8-KOther Events

Johnson Controls International plc 8-K Report, Corporate Update (Jan 14, 2015)

Filed January 14, 2015For Securities:JCI

Summary

Johnson Controls International plc (JCI) reported on January 13, 2015, the completion of a significant restructuring transaction related to asbestos liabilities, primarily stemming from its Grinnell operations. This move involved establishing a dedicated structure to acquire Grinnell's assets and transfer approximately $278 million in cash and other assets, in addition to $22 million received by a Qualified Settlement Fund (QSF) from insurers. This structure aims to efficiently manage and resolve historical asbestos liabilities associated with Grinnell, Scott, and Figgie operations. This transaction is a crucial step in addressing a substantial financial contingency for JCI. The establishment of the dedicated structure and QSF, fully funded with the transferred assets and supplemented by new insurance, is designed to provide a streamlined and efficient resolution mechanism for all historical Grinnell asbestos liabilities. Investors should view this as a positive development that provides greater certainty and potential de-risking around these legacy asbestos claims.

Key Highlights

  • 1Completion of restructuring for asbestos liabilities.
  • 2Dedicated structure established to acquire Grinnell assets.
  • 3Approximately $278 million in cash and assets transferred to the structure.
  • 4A Qualified Settlement Fund (QSF) received $22 million from insurers.
  • 5Structure fully funds all historical Grinnell asbestos liabilities.
  • 6Subsidiaries within the structure assume liabilities from Grinnell, Scott, and Figgie operations.
  • 7New insurance purchased to supplement existing coverage within the structure.

Frequently Asked Questions

The primary purpose of this filing is to announce the completion of a restructuring transaction designed to address and fully fund historical asbestos liabilities related to Johnson Controls' (formerly Tyco International) Grinnell, Scott, and Figgie operations.

The company transferred approximately $278 million in cash and other assets to the new structure. Additionally, a Qualified Settlement Fund (QSF) received $22 million from insurers. This structure is designed to fully fund all historical Grinnell asbestos liabilities.

A dedicated structure has been created, which acquired Grinnell's assets. Subsidiaries within this structure have assumed certain liabilities from historic Grinnell, Scott, and Figgie operations, including all historical Grinnell asbestos liabilities. New insurance was also purchased to enhance coverage.

This restructuring aims to provide a more efficient and streamlined management of asbestos claims, potentially reducing future uncertainty and financial volatility associated with these legacy liabilities. It signifies a significant step in de-risking these contingent liabilities for the company.