01—Abstract
Summary
Summary of the 10-K filed November 14, 2013. Cited figures are marked; the original filing is the authoritative source.
Johnson Controls International plc (JCI), reporting as Tyco International Ltd. in this 2013 10-K, is a global provider of security, fire detection, suppression, and life safety products and services.
The company operates through three main segments: North America Installation & Services, Rest of World Installation & Services, and Global Products, which collectively generated $10.65 billiona in net revenue for fiscal year 2013. A significant portion of the company's revenue is derived from services, with over half of Installation & Services revenue coming from aftermarket products and services. In the fiscal year ended September 27, 2013, Tyco reported revenue of $10.65 billion, an increase of 2.3% from the prior year, driven by growth in its Global Products and ROW Installation & Services segments, partially offset by a decline in its North America Installation & Services segment.
The company continues to emphasize research and development, with R&D expenses at $174 millionb in 2013, focusing on areas like integrated access control and IP video platforms. However, the company also faces significant risks, including general economic conditions, competition, and ongoing legal and environmental matters, such as asbestos liabilities and environmental remediation at its Wisconsin facility.
02—Key points
Key Highlights
- Tyco International Ltd. operates as a global provider of security, fire detection, suppression, and life safety products and services.
- The company is structured into three reporting segments: North America Installation & Services, Rest of World Installation & Services, and Global Products, which together generated $10.65 billion in net revenue in fiscal year 2013.
- Net revenue for fiscal year 2013 increased by 2.3% to $10.65 billion, driven by growth in Global Products and ROW Installation & Services, despite a decline in NA Installation & Services.
- Research and Development expenses were $174 million in fiscal year 2013, indicating a focus on innovation in security and fire safety technologies.
- The company maintains a significant global presence with approximately 70,000 employees worldwide and operates from about 1,100 locations in roughly 50 countries.
- Key risks identified include dependence on general economic conditions, intense competition, currency fluctuations, and significant environmental remediation liabilities, particularly at the Marinette, Wisconsin facility.
- Significant restructuring activities have occurred, including the spin-offs of ADT and Tyco Flow Control in September 2012, which have impacted the company's financial reporting and operational structure.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Johnson Controls International plc kept $0.05.
- Revenue$10.06B100.0%
- Cost of revenue−$3.98B39.6%
- Gross profit$6.07B60.4%
- Operating costs−$5.36B53.3%
- Operating income$712.0M7.1%
- Interest, other & tax−$176.0M1.7%
- Net income$536.0M5.3%
Where FY2013 revenue went
$10.06B- Cost of revenue: $3.98B, 40% of revenue
- SG&A: $2.84B, 28% of revenue
- Other operating costs: $2.35B, 23% of revenue
- Net income: $536.0M, 5.3% of revenue
- R&D: $172.0M, 1.7% of revenue
- Interest, other & tax: $176.0M, 1.7% of revenue
Kept 5.3% as net incomeNet income $536.0M · 5.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed November 14, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $10.06B$9.89B | +1.7% |
| Cost of Revenue | $3.98B$3.90B | +2.0% |
| Gross Profit | $6.07B$5.99B | +1.4% |
| R&D Expenses | $172.00M$145.00M | +18.6% |
| SG&A Expenses | $2.84B$2.82B | +0.5% |
| Operating Income | $712.00M$578.00M | +23.2% |
| Interest Expense | $100.00M$209.00M | −52.2% |
| Net Income | $536.00M$472.00M | +13.6% |
| EPS (Basic) | $1.15$1.02 | +12.7% |
| EPS (Diluted) | $1.14$1.02 | +11.8% |
| Shares Outstanding (Basic) | 465.00M463.00M | +0.4% |
| Shares Outstanding (Diluted) | 472.00M463.00M | +1.9% |
05—Questions
Frequently Asked Questions
What were the primary drivers of revenue growth in fiscal year 2013?
Revenue growth in fiscal year 2013 was primarily driven by the Global Products segment and, to a lesser extent, the Rest of World (ROW) Installation & Services segment. This growth was partly offset by a decline in the North America Installation & Services segment, particularly within its security business.
What are the significant risks and liabilities facing Tyco, as disclosed in this filing?
Tyco faces several significant risks, including the impact of general economic conditions and cyclical industry trends, intense competition leading to margin pressure, currency exchange rate volatility, and substantial environmental remediation liabilities. Notably, the company has ongoing remediation efforts at its Marinette, Wisconsin facility, and faces asbestos-related litigation and liabilities.
How has the company's structure and operations been affected by recent transactions?
The company underwent significant restructuring with the spin-offs of its North American residential security business (ADT) and its flow control business (Tyco Flow Control) in September 2012. These 'separations' have resulted in a re-aligned business structure, with the remaining operations focusing on commercial security, fire, and life safety products and services globally.
What is the company's focus regarding innovation and future development?
The company is actively investing in research and development, with $174 million spent in fiscal year 2013. Key areas of focus include developing residential interactive platforms, enterprise-wide integrated access control platforms, and transitioning to IP video platforms.
06—Continue