What is a capital reduction dividend?

A capital reduction dividend is a distribution of capital to shareholders, typically resulting from a reduction in the company's stated capital (par value of shares). Unlike a traditional dividend paid from earnings, it often represents a return of a portion of the shareholders' investment. In this case, Tyco reduced the par value of its shares and returned that value to shareholders.

How much total capital is Tyco returning to shareholders?

Tyco shareholders approved a plan for a total capital reduction of CHF 0.90 per share, to be paid in four quarterly installments through the end of the second fiscal quarter of 2011. This filing reports on the third of those installments.

What is the significance of the amended Articles of Association?

The amendment to the Articles of Association is a legal and administrative step required to formally reduce the par value of Tyco's shares and reflect the capital distribution. It ensures the company's charter aligns with the capital structure changes resulting from the dividend payment.

Is this a taxable event for shareholders?

The tax implications of a capital reduction dividend can vary depending on the shareholder's jurisdiction and the specific tax laws. Generally, a return of capital may reduce a shareholder's cost basis in the stock, and any amount exceeding the cost basis could be treated as a capital gain. Investors should consult with their tax advisors for personalized advice.

JCI 8-K SEC Disclosure — Nov 29, 2010

Summary

This 8-K filing from Tyco International Ltd. (now Johnson Controls International plc, though the filing is under the Tyco name) on November 29, 2010, reports on the third quarterly installment of a capital reduction dividend approved by shareholders. The dividend, amounting to CHF 0.23 per share (approximately $0.2307 USD), was paid around November 23, 2010, as part of a larger plan to distribute CHF 0.90 per share through fiscal Q2 2011. In conjunction with this payment, Tyco amended its Articles of Association to reflect a reduction in the par value per share by CHF 0.23, bringing the new par value to CHF 6.93. This action is primarily an administrative adjustment related to the capital return to shareholders, with the actual filing of the amended Articles of Association in the Swiss commercial register marking the effective date of this change. Investors should note that this is a return of capital, not a dividend from earnings.

Key Highlights

1Tyco International Ltd. paid the third quarterly installment of a capital reduction dividend totaling CHF 0.23 per share (approx. $0.2307 USD) on November 23, 2010.
2This payment is part of a previously approved plan to return a total of CHF 0.90 per share to shareholders through the second fiscal quarter of 2011.
3The company amended its Articles of Association to reflect a CHF 0.23 per share reduction in the par value of its stock.
4The new par value per share is CHF 6.93, effective upon filing with the Swiss commercial register.
5The filing includes the amended Articles of Association as an exhibit.
6This transaction represents a return of capital to shareholders, not a distribution of earnings.

Johnson Controls International plc 8-K Report, Corporate Update (Nov 29, 2010)

Summary

Key Highlights

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