10-KPeriod: FY2014

Johnson Controls International plc Annual Report, Year Ended Sep 26, 2014

Filed November 14, 2014For Securities:JCI

Summary

Johnson Controls International plc (JCI), formerly known as Tyco International Ltd. in this filing, reported net revenue of $10.34 billion for the fiscal year ended September 26, 2014. The company operates in three main segments: North America Installation & Services, Rest of World Installation & Services, and Global Products. Significant events during the year included progress on the merger with Tyco Ireland to change the jurisdiction of incorporation to Ireland, expected to be effective in November 2014, and the sale of the ADT Korea business for $1.93 billion. The company's financial performance was impacted by substantial asbestos-related charges, totaling $462 million in operating income, primarily related to an agreement in principle for the Yarway bankruptcy and an updated valuation of estimated liabilities. Despite these charges, the company reported income from continuing operations attributable to common shareholders of $794 million. Investors should note the ongoing legal and environmental matters, including significant asbestos liabilities and environmental remediation at the Marinette, Wisconsin facility.

Financial Highlights

55 data points
Beta

Revenue

$10.33B

61.0% Gross Margin

Net Income

$1.22B

11.8% Net Margin

EPS (Diluted)

$1.80

Total Assets

$32.81B

Cash & Equivalents

$364.00M

Free Cash Flow

$2.40B

Financial Statements
Beta
Revenue$10.33B
Cost of Revenue$32.44B
Gross Profit$6.30B
R&D Expenses$193.00M
SG&A Expenses$4.22B
Operating Income$700.00M
Interest Expense$254.00M
Net Income$1.22B
EPS (Basic)$1.82
EPS (Diluted)$1.80
Shares Outstanding (Basic)666.90M
Shares Outstanding (Diluted)674.80M

Key Highlights

  • 1Reported net revenue of $10.34 billion for fiscal year 2014, a 2.7% increase from the prior year.
  • 2Completed the sale of ADT Korea business for $1.93 billion, contributing to a substantial gain in net income.
  • 3The company is undergoing a merger with Tyco Ireland to change its jurisdiction of incorporation from Switzerland to Ireland, expected to be effective in November 2014.
  • 4Significant asbestos-related charges amounting to $462 million negatively impacted operating income, primarily due to liabilities from Yarway and updated claim valuations.
  • 5Operating income decreased by 1.7% to $697 million, largely due to the aforementioned asbestos charges, partially offset by favorable legal settlements and insurance recoveries.
  • 6The Global Products segment showed strong performance with an 8.8% increase in net revenue, driven by growth in security products.
  • 7As of September 26, 2014, the company had a backlog of unfilled orders of $4.86 billion, reflecting a slight increase from the prior year.

Frequently Asked Questions

Net revenue increased by 2.7% to $10.34 billion, driven by organic growth across all three segments, particularly in Global Products, with contributions from acquisitions in the ROW Installation & Services and Global Products segments. Growth was partially offset by divestitures and unfavorable foreign currency impacts.

Asbestos-related charges significantly impacted the company's financial results, totaling $462 million in operating income. This included $225 million related to an agreement in principle for the Yarway bankruptcy and $240 million from an updated valuation of other asbestos-related claims. These charges negatively affected operating income and net income.

The company entered into a merger agreement with Tyco Ireland, a newly-formed Irish public limited company, to change its jurisdiction of organization from Switzerland to Ireland. Shareholder approval was received, and the merger was expected to become effective in November 2014.

The Global Products segment demonstrated strong revenue growth of 8.8%, driven by security products. The North America Installation & Services segment experienced a slight revenue decline of 0.4%, while the Rest of World Installation & Services segment saw a 2.0% increase in net revenue, boosted by acquisitions and growth in emerging markets.