01—Abstract
Summary
Summary of the 10-K filed November 14, 2014. Cited figures are marked; the original filing is the authoritative source.
Johnson Controls International plc (JCI), formerly known as Tyco International Ltd. in this filing, reported net revenue of $10.34 billiona 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 billionb. 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 millionc. Investors should note the ongoing legal and environmental matters, including significant asbestos liabilities and environmental remediation at the Marinette, Wisconsin facility.
02—Key points
Key Highlights
- Reported net revenue of $10.34 billion for fiscal year 2014, a 2.7% increase from the prior year.
- Completed the sale of ADT Korea business for $1.93 billion, contributing to a substantial gain in net income.
- The 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.
- Significant asbestos-related charges amounting to $462 million negatively impacted operating income, primarily due to liabilities from Yarway and updated claim valuations.
- Operating income decreased by 1.7% to $697 million, largely due to the aforementioned asbestos charges, partially offset by favorable legal settlements and insurance recoveries.
- The Global Products segment showed strong performance with an 8.8% increase in net revenue, driven by growth in security products.
- As of September 26, 2014, the company had a backlog of unfilled orders of $4.86 billion, reflecting a slight increase from the prior year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Johnson Controls International plc kept $0.12.
- Revenue$10.33B100.0%
- Cost of revenue−$4.03B39.0%
- Gross profit$6.30B61.0%
- Operating costs−$5.61B54.2%
- Operating income$700.0M6.8%
- Interest, other & tax$515.0M5.0%
- Net income$1.22B11.8%
04—Financials
Financial Highlights
Figures from 10-KFY2014filed November 14, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $10.33B$10.06B | +2.7% |
| Cost of Revenue | $32.44B$3.98B | +714.2% |
| Gross Profit | $6.30B$6.07B | +3.8% |
| R&D Expenses | $193.00M$172.00M | +12.2% |
| SG&A Expenses | $4.22B$2.84B | +48.6% |
| Operating Income | $700.00M$712.00M | −1.7% |
| Interest Expense | $254.00M$100.00M | +154.0% |
| Net Income | $1.22B$536.00M | +126.7% |
| EPS (Basic) | $1.82$1.15 | +58.3% |
| EPS (Diluted) | $1.80$1.14 | +57.9% |
| Shares Outstanding (Basic) | 666.90M465.00M | +43.4% |
| Shares Outstanding (Diluted) | 674.80M472.00M | +43.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth in fiscal year 2014?
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.
What significant financial impacts did asbestos liabilities have on the company's results?
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.
What is the status of the corporate domicile change to Ireland?
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.
How did the company's segment performance vary?
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.
06—Continue