- Q3 reported sales increased 1% and 3%
organically*
- Q3 GAAP EPS of $1.45; Q3 Adjusted
EPS* of $1.14
- Q3 Orders +5% organically year-over-year
- Building Solutions backlog of $12.9
billion increased 10% organically year-over-year
- Initiates fiscal Q4 and updates full year fiscal 2024
guidance*
*
|
This news release
contains non-GAAP financial measures. Definitions and
reconciliations of the non-GAAP financial measures can be found in
the attached footnotes. Non-GAAP measures should be considered in
addition to, and not as replacements for, the most comparable GAAP
measures.
|
CORK,
Ireland, July 31, 2024 /PRNewswire/ -- Johnson
Controls International plc (NYSE: JCI), a global leader for
smart, healthy and sustainable buildings, today reported fiscal
third quarter 2024 GAAP earnings per share ("EPS") of $1.45. Excluding special items, adjusted EPS was
$1.14.
Sales in the quarter of $7.2
billion increased 1% over the prior year on an as reported
basis and 3% organically. GAAP net income was $975 million. Adjusted net income was
$769 million.
"Our third quarter results exceeded expectations with robust
margin expansion, strong free cash flow generation, and continued
Service demand," said George Oliver,
Chairman and CEO. "We have increased our backlog to record levels,
building on our strong momentum driving profitable growth. We have
also tightened our full year adjusted EPS guidance to reflect our
progress and confidence in Johnson Controls' prospects for
continued growth and value creation. The announced divestitures of
our R&LC HVAC and Air Distribution Technologies businesses,
representing roughly 20% of sales, marked a pivotal milestone in
our transformation into a pure-play provider of comprehensive
solutions for commercial buildings and is a significant step to
unlock value for our shareholders."
FISCAL Q3 SEGMENT RESULTS
The financial highlights presented in the tables below are in
accordance with GAAP, unless otherwise indicated. All comparisons
are to the fiscal third quarter of 2023.
A slide presentation to accompany the results can be found in
the Investor Relations section of Johnson Controls' website at
http://investors.johnsoncontrols.com.
Building Solutions North America
|
|
Fiscal
Q3
|
(in
millions)
|
|
2024
|
|
2023
|
|
Change
|
Sales
|
|
$ 2,899
|
|
$ 2,665
|
|
9 %
|
Segment
EBITA
|
|
|
|
|
|
|
GAAP
|
|
521
|
|
385
|
|
35 %
|
Adjusted
(non-GAAP)
|
|
460
|
|
385
|
|
19 %
|
Segment EBITA Margin
%
|
|
|
|
|
|
|
GAAP
|
|
18.0 %
|
|
14.4 %
|
|
360 bp
|
Adjusted
(non-GAAP)
|
|
15.9 %
|
|
14.4 %
|
|
150 bp
|
Sales in the quarter of $2.9
billion increased 9% over the prior year. Organic sales
increased 8% over the prior year led by growth greater than 20% in
Applied HVAC & Controls.
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 $9.0 billion
increased 14% compared to the prior year, excluding M&A and
adjusted for foreign currency.
Segment EBITA margin of 18.0% expanded 360 basis points versus
the prior year led by higher margin backlog conversion, improved
productivity and a favorable earn-out liability adjustment.
Adjusted segment EBITA in Q3 2024 excludes the favorable earn-out
liability adjustment.
Building Solutions EMEA/LA (Europe, Middle
East, Africa/Latin America)
|
|
Fiscal
Q3
|
(in
millions)
|
|
2024
|
|
2023
|
|
Change
|
Sales
|
|
$ 1,081
|
|
$ 1,045
|
|
3 %
|
Segment
EBITA
|
|
|
|
|
|
|
GAAP
|
|
111
|
|
90
|
|
23 %
|
Adjusted
(non-GAAP)
|
|
111
|
|
90
|
|
23 %
|
Segment EBITA Margin
%
|
|
|
|
|
|
|
GAAP
|
|
10.3 %
|
|
8.6 %
|
|
170 bp
|
Adjusted
(non-GAAP)
|
|
10.3 %
|
|
8.6 %
|
|
170 bp
|
Sales in the quarter of $1.1
billion increased 3% over the prior year. Organic sales grew
8% versus the prior year led by strong mid-teen growth in
Service.
Orders in the quarter, excluding M&A and adjusted for
foreign currency, increased 11% year-over-year. Backlog at the end
of the quarter of $2.5 billion
increased 12% year-over-year, excluding M&A and adjusted for
foreign currency.
Segment EBITA margin of 10.3% expanded 170 basis points versus
the prior year driven by the positive mix from the growth in
Service and by the conversion of higher margin Systems backlog.
Building Solutions Asia Pacific
|
|
Fiscal
Q3
|
(in
millions)
|
|
2024
|
|
2023
|
|
Change
|
Sales
|
|
$
575
|
|
$
736
|
|
(22 %)
|
Segment
EBITA
|
|
|
|
|
|
|
GAAP
|
|
67
|
|
102
|
|
(34 %)
|
Adjusted
(non-GAAP)
|
|
67
|
|
102
|
|
(34 %)
|
Segment EBITA Margin
%
|
|
|
|
|
|
|
GAAP
|
|
11.7 %
|
|
13.9 %
|
|
(220 bp)
|
Adjusted
(non-GAAP)
|
|
11.7 %
|
|
13.9 %
|
|
(220 bp)
|
Sales in the quarter of $575
million declined 22% versus the prior year. Organic sales
declined 19% versus the prior year as high single-digit Service
growth was more than offset by continued weakness in the Systems
business in China.
Orders in the quarter, excluding M&A and adjusted for
foreign currency, declined 2% year-over-year. Backlog at the end of
the quarter of $1.4 billion decreased
12% year-over-year, excluding M&A and adjusted for foreign
currency.
Segment EBITA margin of 11.7% declined 220 basis points versus
the prior year as weakness in China more than offset positive mix from the
Service business.
Global Products
|
|
Fiscal
Q3
|
(in
millions)
|
|
2024
|
|
2023
|
|
Change
|
Sales
|
|
$ 2,676
|
|
$ 2,687
|
|
— %
|
Segment
EBITA
|
|
|
|
|
|
|
GAAP
|
|
655
|
|
593
|
|
10 %
|
Adjusted
(non-GAAP)
|
|
655
|
|
593
|
|
10 %
|
Segment EBITA Margin
%
|
|
|
|
|
|
|
GAAP
|
|
24.5 %
|
|
22.1 %
|
|
240 bp
|
Adjusted
(non-GAAP)
|
|
24.5 %
|
|
22.1 %
|
|
240 bp
|
Sales in the quarter of $2.7
billion were flat versus the prior year. Organic sales grew
3% versus the prior year as growth in Commercial and Residential
HVAC was offset by declines in Fire & Security.
Segment EBITA margin of 24.5% expanded 240 basis points versus
the prior year as positive price/cost and improved productivity
more than offset mix headwinds from ongoing weakness in
China.
Corporate
|
|
Fiscal
Q3
|
(in
millions)
|
|
2024
|
|
2023
|
|
Change
|
Corporate
Expense
|
|
|
|
|
|
|
GAAP
|
|
$
135
|
|
$
122
|
|
11 %
|
Adjusted
(non-GAAP)
|
|
119
|
|
78
|
|
53 %
|
Adjusted Corporate expense in Q3 2024 and Q3 2023 exclude
certain transaction/separation costs.
OTHER Q3 ITEMS
- Cash provided by operating activities was $1.0 billion. Free cash flow was $922 million and adjusted free cash flow was
$1.3 billion.
- The Company paid dividends of approximately $249 million.
- The Company repurchased 6.0 million shares of common stock for
approximately $402 million.
- The Company recorded pre-tax restructuring and impairment costs
of $106 million, comprised of
impairments primarily associated with assets classified as held for
sale ($66 million) and severance and
other charges related to ongoing restructuring actions
($40 million).
- The Company recorded a pre-tax gain of $351 million related to insurance recoveries
associated with the water provider Aqueous Film Forming Foam
("AFFF") settlement disclosed in Q2 2024.
GUIDANCE
The following forward-looking statements regarding organic sales
growth, adjusted segment EBITA margin, adjusted segment EBITA
margin improvement and adjusted EPS 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. The Company is unable to present
a quantitative reconciliation of the aforementioned forward-looking
non-GAAP financial measures to its 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 fourth quarter and full year
GAAP financial results.
The Company initiated fiscal 2024 fourth quarter guidance:
- Organic sales up ~7% year-over-year
- Adjusted segment EBITA margin of ~19.0%
- Adjusted EPS before special items of ~$1.23 to $1.26
The Company tightened fiscal 2024 full year EPS guidance:
- Organic sales growth up ~3% year-over-year (previously Up
~MSD)
- Adjusted segment EBITA margin improvement of ~110 basis points,
year-over-year (previously Up ~50 to 75 bps)
- Adjusted EPS before special items of ~$3.66 to $3.69
(previously ~$3.60 to $3.75)
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
414.340.1752
|
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; Johnson Controls ability to remediate its
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; Johnson Controls
ability to successfully execute and complete portfolio
simplification, including the possibility that the expected
benefits will not be realized or will not be realized within the
expected time frame; 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; risks and uncertainties related to the
settlement with a nationwide class of public water systems
concerning the use of AFFF; 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 is
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.
FINANCIAL
STATEMENTS
|
|
Johnson Controls
International plc
|
Consolidated
Statements of Income
|
(in millions, except
per share data; unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Nine Months
Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net sales
|
|
|
|
|
|
|
|
Products and
systems
|
$
5,422
|
|
$
5,431
|
|
$ 14,896
|
|
$ 15,070
|
Services
|
1,809
|
|
1,702
|
|
5,128
|
|
4,817
|
|
7,231
|
|
7,133
|
|
20,024
|
|
19,887
|
Cost of
sales
|
|
|
|
|
|
|
|
Products and
systems
|
3,652
|
|
3,708
|
|
10,273
|
|
10,337
|
Services
|
1,091
|
|
994
|
|
3,090
|
|
2,787
|
|
4,743
|
|
4,702
|
|
13,363
|
|
13,124
|
|
|
|
|
|
|
|
|
Gross
profit
|
2,488
|
|
2,431
|
|
6,661
|
|
6,763
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
1,090
|
|
1,555
|
|
4,854
|
|
4,705
|
Restructuring and
impairment costs
|
106
|
|
81
|
|
399
|
|
844
|
Net financing
charges
|
71
|
|
80
|
|
263
|
|
218
|
Equity
income
|
58
|
|
78
|
|
176
|
|
190
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
1,279
|
|
793
|
|
1,321
|
|
1,186
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
227
|
|
(329)
|
|
99
|
|
(266)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
1,052
|
|
1,122
|
|
1,222
|
|
1,452
|
|
|
|
|
|
|
|
|
Less: Income
attributable to noncontrolling interests
|
77
|
|
73
|
|
150
|
|
152
|
|
|
|
|
|
|
|
|
Net income attributable
to Johnson Controls
|
$
975
|
|
$
1,049
|
|
$
1,072
|
|
$
1,300
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Johnson Controls
|
|
|
|
|
|
|
|
Basic
|
$
1.45
|
|
$
1.54
|
|
$
1.58
|
|
$
1.90
|
Diluted
|
1.45
|
|
1.53
|
|
1.58
|
|
1.89
|
Johnson Controls
International plc
|
Condensed
Consolidated Statements of Financial Position
|
(in millions;
unaudited)
|
|
|
June 30,
2024
|
|
September 30,
2023
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
862
|
|
$
835
|
Accounts receivable -
net
|
6,667
|
|
6,006
|
Inventories
|
2,863
|
|
2,776
|
Current assets held for
sale
|
205
|
|
—
|
Other current
assets
|
1,556
|
|
1,120
|
Current
assets
|
12,153
|
|
10,737
|
|
|
|
|
Property, plant and
equipment - net
|
3,011
|
|
3,136
|
Goodwill
|
17,676
|
|
17,936
|
Other intangible assets
- net
|
4,315
|
|
4,888
|
Investments in
partially-owned affiliates
|
1,054
|
|
1,056
|
Noncurrent assets held
for sale
|
487
|
|
—
|
Other noncurrent
assets
|
4,629
|
|
4,489
|
Total assets
|
$
43,325
|
|
$
42,242
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Short-term
debt
|
$
1,523
|
|
$
385
|
Current portion of
long-term debt
|
998
|
|
645
|
Accounts
payable
|
4,128
|
|
4,268
|
Accrued compensation
and benefits
|
1,012
|
|
958
|
Deferred
revenue
|
2,143
|
|
1,996
|
Current liabilities
held for sale
|
149
|
|
—
|
Other current
liabilities
|
2,771
|
|
2,832
|
Current
liabilities
|
12,724
|
|
11,084
|
|
|
|
|
Long-term
debt
|
7,867
|
|
7,818
|
Pension and
postretirement benefits
|
225
|
|
278
|
Noncurrent liabilities
held for sale
|
203
|
|
—
|
Other noncurrent
liabilities
|
5,163
|
|
5,368
|
Long-term
liabilities
|
13,458
|
|
13,464
|
|
|
|
|
Shareholders' equity
attributable to Johnson Controls
|
15,968
|
|
16,545
|
Noncontrolling
interests
|
1,175
|
|
1,149
|
Total
equity
|
17,143
|
|
17,694
|
Total liabilities and
equity
|
$
43,325
|
|
$
42,242
|
Johnson Controls
International plc
|
Consolidated
Statements of Cash Flows
|
(in millions;
unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Nine Months
Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income attributable
to Johnson Controls
|
$
975
|
|
$ 1,049
|
|
$ 1,072
|
|
$ 1,300
|
Income attributable to
noncontrolling interests
|
77
|
|
73
|
|
150
|
|
152
|
Net income
|
1,052
|
|
1,122
|
|
1,222
|
|
1,452
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
220
|
|
212
|
|
687
|
|
621
|
Pension and
postretirement benefit income
|
(10)
|
|
(20)
|
|
(30)
|
|
(23)
|
Pension and
postretirement contributions
|
(8)
|
|
(12)
|
|
(21)
|
|
(38)
|
Equity in (earnings)
losses of partially-owned affiliates, net of dividends
received
|
104
|
|
28
|
|
2
|
|
(27)
|
Deferred income
taxes
|
11
|
|
(102)
|
|
(389)
|
|
(270)
|
Noncash restructuring
and impairment charges
|
80
|
|
10
|
|
333
|
|
701
|
Equity-based
compensation
|
28
|
|
—
|
|
84
|
|
92
|
Other - net
|
(87)
|
|
14
|
|
(125)
|
|
(104)
|
Changes in assets and
liabilities, excluding acquisitions and divestitures:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(104)
|
|
(307)
|
|
(763)
|
|
(667)
|
Inventories
|
13
|
|
110
|
|
(215)
|
|
(383)
|
Other
assets
|
(349)
|
|
(45)
|
|
(553)
|
|
(214)
|
Restructuring
reserves
|
(19)
|
|
50
|
|
(79)
|
|
33
|
Accounts payable and
accrued liabilities
|
47
|
|
28
|
|
405
|
|
(127)
|
Accrued income
taxes
|
43
|
|
(275)
|
|
14
|
|
(215)
|
Cash provided by
operating activities
|
1,021
|
|
813
|
|
572
|
|
831
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital
expenditures
|
(99)
|
|
(111)
|
|
(324)
|
|
(366)
|
Acquisition of
businesses, net of cash acquired
|
—
|
|
(171)
|
|
1
|
|
(260)
|
Other - net
|
—
|
|
20
|
|
13
|
|
50
|
Cash used by investing
activities
|
(99)
|
|
(262)
|
|
(310)
|
|
(576)
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Net proceeds (payments)
from borrowings with maturities less than three
months
|
(840)
|
|
(1,536)
|
|
679
|
|
(248)
|
Proceeds from
debt
|
859
|
|
855
|
|
1,281
|
|
1,171
|
Repayments of
debt
|
(275)
|
|
—
|
|
(438)
|
|
(536)
|
Stock repurchases and
retirements
|
(402)
|
|
(366)
|
|
(876)
|
|
(613)
|
Payment of cash
dividends
|
(249)
|
|
(248)
|
|
(753)
|
|
(729)
|
Employee equity-based
compensation withholding taxes
|
(2)
|
|
(2)
|
|
(26)
|
|
(34)
|
Dividends paid to
noncontrolling interests
|
(70)
|
|
(77)
|
|
(121)
|
|
(149)
|
Other - net
|
(20)
|
|
1
|
|
(68)
|
|
27
|
Cash used by financing
activities
|
(999)
|
|
(1,373)
|
|
(322)
|
|
(1,111)
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted
cash
|
10
|
|
(75)
|
|
29
|
|
(67)
|
Decrease in cash,
cash equivalents and restricted cash
|
(67)
|
|
(897)
|
|
(31)
|
|
(923)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
960
|
|
2,040
|
|
924
|
|
2,066
|
Cash, cash equivalents
and restricted cash at end of period
|
893
|
|
1,143
|
|
893
|
|
1,143
|
Less: Restricted
cash
|
31
|
|
86
|
|
31
|
|
86
|
Cash and cash
equivalents at end of period
|
$
862
|
|
$ 1,057
|
|
$
862
|
|
$ 1,057
|
FOOTNOTES
1. Non-GAAP Measures
The Company reports various non-GAAP measures in this earnings
release and the related earnings presentation. Non-GAAP
measures should be considered in addition to, and not as
replacements for, the most comparable GAAP measures. Refer to
footnotes two through seven for further information on the
calculations of the non-GAAP measures and reconciliations of the
non-GAAP measures to the most comparable GAAP measures.
Organic sales
Organic sales growth excludes the impact of acquisitions,
divestitures and foreign currency. Management believes organic
sales growth is useful to investors in understanding
period-over-period sales results and trends.
Cash flow
Adjusted free cash flow and adjusted free cash flow conversion
are non-GAAP measures which exclude the impacts of the
following:
- JC Capital cash flows primarily include activity associated
with finance/notes receivables and inventory and/or capital
expenditures related to lease arrangements. JC Capital net income
is primarily related to interest income on the finance/notes
receivable and profit recognized on arrangements with sales-type
lease components.
- Effective January 1, 2024, the
Company has excluded the impact of discontinuing its accounts
receivables factoring programs from adjusted free cash flow and
adjusted free cash flow conversion. The Company has also
re-baselined the prior year adjusted free cash flow measures to
present a more comparative measure without the impact of
factoring.
- Cash impacts of the water systems AFFF settlement and related
insurance recoveries.
Management believes free cash flow and adjusted free cash flow
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 the Company's ability to
generate cash flow from operations and the impact that this cash
flow has on its liquidity. Management also believes adjusted free
cash flows are useful to investors in understanding
period-over-period cash flows, cash trends and ongoing cash flows
of the Company.
Adjusted financial measures
Adjusted financial measures include adjusted segment EBITA,
adjusted net income, adjusted earnings per share, adjusted EBIT,
adjusted EBITDA and adjusted corporate expenses. These non-GAAP
measures are derived by excluding certain amounts from the
corresponding financial measures determined in accordance with
GAAP. The determination of the excluded amounts is a matter of
management judgment and depends upon the nature and variability of
the underlying expense or income amounts and other factors.
As detailed in the tables included in footnotes four through
seven, the following items were excluded from certain financial
measures:
- Net mark-to-market adjustments are the result of
adjusting restricted asbestos investments and pension and
postretirement plan assets to their current market value. These
adjustments may have a favorable or unfavorable impact on
results.
- Restructuring and impairment costs - Restructuring costs
include costs associated with exit plans or other restructuring
plans that will have a more significant impact on the underlying
cost structure of the organization. Impairment costs primarily
relate to write-downs of goodwill, intangible assets and assets
held for sale to their fair value.
- NCI impact of restructuring and impairment costs
represent the portion of restructuring and impairment costs
attributable to Noncontrolling Interests.
- Water systems AFFF settlement and insurance recoveries
include amounts related to a settlement with a nationwide class of
public water systems concerning the use of AFFF manufactured and
sold by a subsidiary of the Company.
- Transaction/separation costs include costs associated
with significant mergers and acquisitions.
- Earn-out adjustments relate to earn-out liabilities
associated with certain significant acquisitions and may have a
favorable or unfavorable impact on results.
- Warehouse fire loss relates to an uninsured loss
attributable to a fire at a warehouse in Menominee, Michigan.
- Cyber incident costs primarily represent expenses, net
of insurance recoveries, associated with the response to, and
remediation of, a cybersecurity incident which occurred in
September 2023.
- Global products product quality issue are costs related
to a product quality issue within the Global Products segment that
is unusual due to the magnitude of the expected cost to remediate
in comparison to typical product quality issues experienced by the
Company.
- Related tax impact includes the tax impact of the
various excluded items.
Management believes the exclusion of these items is useful to
investors due to the unusual nature and/or magnitude of the
amounts. When considered together with unadjusted amounts, adjusted
financial measures are useful to investors in understanding
period-over-period operating results, business trends and ongoing
operations of the Company. Management may also use these metrics as
guides in forecasting, budgeting and long-term planning processes
and for compensation purposes.
Debt ratios
Management believes that net debt to adjusted EBITDA, a non-GAAP
measure, is useful to understanding the Company's financial
condition as the ratio provides an overview of the extent to which
the Company relies on external debt financing for its funding and
also is a measure of risk to its shareholders.
2. Sales
The following tables detail the changes in sales attributable to
organic growth, foreign currency, acquisitions, divestitures and
other (unaudited):
|
Three Months Ended June
30
|
Net
sales
|
Building
Solutions
|
|
|
|
|
(in
millions)
|
North
America
|
|
EMEA/LA
|
|
Asia
Pacific
|
|
Total
|
|
Global
Products
|
|
Total JCI
plc
|
Net sales -
2023
|
$
2,665
|
|
$
1,045
|
|
$
736
|
|
$
4,446
|
|
$
2,687
|
|
$
7,133
|
Base year
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Divestitures and
other
|
—
|
|
(1)
|
|
(17)
|
|
(18)
|
|
(7)
|
|
(25)
|
Foreign
currency
|
2
|
|
(46)
|
|
(25)
|
|
(69)
|
|
(80)
|
|
(149)
|
Adjusted base net
sales
|
2,667
|
|
998
|
|
694
|
|
4,359
|
|
2,600
|
|
6,959
|
Acquisitions
|
16
|
|
1
|
|
15
|
|
32
|
|
—
|
|
32
|
Organic
growth
|
216
|
|
82
|
|
(134)
|
|
164
|
|
76
|
|
240
|
Net sales -
2024
|
$
2,899
|
|
$
1,081
|
|
$
575
|
|
$
4,555
|
|
$
2,676
|
|
$
7,231
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %:
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
9 %
|
|
3 %
|
|
(22 %)
|
|
2 %
|
|
— %
|
|
1 %
|
Organic
growth
|
8 %
|
|
8 %
|
|
(19 %)
|
|
4 %
|
|
3 %
|
|
3 %
|
|
Nine Months Ended June
30
|
Net
sales
|
Building
Solutions
|
|
|
|
|
(in
millions)
|
North
America
|
|
EMEA/LA
|
|
Asia
Pacific
|
|
Total
|
|
Global
Products
|
|
Total JCI
plc
|
Net sales -
2023
|
$
7,552
|
|
$
3,051
|
|
$
2,049
|
|
$ 12,652
|
|
$
7,235
|
|
$ 19,887
|
Base year
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Divestitures
and other
|
—
|
|
(3)
|
|
(51)
|
|
(54)
|
|
(12)
|
|
(66)
|
Foreign
currency
|
15
|
|
(8)
|
|
(68)
|
|
(61)
|
|
(144)
|
|
(205)
|
Adjusted base net
sales
|
7,567
|
|
3,040
|
|
1,930
|
|
12,537
|
|
7,079
|
|
19,616
|
Acquisitions
|
48
|
|
7
|
|
51
|
|
106
|
|
29
|
|
135
|
Organic
growth
|
510
|
|
136
|
|
(408)
|
|
238
|
|
35
|
|
273
|
Net sales -
2024
|
$
8,125
|
|
$
3,183
|
|
$
1,573
|
|
$ 12,881
|
|
$
7,143
|
|
$ 20,024
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %:
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
8 %
|
|
4 %
|
|
(23 %)
|
|
2 %
|
|
(1 %)
|
|
1 %
|
Organic
growth
|
7 %
|
|
4 %
|
|
(21 %)
|
|
2 %
|
|
— %
|
|
1 %
|
|
Three Months Ended June
30
|
Products and systems
revenue
|
Building
Solutions
|
|
|
|
|
(in
millions)
|
North
America
|
|
EMEA/LA
|
|
Asia
Pacific
|
|
Total
|
|
Global
Products
|
|
Total JCI
plc
|
Products and systems
revenue - 2023
|
$
1,636
|
|
$
571
|
|
$
537
|
|
$ 2,744
|
|
$
2,687
|
|
$
5,431
|
Base year
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Divestitures and
other
|
—
|
|
—
|
|
—
|
|
—
|
|
(7)
|
|
(7)
|
Foreign
currency
|
2
|
|
(12)
|
|
(18)
|
|
(28)
|
|
(80)
|
|
(108)
|
Adjusted products and
systems revenue
|
1,638
|
|
559
|
|
519
|
|
2,716
|
|
2,600
|
|
5,316
|
Acquisitions
|
2
|
|
1
|
|
10
|
|
13
|
|
—
|
|
13
|
Organic
growth
|
150
|
|
15
|
|
(148)
|
|
17
|
|
76
|
|
93
|
Products and systems
revenue - 2024
|
$
1,790
|
|
$
575
|
|
$
381
|
|
$ 2,746
|
|
$
2,676
|
|
$
5,422
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %:
|
|
|
|
|
|
|
|
|
|
|
|
Products and systems
revenue
|
9 %
|
|
1 %
|
|
(29 %)
|
|
— %
|
|
— %
|
|
— %
|
Organic
growth
|
9 %
|
|
3 %
|
|
(29 %)
|
|
1 %
|
|
3 %
|
|
2 %
|
|
Nine Months Ended June
30
|
Products and systems
revenue
|
Building
Solutions
|
|
|
|
|
(in
millions)
|
North
America
|
|
EMEA/LA
|
|
Asia
Pacific
|
|
Total
|
|
Global
Products
|
|
Total JCI
plc
|
Products and systems
revenue - 2023
|
$
4,641
|
|
$
1,705
|
|
$
1,489
|
|
$ 7,835
|
|
$
7,235
|
|
$15,070
|
Base year
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Divestitures and
other
|
—
|
|
(1)
|
|
—
|
|
(1)
|
|
(12)
|
|
(13)
|
Foreign
currency
|
14
|
|
35
|
|
(51)
|
|
(2)
|
|
(144)
|
|
(146)
|
Adjusted products and
systems revenue
|
4,655
|
|
1,739
|
|
1,438
|
|
7,832
|
|
7,079
|
|
14,911
|
Acquisitions
|
5
|
|
4
|
|
30
|
|
39
|
|
29
|
|
68
|
Organic
growth
|
349
|
|
(25)
|
|
(442)
|
|
(118)
|
|
35
|
|
(83)
|
Products and systems
revenue - 2024
|
$
5,009
|
|
$
1,718
|
|
$
1,026
|
|
$ 7,753
|
|
$
7,143
|
|
$ 14,896
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %:
|
|
|
|
|
|
|
|
|
|
|
|
Products and systems
revenue
|
8 %
|
|
1 %
|
|
(31 %)
|
|
(1 %)
|
|
(1 %)
|
|
(1 %)
|
Organic
growth
|
7 %
|
|
(1 %)
|
|
(31 %)
|
|
(2 %)
|
|
— %
|
|
(1 %)
|
|
Three Months Ended June
30
|
Service
revenue
|
Building
Solutions
|
|
|
|
|
(in
millions)
|
North
America
|
|
EMEA/LA
|
|
Asia
Pacific
|
|
Total
|
|
Global
Products
|
|
Total JCI
plc
|
Service revenue -
2023
|
$
1,029
|
|
$
474
|
|
$
199
|
|
$ 1,702
|
|
$ —
|
|
$
1,702
|
Base year
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Divestitures and
other
|
—
|
|
(1)
|
|
(17)
|
|
(18)
|
|
—
|
|
(18)
|
Foreign
currency
|
—
|
|
(34)
|
|
(7)
|
|
(41)
|
|
—
|
|
(41)
|
Adjusted base service
revenue
|
1,029
|
|
439
|
|
175
|
|
1,643
|
|
—
|
|
1,643
|
Acquisitions
|
14
|
|
—
|
|
5
|
|
19
|
|
—
|
|
19
|
Organic
growth
|
66
|
|
67
|
|
14
|
|
147
|
|
—
|
|
147
|
Service revenue -
2024
|
$
1,109
|
|
$
506
|
|
$
194
|
|
$ 1,809
|
|
$ —
|
|
$
1,809
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %:
|
|
|
|
|
|
|
|
|
|
|
|
Service
revenue
|
8 %
|
|
7 %
|
|
(3 %)
|
|
6 %
|
|
— %
|
|
6 %
|
Organic
growth
|
6 %
|
|
15 %
|
|
8 %
|
|
9 %
|
|
— %
|
|
9 %
|
|
Nine Months Ended June
30
|
Service
revenue
|
Building
Solutions
|
|
|
|
|
(in
millions)
|
North
America
|
|
EMEA/LA
|
|
Asia
Pacific
|
|
Total
|
|
Global
Products
|
|
Total JCI
plc
|
Service revenue -
2023
|
$
2,911
|
|
$
1,346
|
|
$
560
|
|
$ 4,817
|
|
$ —
|
|
$
4,817
|
Base year
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Divestitures and
other
|
—
|
|
(2)
|
|
(51)
|
|
(53)
|
|
—
|
|
(53)
|
Foreign
currency
|
1
|
|
(43)
|
|
(17)
|
|
(59)
|
|
—
|
|
(59)
|
Adjusted base service
revenue
|
2,912
|
|
1,301
|
|
492
|
|
4,705
|
|
—
|
|
4,705
|
Acquisitions
|
43
|
|
3
|
|
21
|
|
67
|
|
—
|
|
67
|
Organic
growth
|
161
|
|
161
|
|
34
|
|
356
|
|
—
|
|
356
|
Service revenue -
2024
|
$
3,116
|
|
$
1,465
|
|
$
547
|
|
$ 5,128
|
|
$ —
|
|
$
5,128
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %:
|
|
|
|
|
|
|
|
|
|
|
|
Service
revenue
|
7 %
|
|
9 %
|
|
(2 %)
|
|
6 %
|
|
— %
|
|
6 %
|
Organic
growth
|
6 %
|
|
12 %
|
|
7 %
|
|
8 %
|
|
— %
|
|
8 %
|
3. Cash Flow, Free Cash Flow and Free Cash Flow
Conversion
The following table includes free cash flow and free cash flow
conversion (unaudited):
|
Three Months Ended June
30,
|
|
Nine Months Ended June
30,
|
(in
millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Cash provided by
operating activities
|
$
1,021
|
|
$
813
|
|
$
572
|
|
$
831
|
|
Capital
expenditures
|
(99)
|
|
(111)
|
|
(324)
|
|
(366)
|
|
Free cash flow
(non-GAAP)
|
$
922
|
|
$
702
|
|
$
248
|
|
$
465
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to JCI
|
$
975
|
|
$
1,049
|
|
$
1,072
|
|
$
1,300
|
|
Free cash flow
conversion from net income (non-GAAP)
|
95 %
|
|
67 %
|
|
23 %
|
|
36 %
|
|
The following table includes adjusted free cash flow and
adjusted free cash flow conversion (unaudited):
|
Three Months
Ended
June 30,
|
|
Nine Months
Ended
June 30,
|
(in
millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Free cash flow
(non-GAAP)
|
$
922
|
|
$
702
|
|
$
248
|
|
$
465
|
Adjustments:
|
|
|
|
|
|
|
|
JC Capital cash used
by operating activities
|
49
|
|
39
|
|
170
|
|
81
|
Water systems AFFF
settlement cash payments and
insurance recoveries
|
243
|
|
—
|
|
243
|
|
—
|
Impact from
discontinuation of factoring programs
|
49
|
|
—
|
|
648
|
|
—
|
Adjusted free cash flow
(non-GAAP)
|
1,263
|
|
741
|
|
1,309
|
|
546
|
Prior year impact from
factoring programs
|
—
|
|
5
|
|
—
|
|
79
|
Re-baselined adjusted
free cash flow (non-GAAP)
|
$
1,263
|
|
$
746
|
|
$
1,309
|
|
$
625
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to JCI (non-GAAP)
|
$
769
|
|
$
706
|
|
$
1,652
|
|
$
1,686
|
JC Capital net
income
|
(3)
|
|
(4)
|
|
(8)
|
|
(12)
|
Adjusted net income
attributable to JCI, excluding
JC Capital
(non-GAAP)
|
$
766
|
|
$
702
|
|
$
1,644
|
|
$
1,674
|
Adjusted free cash flow
conversion (non-GAAP)
|
165 %
|
|
106 %
|
|
80 %
|
|
37 %
|
4. EBITA, EBIT and Corporate Expense
The Company evaluates the performance of its business units
primarily on segment EBITA.
|
Three Months Ended June
30,
|
|
Nine Months Ended June
30,
|
|
Actual
|
|
Adjusted
(Non-GAAP)
|
|
Actual
|
|
Adjusted
(Non-GAAP)
|
(in millions;
unaudited)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
EBITA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
North America
|
$ 521
|
|
$ 385
|
|
$ 460
|
|
$ 385
|
|
$
1,179
|
|
$ 967
|
|
$
1,118
|
|
$ 967
|
Building Solutions
EMEA/LA
|
111
|
|
90
|
|
111
|
|
90
|
|
280
|
|
234
|
|
280
|
|
234
|
Building Solutions Asia
Pacific
|
67
|
|
102
|
|
67
|
|
102
|
|
167
|
|
249
|
|
167
|
|
249
|
Global
Products
|
655
|
|
593
|
|
655
|
|
593
|
|
1,453
|
|
1,463
|
|
1,479
|
|
1,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
(non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to JCI
|
$ 975
|
|
$
1,049
|
|
$ 769
|
|
$ 706
|
|
$
1,072
|
|
$
1,300
|
|
$
1,652
|
|
$
1,686
|
Income attributable
to
noncontrolling
interests (1)
|
77
|
|
73
|
|
79
|
|
73
|
|
150
|
|
152
|
|
156
|
|
152
|
Net income
|
1,052
|
|
1,122
|
|
848
|
|
779
|
|
1,222
|
|
1,452
|
|
1,808
|
|
1,838
|
Less: Income tax
benefit
(provision)
(2)
|
227
|
|
(329)
|
|
136
|
|
122
|
|
99
|
|
(266)
|
|
289
|
|
287
|
Income before income
taxes
|
1,279
|
|
793
|
|
984
|
|
901
|
|
1,321
|
|
1,186
|
|
2,097
|
|
2,125
|
Net financing
charges
|
71
|
|
80
|
|
71
|
|
80
|
|
263
|
|
218
|
|
263
|
|
218
|
EBIT (non-GAAP)
|
$
1,350
|
|
$ 873
|
|
$
1,055
|
|
$ 981
|
|
$
1,584
|
|
$
1,404
|
|
$
2,360
|
|
$
2,343
|
|
|
(1)
|
Adjusted income
attributable to noncontrolling interests excludes the impact of
restructuring and impairment costs.
|
|
|
(2)
|
Adjusted income tax
benefit (provision) excludes the related tax impacts of pre-tax
adjusting items.
|
The following tables reconcile segment EBITA to adjusted
segment EBITA (unaudited):
|
Three Months Ended June
30,
|
(in
millions)
|
Building
Solutions
North
America
|
|
Building
Solutions
EMEA/LA
|
|
Building
Solutions
Asia Pacific
|
|
Global
Products
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
EBITA
|
$ 521
|
|
$ 385
|
|
$ 111
|
|
$ 90
|
|
$ 67
|
|
$
102
|
|
$
655
|
|
$
593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earn-out
adjustments
|
(61)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA
(non-GAAP)
|
$ 460
|
|
$ 385
|
|
$ 111
|
|
$ 90
|
|
$ 67
|
|
$
102
|
|
$
655
|
|
$
593
|
|
Nine Months Ended June
30,
|
(in
millions)
|
Building
Solutions
North
America
|
|
Building
Solutions
EMEA/LA
|
|
Building
Solutions
Asia Pacific
|
|
Global
Products
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
EBITA
|
$
1,179
|
|
$ 967
|
|
$ 280
|
|
$ 234
|
|
$ 167
|
|
$
249
|
|
$ 1,453
|
|
$ 1,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earn-out
adjustments
|
(61)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(7)
|
|
(30)
|
Uninsured warehouse
fire loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
40
|
Global Products
product quality issue
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
33
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA
(non-GAAP)
|
$
1,118
|
|
$ 967
|
|
$ 280
|
|
$ 234
|
|
$ 167
|
|
$
249
|
|
$ 1,479
|
|
$ 1,473
|
The following table reconciles Corporate expense as reported to
the comparable adjusted amounts (unaudited):
|
Three Months Ended
June 30,
|
|
Nine Months Ended
June 30,
|
(in
millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
Corporate expense
(GAAP)
|
$
135
|
|
$
122
|
|
$
373
|
|
$
362
|
|
|
|
|
|
.
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
Transaction/separation
costs
|
(16)
|
|
(44)
|
|
(28)
|
|
(101)
|
Cyber incident
costs
|
—
|
|
—
|
|
(27)
|
|
—
|
Adjusted corporate
expense (non-GAAP)
|
$
119
|
|
$
78
|
|
$
318
|
|
$
261
|
5. Net Income and Diluted Earnings Per Share
The following tables reconcile net income attributable
to JCI and diluted earnings per share as reported to the
comparable adjusted amounts (unaudited):
|
Three Months Ended June
30,
|
|
Net income attributable
to
JCI
|
|
Diluted earnings
per share
|
(in millions, except
per share)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
As reported
(GAAP)
|
$
975
|
|
$
1,049
|
|
$
1.45
|
|
$
1.53
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
Net mark-to-market
adjustments
|
(5)
|
|
(17)
|
|
(0.01)
|
|
(0.02)
|
Restructuring and
impairment costs
|
106
|
|
81
|
|
0.16
|
|
0.12
|
NCI impact of
restructuring and impairment costs
|
(2)
|
|
—
|
|
—
|
|
—
|
Water systems AFFF
insurance recoveries
|
(351)
|
|
—
|
|
(0.52)
|
|
—
|
Transaction/separation
costs
|
16
|
|
44
|
|
0.02
|
|
0.06
|
Earn-out
adjustments
|
(61)
|
|
—
|
|
(0.09)
|
|
—
|
Discrete tax
items
|
—
|
|
(438)
|
|
—
|
|
(0.64)
|
Related tax
impact
|
91
|
|
(13)
|
|
0.14
|
|
(0.02)
|
Adjusted
(non-GAAP)*
|
$
769
|
|
$
706
|
|
$
1.14
|
|
$
1.03
|
|
* May not sum due to
rounding
|
|
Nine Months Ended June
30,
|
|
Net income attributable
to
JCI
|
|
Diluted earnings
per share
|
(in millions, except
per share)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
As reported
(GAAP)
|
$
1,072
|
|
$
1,300
|
|
$
1.58
|
|
$
1.89
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
Net
mark-to-market adjustments
|
(42)
|
|
(16)
|
|
(0.06)
|
|
(0.02)
|
Restructuring
and impairment costs
|
399
|
|
844
|
|
0.59
|
|
1.23
|
NCI impact of
restructuring and impairment costs
|
(6)
|
|
—
|
|
(0.01)
|
|
—
|
Water systems
AFFF settlement
|
750
|
|
—
|
|
1.11
|
|
—
|
Water systems
AFFF insurance recoveries
|
(351)
|
|
—
|
|
(0.52)
|
|
—
|
Transaction/separation costs
|
28
|
|
101
|
|
0.04
|
|
0.15
|
Earn-out
adjustments
|
(68)
|
|
(30)
|
|
(0.10)
|
|
(0.04)
|
Warehouse fire
loss
|
—
|
|
40
|
|
—
|
|
0.06
|
Cyber incident
costs
|
27
|
|
—
|
|
0.04
|
|
—
|
Global Products
product quality issue
|
33
|
|
—
|
|
0.05
|
|
—
|
Discrete tax
items
|
—
|
|
(438)
|
|
—
|
|
(0.64)
|
Related tax
impact
|
(190)
|
|
(115)
|
|
(0.28)
|
|
(0.17)
|
Adjusted
(non-GAAP)*
|
$
1,652
|
|
$
1,686
|
|
$
2.43
|
|
$
2.45
|
|
* May not sum due to
rounding
|
The following table reconciles the denominators used to
calculate basic and diluted earnings per share (in millions;
unaudited):
|
Three Months Ended
June 30,
|
|
Nine Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding
|
670.3
|
|
683.3
|
|
676.7
|
|
685.7
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
Stock options,
unvested restricted stock and
unvested performance share awards
|
2.5
|
|
2.9
|
|
1.9
|
|
3.1
|
Diluted weighted
average shares outstanding
|
672.8
|
|
686.2
|
|
678.6
|
|
688.8
|
6. Debt Ratios
The following table includes net debt to income before income
taxes and net debt to adjusted EBITDA (unaudited):
(in
millions)
|
June 30,
2024
|
|
March 31,
2024
|
|
June 30,
2023
|
Short-term
debt
|
$
1,523
|
|
$
2,210
|
|
$
186
|
Current portion of
long-term debt
|
998
|
|
1,165
|
|
1,081
|
Long-term
debt
|
7,867
|
|
7,348
|
|
8,497
|
Total debt
|
10,388
|
|
10,723
|
|
9,764
|
Less: cash and cash
equivalents
|
862
|
|
843
|
|
1,057
|
Net debt
|
$
9,526
|
|
$
9,880
|
|
$
8,707
|
|
|
|
|
|
|
Last twelve months
income before income taxes
|
$
1,845
|
|
$
1,359
|
|
$
1,792
|
|
|
|
|
|
|
Net debt to income
before income taxes
|
5.2x
|
|
7.3x
|
|
4.9x
|
|
|
|
|
|
|
Last twelve months
adjusted EBITDA (non-GAAP)
|
$
4,210
|
|
$
4,128
|
|
$
4,078
|
|
|
|
|
|
|
Net debt to adjusted
EBITDA (non-GAAP)
|
2.3x
|
|
2.4x
|
|
2.1x
|
The following table reconciles net income to adjusted EBIT
and adjusted EBITDA (unaudited):
|
Twelve Months
Ended
|
(in
millions)
|
June 30,
2024
|
|
March 31,
2024
|
|
June 30,
2023
|
Net income
|
$
1,803
|
|
$
1,873
|
|
$
2,261
|
Income tax provision
(benefit)
|
42
|
|
(514)
|
|
(469)
|
Net financing
charges
|
326
|
|
335
|
|
278
|
EBIT
|
2,171
|
|
1,694
|
|
2,070
|
Adjusting
items:
|
|
|
|
|
|
Net mark-to-market
adjustments
|
66
|
|
54
|
|
(208)
|
Restructuring and
impairment costs
|
619
|
|
594
|
|
1,011
|
Environmental
remediation and related
reserves
adjustment
|
—
|
|
—
|
|
255
|
Water systems AFFF
settlement
|
750
|
|
750
|
|
—
|
Water systems AFFF
insurance recoveries
|
(351)
|
|
—
|
|
—
|
Earn-out
adjustments
|
(68)
|
|
(7)
|
|
(30)
|
Global Products
product quality issue
|
33
|
|
33
|
|
—
|
Warehouse fire
loss
|
—
|
|
—
|
|
40
|
Cyber incident
costs
|
27
|
|
27
|
|
—
|
Transaction/separation
costs
|
49
|
|
77
|
|
122
|
Adjusted EBIT
(non-GAAP)
|
3,296
|
|
3,222
|
|
3,260
|
Depreciation and
amortization
|
914
|
|
906
|
|
818
|
Adjusted EBITDA
(non-GAAP)
|
$
4,210
|
|
$
4,128
|
|
$
4,078
|
7. Income Taxes
The Company's effective tax rate before consideration of certain
excluded items was approximately 13.75% for the three and nine
months ending June 30, 2024 and
approximately 13.5% for the three and nine months ending
June 30, 2023.
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SOURCE Johnson Controls International plc