruing to the Participant from the Award will be considered to be part of the Participant’s normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments. In no event may the Award or any benefit accruing to the Participant from the Award be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate. In consideration of the Award, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from termination of the Participant’s employment by the Company or any Affiliate (for any reason whatsoever and whether or not in breach of local labor laws) and the Participant irrevocably releases the Company and its Affiliates from any such claim that may arise. If, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acknowledging the grant, the Participant shall have been deemed irrevocably to have waived any entitlement to pursue such claim.
|
7.
|
Electronic Delivery
. The Company or its Affiliates may, in its or their sole discretion, decide to deliver any documents related to current or future participation in the Plan or related to this Award by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Participant hereby agrees that all on-line acknowledgements shall have the same force and effect as a written signature.
|
8.
|
Securities Compliance.
The Company may place a legend or legends upon the certificates for Shares issued under the Plan and may issue “stop transfer” instructions to its transfer agent in respect of such Shares as it determines to be necessary or appropriate to (a) prevent a violation of, or to obtain an exemption from, the registration requirements of the Securities Act of 1933, as amended, applicable state securities laws or other legal requirements, or (b) implement the provisions of the Plan, this Award or any other agreement between the Company and the Participant with respect to such Shares.
|
9.
|
Successors
. All obligations of the Company under this Award shall be binding on any successor to the Company. The terms of this Award and the Plan shall be binding upon and inure to the benefit of the Participant, and his or her heirs, executors, administrators or legal representatives.
|
10.
|
Legal Compliance
. The granting of this Award and the issuance of Shares under this Award shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
|
11.
|
Governing Law; Arbitration
. This Award, and the interpretation of this Award Agreement, shall be governed by (a) the internal laws of Ireland (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to the validity and authorization of any Shares issued under this Award, and (b) the internal laws of the State of Wisconsin (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to all other matters. Arbitration will be conducted per the provisions in the Plan.
|
12.
|
Data Privacy and Sharing
. As a condition of the granting of the Award, the Participant acknowledges and agrees that it is necessary for some of the Participant’s personal identifiable information to be provided to certain employees of the Company, the third party data processor that administers the Plan and the Company’s designated third party broker in the United States. These transfers will be made pursuant to a contract that requires the processor to provide adequate levels of protection for data privacy and security interests in accordance with the EU Data Privacy Directive 95/46 EC and the implementing legislation of the Participant’s home country (or any successor or superseding regulation). By acknowledging the Award, the Participant acknowledges having been informed of the processing of the Participant’s personal identifiable information described in the preceding paragraph and consents to the Company collecting and transferring to the Company's Shareholder Services Department, and its independent benefit plan administrator and third party broker, the Participant’s personal data that are necessary to administer the Award and the Plan. The Participant understands that his or her personal information may be transferred, processed and stored outside of the Participant’s home country in a country that may not have the same data protection laws as his or her home country, for the purposes mentioned in this Award.
|
13.
|
Restrictive Covenants.
In consideration for the Participant’s opportunity to earn the benefits provided in this Award Agreement, Participant agrees to be bound by the restrictive covenants in Attachment A. For the sake of clarity, by accepting this Award, Participant agrees to be bound by such restrictive covenants even if Participant ultimately forfeits this Award or otherwise fails to receive any benefits under this Award Agreement.
|
(a)
|
“Award” means this grant of Options and/or an SAR.
|
(b)
|
“Award Notice” means the Award notification delivered or made available to the Participant (in either paper or electronic form).
|
(c)
|
“Cause” means (i) if the Participant is subject to an employment agreement with the Company or a Subsidiary that contains a definition of “cause”, such definition, or (ii) otherwise, any of the following as determined by the Committee: (A) violation of the provisions of any employment agreement, non-competition agreement, confidentiality agreement, or similar agreement with the Company or a Subsidiary, or the Company’s or a Subsidiary’s code of ethics, as then in effect, (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the Company or a Subsidiary, (C) commission of an act of dishonesty or disloyalty involving the Company or a Subsidiary, (D) violation of any federal, state or local law in connection with the Participant’s employment or service, or (E) breach of any fiduciary duty to the Company or a Subsidiary.
|
(d)
|
“Company” means Johnson Controls International plc, an Irish public limited company, or any successor thereto.
|
(e)
|
“Fair Market Value” means, per Share on a particular date, the closing sales price on such date on the New York Stock Exchange, or if no sales of Shares occur on the date in question, on the next preceding date on which there was a sale on such market.
|
(f)
|
“Grant Date” is the date the Award was made to the Participant, as specified in the Award Notice.
|
(g)
|
“Inimical Conduct” means any act or omission that is inimical to the best interests of the Company or any Affiliate as determined by the Committee in its sole discretion, including but not limited to: (i) violation of any employment, noncompete, confidentiality or other agreement in effect with the Company or any Affiliate, (ii) taking any steps or doing anything which would damage or negatively reflect on the reputation of the Company or an Affiliate, or (iii) failure to comply with applicable laws relating to trade secrets, confidential information or unfair competition.
|
(h)
|
“Option” means this nonqualified share option representing the right to purchase Shares at a stated price for a specified period of time.
|
(i)
|
“Plan” means the Johnson Controls International plc 2012 Share and Incentive Plan (as amended and restated as of September 2, 2016) and as may be further amended from time to time.
|
(j)
|
“Retirement” means termination of employment from the Company and its Subsidiaries (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Subsidiaries (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).
|
(k)
|
“SAR” is an Award of Share Appreciation Rights which will be settled in cash. The Participant will receive the economic equivalent of the excess of the Fair Market Value on the exercise date over the Exercise Price.
|
(l)
|
“Share” means an ordinary share in the capital of the Company.
|
(a)
|
Fifty Percent (50%) of the Award shall vest on the second anniversary of the Grant Date.
|
(b)
|
Fifty Percent (50%) of the Award shall vest on the third anniversary of the Grant Date.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Johnson Controls International plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ George R. Oliver
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George R. Oliver
Chairman and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Johnson Controls International plc;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Brian J. Stief
|
Brian J. Stief
Executive Vice President and
Chief Financial Officer
|
1.
|
the Quarterly Report on Form 10-Q for the quarter ended
December 31, 2017
(Periodic Report) to which this statement is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and
|
2.
|
information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Johnson Controls International plc.
|
|
/s/ George R. Oliver
|
George R. Oliver
Chairman and Chief Executive Officer
|
|
/s/ Brian J. Stief
|
Brian J. Stief
Executive Vice President and
Chief Financial Officer
|