01—Abstract
Summary
Summary of the 10-K filed November 16, 2011. Cited figures are marked; the original filing is the authoritative source.
Johnson Controls International plc (JCI), formerly known as Tyco International Ltd., reported net revenue of $17.4 billiona for the fiscal year ended September 30, 2011.
The company operates across three primary segments: Tyco Security Solutions, Tyco Fire Protection, and Tyco Flow Control. A significant development during the year was the announcement of a plan to separate Tyco into three distinct publicly traded companies, focusing on North American residential security, flow control, and commercial fire and security. This strategic move aims to unlock shareholder value by creating more focused entities.
Financially, the company demonstrated resilience, with increased revenue and operating income compared to the prior year. The Tyco Security Solutions segment was a key driver of growth, benefiting from acquisitions like Broadview Security and organic expansion.
The company also managed its debt effectively and returned capital to shareholders through dividends and share repurchases. However, the company faces ongoing risks including intense competition, global economic uncertainties, foreign currency fluctuations, and significant legal and regulatory challenges, including ongoing investigations related to the Foreign Corrupt Practices Act.
02—Key points
Key Highlights
- Net revenue reached $17.4 billion for the fiscal year ended September 30, 2011.
- The company announced a plan to separate into three independent publicly traded companies, expected to be completed in 2012.
- Tyco Security Solutions showed strong growth, with net revenue increasing by 11.5% year-over-year, driven by acquisitions and organic growth.
- Operating income saw a significant increase of 33% to $2.1 billion, aided by divestiture gains and improved segment performance.
- The company returned $1.3 billion to shareholders through share repurchases and $458 million in dividends during the fiscal year.
- Significant risk factors include intense competition, global economic conditions, foreign currency volatility, and ongoing FCPA investigations.
- The company's debt-to-capital ratio remained conservative at 23% as of September 30, 2011.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Johnson Controls International plc kept $0.16.
- Revenue$10.56B100.0%
- Cost of revenue−$6.89B65.3%
- Gross profit$3.67B34.7%
- Operating costs−$2.69B25.4%
- Operating income$982.0M9.3%
- Interest, other & tax$737.0M7.0%
- Net income$1.72B16.3%
04—Financials
Financial Highlights
Figures from 10-KFY2011filed November 16, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $10.56B$11.02B | −4.2% |
| Cost of Revenue | $6.89B$7.40B | −6.9% |
| Gross Profit | $3.67B$3.62B | +1.4% |
| R&D Expenses | $129.00M$113.00M | +14.2% |
| SG&A Expenses | $2.83B$2.95B | −3.8% |
| Operating Income | $982.00M$615.00M | +59.7% |
| Interest Expense | $240.00M$279.00M | −14.0% |
| Net Income | $1.72B$1.13B | +52.1% |
| EPS (Basic) | $3.63$2.33 | +55.8% |
| EPS (Diluted) | $3.59$2.31 | +55.4% |
| Shares Outstanding (Basic) | 474.00M485.00M | −2.3% |
| Shares Outstanding (Diluted) | 479.00M488.00M | −1.8% |
05—Questions
Frequently Asked Questions
What were the main business segments of Tyco International in 2011?
In 2011, Tyco International operated through three main segments: Tyco Security Solutions (design, sale, installation, service, and monitoring of electronic security systems), Tyco Fire Protection (design, manufacture, sale, installation, and service of fire detection and suppression systems), and Tyco Flow Control (design, manufacture, sale, and service of valves, pipes, fittings, and related products).
What major strategic decision was announced in 2011?
In September 2011, Tyco announced a plan to separate the company into three independent, publicly traded entities: one focused on North American residential security, another on flow control, and the third on commercial fire and security. This separation was expected to be completed by the end of the third calendar quarter of 2012.
What were the key financial highlights for the fiscal year ended September 30, 2011?
The company reported net revenue of $17.4 billion and operating income of $2.1 billion, an increase from the previous year. This growth was supported by acquisitions, particularly in the Security Solutions segment, and a strong performance in recurring revenue streams. The company also returned significant capital to shareholders through share repurchases and dividends.
What are some of the significant risks highlighted in the filing?
Key risks include intense competition across all segments, adverse impacts from general economic and cyclical industry conditions, volatility in currency exchange rates and commodity prices, failure to maintain information technology security, and significant ongoing legal and regulatory matters, including investigations related to the U.S. Foreign Corrupt Practices Act (FCPA).
06—Continue