Attached files
file | filename |
---|---|
EX-99.1 - EX-99.1 - Johnson Controls International plc | a16-20376_1ex99d1.htm |
8-K - 8-K - Johnson Controls International plc | a16-20376_18k.htm |
Exhibit 99.2
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Spin-Off of Adient
On October 31, 2016 (the Distribution Date), Johnson Controls International plc (the Company or Johnson Controls) completed the spin-off of its automotive seating and interiors business, Adient plc (Adient), to its shareholders (the Spin-Off). On October 31, 2016, each of the Companys shareholders of record as of the close of business on October 19, 2016 (the Record Date), received one ordinary share of Adient for every ten ordinary shares of Johnson Controls held at the close of business on the Record Date. Johnson Controls shareholders will receive cash in lieu of fractional shares of Adient (if any). Adient is now an independent public company trading under the symbol ADNT on the New York Stock Exchange.
After the Distribution Date, the Company does not beneficially own any ordinary shares of Adient and will no longer consolidate Adient within its financial results. Beginning in the first quarter of fiscal 2017, Adients historical financial results for periods prior to the Distribution Date will be reflected in the Companys consolidated financial statements as a discontinued operation (the Adient Discontinued Operations).
Unaudited Pro Forma Consolidated Financial Information
The following unaudited pro forma consolidated financial statements as of June 30, 2016, and for the nine months ended June 30, 2016 and for each of the years ended September 30, 2015, 2014 and 2013, reflect adjustments to the Companys historical financial results related to the:
· Spin-Off and related events. The unaudited pro forma consolidated statements of income for the nine months ended June 30, 2016 and the year ended September 30, 2015 give effect to the Spin-Off and related events as if they occurred at the beginning of this period on October 1, 2014. The unaudited pro forma consolidated statement of financial position gives effect to the Spin-Off and related events as if they occurred as of June 30, 2016, the Companys latest balance sheet date.
· Adient Discontinued Operation. The unaudited pro forma consolidated statements of income reflect the removal of the Adient Discontinued Operation historical results in all periods presented.
The unaudited pro forma consolidated statements of income (i) are presented based on information currently available, (ii) are intended for informational purposes only, (iii) are not necessarily indicative of and do not purport to represent what the Companys operating results would have been had the Spin-Off and related events occurred as described or what the Companys future operating results will be after giving effect to these events, and (iv) do not reflect all actions that may be undertaken by the Company after the Spin-Off and disposition of Adient.
The unaudited pro forma consolidated financial statements and the accompanying notes should be read together with:
· Historical financial statements of Johnson Controls as of and for the year ended September 30, 2015 and the related notes included in Johnson Controls Annual Report on Form 10-K for the year ended September 30, 2015 that Johnson Controls filed with the Securities and Exchange Commission (SEC) on November 18, 2015, portions of which (including Part I, Item 1. Business, and the following items from Part II of the Annual Report: Item 6. Selected Financial Data, Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data) were recast in Johnson Controls Current Report on Form 8-K filed with the SEC on March 3, 2016;
· Separate historical financial statements of Johnson Controls as of and for the nine months ended June 30, 2016 and the related notes included in Johnson Controls Quarterly Report on Form 10-Q for the period ended June 30, 2016 that Johnson Controls filed with the SEC on July 29, 2016; and
· Adients audited annual and unaudited interim combined financial statements and accompanying notes and Managements Discussion and Analysis of Financial Condition and Results of Operations included in Adients Registration Statement on Form 10 filed with the SEC on April 27, 2016 and most recently amended on September 20, 2016.
In the enclosed unaudited pro forma consolidated statements of income and unaudited pro forma consolidated statement of financial positon, the amounts reflected in the columns presented are described below:
Historical Johnson Controls
This column reflects Johnson Controls historical financial statements for the periods presented and does not reflect any adjustments related to the Spin-Off and related events.
The historical Johnson Controls consolidated statement of financial position as of June 30, 2016 and the consolidated statement of income for the nine months ended June 30, 2016 were derived from the Companys unaudited interim consolidated financial statements included in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. The historical Johnson Controls consolidated statements of income for each of the years ended September 30, 2015, 2014 and 2013, were derived from the Companys audited consolidated financial statements included in its Annual Report on Form 10-K (portions of which were recast in Johnson Controls Current Report on Form 8-K filed with the SEC on March 3, 2016 as previously noted) for the year ended September 30, 2015.
Adient Discontinued Operations
The unaudited pro forma financial information related to the Adient Discontinued Operations has been prepared in accordance with the discontinued operations guidance in Accounting Standards Codification 205, Financial Statement Presentation and therefore does not reflect what Johnson Controls or Adients results of operations would have been on a stand-alone basis and are not necessarily indicative of Johnson Controls or Adients future results of operations. As such, the unaudited pro forma combined financial statements of income do not allocate any general corporate overhead expenses of Johnson Controls to Adient.
The information in the Adient Discontinued Operations column in the unaudited pro forma consolidated statements of income was prepared based on the Johnson Controls interim unaudited and annual audited financial statements and only include costs that are directly attributable to the operating results of Adient.
Pro Forma Adjustments
The unaudited pro forma consolidated financial statements as of and for the nine months ended June 30, 2016 and the year ended September 30, 2015 include the following additional pro forma adjustments which are further described in the accompanying notes:
· Adjustment to remove non-recurring Spin-Off separation costs incurred to date from the unaudited pro forma consolidated statements of income.
· Recognition of the recapitalization of equity to reflect the distribution of the Adient net assets, including a $3,000 million dividend from Adient to Johnson Controls.
JOHNSON CONTROLS INTERNATIONAL PLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED JUNE 30, 2016
(in millions, except share data)
|
|
Historical |
|
Adient |
|
Pro Forma |
|
Pro Forma |
| ||||
Net sales |
|
|
|
|
|
|
|
|
| ||||
Products and systems |
|
$ |
24,772 |
|
$ |
(12,893 |
) |
$ |
|
|
$ |
11,879 |
|
Services |
|
2,704 |
|
|
|
|
|
2,704 |
| ||||
|
|
27,476 |
|
(12,893 |
) |
|
|
14,583 |
| ||||
Cost of sales |
|
|
|
|
|
|
|
|
| ||||
Products and systems |
|
20,369 |
|
(11,610 |
) |
|
|
8,759 |
| ||||
Services |
|
1,858 |
|
|
|
|
|
1,858 |
| ||||
|
|
22,227 |
|
(11,610 |
) |
|
|
10,617 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Gross profit |
|
5,249 |
|
(1,283 |
) |
|
|
3,966 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Selling, general and administrative expenses |
|
(3,411 |
) |
770 |
|
46 |
(a) |
(2,595 |
) | ||||
Restructuring and impairment costs |
|
(331 |
) |
244 |
|
|
|
(87 |
) | ||||
Net financing charges |
|
(211 |
) |
9 |
|
|
|
(202 |
) | ||||
Equity income |
|
387 |
|
(260 |
) |
|
|
127 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations before income taxes |
|
1,683 |
|
(520 |
) |
46 |
|
1,209 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income tax provision |
|
1,203 |
|
(1,054 |
) |
2 |
(b) |
151 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income from continuing operations |
|
480 |
|
534 |
|
44 |
|
1,058 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations attributable to noncontrolling interests |
|
177 |
|
(61 |
) |
|
|
116 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income from continuing operations attributable to Johnson Controls |
|
$ |
303 |
|
$ |
595 |
|
$ |
44 |
|
$ |
942 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share attributable to Johnson Controls from continuing operations |
|
$ |
0.47 |
|
|
|
|
|
$ |
1.46 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per share attributable to Johnson Controls from continuing operations |
|
$ |
0.47 |
|
|
|
|
|
$ |
1.45 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
647.0 |
|
|
|
|
|
647.0 |
| ||||
Diluted |
|
651.5 |
|
|
|
|
|
651.5 |
|
JOHNSON CONTROLS INTERNATIONAL PLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FISCAL YEAR ENDED SEPTEMBER 30, 2015
(in millions, except share data)
|
|
Historical |
|
Adient |
|
Pro Forma |
|
Pro Forma |
| ||||
Net sales |
|
|
|
|
|
|
|
|
| ||||
Products and systems |
|
$ |
33,513 |
|
$ |
(20,079 |
) |
$ |
|
|
$ |
13,434 |
|
Services |
|
3,666 |
|
|
|
|
|
3,666 |
| ||||
|
|
37,179 |
|
(20,079 |
) |
|
|
17,100 |
| ||||
Cost of sales |
|
|
|
|
|
|
|
|
| ||||
Products and systems |
|
28,214 |
|
(18,163 |
) |
|
|
10,051 |
| ||||
Services |
|
2,518 |
|
|
|
|
|
2,518 |
| ||||
|
|
30,732 |
|
(18,163 |
) |
|
|
12,569 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Gross profit |
|
6,447 |
|
(1,916 |
) |
|
|
4,531 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Selling, general and administrative expenses |
|
(3,986 |
) |
795 |
|
2 |
(a) |
(3,189 |
) | ||||
Restructuring and impairment costs |
|
(397 |
) |
182 |
|
|
|
(215 |
) | ||||
Net financing charges |
|
(288 |
) |
14 |
|
|
|
(274 |
) | ||||
Equity income |
|
375 |
|
(295 |
) |
|
|
80 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations before income taxes |
|
2,151 |
|
(1,220 |
) |
2 |
|
933 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income tax provision |
|
600 |
|
(529 |
) |
|
|
71 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income from continuing operations |
|
1,551 |
|
(691 |
) |
2 |
|
862 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations attributable to noncontrolling interests |
|
112 |
|
(66 |
) |
|
|
46 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income from continuing operations attributable to Johnson Controls |
|
$ |
1,439 |
|
$ |
(625 |
) |
$ |
2 |
|
$ |
816 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share attributable to Johnson Controls from continuing operations |
|
$ |
2.20 |
|
|
|
|
|
$ |
1.25 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per share attributable to Johnson Controls from continuing operations |
|
$ |
2.18 |
|
|
|
|
|
$ |
1.23 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
655.2 |
|
|
|
|
|
655.2 |
| ||||
Diluted |
|
661.5 |
|
|
|
|
|
661.5 |
|
JOHNSON CONTROLS INTERNATIONAL PLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FISCAL YEAR ENDED SEPTEMBER 30, 2014
(in millions, except share data)
|
|
Historical |
|
Adient |
|
Pro Forma |
| |||
Net sales |
|
|
|
|
|
|
| |||
Products and systems |
|
$ |
34,978 |
|
$ |
(22,032 |
) |
$ |
12,946 |
|
Services |
|
3,771 |
|
|
|
3,771 |
| |||
|
|
38,749 |
|
(22,032 |
) |
16,717 |
| |||
Cost of sales |
|
|
|
|
|
|
| |||
Products and systems |
|
29,910 |
|
(20,039 |
) |
9,871 |
| |||
Services |
|
2,534 |
|
|
|
2,534 |
| |||
|
|
32,444 |
|
(20,039 |
) |
12,405 |
| |||
|
|
|
|
|
|
|
| |||
Gross profit |
|
6,305 |
|
(1,993 |
) |
4,312 |
| |||
|
|
|
|
|
|
|
| |||
Selling, general and administrative expenses |
|
(4,216 |
) |
1,222 |
|
(2,994 |
) | |||
Restructuring and impairment costs |
|
(324 |
) |
159 |
|
(165 |
) | |||
Net financing charges |
|
(244 |
) |
18 |
|
(226 |
) | |||
Equity income |
|
395 |
|
(285 |
) |
110 |
| |||
|
|
|
|
|
|
|
| |||
Income from continuing operations before income taxes |
|
1,916 |
|
(879 |
) |
1,037 |
| |||
|
|
|
|
|
|
|
| |||
Income tax provision |
|
407 |
|
(314 |
) |
93 |
| |||
|
|
|
|
|
|
|
| |||
Net income from continuing operations |
|
1,509 |
|
(565 |
) |
944 |
| |||
|
|
|
|
|
|
|
| |||
Income from continuing operations attributable to noncontrolling interests |
|
105 |
|
(67 |
) |
38 |
| |||
|
|
|
|
|
|
|
| |||
Net income from continuing operations attributable to Johnson Controls |
|
$ |
1,404 |
|
$ |
(498 |
) |
$ |
906 |
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
Basic earnings per share attributable to Johnson Controls from continuing operations |
|
$ |
2.11 |
|
|
|
$ |
1.36 |
| |
|
|
|
|
|
|
|
| |||
Diluted earnings per share attributable to Johnson Controls from continuing operations |
|
$ |
2.08 |
|
|
|
$ |
1.34 |
| |
|
|
|
|
|
|
|
| |||
Weighted average number of shares outstanding: |
|
|
|
|
|
|
| |||
Basic |
|
666.9 |
|
|
|
666.9 |
| |||
Diluted |
|
674.8 |
|
|
|
674.8 |
|
JOHNSON CONTROLS INTERNATIONAL PLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FISCAL YEAR ENDED SEPTEMBER 30, 2013
(in millions, except share data)
|
|
Historical |
|
Adient |
|
Pro Forma |
| |||
Net sales |
|
|
|
|
|
|
| |||
Products and systems |
|
$ |
33,092 |
|
$ |
(20,461 |
) |
$ |
12,631 |
|
Services |
|
4,053 |
|
|
|
4,053 |
| |||
|
|
37,145 |
|
(20,461 |
) |
16,684 |
| |||
Cost of sales |
|
|
|
|
|
|
| |||
Products and systems |
|
28,189 |
|
(18,833 |
) |
9,356 |
| |||
Services |
|
2,810 |
|
|
|
2,810 |
| |||
|
|
30,999 |
|
(18,833 |
) |
12,166 |
| |||
|
|
|
|
|
|
|
| |||
Gross profit |
|
6,146 |
|
(1,628 |
) |
4,518 |
| |||
|
|
|
|
|
|
|
| |||
Selling, general and administrative expenses |
|
(3,627 |
) |
1,097 |
|
(2,530 |
) | |||
Restructuring and impairment costs |
|
(903 |
) |
712 |
|
(191 |
) | |||
Net financing charges |
|
(247 |
) |
12 |
|
(235 |
) | |||
Equity income |
|
399 |
|
(303 |
) |
96 |
| |||
|
|
|
|
|
|
|
| |||
Income from continuing operations before income taxes |
|
1,768 |
|
(110 |
) |
1,658 |
| |||
|
|
|
|
|
|
|
| |||
Income tax provision |
|
674 |
|
(206 |
) |
468 |
| |||
|
|
|
|
|
|
|
| |||
Net income from continuing operations |
|
1,094 |
|
96 |
|
1,190 |
| |||
|
|
|
|
|
|
|
| |||
Income from continuing operations attributable to noncontrolling interests |
|
102 |
|
(58 |
) |
44 |
| |||
|
|
|
|
|
|
|
| |||
Net income from continuing operations attributable to Johnson Controls |
|
$ |
992 |
|
$ |
154 |
|
$ |
1,146 |
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
Basic earnings per share attributable to Johnson Controls from continuing operations |
|
$ |
1.45 |
|
|
|
$ |
1.68 |
| |
|
|
|
|
|
|
|
| |||
Diluted earnings per share attributable to Johnson Controls from continuing operations |
|
$ |
1.44 |
|
|
|
$ |
1.66 |
| |
|
|
|
|
|
|
|
| |||
Weighted average number of shares outstanding: |
|
|
|
|
|
|
| |||
Basic |
|
683.7 |
|
|
|
683.7 |
| |||
Diluted |
|
689.2 |
|
|
|
689.2 |
|
JOHNSON CONTROLS INTERNATIONAL PLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF JUNE 30, 2016
(in millions)
|
|
Historical |
|
Adient |
|
Pro Forma |
|
Pro Forma |
| ||||
Assets |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
|
$ |
467 |
|
$ |
(120 |
) |
$ |
2,827 |
(a), (c) |
$ |
3,174 |
|
Accounts receivable - net |
|
6,170 |
|
(2,132 |
) |
|
|
4,038 |
| ||||
Inventories |
|
2,972 |
|
(704 |
) |
|
|
2,268 |
| ||||
Assets held for sale |
|
17 |
|
|
|
|
|
17 |
| ||||
Other current assets |
|
2,221 |
|
(778 |
) |
|
|
1,443 |
| ||||
Current assets |
|
11,847 |
|
(3,734 |
) |
2,827 |
|
10,940 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Property, plant and equipment - net |
|
6,374 |
|
(2,124 |
) |
|
|
4,250 |
| ||||
Goodwill |
|
7,093 |
|
(2,374 |
) |
|
|
4,719 |
| ||||
Other intangible assets - net |
|
1,568 |
|
(117 |
) |
|
|
1,451 |
| ||||
Investments in partially-owned affiliates |
|
2,665 |
|
(1,694 |
) |
|
|
971 |
| ||||
Other noncurrent assets |
|
2,332 |
|
(407 |
) |
|
|
1,925 |
| ||||
Total assets |
|
$ |
31,879 |
|
$ |
(10,450 |
) |
$ |
2,827 |
|
$ |
24,256 |
|
|
|
|
|
|
|
|
|
|
| ||||
Liabilities and Equity |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Short-term debt |
|
$ |
2,189 |
|
$ |
(522 |
) |
$ |
|
|
$ |
1,667 |
|
Current portion of long-term debt |
|
670 |
|
(71 |
) |
|
|
599 |
| ||||
Accounts payable |
|
5,455 |
|
(2,502 |
) |
|
|
2,953 |
| ||||
Accrued compensation and benefits |
|
1,093 |
|
(409 |
) |
|
|
684 |
| ||||
Other current liabilities |
|
3,479 |
|
(962 |
) |
|
|
2,517 |
| ||||
Current liabilities |
|
12,886 |
|
(4,466 |
) |
|
|
8,420 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Long-term debt |
|
5,139 |
|
(276 |
) |
|
|
4,863 |
| ||||
Pension and postretirement benefits |
|
727 |
|
(88 |
) |
|
|
639 |
| ||||
Other noncurrent liabilities |
|
2,353 |
|
(360 |
) |
|
|
1,993 |
| ||||
Long-term liabilities |
|
8,219 |
|
(724 |
) |
|
|
7,495 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Redeemable noncontrolling interests |
|
251 |
|
(49 |
) |
|
|
202 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Common stock |
|
718 |
|
|
|
|
|
718 |
| ||||
Capital in excess of par value |
|
3,119 |
|
|
|
|
|
3,119 |
| ||||
Retained earnings |
|
10,575 |
|
(5,666 |
) |
2,827 |
(a), (c) |
7,736 |
| ||||
Treasury stock, at cost |
|
(3,639 |
) |
|
|
|
|
(3,639 |
) | ||||
Accumulated other comprehensive loss |
|
(1,174 |
) |
586 |
|
|
|
(588 |
) | ||||
Shareholders equity attributable to Johnson Controls |
|
9,599 |
|
(5,080 |
) |
2,827 |
|
7,346 |
| ||||
Noncontrolling interests |
|
924 |
|
(131 |
) |
|
|
793 |
| ||||
Total equity |
|
10,523 |
|
(5,211 |
) |
2,827 |
|
8,139 |
| ||||
Total liabilities and equity |
|
$ |
31,879 |
|
$ |
(10,450 |
) |
$ |
2,827 |
|
$ |
24,256 |
|
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements as of June 30, 2016 and for the nine months ended June 30, 2016 and the latest fiscal year ended September 30, 2015 include the following Spin-Off-related adjustments:
(a) Removal of $46 million of Adient separation costs in the nine months ended June 30, 2016 and $2 million of Adient separation costs in the year ended September 30, 2015. These costs directly relate to the Spin-Off of Adient and will not recur and as such, have been removed from the unaudited pro forma consolidated statements of income. On the unaudited pro forma consolidated statement of financial position, we have reflected a pro forma accrual of approximately $173 million of estimated Adient separation costs that the Company expects to incur subsequent to June 30, 2016 to complete the Spin-Off.
(b) The tax effects of pro forma adjustment (a) reflect the tax benefit recorded at the time the costs were incurred.
(c) In connection with the Adient Spin-off, Adient has obtained $3,500 million in debt financing. Approximately $500 million of the proceeds of such financing remain with Adient following the Spin-Off, with approximately $3,000 million distributed to the Company prior to the completion of the Spin-Off.