Date of Report (Date of Earliest Event Reported): | July 31, 2019 |
Ireland | 001-13836 | 98-0390500 | ||
(State or Other Jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||
One Albert Quay | ||
Cork, Ireland | ||
(Address of Principal Executive Offices) | ||
Registrant's Telephone Number, including Area Code: 353-21-423-5000 | ||
Not Applicable | ||
(Former name or former address, if changed since last report) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
Ordinary Shares, Par Value $0.01 | JCI | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter). | |||||
Emerging growth company | ¨ | ||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
99.1 | Press release issued by Johnson Controls International plc, dated July 31, 2019. |
July 31, 2019 | By: | /s/ Robert M. VanHimbergen | |||
Name: | Robert M. VanHimbergen | ||||
Title: | Vice President and Corporate Controller |
CONTACT: | Investors: Antonella Franzen (609) 720-4665 Ryan Edelman (609) 720-4545 Media: Fraser Engerman (414) 524-2733 | Exhibit 99.1 |
▪ | GAAP EPS from continuing operations of $0.16 per share, including special items |
▪ | Adjusted EPS from continuing operations of $0.65, up 20% versus prior year |
▪ | Sales of $6.5 billion, up 3%, reflecting organic growth of 6%; Field up 2% with organic growth of 5%; Products up 3% with organic growth of 7% |
▪ | Field orders up 6% organically versus prior year; Backlog up 7% organically versus prior year |
▪ | Cash provided by operating activities from continuing operations of $0.6 billion; Adjusted free cash flow of $0.6 billion |
▪ | Completed the sale of the Power Solutions business with net cash proceeds of $11.6 billion; equity tender approximated 102 million shares for $4.0 billion and repaid $3.4 billion of debt |
▪ | Tightens fiscal 2019 adjusted EPS from continuing operations guidance range to $1.93 to $1.95, representing a year-over-year increase of 21% to 23% |
GAAP | GAAP | Adjusted | Adjusted | |||||||
Q3 2018 | Q3 2019 | Q3 2018 | Q3 2019 | Change | ||||||
Sales | $6,282 | $6,451 | $6,282 | $6,451 | +3% | |||||
Segment EBITA | 942 | 832 | 954 | 992 | +4% | |||||
EBIT | 702 | 583 | 753 | 809 | +7% | |||||
Net income from continuing operations | 474 | 141 | 506 | 565 | +12% | |||||
Diluted EPS from continuing operations | $0.51 | $0.16 | $0.54 | $0.65 | +20% |
GAAP | GAAP | Adjusted | Adjusted | |||||||
Q3 2018 | Q3 2019 | Q3 2018 | Q3 2019 | Change | ||||||
Sales | $2,246 | $2,327 | $2,246 | $2,327 | 4% | |||||
Segment EBITA | $314 | $300 | $318 | $310 | (3%) | |||||
Segment EBITA margin % | 14.0% | 12.9% | 14.2% | 13.3% | (90bps) |
GAAP | GAAP | Adjusted | Adjusted | |||||||
Q3 2018 | Q3 2019 | Q3 2018 | Q3 2019 | Change | ||||||
Sales | $926 | $922 | $926 | $922 | (0%) | |||||
Segment EBITA | $96 | $101 | $98 | $103 | 5% | |||||
Segment EBITA margin % | 10.4% | 11.0% | 10.6% | 11.2% | 60bps |
GAAP | GAAP | Adjusted | Adjusted | |||||||
Q3 2018 | Q3 2019 | Q3 2018 | Q3 2019 | Change | ||||||
Sales | $681 | $691 | $681 | $691 | 1% | |||||
Segment EBITA | $97 | $98 | $97 | $98 | 1% | |||||
Segment EBITA margin % | 14.2% | 14.2% | 14.2% | 14.2% | Flat |
GAAP | GAAP | Adjusted | Adjusted | |||||||
Q3 2018 | Q3 2019 | Q3 2018 | Q3 2019 | Change | ||||||
Sales | $2,429 | $2,511 | $2,429 | $2,511 | 3% | |||||
Segment EBITA | $435 | $333 | $441 | $481 | 9% | |||||
Segment EBITA margin % | 17.9% | 13.3% | 18.2% | 19.2% | 100bps |
GAAP | GAAP | Adjusted | Adjusted | |||||||
Q3 2018 | Q3 2019 | Q3 2018 | Q3 2019 | Change | ||||||
Corporate expense | ($142) | $70 | ($103) | ($90) | (13%) |
• | For the quarter, cash provided by operating activities from continuing operations was $0.6 billion and capital expenditures were $0.1 billion, resulting in free cash flow from continuing operations of $0.5 billion. Adjusted free cash flow was $0.6 billion, which excludes net cash outflows of $0.1 billion primarily related to integration costs. |
• | Year-to-date, cash provided by operating activities from continuing operations was $0.7 billion and capital expenditures were $0.4 billion, resulting in a free cash flow from continuing operations of $0.3 billion. Adjusted free cash flow was $0.6 billion, which excludes net cash outflows of $0.3 billion primarily related to restructuring and integration costs. |
• | During the quarter, the Company repurchased approximately 105 million shares for $4.1 billion, including the completion of the share tender on June 5, 2019. Year-to-date, the Company repurchased approximately 135 million shares for $5.1 billion, representing ~14% of shares outstanding. |
• | During the quarter, the Company repaid $5.1 billion of short and long-term debt, including the completion of the $1.5 billion debt tender on May 30, 2019. As a result of the tender, the Company recorded a net pre-tax charge of $60 million as a loss on the early extinguishment of debt. During the quarter, the Company also repaid all outstanding financial obligations under the Tyco International Holding S.à.r.l (TSarl) term loan, revolving credit facility and TSarl other indebtedness. |
• | Due to favorable resolution in the quarter, the Company released an indemnification reserve of $226 million related to a post-sale tax contingency for a previously divested Tyco business. |
• | The Company recorded a $235 million non-cash asset impairment charge in the quarter related to the disposition of a non-core business now reported as held for sale. |
• | The Company recorded a charge in the amount of $140 million related to environmental remediation costs associated with its facilities in Marinette, Wisconsin. |
• | The Company recorded a discrete period tax charge of $226 million related primarily to newly enacted regulations related to U.S. Tax Reform in the quarter. |
• | In connection with the sale of Power Solutions, the Company recorded a pre-tax gain of $5.2 billion which is reported in discontinued operations. |
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) | |||||||||
Three Months Ended June 30, | |||||||||
2019 | 2018 | ||||||||
Net sales | $ | 6,451 | $ | 6,282 | |||||
Cost of sales | 4,307 | 4,194 | |||||||
Gross profit | 2,144 | 2,088 | |||||||
Selling, general and administrative expenses | (1,388 | ) | (1,441 | ) | |||||
Restructuring and impairment costs | (235 | ) | — | ||||||
Net financing charges | (119 | ) | (95 | ) | |||||
Equity income | 62 | 55 | |||||||
Income from continuing operations before income taxes | 464 | 607 | |||||||
Income tax provision | 239 | 61 | |||||||
Income from continuing operations | 225 | 546 | |||||||
Income from discontinued operations, net of tax | 4,051 | 258 | |||||||
Net income | 4,276 | 804 | |||||||
Less: Income from continuing operations attributable to noncontrolling interests | 84 | 72 | |||||||
Less: Income from discontinued operations attributable to noncontrolling interests | — | 9 | |||||||
Net income attributable to JCI | $ | 4,192 | $ | 723 | |||||
Income from continuing operations | $ | 141 | $ | 474 | |||||
Income from discontinued operations | 4,051 | 249 | |||||||
Net income attributable to JCI | $ | 4,192 | $ | 723 | |||||
Diluted earnings per share from continuing operations | $ | 0.16 | $ | 0.51 | |||||
Diluted earnings per share from discontinued operations | 4.63 | 0.27 | |||||||
Diluted earnings per share | $ | 4.79 | $ | 0.78 | |||||
Diluted weighted average shares | 875.2 | 930.7 | |||||||
Shares outstanding at period end | 795.7 | 924.9 |
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) | |||||||||
Nine Months Ended June 30, | |||||||||
2019 | 2018 | ||||||||
Net sales | $ | 17,694 | $ | 17,217 | |||||
Cost of sales | 11,981 | 11,607 | |||||||
Gross profit | 5,713 | 5,610 | |||||||
Selling, general and administrative expenses | (4,284 | ) | (4,250 | ) | |||||
Restructuring and impairment costs | (235 | ) | (154 | ) | |||||
Net financing charges | (302 | ) | (304 | ) | |||||
Equity income | 137 | 129 | |||||||
Income from continuing operations before income taxes | 1,029 | 1,031 | |||||||
Income tax provision | 394 | 314 | |||||||
Income from continuing operations | 635 | 717 | |||||||
Income from discontinued operations, net of tax | 4,598 | 841 | |||||||
Net income | 5,233 | 1,558 | |||||||
Less: Income from continuing operations attributable to noncontrolling interests | 147 | 134 | |||||||
Less: Income from discontinued operations attributable to noncontrolling interests | 24 | 33 | |||||||
Net income attributable to JCI | $ | 5,062 | $ | 1,391 | |||||
Income from continuing operations | $ | 488 | $ | 583 | |||||
Income from discontinued operations | 4,574 | 808 | |||||||
Net income attributable to JCI | $ | 5,062 | $ | 1,391 | |||||
Diluted earnings per share from continuing operations | $ | 0.54 | $ | 0.63 | |||||
Diluted earnings per share from discontinued operations | 5.07 | 0.87 | |||||||
Diluted earnings per share * | $ | 5.61 | $ | 1.49 | |||||
Diluted weighted average shares | 902.2 | 932.1 | |||||||
Shares outstanding at period end | 795.7 | 924.9 |
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) | ||||||||
June 30, 2019 | September 30, 2018 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 3,685 | $ | 185 | ||||
Accounts receivable - net | 6,033 | 5,622 | ||||||
Inventories | 2,050 | 1,819 | ||||||
Assets held for sale | 95 | 3,015 | ||||||
Other current assets | 1,179 | 1,182 | ||||||
Current assets | 13,042 | 11,823 | ||||||
Property, plant and equipment - net | 3,282 | 3,300 | ||||||
Goodwill | 18,312 | 18,381 | ||||||
Other intangible assets - net | 5,739 | 6,187 | ||||||
Investments in partially-owned affiliates | 848 | 848 | ||||||
Noncurrent assets held for sale | 59 | 5,188 | ||||||
Other noncurrent assets | 1,787 | 3,070 | ||||||
Total assets | $ | 43,069 | $ | 48,797 | ||||
LIABILITIES AND EQUITY | ||||||||
Short-term debt and current portion of long-term debt | $ | 521 | $ | 1,307 | ||||
Accounts payable and accrued expenses | 4,452 | 4,428 | ||||||
Liabilities held for sale | 46 | 1,791 | ||||||
Other current liabilities | 4,223 | 3,724 | ||||||
Current liabilities | 9,242 | 11,250 | ||||||
Long-term debt | 6,804 | 9,623 | ||||||
Other noncurrent liabilities | 5,614 | 5,259 | ||||||
Noncurrent liabilities held for sale | — | 207 | ||||||
Shareholders' equity attributable to JCI | 20,363 | 21,164 | ||||||
Noncontrolling interests | 1,046 | 1,294 | ||||||
Total liabilities and equity | $ | 43,069 | $ | 48,797 |
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) | |||||||||||||
Three Months Ended June 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Operating Activities | |||||||||||||
Net income attributable to JCI from continuing operations | $ | 141 | $ | 474 | |||||||||
Income from continuing operations attributable to noncontrolling interests | 84 | 72 | |||||||||||
Net income from continuing operations | 225 | 546 | |||||||||||
Adjustments to reconcile net income from continuing operations to | |||||||||||||
cash provided by operating activities: | |||||||||||||
Depreciation and amortization | 203 | 227 | |||||||||||
Pension and postretirement benefit income | (28 | ) | (36 | ) | |||||||||
Pension and postretirement contributions | (14 | ) | (17 | ) | |||||||||
Equity in earnings of partially-owned affiliates, net of dividends received | 73 | (25 | ) | ||||||||||
Deferred income taxes | (121 | ) | 1 | ||||||||||
Non-cash restructuring and impairment costs | 235 | — | |||||||||||
Other - net | 75 | 33 | |||||||||||
Changes in assets and liabilities, excluding acquisitions and divestitures: | |||||||||||||
Accounts receivable | (355 | ) | (347 | ) | |||||||||
Inventories | 32 | (2 | ) | ||||||||||
Other assets | (33 | ) | (71 | ) | |||||||||
Restructuring reserves | (25 | ) | (49 | ) | |||||||||
Accounts payable and accrued liabilities | (19 | ) | 321 | ||||||||||
Accrued income taxes | 360 | (24 | ) | ||||||||||
Cash provided by operating activities from continuing operations | 608 | 557 | |||||||||||
Investing Activities | |||||||||||||
Capital expenditures | (123 | ) | (201 | ) | |||||||||
Acquisition of businesses, net of cash acquired | (3 | ) | (9 | ) | |||||||||
Business divestitures, net of cash divested | 6 | (13 | ) | ||||||||||
Other - net | 16 | 13 | |||||||||||
Cash used in investing activities from continuing operations | (104 | ) | (210 | ) | |||||||||
Financing Activities | |||||||||||||
Increase (decrease) in short and long-term debt - net | (5,163 | ) | 34 | ||||||||||
Stock repurchases | (4,122 | ) | (56 | ) | |||||||||
Payment of cash dividends | (233 | ) | (241 | ) | |||||||||
Proceeds from the exercise of stock options | 60 | 3 | |||||||||||
Employee equity-based compensation withholdings | (3 | ) | (2 | ) | |||||||||
Cash used in financing activities from continuing operations | (9,461 | ) | (262 | ) | |||||||||
Discontinued Operations | |||||||||||||
Net cash provided by (used in) operating activities | (385 | ) | 170 | ||||||||||
Net cash provided by (used in) investing activities | 12,733 | (84 | ) | ||||||||||
Net cash used by financing activities | (7 | ) | (12 | ) | |||||||||
Net cash flows provided by discontinued operations | 12,341 | 74 | |||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 14 | (145 | ) | ||||||||||
Changes in cash held for sale | 45 | 8 | |||||||||||
Increase in cash, cash equivalents and restricted cash | $ | 3,443 | $ | 22 |
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) | |||||||||||||
Nine Months Ended June 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Operating Activities | |||||||||||||
Net income attributable to JCI from continuing operations | $ | 488 | $ | 583 | |||||||||
Income from continuing operations attributable to noncontrolling interests | 147 | 134 | |||||||||||
Net income from continuing operations | 635 | 717 | |||||||||||
Adjustments to reconcile net income from continuing operations to | |||||||||||||
cash provided by operating activities: | |||||||||||||
Depreciation and amortization | 625 | 649 | |||||||||||
Pension and postretirement benefit income | (85 | ) | (108 | ) | |||||||||
Pension and postretirement contributions | (51 | ) | (53 | ) | |||||||||
Equity in earnings of partially-owned affiliates, net of dividends received | 6 | (84 | ) | ||||||||||
Deferred income taxes | 382 | (78 | ) | ||||||||||
Non-cash restructuring and impairment costs | 235 | 28 | |||||||||||
Gain on Scott Safety business divestiture | — | (114 | ) | ||||||||||
Other - net | 108 | 71 | |||||||||||
Changes in assets and liabilities, excluding acquisitions and divestitures: | |||||||||||||
Accounts receivable | (494 | ) | (454 | ) | |||||||||
Inventories | (289 | ) | (211 | ) | |||||||||
Other assets | (62 | ) | (245 | ) | |||||||||
Restructuring reserves | (84 | ) | (55 | ) | |||||||||
Accounts payable and accrued liabilities | (36 | ) | 268 | ||||||||||
Accrued income taxes | (179 | ) | 366 | ||||||||||
Cash provided by operating activities from continuing operations | 711 | 697 | |||||||||||
Investing Activities | |||||||||||||
Capital expenditures | (401 | ) | (481 | ) | |||||||||
Acquisition of businesses, net of cash acquired | (16 | ) | (24 | ) | |||||||||
Business divestitures, net of cash divested | 12 | 2,101 | |||||||||||
Other - net | 42 | 5 | |||||||||||
Cash provided by (used in) investing activities from continuing operations | (363 | ) | 1,601 | ||||||||||
Financing Activities | |||||||||||||
Increase (decrease) in short and long-term debt - net | (3,619 | ) | (1,510 | ) | |||||||||
Debt financing costs | — | (4 | ) | ||||||||||
Stock repurchases | (5,122 | ) | (255 | ) | |||||||||
Payment of cash dividends | (712 | ) | (714 | ) | |||||||||
Dividends paid to noncontrolling interests | (132 | ) | (43 | ) | |||||||||
Proceeds from the exercise of stock options | 111 | 39 | |||||||||||
Employee equity-based compensation withholdings | (26 | ) | (38 | ) | |||||||||
Cash used in financing activities from continuing operations | (9,500 | ) | (2,525 | ) | |||||||||
Discontinued Operations | |||||||||||||
Net cash provided by operating activities | 117 | 567 | |||||||||||
Net cash provided by (used in) investing activities | 12,580 | (312 | ) | ||||||||||
Net cash (used in) financing activities | (35 | ) | (3 | ) | |||||||||
Net cash flows provided by discontinued operations | 12,662 | 252 | |||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (24 | ) | (84 | ) | |||||||||
Changes in cash held for sale | 15 | 13 | |||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | $ | 3,501 | $ | (46 | ) |
Three Months Ended June 30, | |||||||||||||||
(in millions; unaudited) | 2019 | 2018 | |||||||||||||
Actual | Adjusted Non-GAAP | Actual | Adjusted Non-GAAP | ||||||||||||
Net sales | |||||||||||||||
Building Solutions North America | $ | 2,327 | $ | 2,327 | $ | 2,246 | $ | 2,246 | |||||||
Building Solutions EMEA/LA | 922 | 922 | 926 | 926 | |||||||||||
Building Solutions Asia Pacific | 691 | 691 | 681 | 681 | |||||||||||
Global Products | 2,511 | 2,511 | 2,429 | 2,429 | |||||||||||
Net sales | $ | 6,451 | $ | 6,451 | $ | 6,282 | $ | 6,282 | |||||||
Segment EBITA (1) | |||||||||||||||
Building Solutions North America | $ | 300 | $ | 310 | $ | 314 | $ | 318 | |||||||
Building Solutions EMEA/LA | 101 | 103 | 96 | 98 | |||||||||||
Building Solutions Asia Pacific | 98 | 98 | 97 | 97 | |||||||||||
Global Products | 333 | 481 | 435 | 441 | |||||||||||
Segment EBITA | 832 | 992 | 942 | 954 | |||||||||||
Corporate expenses (2) | 70 | (90 | ) | (142 | ) | (103 | ) | ||||||||
Amortization of intangible assets | (93 | ) | (93 | ) | (98 | ) | (98 | ) | |||||||
Net mark-to-market adjustments (3) | 9 | — | — | — | |||||||||||
Restructuring and impairment costs (4) | (235 | ) | — | — | — | ||||||||||
EBIT (5) | 583 | 809 | 702 | 753 | |||||||||||
EBIT margin | 9.0 | % | 12.5 | % | 11.2 | % | 12.0 | % | |||||||
Net financing charges (6) | (119 | ) | (59 | ) | (95 | ) | (95 | ) | |||||||
Income from continuing operations before income taxes | 464 | 750 | 607 | 658 | |||||||||||
Income tax provision (7) | (239 | ) | (101 | ) | (61 | ) | (80 | ) | |||||||
Income from continuing operations | 225 | 649 | 546 | 578 | |||||||||||
Income from continuing operations attributable to noncontrolling interests | (84 | ) | (84 | ) | (72 | ) | (72 | ) | |||||||
Net income from continuing operations attributable to JCI | $ | 141 | $ | 565 | $ | 474 | $ | 506 |
Nine Months Ended June 30, | |||||||||||||||
(in millions; unaudited) | 2019 | 2018 | |||||||||||||
Actual | Adjusted Non-GAAP | Actual | Adjusted Non-GAAP | ||||||||||||
Net sales | |||||||||||||||
Building Solutions North America | $ | 6,630 | $ | 6,630 | $ | 6,355 | $ | 6,355 | |||||||
Building Solutions EMEA/LA | 2,707 | 2,707 | 2,748 | 2,748 | |||||||||||
Building Solutions Asia Pacific | 1,932 | 1,932 | 1,864 | 1,864 | |||||||||||
Global Products | 6,425 | 6,425 | 6,250 | 6,250 | |||||||||||
Net sales | $ | 17,694 | $ | 17,694 | $ | 17,217 | $ | 17,217 | |||||||
Segment EBITA (1) | |||||||||||||||
Building Solutions North America | $ | 807 | $ | 822 | $ | 780 | $ | 798 | |||||||
Building Solutions EMEA/LA | 258 | 261 | 242 | 247 | |||||||||||
Building Solutions Asia Pacific | 240 | 240 | 242 | 242 | |||||||||||
Global Products | 774 | 930 | 949 | 856 | |||||||||||
Segment EBITA | 2,079 | 2,253 | 2,213 | 2,143 | |||||||||||
Corporate expenses (2) | (233 | ) | (287 | ) | (442 | ) | (321 | ) | |||||||
Amortization of intangible assets | (288 | ) | (288 | ) | (282 | ) | (282 | ) | |||||||
Net mark-to-market adjustments (3) | 8 | — | — | — | |||||||||||
Restructuring and impairment costs (4) | (235 | ) | — | (154 | ) | — | |||||||||
EBIT (5) | 1,331 | 1,678 | 1,335 | 1,540 | |||||||||||
EBIT margin | 7.5 | % | 9.5 | % | 7.8 | % | 8.9 | % | |||||||
Net financing charges (6) | (302 | ) | (242 | ) | (304 | ) | (304 | ) | |||||||
Income from continuing operations before income taxes | 1,029 | 1,436 | 1,031 | 1,236 | |||||||||||
Income tax provision (7) | (394 | ) | (194 | ) | (314 | ) | (150 | ) | |||||||
Income from continuing operations | 635 | 1,242 | 717 | 1,086 | |||||||||||
Income from continuing operations attributable to noncontrolling interests | (147 | ) | (147 | ) | (134 | ) | (134 | ) | |||||||
Net income from continuing operations attributable to JCI | $ | 488 | $ | 1,095 | $ | 583 | $ | 952 |
(in millions) | Building Solutions North America | Building Solutions EMEA/LA | Building Solutions Asia Pacific | Global Products | Consolidated JCI plc | ||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Segment EBITA as reported | $ | 300 | $ | 314 | $ | 101 | $ | 96 | $ | 98 | $ | 97 | $ | 333 | $ | 435 | $ | 832 | $ | 942 | |||||||||||||||||||
Segment EBITA margin as reported | 12.9 | % | 14.0 | % | 11.0 | % | 10.4 | % | 14.2 | % | 14.2 | % | 13.3 | % | 17.9 | % | 12.9 | % | 15.0 | % | |||||||||||||||||||
Adjusting items: | |||||||||||||||||||||||||||||||||||||||
Integration costs | 10 | 4 | 2 | 2 | — | — | 8 | 6 | 20 | 12 | |||||||||||||||||||||||||||||
Environmental reserve (8) | — | — | — | — | — | — | 140 | — | 140 | — | |||||||||||||||||||||||||||||
Adjusted segment EBITA | $ | 310 | $ | 318 | $ | 103 | $ | 98 | $ | 98 | $ | 97 | $ | 481 | $ | 441 | $ | 992 | $ | 954 | |||||||||||||||||||
Adjusted segment EBITA margin | 13.3 | % | 14.2 | % | 11.2 | % | 10.6 | % | 14.2 | % | 14.2 | % | 19.2 | % | 18.2 | % | 15.4 | % | 15.2 | % |
(in millions) | Building Solutions North America | Building Solutions EMEA/LA | Building Solutions Asia Pacific | Global Products | Consolidated JCI plc | ||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Segment EBITA as reported | $ | 807 | $ | 780 | $ | 258 | $ | 242 | $ | 240 | $ | 242 | $ | 774 | $ | 949 | $ | 2,079 | $ | 2,213 | |||||||||||||||||||
Segment EBITA margin as reported | 12.2 | % | 12.3 | % | 9.5 | % | 8.8 | % | 12.4 | % | 13.0 | % | 12.0 | % | 15.2 | % | 11.7 | % | 12.9 | % | |||||||||||||||||||
Adjusting items: | |||||||||||||||||||||||||||||||||||||||
Integration costs | 15 | 18 | 3 | 5 | — | — | 16 | 21 | 34 | 44 | |||||||||||||||||||||||||||||
Scott Safety gain on sale | — | — | — | — | — | — | — | (114 | ) | — | (114 | ) | |||||||||||||||||||||||||||
Environmental reserve (8) | — | — | — | — | — | — | 140 | — | 140 | — | |||||||||||||||||||||||||||||
Adjusted segment EBITA | $ | 822 | $ | 798 | $ | 261 | $ | 247 | $ | 240 | $ | 242 | $ | 930 | $ | 856 | $ | 2,253 | $ | 2,143 | |||||||||||||||||||
Adjusted segment EBITA margin | 12.4 | % | 12.6 | % | 9.6 | % | 9.0 | % | 12.4 | % | 13.0 | % | 14.5 | % | 13.7 | % | 12.7 | % | 12.4 | % |
Net Income Attributable to JCI plc | Net Income Attributable to JCI plc from Continuing Operations | ||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Earnings per share as reported for JCI plc | $ | 4.79 | $ | 0.78 | $ | 0.16 | $ | 0.51 | |||||||
Adjusting items: | |||||||||||||||
Transaction costs | — | — | — | — | |||||||||||
Integration costs | 0.09 | 0.05 | 0.09 | 0.05 | |||||||||||
Related tax impact | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | |||||||
Scott Safety gain on sale | — | — | — | — | |||||||||||
Related tax impact | — | — | — | — | |||||||||||
Net mark-to-market adjustments | (0.01 | ) | — | (0.01 | ) | — | |||||||||
Related tax impact | — | — | — | — | |||||||||||
Restructuring and impairment costs | 0.27 | — | 0.27 | — | |||||||||||
Related tax impact | (0.06 | ) | — | (0.06 | ) | — | |||||||||
Tax indemnification reserve release | (0.26 | ) | — | (0.26 | ) | — | |||||||||
Environmental reserve | 0.16 | — | 0.16 | — | |||||||||||
Related tax impact | (0.03 | ) | — | (0.03 | ) | — | |||||||||
Loss on extinguishment of debt | 0.07 | — | 0.07 | — | |||||||||||
Power Solutions gain on sale, net of | |||||||||||||||
transaction and other costs | (6.00 | ) | — | — | — | ||||||||||
Related tax impact | 1.43 | — | — | — | |||||||||||
Cease of Power Solutions | |||||||||||||||
depreciation / amortization expense | (0.02 | ) | — | — | — | ||||||||||
Related tax impact | 0.01 | — | — | — | |||||||||||
Discrete tax items | 0.26 | (0.01 | ) | 0.26 | (0.01 | ) | |||||||||
Adjusted earnings per share for JCI plc * | $ | 0.69 | $ | 0.81 | $ | 0.65 | $ | 0.54 |
Net Income Attributable to JCI plc | Net Income Attributable to JCI plc from Continuing Operations | ||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Earnings per share as reported for JCI plc | $ | 5.61 | $ | 1.49 | $ | 0.54 | $ | 0.63 | |||||||
Adjusting items: | |||||||||||||||
Transaction costs | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||
Integration costs | 0.22 | 0.17 | 0.22 | 0.17 | |||||||||||
Related tax impact | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.02 | ) | |||||||
Scott Safety gain on sale | — | (0.12 | ) | — | (0.12 | ) | |||||||||
Related tax impact | — | 0.03 | — | 0.03 | |||||||||||
Net mark-to-market adjustments | (0.01 | ) | — | (0.01 | ) | — | |||||||||
Related tax impact | — | — | — | — | |||||||||||
Restructuring and impairment costs | 0.26 | 0.17 | 0.26 | 0.17 | |||||||||||
Related tax impact | (0.06 | ) | (0.03 | ) | (0.06 | ) | (0.02 | ) | |||||||
Tax indemnification reserve | (0.25 | ) | — | (0.25 | ) | — | |||||||||
Environmental reserve | 0.16 | — | 0.16 | — | |||||||||||
Related tax impact | (0.03 | ) | — | (0.03 | ) | — | |||||||||
Loss on extinguishment of debt | 0.07 | — | 0.07 | — | |||||||||||
Power Solutions gain on sale, net of | |||||||||||||||
transaction and other costs | (5.77 | ) | — | — | — | ||||||||||
Related tax impact | 1.39 | — | — | — | |||||||||||
Cease of Power Solutions | |||||||||||||||
depreciation / amortization expense | (0.13 | ) | — | — | — | ||||||||||
Related tax impact | 0.03 | — | — | — | |||||||||||
Discrete tax items | 0.42 | 0.19 | 0.33 | 0.19 | |||||||||||
Adjusted earnings per share for JCI plc * | $ | 1.89 | $ | 1.89 | $ | 1.21 | $ | 1.02 |
Three Months Ended | Nine Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Weighted average shares outstanding for JCI plc | |||||||||||
Basic weighted average shares outstanding | 870.9 | 925.6 | 898.4 | 926.0 | |||||||
Effect of dilutive securities: | |||||||||||
Stock options, unvested restricted stock | |||||||||||
and unvested performance share awards | 4.3 | 5.1 | 3.8 | 6.1 | |||||||
Diluted weighted average shares outstanding | 875.2 | 930.7 | 902.2 | 932.1 |
(in millions) | Net Sales for the Three Months Ended June 30, 2018 | Base Year Adjustments - Acquisitions and Divestitures | Adjusted Base Net Sales for the Three Months Ended June 30, 2018 | Foreign Currency | Organic Growth | Net Sales for the Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||||
Building Solutions North America | $ | 2,246 | $ | — | — | $ | 2,246 | $ | (7 | ) | — | $ | 88 | 4 | % | $ | 2,327 | 4 | % | ||||||||||||||||
Building Solutions EMEA/LA | 926 | (1 | ) | — | 925 | (54 | ) | -6 | % | 51 | 6 | % | 922 | 0 | % | ||||||||||||||||||||
Building Solutions Asia Pacific | 681 | 1 | — | 682 | (31 | ) | -5 | % | 40 | 6 | % | 691 | 1 | % | |||||||||||||||||||||
Total field | 3,853 | — | — | 3,853 | (92 | ) | -2 | % | 179 | 5 | % | 3,940 | 2 | % | |||||||||||||||||||||
Global Products | 2,429 | (39 | ) | -2 | % | 2,390 | (49 | ) | -2 | % | 170 | 7 | % | 2,511 | 5 | % | |||||||||||||||||||
Total net sales | $ | 6,282 | $ | (39 | ) | -1 | % | $ | 6,243 | $ | (141 | ) | -2 | % | $ | 349 | 6 | % | $ | 6,451 | 3 | % |
(in millions) | Net Sales for the Nine Months Ended June 30, 2018 | Base Year Adjustments - Acquisitions and Divestitures | Adjusted Base Net Sales for the Nine Months Ended June 30, 2018 | Foreign Currency | Organic Growth | Net Sales for the Nine Months Ended June 30, 2019 | |||||||||||||||||||||||||||||
Building Solutions North America | $ | 6,355 | $ | — | — | $ | 6,355 | $ | (25 | ) | — | $ | 300 | 5 | % | $ | 6,630 | 4 | % | ||||||||||||||||
Building Solutions EMEA/LA | 2,748 | 1 | — | 2,749 | (166 | ) | -6 | % | 124 | 5 | % | 2,707 | -2 | % | |||||||||||||||||||||
Building Solutions Asia Pacific | 1,864 | 1 | — | 1,865 | (75 | ) | -4 | % | 142 | 8 | % | 1,932 | 4 | % | |||||||||||||||||||||
Total field | 10,967 | 2 | — | 10,969 | (266 | ) | -2 | % | 566 | 5 | % | 11,269 | 3 | % | |||||||||||||||||||||
Global Products | 6,250 | (126 | ) | -2 | % | 6,124 | (140 | ) | -2 | % | 441 | 7 | % | 6,425 | 5 | % | |||||||||||||||||||
Total net sales | $ | 17,217 | $ | (124 | ) | -1 | % | $ | 17,093 | $ | (406 | ) | -2 | % | $ | 1,007 | 6 | % | $ | 17,694 | 4 | % |
(in millions) | Adjusted Segment EBITA / EBIT for the Three Months Ended June 30, 2018 | Base Year Adjustments - Acquisitions and Divestitures | Adjusted Base Segment EBITA / EBIT for the Three Months Ended June 30, 2018 | Foreign Currency | Organic Growth | Adjusted Segment EBITA / EBIT for the Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||||
Building Solutions North America | $ | 318 | $ | — | — | $ | 318 | $ | — | — | $ | (8 | ) | -3 | % | $ | 310 | -3 | % | ||||||||||||||||
Building Solutions EMEA/LA | 98 | — | — | 98 | (9 | ) | -9 | % | 14 | 14 | % | 103 | 5 | % | |||||||||||||||||||||
Building Solutions Asia Pacific | 97 | — | — | 97 | (3 | ) | -3 | % | 4 | 4 | % | 98 | 1 | % | |||||||||||||||||||||
Total field | 513 | — | — | 513 | (12 | ) | -2 | % | 10 | 2 | % | 511 | 0 | % | |||||||||||||||||||||
Global Products | 441 | (4 | ) | -1 | % | 437 | (9 | ) | -2 | % | 53 | 12 | % | 481 | 10 | % | |||||||||||||||||||
Total adjusted segment EBITA | 954 | (4 | ) | — | 950 | $ | (21 | ) | -2 | % | $ | 63 | 7 | % | 992 | 4 | % | ||||||||||||||||||
Corporate expenses | (103 | ) | — | (103 | ) | (90 | ) | 13 | % | ||||||||||||||||||||||||||
Amortization of intangible assets | (98 | ) | — | (98 | ) | (93 | ) | 5 | % | ||||||||||||||||||||||||||
Total adjusted EBIT | $ | 753 | $ | (4 | ) | $ | 749 | $ | 809 | 8 | % | ||||||||||||||||||||||||
(in millions) | Adjusted Segment EBITA / EBIT for the Nine Months Ended June 30, 2018 | Base Year Adjustments - Acquisitions and Divestitures | Adjusted Base Segment EBITA / EBIT for the Nine Months Ended June 30, 2018 | Foreign Currency | Organic Growth | Adjusted Segment EBITA / EBIT for the Nine Months Ended June 30, 2019 | |||||||||||||||||||||||||||||
Building Solutions North America | $ | 798 | $ | — | — | $ | 798 | $ | (2 | ) | — | $ | 26 | 3 | % | $ | 822 | 3 | % | ||||||||||||||||
Building Solutions EMEA/LA | 247 | 1 | — | 248 | (26 | ) | -10 | % | 39 | 16 | % | 261 | 5 | % | |||||||||||||||||||||
Building Solutions Asia Pacific | 242 | — | — | 242 | (7 | ) | -3 | % | 5 | 2 | % | 240 | -1 | % | |||||||||||||||||||||
Total field | 1,287 | 1 | — | 1,288 | (35 | ) | -3 | % | 70 | 5 | % | 1,323 | 3 | % | |||||||||||||||||||||
Global Products | 856 | (16 | ) | -2 | % | 840 | (19 | ) | -2 | % | 109 | 13 | % | 930 | 11 | % | |||||||||||||||||||
Total adjusted segment EBITA | 2,143 | (15 | ) | -1 | % | 2,128 | $ | (54 | ) | -3 | % | $ | 179 | 8 | % | 2,253 | 6 | % | |||||||||||||||||
Corporate expenses | (321 | ) | — | (321 | ) | (287 | ) | 11 | % | ||||||||||||||||||||||||||
Amortization of intangible assets | (282 | ) | 2 | (280 | ) | (288 | ) | -3 | % | ||||||||||||||||||||||||||
Total adjusted EBIT | $ | 1,540 | $ | (13 | ) | $ | 1,527 | $ | 1,678 | 10 | % | ||||||||||||||||||||||||
(in billions) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Nine Months Ended June 30, 2019 | Nine Months Ended June 30, 2018 | |||||||||||
Cash provided by operating activities from continuing operations | $ | 0.6 | $ | 0.6 | $ | 0.7 | $ | 0.7 | |||||||
Capital expenditures | (0.1 | ) | (0.2 | ) | (0.4 | ) | (0.5 | ) | |||||||
Reported free cash flow | 0.5 | 0.4 | 0.3 | 0.2 | |||||||||||
Adjusting items: | |||||||||||||||
Transaction/integration costs | 0.1 | 0.1 | 0.2 | 0.2 | |||||||||||
Restructuring payments | — | — | 0.1 | 0.2 | |||||||||||
Nonrecurring tax payments, net of refunds | — | — | — | (0.1 | ) | ||||||||||
Total adjusting items | 0.1 | 0.1 | 0.3 | 0.3 | |||||||||||
Adjusted free cash flow | $ | 0.6 | $ | 0.5 | $ | 0.6 | $ | 0.5 | |||||||
Adjusted net income from continuing operations | |||||||||||||||
attributable to JCI | $ | 0.6 | $ | 0.5 | $ | 1.1 | $ | 1.0 | |||||||
Adjusted free cash flow conversion | 100 | % | 100 | % | 55 | % | 50 | % |
(in millions) | June 30, 2019 | September 30, 2018 | |||||
Short-term debt and current portion of long-term debt | $ | 521 | $ | 1,307 | |||
Long-term debt | 6,804 | 9,623 | |||||
Total debt | 7,325 | 10,930 | |||||
Less: cash and cash equivalents | 3,685 | 185 | |||||
Total net debt | 3,640 | 10,745 | |||||
Shareholders' equity attributable to JCI | 20,363 | 21,164 | |||||
Total capitalization | $ | 24,003 | $ | 31,909 | |||
Total net debt as a % of total capitalization | 15.2 | % | 33.7 | % |