- Q1 reported sales were flat versus prior year and declined 1%
organically
- Q1 GAAP EPS of $0.55; Q1 Adjusted
EPS of $0.51
- Q1 Orders +1% organically year-over-year
- Building Solutions backlog of $12.1
billion, increased 7% organically year-over-year
- Updates FY24 Adjusted EPS before special items of ~$3.60 to $3.75
from
prior range of ~$3.65 to $3.80
- Early stages of pursuing strategic alternatives for
non-commercial businesses
CORK,
Ireland, Jan. 30, 2024 /PRNewswire/ -- Johnson
Controls International plc (NYSE: JCI), a global leader for smart,
healthy and sustainable buildings, today reported fiscal first
quarter 2024 GAAP earnings per share ("EPS") from continuing
operations of $0.55. Excluding
special items, adjusted EPS from continuing operations was
$0.51 (see attached footnotes for
non-GAAP reconciliation).
Sales in the quarter of $6.1
billion were flat compared to the prior year on an as
reported basis and declined 1% organically. GAAP net income from
continuing operations was $374
million. Adjusted net income from continuing operations was
$350 million.
"We continued to position Johnson Controls for the future,
delivering solid first quarter results and appointing Marc
Vandiepenbeeck as CFO," said Johnson Controls Chairman and CEO
George Oliver. "Our value
proposition of making buildings smarter, healthier and more
sustainable is resonating with our customers and translating into
record backlog. After managing through a temporary cyber disruption
and the seasonality of the first quarter, we are entering the new
calendar year with accelerating momentum."
Mr. Oliver continued, "The management team continues to simplify
and transform the company into a comprehensive solutions provider
for commercial buildings. As part of the continuous evaluation of
our portfolio, we are in the early stages of pursuing strategic
alternatives of our non-commercial businesses, in line with our
objective to maximize value to our shareholders."
Income and EPS amounts attributable to Johnson Controls
ordinary shareholders
($ millions, except per-share
amounts)
The financial highlights presented in the tables below are in
accordance with GAAP, unless otherwise indicated. All comparisons
are to the fiscal first quarter of 2023.
Organic sales growth, adjusted segment EBITA, adjusted corporate
expense, adjusted net income from continuing operations, adjusted
EPS from continuing operations, cash provided by operating
activities from continuing operations, excluding JC Capital, and
adjusted free cash flow are non-GAAP financial measures. For a
reconciliation of non-GAAP measures and detail of the special
items, refer to the attached footnotes.
This press release includes forward-looking statements regarding
organic revenue growth, adjusted segment EBITA margin improvement
and adjusted EPS, which are non-GAAP financial measures. These
non-GAAP financial measures are derived by excluding certain
amounts from the corresponding financial measures determined in
accordance with GAAP. The determination of the amounts excluded is
a matter of management judgment and depends upon, among other
factors, the nature of the underlying expense or income amounts
recognized in a given period and the high variability of certain
amounts, such as mark-to-market adjustments. Organic revenue growth
excludes the effect of acquisitions, divestitures and foreign
currency. We are unable to present a quantitative reconciliation of
the aforementioned forward-looking non-GAAP financial measures to
their most directly comparable forward-looking GAAP financial
measures because such information is not available, and management
cannot reliably predict the necessary components of such GAAP
measures without unreasonable effort or expense. The unavailable
information could have a significant impact on the Company's fiscal
2024 second quarter and full year GAAP financial results.
A slide presentation to accompany the results can be found in
the Investor Relations section of Johnson Controls' website at
http://investors.johnsoncontrols.com.
SEGMENT RESULTS
Building Solutions North America
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2023
|
2024
|
2023
|
2024
|
Sales
|
$2,367
|
$2,487
|
$2,367
|
$2,487
|
Segment
EBITA
|
267
|
285
|
267
|
285
|
Segment EBITA Margin
%
|
11.3 %
|
11.5 %
|
11.3 %
|
11.5 %
|
Sales in the quarter of $2.5
billion increased 5% versus the prior year. Organic sales
increased 4% over the prior year led by double-digit growth in
Applied HVAC & Controls.
Orders in the quarter, excluding M&A and adjusted for
foreign currency, increased 6% year-over-year. Backlog at the end
of the quarter of $8.4 billion
increased 11% compared to the prior year, excluding M&A and
adjusted for foreign currency.
Segment EBITA was $285 million, up
7% versus the prior year. Segment EBITA margin of 11.5% expanded 20
basis points versus the prior year led by higher margin backlog
conversion and continued growth in Services.
Building Solutions EMEA/LA (Europe, Middle
East, Africa/Latin America)
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2023
|
2024
|
2023
|
2024
|
Sales
|
$975
|
$1,038
|
$975
|
$1,038
|
Segment
EBITA
|
75
|
80
|
75
|
80
|
Segment EBITA Margin
%
|
7.7 %
|
7.7 %
|
7.7 %
|
7.7 %
|
Sales in the quarter of $1.0
billion increased 6% versus the prior year. Organic sales
grew 2% versus the prior year led by strength in Applied HVAC &
Controls, Fire & Security, and high-single digit growth in
Service.
Orders in the quarter, excluding M&A and adjusted for
foreign currency, increased 5% year-over-year. Backlog at the end
of the quarter of $2.4 billion
increased 10% year-over-year, excluding M&A and adjusted for
foreign currency.
Segment EBITA was $80 million, up
7% versus the prior year. Segment EBITA margin of 7.7% was flat
versus the prior year as the growth in Service was offset by the
conversion of lower margin Install backlog.
Building Solutions Asia Pacific
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2023
|
2024
|
2023
|
2024
|
Sales
|
$646
|
$507
|
$646
|
$507
|
Segment
EBITA
|
68
|
46
|
68
|
46
|
Segment EBITA Margin
%
|
10.5 %
|
9.1 %
|
10.5 %
|
9.1 %
|
Sales in the quarter of $507
million declined 22% versus the prior year. Organic sales
declined 21% versus the prior year as mid single-digit Service
growth was more than offset by accelerating weakness in
China.
Orders in the quarter, excluding M&A and adjusted for
foreign currency, declined 31% year-over-year. Backlog at the
end of the quarter of $1.3 billion
decreased 21% year-over-year, excluding M&A and adjusted for
foreign currency.
Segment EBITA was $46 million,
down 32% versus the prior year. Segment EBITA margin of 9.1%
declined 140 basis points versus the prior year primarily related
to declines in the Install business in China.
Global Products
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2023
|
2024
|
2023
|
2024
|
Sales
|
$2,080
|
$2,062
|
$2,080
|
$2,062
|
Segment
EBITA
|
382
|
369
|
422
|
369
|
Segment EBITA Margin
%
|
18.4 %
|
17.9 %
|
20.3 %
|
17.9 %
|
Sales in the quarter of $2.1
billion declined 1% versus the prior year. Organic sales
were down 1% versus the prior year as growth in Applied and Light
Commercial HVAC was offset by declines in global Residential
HVAC.
Segment EBITA was $369 million,
down 3% versus the prior year. Segment EBITA margin of 17.9%
declined 50 basis points versus the prior year as the result of
unfavorable manufacturing absorption and mix. Adjusted segment
EBITA in Q1 2023 excluded the impact of an uninsured loss
associated with a fire at a leased warehouse facility.
Corporate
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2023
|
2024
|
2023
|
2024
|
Corporate
Expense
|
($109)
|
($139)
|
($82)
|
($116)
|
Corporate expense was $139 million
in the quarter, an increase of 28% compared to the prior year.
Adjusted Corporate expense in Q1 2024 excluded certain one-time
cyber incident-related costs and in Q1 2023 excluded certain
transaction/separation costs.
OTHER Q1 ITEMS
- Cash used by operating activities from continuing operations
was $246 million, while cash used by
operating activities from continuing operations, excluding JC
Capital, was $158 million. Capital
expenditures were $92 million,
resulting in adjusted free cash flow from continuing operations of
$(250) million. This was favorable by
$180 million compared to Q1
2023.
- The Company paid dividends of approximately $252 million during Q1 2024.
- The Company recorded pre-tax restructuring and impairment costs
of $39 million, primarily comprised
of severance charges related to ongoing restructuring actions.
- The Company recorded a net discrete period tax benefit of
$57 million related to benefits from
Swiss cantonal tax reform partially offset by a provision related
to a change in indefinite reinvestment assertion for certain
subsidiaries.
SECOND QUARTER GUIDANCE
The Company initiated fiscal 2024 second quarter guidance:
- Organic revenue ~flat year-over-year
- Adjusted segment EBITA margin of ~14.5%
- Adjusted EPS before special items of ~$0.74 to $0.78
FULL YEAR GUIDANCE
The Company updated fiscal 2024 full year EPS guidance:
- Organic revenue growth up ~MSD year-over year
- Adjusted segment EBITA margin improvement of ~50 to 75 basis
points, year-over-year (previously guided to ~25+ basis points
improvement)
- Adjusted EPS before special items of ~$3.60 to $3.75
from prior range of ~$3.65 to
$3.80
CONFERENCE CALL & WEBCAST INFO
Johnson Controls will host a conference call to discuss this
quarter's results at 8:30 a.m. ET
today, which can be accessed by dialing 844-763-8274 (in
the United States) or
+1-412-717-9224 (outside the United
States), or via webcast. A slide presentation will accompany
the prepared remarks and has been posted on the investor relations
section of the Johnson Controls website at
https://investors.johnsoncontrols.com/news-and-events/events-and-presentations.
A replay will be made available approximately two hours following
the conclusion of the conference call.
About Johnson Controls
At Johnson Controls (NYSE:JCI), we transform the environments
where people live, work, learn and play. As the global leader in
smart, healthy and sustainable buildings, our mission is to
reimagine the performance of buildings to serve people, places and
the planet.
Building on a proud history of nearly 140 years of innovation,
we deliver the blueprint of the future for industries such as
healthcare, schools, data centers, airports, stadiums,
manufacturing and beyond through OpenBlue, our comprehensive
digital offering.
Today, with a global team of 100,000 experts in more than 150
countries, Johnson Controls offers the world`s largest portfolio of
building technology and software as well as service solutions from
some of the most trusted names in the industry.
Visit www.johnsoncontrols.com for more information and follow
@Johnson Controls on social platforms.
JOHNSON CONTROLS
CONTACTS:
|
|
|
|
INVESTOR
CONTACTS:
|
MEDIA
CONTACT:
|
|
|
Jim Lucas
|
Danielle
Canzanella
|
Direct: +1 651.391.3182
|
Direct: +1
203.499.8297
|
Email:
jim.lucas@jci.com
|
Email:
danielle.canzanella@jci.com
|
|
|
Michael
Gates
|
|
Direct: +1
414.524.5785
|
|
Email:
michael.j.gates@jci.com
|
|
Johnson Controls International plc
Cautionary Statement Regarding Forward-Looking
Statements
Johnson Controls International plc has made statements in this
communication that are forward-looking and therefore are
subject to risks and uncertainties. All statements in this document
other than statements of historical fact are, or could
be, "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. In this
communication, statements regarding Johnson Controls future
financial position, sales, costs, earnings, cash flows, other
measures of results of operations, synergies and integration
opportunities, capital expenditures, debt levels and market outlook
are forward-looking statements. Words such as "may," "will,"
"expect," "intend," "estimate," "anticipate," "believe," "should,"
"forecast," "project" or "plan" and terms of similar
meaning are also generally intended to identify forward-looking
statements. However, the absence of these words does not mean
that a statement is not forward-looking. Johnson Controls cautions
that these statements are subject to numerous important risks,
uncertainties, assumptions and other factors, some of which are
beyond its control, that could cause its actual results to differ
materially from those expressed or implied by such forward-looking
statements, including, among others, risks related to: Johnson
Controls ability to develop or acquire new products and
technologies that achieve market acceptance and meet applicable
quality and regulatory requirements; the ability to manage general
economic, business and capital market conditions, including the
impact of recessions, economic downturns and global price
inflation; fluctuations in the cost and availability of public and
private financing for its customers; the ability to innovate and
adapt to emerging technologies, ideas and trends in the
marketplace, including the incorporation of technologies such as
artificial intelligence; the ability to manage macroeconomic and
geopolitical volatility, including shortages impacting the
availability of raw materials and component products and the
conflicts between Russia and
Ukraine and Israel and Hamas; managing the risks and
impacts of potential and actual security breaches, cyberattacks,
privacy breaches or data breaches, including business, service, or
operational disruptions, the unauthorized access to or disclosure
of data, financial loss, reputational damage, increased response
and remediation costs, legal, and regulatory proceedings or other
unfavorable outcomes; our ability to remediate our material
weakness; maintaining and improving the capacity, reliability and
security of Johnson Controls enterprise information technology
infrastructure; the ability to manage the lifecycle cybersecurity
risk in the development, deployment and operation of Johnson
Controls digital platforms and services; changes to laws or
policies governing foreign trade, including economic sanctions,
tariffs, foreign exchange and capital controls, import/export
controls or other trade restrictions; fluctuations in currency
exchange rates; changes or uncertainty in laws, regulations, rates,
policies, or interpretations that impact Johnson Controls business
operations or tax status; the ability to adapt to global climate
change, climate change regulation and successfully meet Johnson
Controls public sustainability commitments; the outcome of
litigation and governmental proceedings; the risk of infringement
or expiration of intellectual property rights; Johnson Controls
ability to manage disruptions caused by catastrophic or
geopolitical events, such as natural disasters, armed conflict,
political change, climate change, pandemics and outbreaks of
contagious diseases and other adverse public health developments;
the ability of Johnson Controls to drive organizational
improvement; any delay or inability of Johnson Controls to realize
the expected benefits and synergies of recent portfolio
transactions; the ability to hire and retain senior management and
other key personnel; the tax treatment of recent portfolio
transactions; significant transaction costs and/or unknown
liabilities associated with such transactions; labor shortages,
work stoppages, union negotiations, labor disputes and other
matters associated with the labor force; and the cancellation of or
changes to commercial arrangements. A detailed discussion of risks
related to Johnson Controls business is included in the section
entitled "Risk Factors" in Johnson Controls Annual Report on Form
10-K for the fiscal year filed with the SEC, which is available at
www.sec.gov and www.johnsoncontrols.com under the "Investors" tab.
The description of certain of these risks supplemented in Item 1A
of Part II of Johnson Controls subsequently filed Quarterly Reports
on Form 10-Q. Shareholders, potential investors and others should
consider these factors in evaluating the forward-looking statements
and should not place undue reliance on such statements. The
forward-looking statements included in this communication are made
only as of the date of this document, unless otherwise specified,
and, except as required by law, Johnson Controls assumes no
obligation, and disclaims any obligation, to update such statements
to reflect events or circumstances occurring after the date of this
communication.
Non-GAAP Financial Information
This press release contains financial information regarding
adjusted earnings per share, which is a non-GAAP performance
measure. The adjusting items include restructuring and impairment
costs, net mark-to-market adjustments, certain
transaction/separation costs, cyber incident costs, warehouse fire
loss, and discrete tax items. Financial information regarding
organic sales growth, adjusted segment EBITA, adjusted segment
EBITA margin, adjusted Corporate expense, cash provided by
operating activities from continuing operations, excluding JC
Capital, adjusted free cash flow, and adjusted net income from
continuing operations are also presented, which are non-GAAP
performance measures. Management believes that, when considered
together with unadjusted amounts, these non-GAAP measures are
useful to investors in understanding period-over-period operating
results and business trends of Johnson Controls. Management may
also use these metrics as guides in forecasting, budgeting and
long-term planning processes and for compensation purposes. These
metrics should be considered in addition to, and not as
replacements for, the most comparable GAAP measure. For
further information on the calculation of the non-GAAP measures and
a reconciliation of these non-GAAP measures, refer to the attached
footnotes.
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(in millions, except
per share data; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
Net sales
|
$
6,094
|
|
|
$
6,068
|
Cost of
sales
|
4,102
|
|
|
3,977
|
|
Gross profit
|
1,992
|
|
|
2,091
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
1,513
|
|
|
1,571
|
Restructuring and
impairment costs
|
39
|
|
|
345
|
Net financing
charges
|
99
|
|
|
67
|
Equity
income
|
62
|
|
|
62
|
|
|
|
|
|
|
Income before income
taxes
|
403
|
|
|
170
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
(1)
|
|
|
14
|
|
|
|
|
|
|
Net income
|
404
|
|
|
156
|
|
|
|
|
|
|
Less: Income
attributable to noncontrolling interests
|
30
|
|
|
38
|
|
|
|
|
|
|
Net income attributable
to JCI
|
$
374
|
|
|
$
118
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
0.55
|
|
|
$
0.17
|
|
|
|
|
|
|
Diluted weighted
average shares
|
682.4
|
|
|
690.3
|
Shares outstanding at
period end
|
681.5
|
|
|
687.2
|
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
September
30,
|
|
|
2023
|
|
2023
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
1,801
|
|
$
835
|
|
Accounts receivable -
net
|
6,045
|
|
6,006
|
|
Inventories
|
3,006
|
|
2,776
|
|
Other current
assets
|
1,202
|
|
1,120
|
|
|
12,054
|
|
10,737
|
|
|
|
|
|
|
Property, plant and
equipment - net
|
3,131
|
|
3,136
|
|
Goodwill
|
18,124
|
|
17,936
|
|
Other intangible assets
- net
|
4,835
|
|
4,888
|
|
Investments in
partially-owned affiliates
|
1,144
|
|
1,056
|
|
Other noncurrent
assets
|
4,693
|
|
4,489
|
|
|
$
43,981
|
|
$
42,242
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
2,650
|
|
$
1,030
|
|
Accounts payable and
accrued expenses
|
4,910
|
|
5,226
|
|
Other current
liabilities
|
4,849
|
|
4,828
|
|
|
12,409
|
|
11,084
|
|
|
|
|
|
|
Long-term
debt
|
7,959
|
|
7,818
|
|
Other noncurrent
liabilities
|
5,739
|
|
5,646
|
|
Shareholders' equity
attributable to JCI
|
16,698
|
|
16,545
|
|
Noncontrolling
interests
|
1,176
|
|
1,149
|
|
|
$
43,981
|
|
$
42,242
|
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
|
|
|
2023
|
|
|
2022
|
Operating
Activities
|
|
|
|
|
Net income attributable
to JCI
|
$
374
|
|
|
$
118
|
Income attributable to
noncontrolling interests
|
30
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
Net income
|
404
|
|
|
156
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income to cash used by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
231
|
|
|
203
|
|
|
Pension and
postretirement benefit income
|
(10)
|
|
|
(6)
|
|
|
Pension and
postretirement contributions
|
(6)
|
|
|
(9)
|
|
|
Equity in earnings of
partially-owned affiliates, net of dividends received
|
(56)
|
|
|
(56)
|
|
|
Deferred income
taxes
|
(70)
|
|
|
(92)
|
|
|
Non-cash restructuring
and impairment costs
|
9
|
|
|
294
|
|
|
Other - net
|
8
|
|
|
3
|
|
|
Changes in assets and
liabilities, excluding acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
61
|
|
|
(88)
|
|
|
|
|
Inventories
|
(203)
|
|
|
(348)
|
|
|
|
|
Other assets
|
(191)
|
|
|
(68)
|
|
|
|
|
Restructuring
reserves
|
(14)
|
|
|
14
|
|
|
|
|
Accounts payable and
accrued liabilities
|
(414)
|
|
|
(338)
|
|
|
|
|
Accrued income
taxes
|
5
|
|
|
39
|
|
|
|
|
|
Cash used by operating
activities
|
(246)
|
|
|
(296)
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Capital
expenditures
|
(92)
|
|
|
(134)
|
Acquisition of
businesses, net of cash acquired
|
(2)
|
|
|
(79)
|
Other - net
|
20
|
|
|
24
|
|
|
|
|
|
Cash used by investing
activities
|
(74)
|
|
|
(189)
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Increase in short and
long-term debt - net
|
1,530
|
|
|
420
|
Stock repurchases and
retirements
|
-
|
|
|
(154)
|
Payment of cash
dividends
|
(252)
|
|
|
(241)
|
Other - net
|
(50)
|
|
|
(16)
|
|
|
|
|
|
Cash provided by
financing activities
|
1,228
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
60
|
|
|
(14)
|
Increase (decrease)
in cash, cash equivalents and restricted cash
|
$
968
|
|
|
$
(490)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOOTNOTES
|
|
1.
Financial Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company evaluates
the performance of its business units primarily on segment earnings
before interest, taxes and amortization (EBITA), which represents
income before income
taxes and noncontrolling interests, excluding general corporate
expenses, intangible asset amortization, net mark-to-market
adjustments related to restricted asbestos investments and
pension and postretirement plans, restructuring and impairment
costs and net financing charges.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions;
unaudited)
|
|
|
Three Months Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
Adjusted
Non-GAAP
|
|
Actual
|
|
Adjusted
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
North America
|
|
|
$
285
|
|
$
285
|
|
$
267
|
|
$
267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
|
|
80
|
|
80
|
|
75
|
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions Asia
Pacific
|
|
|
46
|
|
46
|
|
68
|
|
68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
Products
|
|
|
$
369
|
|
$
369
|
|
$
382
|
|
$
422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to JCI
|
|
|
$
374
|
|
$
350
|
|
$
118
|
|
$
463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income attributable to
noncontrolling interests (2)
|
|
|
30
|
|
32
|
|
38
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
404
|
|
382
|
|
156
|
|
501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Income tax
benefit (provision) (3)
|
|
|
1
|
|
(61)
|
|
(14)
|
|
(78)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
403
|
|
443
|
|
170
|
|
579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financing
charges
|
|
|
99
|
|
99
|
|
67
|
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (4)
|
|
|
$
502
|
|
$
542
|
|
$
237
|
|
$
646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT margin (4)
|
|
|
8.2 %
|
|
8.9 %
|
|
3.9 %
|
|
10.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company's press
release contains financial information regarding adjusted segment
EBITA and adjusted segment EBITA margins, which are non-GAAP
performance measures.
The Company's definition of adjusted segment EBITA excludes other
non-recurring items that are not considered to be directly related
to the underlying operating performance of its
businesses. Management believes these non-GAAP measures are useful
to investors in understanding the ongoing operations and business
trends of the Company.
|
|
|
The following is the
three months ended December 31, 2023 and 2022 reconciliation of
segment EBITA and segment EBITA margin as reported to adjusted
segment EBITA and
adjusted segment EBITA margin (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Building
Solutions
North America
|
|
Building
Solutions
EMEA/LA
|
|
Building
Solutions
Asia Pacific
|
|
Global
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA as
reported
|
$ 285
|
|
$
267
|
|
$
80
|
|
$
75
|
|
$
46
|
|
$
68
|
|
$
369
|
|
$
382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA margin as
reported (5)
|
11.5 %
|
|
11.3 %
|
|
7.7 %
|
|
7.7 %
|
|
9.1 %
|
|
10.5 %
|
|
17.9 %
|
|
18.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse fire
loss
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA
|
$ 285
|
|
$
267
|
|
$
80
|
|
$
75
|
|
$
46
|
|
$
68
|
|
$
369
|
|
$
422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment EBITA
margin (5)
|
11.5 %
|
|
11.3 %
|
|
7.7 %
|
|
7.7 %
|
|
9.1 %
|
|
10.5 %
|
|
17.9 %
|
|
20.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Adjusted income
attributable to noncontrolling interests for the three months ended
December 31, 2023 excludes impact from restructuring and impairment
costs of $2 million.
|
|
|
(3) Adjusted income tax
provision for the three months ended December 31, 2023 excluded tax
benefits related to Switzerland tax reform of $80 million and
the net tax benefit of pre-tax
adjusting items of $5 million, partially offset by tax provisions
related to China APB23 adjustments of $23 million. Adjusted income
tax provision for the three months ended December 31,
2022 excludes the net tax benefit of pre-tax adjusting items of $64
million.
|
|
|
(4) Management defines
earnings before interest and taxes (EBIT) as income before net
financing charges, income taxes and noncontrolling interests. EBIT
margin is defined as EBIT
divided by net sales. EBIT and EBIT margin are non-GAAP performance
measures. Management believes these non-GAAP measures are useful to
investors in understanding the
ongoing operations and business trends of the Company. A
reconciliation of net income to EBIT is shown earlier within this
footnote. Adjusted EBIT for the three months ended December
31, 2023 excludes restructuring and impairment costs of $39
million, net mark-to-market gains on restricted asbestos
investments of $22 million and certain cyber incident costs of
$23
million. Adjusted EBIT for the three months ended December 31, 2022
excludes restructuring and impairment costs of $345 million, net
mark-to-market gains on restricted asbestos
investments and pension and postretirement plans of $3 million and
certain transaction/separation costs of $27 million.
|
|
|
(5) Segment EBITA
margin is defined as segment EBITA divided by segment net sales, as
disclosed in the Company's press release.
|
|
|
|
|
|
The Company's press
release and earnings presentation include forward-looking
statements regarding organic revenue growth, adjusted segment EBITA
margin improvement, adjusted
free cash flow and adjusted EPS, which are non-GAAP financial
measures. These non-GAAP financial measures are derived by
excluding certain amounts from the corresponding
financial measures determined in accordance with GAAP. The
determination of the amounts excluded is a matter of management
judgment and depends upon, among other factors, the
nature of the underlying expense or income amounts recognized in a
given period and the high variability of certain amounts, such as
mark-to-market adjustments. Organic revenue
growth excludes the effect of acquisitions, divestitures and
foreign currency. We are unable to present a quantitative
reconciliation of the aforementioned forward-looking non-GAAP
financial measures to their most directly comparable
forward-looking GAAP financial measures because such information is
not available, and management cannot reliably predict the
necessary components of such GAAP measures without unreasonable
effort or expense. The unavailable information could have a
significant impact on the Company's fiscal 2024
second quarter and full year GAAP financial
results.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
Diluted Earnings Per Share Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's press
release contains financial information regarding adjusted earnings
per share, which is a non-GAAP performance measure. The adjusting
items shown in the table
below are excluded because these items are not considered to be
directly related to the underlying operating performance of the
Company. Management believes this non-GAAP
measure is useful to investors in understanding the ongoing
operations and business trends of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of
diluted earnings per share as reported to adjusted diluted earnings
per share for the respective periods is shown below
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable
to JCI plc
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share as
reported for JCI plc
|
$ 0.55
|
|
$
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
mark-to-market adjustments
|
(0.03)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
0.01
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
and impairment costs
|
0.05
|
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
(0.01)
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction/separation costs
|
-
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cyber incident
costs
|
0.03
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse fire
loss
|
-
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
-
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net discrete tax
items
|
(0.08)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share for JCI plc*
|
$ 0.51
|
|
$
0.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* May not sum due to
rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
table reconciles the denominators used to calculate basic and
diluted earnings per share for JCI plc (in millions;
unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding for JCI plc
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding
|
680.7
|
|
687.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options,
unvested restricted stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
unvested performance share awards
|
1.7
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
682.4
|
|
690.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
Organic Growth Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
change in net sales for the three months ended December 31, 2023
versus the three months ended December 31, 2022, including organic
growth, are shown
below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Net Sales for the
Three Months Ended
December 31, 2022
|
|
Base Year Adjustments
-
Divestitures and Other
|
|
Base Year Adjustments
-
Foreign Currency
|
|
Adjusted Base Net
Sales for the
Three Months Ended
December 31, 2022
|
|
Acquisitions
|
|
Organic
Growth
|
|
Net Sales for the
Three Months Ended
December 31, 2023
|
|
|
|
|
|
|
Building Solutions
North America
|
$
2,367
|
|
$
-
|
|
-
|
|
$
6
|
|
-
|
|
$
2,373
|
|
$
16
|
|
1 %
|
|
$
98
|
|
4 %
|
|
$
2,487
|
|
5 %
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
975
|
|
-
|
|
-
|
|
42
|
|
4 %
|
|
1,017
|
|
3
|
|
-
|
|
18
|
|
2 %
|
|
1,038
|
|
6 %
|
|
|
|
|
|
|
Building Solutions Asia
Pacific
|
646
|
|
(17)
|
|
-3 %
|
|
(10)
|
|
-2 %
|
|
619
|
|
19
|
|
3 %
|
|
(131)
|
|
-21 %
|
|
507
|
|
-22 %
|
|
|
|
|
|
|
Total Building Solutions
|
3,988
|
|
(17)
|
|
-
|
|
38
|
|
1 %
|
|
4,009
|
|
38
|
|
1 %
|
|
(15)
|
|
-
|
|
4,032
|
|
1 %
|
|
|
|
|
|
|
Global
Products
|
2,080
|
|
(2)
|
|
-
|
|
(10)
|
|
-
|
|
2,068
|
|
22
|
|
1 %
|
|
(28)
|
|
-1 %
|
|
2,062
|
|
-1 %
|
|
|
|
|
|
|
Total net sales
|
$
6,068
|
|
$
(19)
|
|
-
|
|
$
28
|
|
-
|
|
$
6,077
|
|
$
60
|
|
1 %
|
|
$ (43)
|
|
-1 %
|
|
$
6,094
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
change in total service revenue for the three months ended December
31, 2023 versus the three months ended December 31, 2022, including
organic growth,
are shown below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Service Revenue
for the
Three Months Ended
December 31, 2022
|
|
Base Year Adjustments
-
Divestitures and Other
|
|
Base Year Adjustments
-
Foreign Currency
|
|
Adjusted Base
Service
Revenue for the
Three Months Ended
December 31, 2022
|
|
Acquisitions
|
|
Organic
Growth
|
|
Service Revenue
for the
Three Months Ended
December 31, 2023
|
|
|
|
|
|
|
Building Solutions
North America
|
$
916
|
|
$
-
|
|
-
|
|
$
1
|
|
-
|
|
$
917
|
|
$
14
|
|
2 %
|
|
$
38
|
|
4 %
|
|
$ 969
|
|
6 %
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
423
|
|
(1)
|
|
-
|
|
8
|
|
2 %
|
|
430
|
|
2
|
|
-
|
|
34
|
|
8 %
|
|
466
|
|
10 %
|
|
|
|
|
|
|
Building Solutions Asia
Pacific
|
173
|
|
(17)
|
|
-10 %
|
|
(2)
|
|
-1 %
|
|
154
|
|
8
|
|
5 %
|
|
8
|
|
5 %
|
|
170
|
|
-2 %
|
|
|
|
|
|
|
Total Building Solutions
|
1,512
|
|
(18)
|
|
-1 %
|
|
7
|
|
-
|
|
1,501
|
|
24
|
|
2 %
|
|
80
|
|
5 %
|
|
1,605
|
|
6 %
|
|
|
|
|
|
|
Global
Products
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
Total service revenue
|
$
1,512
|
|
$
(18)
|
|
-1 %
|
|
$
7
|
|
-
|
|
$
1,501
|
|
$
24
|
|
2 %
|
|
$
80
|
|
5 %
|
|
$
1,605
|
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
change in total install revenue for the three months ended December
31, 2023 versus the three months ended December 31, 2022, including
organic growth,
are shown below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Install Revenue
for the
Three Months Ended
December 31, 2022
|
|
Base Year Adjustments
-
Divestitures and Other
|
|
Base Year Adjustments
-
Foreign Currency
|
|
Adjusted Base Install
Revenue for the
Three Months Ended
December 31, 2022
|
|
Acquisitions
|
|
Organic
Growth
|
|
Install Revenue
for the
Three Months Ended
December 31, 2023
|
|
|
|
|
|
|
Building Solutions
North America
|
$
1,451
|
|
$
-
|
|
-
|
|
$
5
|
|
-
|
|
$
1,456
|
|
$
2
|
|
-
|
|
$
60
|
|
4 %
|
|
$
1,518
|
|
5 %
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
552
|
|
1
|
|
-
|
|
34
|
|
6 %
|
|
587
|
|
1
|
|
-
|
|
(16)
|
|
-3 %
|
|
572
|
|
4 %
|
|
|
|
|
|
|
Building Solutions Asia
Pacific
|
473
|
|
-
|
|
-
|
|
(8)
|
|
-2 %
|
|
465
|
|
11
|
|
2 %
|
|
(139)
|
|
-30 %
|
|
337
|
|
-29 %
|
|
|
|
|
|
|
Total Building Solutions
|
2,476
|
|
1
|
|
-
|
|
31
|
|
1 %
|
|
2,508
|
|
14
|
|
1 %
|
|
(95)
|
|
-4 %
|
|
2,427
|
|
-2 %
|
|
|
|
|
|
|
Global
Products
|
2,080
|
|
(2)
|
|
-
|
|
(10)
|
|
-
|
|
2,068
|
|
22
|
|
1 %
|
|
(28)
|
|
-1 %
|
|
2,062
|
|
-1 %
|
|
|
|
|
|
|
Total install revenue
|
$
4,556
|
|
$
(1)
|
|
-
|
|
$
21
|
|
-
|
|
$
4,576
|
|
$
36
|
|
1 %
|
|
$ (123)
|
|
-3 %
|
|
$
4,489
|
|
-1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Adjusted
Free Cash Flow Conversion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's press
release contains financial information regarding adjusted free cash
flow and adjusted free cash flow conversion, which are non-GAAP
performance measures. We
also present below free cash flow conversion from the GAAP measure
of net income attributable to JCI. Effective January 1, 2023, the
Company has excluded the impact of its financing
entity, JC Capital, from the calculation of adjusted free cash
flow. Management believes this provides a more true representation
of the Company's operational ability to convert cash,
without the contrary impact from financing activities. The impact
on interim and annual periods prior to January 1, 2023 was not
material. JC Capital cash flows that are excluded from the
calculation of adjusted free cash flow primarily include activity
associated with finance/notes receivables and inventory and/or
capital expenditures related to lease arrangements. JC
Capital net income that is excluded is primarily related to
interest income on the finance/notes receivable and profit
recognized on arrangements with sales-type lease components.
Adjusted free cash flow is defined as cash provided (used) by
operating activities, excluding JC Capital, less capital
expenditures, excluding JC Capital. Free cash flow conversion
from
net income is defined as free cash flow divided by net income
attributable to JCI. Adjusted free cash flow conversion is defined
as free cash flow divided by adjusted net income
attributable to JCI, excluding JC Capital. Management believes
these non-GAAP measures are useful to investors in understanding
the strength of the Company and its ability to
generate cash. These non-GAAP measures can also be used to evaluate
our ability to generate cash flow from operations and the impact
that this cash flow has on our liquidity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is the
three months ended December 31, 2023 and 2022 calculation of free
cash flow and adjusted free cash flow (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2023
|
|
Three Months Ended
December 31, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Consolidated JCI
plc
|
|
Consolidated JCI
plc,
excluding JC Capital
|
|
Consolidated JCI
plc
|
|
Consolidated JCI
plc,
excluding JC Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash used by operating
activities
|
$
(246)
|
|
$
(158)
|
|
$
(296)
|
|
$
(296)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(92)
|
|
(92)
|
|
(134)
|
|
(134)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow /
Adjusted free cash flow (excluding JC Capital)
|
$
(338)
|
|
$
(250)
|
|
$
(430)
|
|
$
(430)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is the
three months ended December 31, 2023 and 2022 calculation of free
cash flow conversion from net income and adjusted free cash flow
conversion (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2023
|
|
Three Months Ended
December 31, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Consolidated JCI
plc
|
|
Consolidated JCI
plc,
excluding JC Capital
|
|
Consolidated JCI
plc
|
|
Consolidated JCI
plc,
excluding JC Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to JCI
|
$
374
|
|
$
372
|
|
$
118
|
|
$
118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
conversion from net income
|
-90 %
|
|
-67 %
|
|
-364 %
|
|
-364 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to JCI
|
$
350
|
|
$
348
|
|
$
463
|
|
$
463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash flow
conversion
|
-97 %
|
|
-72 %
|
|
-93 %
|
|
-93 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
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|
|
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|
|
|
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|
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|
|
|
|
|
|
|
5. Debt
Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's earnings
presentation provides financial information regarding net debt to
adjusted EBITDA, which is a non-GAAP performance measure. We also
present below net debt
to income before income taxes. The Company believes these ratios
are useful to understanding the Company's financial condition as
they provide an overview of the extent to which the
Company relies on external debt financing for its funding and are a
measure of risk to its shareholders. The following is the December
31, 2023, September 30, 2023, and December 31,
2022 calculation of net debt to income before income taxes and net
debt to adjusted EBITDA (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
2,650
|
|
$
1,030
|
|
$
1,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
7,959
|
|
7,818
|
|
7,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
10,609
|
|
8,848
|
|
9,747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: cash and cash
equivalents
|
1,801
|
|
835
|
|
1,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net
debt
|
$
8,808
|
|
$
8,013
|
|
$
8,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last twelve months
income before income taxes
|
$
1,943
|
|
$
1,710
|
|
$
1,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net debt to
income before income taxes
|
4.5x
|
|
4.7x
|
|
5.9x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last twelve months
adjusted EBITDA
|
$
4,051
|
|
$
4,127
|
|
$
3,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net debt to
adjusted EBITDA
|
2.2x
|
|
1.9x
|
|
2.2x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is the
last twelve months ended December 31, 2023, September 30, 2023, and
December 31, 2022 reconciliation of net income to adjusted EBIT and
adjusted EBITDA,
which are non-GAAP performance measures (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Last Twelve
Months
Ended
December 31, 2023
|
|
Last Twelve
Months
Ended
September 30, 2023
|
|
Last Twelve
Months
Ended
December 31, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
2,281
|
|
$
2,033
|
|
$
1,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
(338)
|
|
(323)
|
|
(70)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financing
charges
|
313
|
|
281
|
|
227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
2,256
|
|
1,991
|
|
1,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
mark-to-market adjustments
|
73
|
|
92
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and impairment costs
|
758
|
|
1,064
|
|
1,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental remediation and related reserves
adjustment
|
-
|
|
-
|
|
|
|
255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silent-Aire other nonrecurring costs
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silent-Aire earn-out adjustment
|
|
|
(30)
|
|
|
|
(30)
|
|
|
|
(43)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charges
attributable to the suspension of operations in Russia
|
-
|
|
-
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse
fire loss
|
|
|
-
|
|
|
|
40
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cyber
incident costs
|
|
|
23
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction/separation costs
|
|
|
95
|
|
|
|
122
|
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT
(1)
|
3,175
|
|
3,279
|
|
2,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
876
|
|
848
|
|
803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
$
4,051
|
|
$
4,127
|
|
$
3,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company's
definition of adjusted EBIT and adjusted EBITDA excludes special
items that are not considered to be directly related to the
underlying operating performance of its
businesses. Management believes this non-GAAP measure is useful to
investors in understanding the ongoing operations and business
trends of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's effective
tax rate before consideration of net mark-to-market adjustments,
restructuring and impairment costs, discrete tax items, certain
transaction/separation costs,
cyber incident costs and warehouse fire loss for the three months
ending December 31, 2023 and December 31, 2022 is approximately
13.75% and 13.5%, respectively.
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/johnson-controls-reports-solid-q1-results-updates-fy24-guidance-302047316.html
SOURCE Johnson Controls International plc