01—Abstract
Summary
Summary of the 10-K filed November 16, 2012. Cited figures are marked; the original filing is the authoritative source.
Johnson Controls International plc (referred to as Tyco International Ltd. in this filing) reported total net revenue of $10.4 billiona for the fiscal year ended September 28, 2012.
The company operates in three primary segments: North America Systems Installation & Services, Rest of World Systems Installation & Services, and Global Products. A significant event during the year was the spin-off of its North American residential security and flow control businesses into separate publicly traded companies, ADT and Pentair Ltd., respectively. This transaction, referred to as the '2012 Separation,' resulted in these divested businesses being classified as discontinued operations, impacting the comparability of year-over-year financial results.
The company faced mixed results, with net revenue declining slightly by 1.5%b year-over-year. While the Global Products segment saw strong organic revenue growth of 10.1%, the Installation & Services segments experienced declines or modest growth.
Operating income saw a significant decrease of 30.2%c primarily due to a large net gain on divestitures recognized in the prior year related to the sale of its Electrical and Metal Products business. The company also faced ongoing challenges including general economic conditions, competition, and risks associated with international operations.
02—Key points
Key Highlights
- Tyco International Ltd. reported total net revenue of $10.4 billion for the fiscal year ended September 28, 2012.
- The company completed the spin-off of its North American residential security (ADT) and flow control (Pentair Ltd.) businesses as part of the '2012 Separation,' classifying them as discontinued operations.
- Net revenue decreased by 1.5% to $10.4 billion, but organic revenue growth from continuing operations was 2.4%, driven by the Global Products segment.
- Operating income decreased by 30.2% to $685 million, largely impacted by a significant net gain on divestitures in the prior year.
- The Global Products segment showed strong performance with net revenue growth of 19.7% and organic revenue growth of 10.1%.
- The company experienced a net loss from continuing operations attributable to Tyco common shareholders of $332 million, a reversal from the prior year's income of $617 million, partly due to separation costs and debt extinguishment.
- The company manages a global footprint with over 1,200 locations in more than 50 countries, with approximately 50% of revenues derived from outside North America.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Johnson Controls International plc kept $0.05.
- Revenue$9.89B100.0%
- Cost of revenue−$3.90B39.5%
- Gross profit$5.99B60.5%
- Operating costs−$5.41B54.7%
- Operating income$578.0M5.8%
- Interest, other & tax−$106.0M1.1%
- Net income$472.0M4.8%
Where FY2012 revenue went
$9.89B- Cost of revenue: $3.90B, 39% of revenue
- SG&A: $2.82B, 29% of revenue
- Other operating costs: $2.44B, 25% of revenue
- Net income: $472.0M, 4.8% of revenue
- R&D: $145.0M, 1.5% of revenue
- Interest, other & tax: $106.0M, 1.1% of revenue
Kept 4.8% as net incomeNet income $472.0M · 4.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed November 16, 2012Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $9.89B$10.56B | −6.3% |
| Cost of Revenue | $3.90B$6.89B | −43.3% |
| Gross Profit | $5.99B$3.67B | +63.3% |
| R&D Expenses | $145.00M$129.00M | +12.4% |
| SG&A Expenses | $2.82B$2.83B | −0.4% |
| Operating Income | $578.00M$982.00M | −41.1% |
| Interest Expense | $209.00M$240.00M | −12.9% |
| Net Income | $472.00M$1.72B | −72.5% |
| EPS (Basic) | $1.02$3.63 | −71.9% |
| EPS (Diluted) | $1.02$3.59 | −71.6% |
| Shares Outstanding (Basic) | 463.00M474.00M | −2.3% |
| Shares Outstanding (Diluted) | 463.00M479.00M | −3.3% |
05—Questions
Frequently Asked Questions
What were the major strategic transactions completed by Tyco International in fiscal year 2012?
The most significant strategic transaction was the '2012 Separation,' which involved the spin-off of its North American residential security business (ADT) and its flow control business (Pentair Ltd.) into separate, publicly traded companies. These businesses are now reported as discontinued operations.
How did the spin-offs affect the company's reported financial results?
The spin-offs resulted in the divested businesses being classified as discontinued operations, making direct year-over-year comparisons of total net revenue and net income more complex. The separation also incurred significant costs, including debt refinancing expenses, impacting the results from continuing operations.
Which business segment performed strongest in terms of revenue growth?
The Global Products segment demonstrated the strongest performance, with net revenue growing by 19.7% to $2.1 billion and organic revenue growing by 10.1%. This segment designs, manufactures, and sells fire protection, security, and life safety products.
What are the key risks and challenges highlighted in the filing?
The company identified several key risks, including adverse impacts from general economic and cyclical industry conditions, intense competition in its markets, risks associated with international operations, currency exchange rate volatility, and potential liabilities from ongoing litigation and environmental matters. The spin-off also created new risks, such as restrictions on competing with ADT in certain markets.
06—Continue