- Q1 reported sales +4% versus prior year; +9% organically
- Q1 GAAP EPS of $0.17; Adjusted
EPS of $0.67, up 24% versus prior
year
- Q1 Orders +5% organically year-over year
- Record backlog of $11.3 billion,
increased 11% organically year-over-year
- Initiates fiscal Q2 and updates fiscal 2023 full year
guidance
CORK,
Ireland, Feb. 1, 2023 /PRNewswire/ -- Johnson
Controls International plc (NYSE: JCI), a global leader for smart,
healthy and sustainable buildings, today reported fiscal first
quarter 2023 GAAP earnings per share ("EPS") from continuing
operations, including special items, of $0.17. Excluding special items, adjusted EPS from
continuing operations was $0.67, up
24% versus the prior year period (see attached footnotes for
non-GAAP reconciliation).
Sales in the quarter of $6.1
billion increased 4% compared to the prior year on an as
reported basis and grew 9% organically. GAAP net income from
continuing operations was $118
million. Adjusted net income from continuing operations of
$463 million was up 22% versus the
prior year. Earnings before interest and taxes ("EBIT") was
$237 million and EBIT margin was
3.9%. Adjusted EBIT was $646 million
and adjusted EBIT margin was 10.6%, improving 140 basis points
versus the prior year.
"Johnson Controls delivered solid first quarter results," said
George Oliver, Chairman and Chief
Executive Officer. "Our momentum remains strong, and we are
uniquely positioned to accelerate growth across our service-based
businesses and expand our digital solutions through our innovative
OpenBlue platform. Our unique offerings enable us to lead the
future of smart, healthy and sustainable buildings."
"Our earnings results came in at the high end of our
guidance as we executed on our higher margin backlog,
delivered on our productivity initiatives and improved our
operational execution," said Olivier
Leonetti, Chief Financial Officer. "Our pipeline remains
robust, and we are well positioned to capture tailwinds across our
vectors of growth and deliver strong financial performance."
Income and EPS amounts attributable to Johnson Controls
ordinary shareholders
($ 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 2022.
Organic sales growth, adjusted sales, organic segment EBITA
growth, total segment EBITA, adjusted segment EBITA, adjusted
corporate expense, EBIT, adjusted EBIT, adjusted net income from
continuing operations, adjusted EPS from continuing operations, and
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
2023 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.
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2022
|
2023
|
2022
|
2023
|
Sales
|
$5,862
|
$6,068
|
$5,862
|
$6,068
|
Segment
EBITA
|
723
|
792
|
723
|
832
|
EBIT
|
543
|
237
|
542
|
646
|
Net income from
continuing operations
|
381
|
118
|
380
|
463
|
|
|
|
|
|
Diluted EPS from
continuing operations
|
$0.54
|
$0.17
|
$0.54
|
$0.67
|
|
|
|
|
|
SEGMENT RESULTS
Building Solutions North America
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2022
|
2023
|
2022
|
2023
|
Sales
|
$2,152
|
$2,367
|
$2,152
|
$2,367
|
Segment
EBITA
|
250
|
267
|
250
|
267
|
Segment EBITA Margin
%
|
11.6 %
|
11.3 %
|
11.6 %
|
11.3 %
|
Sales in the quarter of $2.4
billion increased 10% versus the prior year. Organic sales
increased 10% over the prior year led by continued growth in our
Install business, including low double-digit growth in both
retrofit and new construction.
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 $7.5 billion
increased 16% compared to the prior year, excluding M&A and
adjusted for foreign currency.
Segment EBITA was $267 million, up
7% versus the prior year. Segment EBITA margin of 11.3% declined 30
basis points versus the prior year as positive price/cost and the
benefits of SG&A/COGS optimization actions were more than
offset by unfavorable mix.
Building Solutions EMEA/LA (Europe, Middle
East, Africa/Latin America)
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2022
|
2023
|
2022
|
2023
|
Sales
|
$959
|
$975
|
$959
|
$975
|
Segment
EBITA
|
104
|
75
|
104
|
75
|
Segment EBITA Margin
%
|
10.8 %
|
7.7 %
|
10.8 %
|
7.7 %
|
Sales in the quarter of $975
million increased 2% versus the prior year. Organic sales
grew 12% versus the prior year led by mid-teens growth in our
service-based business and low double-digit growth in Fire &
Security. By region, strong organic growth was seen in Europe, Latin
America, and the Middle East.
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 $2.2 billion
increased 5% year-over-year, excluding M&A and adjusted for
foreign currency.
Segment EBITA was $75 million,
down 28% versus the prior year. Segment EBITA margin of 7.7%
declined 310 basis points versus the prior year as favorable volume
leverage and the benefits of SG&A/COGS optimization actions
were more than offset by dilutive price/cost and unfavorable
mix.
Building Solutions Asia Pacific
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2022
|
2023
|
2022
|
2023
|
Sales
|
$675
|
$646
|
$675
|
$646
|
Segment
EBITA
|
68
|
68
|
68
|
68
|
Segment EBITA Margin
%
|
10.1 %
|
10.5 %
|
10.1 %
|
10.5 %
|
Sales in the quarter of $646
million declined 4% versus the prior year. Sales increased
7% organically versus the prior year led by continued demand for
HVAC & Controls. By region, sales in China grew 1% in the quarter, impacted by
COVID-related lockdowns.
Orders in the quarter, excluding M&A and adjusted for
foreign currency, declined 1% year-over-year. Backlog at the end of
the quarter of $1.6 billion declined
1% year-over-year, excluding M&A and adjusted for foreign
currency.
Segment EBITA was $68 million,
flat versus the prior year. Segment EBITA margin of 10.5% improved
40 basis points versus the prior year as positive price/cost and
the benefits of SG&A/COGS optimization actions were slightly
offset by continued FX headwinds and lower volumes.
Global Products
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2022
|
2023
|
2022
|
2023
|
Sales
|
$2,076
|
$2,080
|
$2,076
|
$2,080
|
Segment
EBITA
|
301
|
382
|
301
|
422
|
Segment EBITA Margin
%
|
14.5 %
|
18.4 %
|
14.5 %
|
20.3 %
|
Sales in the quarter of $2.1
billion were flat versus the prior year. Organic sales grew
7% versus the prior year driven by strong price realization and
continued growth in Commercial HVAC and Fire Detection
products.
Segment EBITA was $382 million, up
27% versus the prior year. Segment EBITA margin of 18.4% expanded
390 basis points versus the prior year driven by positive
price/cost and the benefits of SG&A/COGS actions.
Corporate
|
Fiscal
Q1
|
|
GAAP
|
Adjusted
|
|
2022
|
2023
|
2022
|
2023
|
Corporate
Expense
|
($70)
|
($109)
|
($70)
|
($82)
|
Corporate expense was $109 million
in the quarter, an increase of 56% compared to the prior year.
OTHER ITEMS
- For the quarter, cash used in operating activities from
continuing operations was ($296)
million and capital expenditures were $134 million, resulting in a free cash flow from
continuing operations of ($430)
million.
- During the quarter, the Company recorded net pre-tax
mark-to-market gains of $3 million
related primarily to the remeasurement of the Company's pension and
postretirement benefit plans and restricted asbestos
investments.
- During the quarter, the Company recorded pre-tax restructuring
and impairment costs of $345 million,
including $57 million of
restructuring charges and $288
million of impairments related to businesses classified as
held for sale.
SECOND QUARTER GUIDANCE
The Company initiated fiscal 2023 second quarter guidance:
- Organic revenue growth of ~10% year-over-year
- Adjusted segment EBITA margin improvement of 100 to 110 basis
points year-over-year
- Adjusted EPS before special items of $0.72 to $0.74;
representing 15% to 18% growth year-over-year
FULL YEAR GUIDANCE
The Company updated its fiscal 2023 full year EPS guidance:
- Organic revenue growth of high single-digits to low
double-digits year-over year
- Adjusted segment EBITA margin improvement of 90 to 120 basis
points, year-over-year
- Adjusted EPS before special items of $3.30 to $3.60;
representing 10% to 20% growth year-over-year
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 888-324-9610 (in
the United States) or 630-395-0255
(outside the United States), or
via webcast. The passcode is "Johnson Controls". 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 manage general economic, business and capital
market conditions, including recessions and other economic
downturns, the ability to manage macroeconomic and geopolitical
volatility, including global price inflation, shortages impacting
the availability of raw materials and component products and the
conflict between Russia and
Ukraine; the ability to develop or
acquire new products and technologies that achieve market
acceptance and meet applicable regulatory requirements; the
strength of the U.S. or other economies; fluctuations in currency
exchange rates; changes or uncertainty in laws, regulations, rates,
policies or interpretations that impact Johnson Controls business
operations or tax status; changes to laws or policies governing
foreign trade, including economic sanctions, increased tariffs or
trade restrictions; maintaining 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; the risk of infringement
or expiration of intellectual property rights; Johnson Controls
ability to manage the impacts of natural disasters, climate change,
pandemics and outbreaks of contagious diseases and other adverse
public health developments, such as the COVID-19 pandemic; 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 outcome of litigation and governmental
proceedings; 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 2022 fiscal year filed with the SEC on
November 15, 2022, 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.
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, Silent-Aire other nonrecurring items, certain
transaction/separation costs, and warehouse fire loss. Financial
information regarding organic sales growth, adjusted sales, EBIT,
EBIT margin, adjusted EBIT, adjusted EBIT margin, organic segment
EBITA growth, total segment EBITA, adjusted segment EBITA, adjusted
segment EBITA margin, adjusted Corporate expense, free cash flow,
free cash flow conversion 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,
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
Net sales
|
$
6,068
|
|
|
$
5,862
|
Cost of
sales
|
3,977
|
|
|
3,971
|
|
Gross profit
|
2,091
|
|
|
1,891
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
1,571
|
|
|
1,369
|
Restructuring and
impairment costs
|
345
|
|
|
49
|
Net financing
charges
|
67
|
|
|
53
|
Equity
income
|
62
|
|
|
70
|
|
|
|
|
|
|
Income before income
taxes
|
170
|
|
|
490
|
|
|
|
|
|
|
Income tax
provision
|
14
|
|
|
71
|
|
|
|
|
|
|
Net income
|
156
|
|
|
419
|
|
|
|
|
|
|
Income attributable to
noncontrolling interests
|
38
|
|
|
38
|
|
|
|
|
|
|
Net income attributable
to JCI
|
$
118
|
|
|
$
381
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
0.17
|
|
|
$
0.54
|
|
|
|
|
|
|
Diluted weighted
average shares
|
690.3
|
|
|
709.5
|
|
|
|
|
|
|
Shares outstanding at
period end
|
687.2
|
|
|
702.8
|
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
September
30,
|
|
|
|
2022
|
|
2022
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
1,509
|
|
$
2,031
|
|
Accounts receivable -
net
|
5,722
|
|
5,528
|
|
Inventories
|
2,895
|
|
2,510
|
|
Assets held for
sale
|
418
|
|
387
|
|
Other current
assets
|
1,293
|
|
1,229
|
|
|
Current
assets
|
11,837
|
|
11,685
|
|
|
|
|
|
|
|
Property, plant and
equipment - net
|
3,098
|
|
3,042
|
|
Goodwill
|
|
17,684
|
|
17,328
|
|
Other intangible assets
- net
|
4,673
|
|
4,641
|
|
Investments in
partially-owned affiliates
|
1,053
|
|
963
|
|
Noncurrent assets held
for sale
|
588
|
|
751
|
|
Other noncurrent
assets
|
3,864
|
|
3,748
|
|
|
Total assets
|
$
42,797
|
|
$
42,158
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
1,963
|
|
$
1,534
|
|
Accounts payable and
accrued expenses
|
5,050
|
|
5,219
|
|
Liabilities held for
sale
|
310
|
|
236
|
|
Other current
liabilities
|
4,240
|
|
4,250
|
|
|
Current
liabilities
|
11,563
|
|
11,239
|
|
|
|
|
|
|
|
Long-term
debt
|
7,784
|
|
7,426
|
|
Other noncurrent
liabilities
|
6,145
|
|
6,029
|
|
Noncurrent liabilities
held for sale
|
62
|
|
62
|
|
Shareholders' equity
attributable to JCI
|
16,046
|
|
16,268
|
|
Noncontrolling
interests
|
1,197
|
|
1,134
|
|
|
Total liabilities and
equity
|
$
42,797
|
|
$
42,158
|
JOHNSON CONTROLS
INTERNATIONAL PLC
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
|
|
|
2022
|
|
|
2021
|
Operating
Activities
|
|
|
|
|
Net income attributable
to JCI
|
$
118
|
|
|
$
381
|
Income attributable to
noncontrolling interests
|
38
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
Net income
|
156
|
|
|
419
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income to cash provided (used) by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
203
|
|
|
224
|
|
|
Pension and
postretirement benefit income
|
(6)
|
|
|
(82)
|
|
|
Pension and
postretirement contributions
|
(9)
|
|
|
(41)
|
|
|
Equity in earnings of
partially-owned affiliates, net of dividends received
|
(56)
|
|
|
(18)
|
|
|
Deferred income
taxes
|
(92)
|
|
|
(32)
|
|
|
Noncash restructuring
and impairment costs
|
294
|
|
|
-
|
|
|
Other - net
|
3
|
|
|
1
|
|
|
Changes in assets and
liabilities, excluding acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(88)
|
|
|
(75)
|
|
|
|
|
Inventories
|
(348)
|
|
|
(376)
|
|
|
|
|
Other assets
|
(68)
|
|
|
(63)
|
|
|
|
|
Restructuring
reserves
|
14
|
|
|
19
|
|
|
|
|
Accounts payable and
accrued liabilities
|
(338)
|
|
|
333
|
|
|
|
|
Accrued income
taxes
|
39
|
|
|
83
|
|
|
|
|
|
Cash provided (used) by
operating activities from continuing operations
|
(296)
|
|
|
392
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Capital
expenditures
|
(134)
|
|
|
(135)
|
Acquisition of
businesses, net of cash acquired
|
(79)
|
|
|
(108)
|
Other - net
|
24
|
|
|
25
|
|
|
|
|
|
Cash used by investing
activities from continuing operations
|
(189)
|
|
|
(218)
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Increase in short and
long-term debt - net
|
420
|
|
|
394
|
Stock repurchases and
retirements
|
(154)
|
|
|
(526)
|
Payment of cash
dividends
|
(241)
|
|
|
(191)
|
Proceeds from the
exercise of stock options
|
19
|
|
|
8
|
Dividends paid to
noncontrolling interests
|
(10)
|
|
|
-
|
Employee equity-based
compensation withholding taxes
|
(30)
|
|
|
(47)
|
Other - net
|
5
|
|
|
5
|
|
|
|
|
|
Cash provided (used) by
financing activities from continuing operations
|
9
|
|
|
(357)
|
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations
|
|
|
|
|
Net cash used by
operating activities
|
-
|
|
|
(4)
|
Net cash used by
investing activities
|
-
|
|
|
-
|
Net cash used by
financing activities
|
-
|
|
|
-
|
|
|
|
|
|
Net cash flows used by
discontinued operations
|
-
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(14)
|
|
|
67
|
Decrease in cash,
cash equivalents and restricted cash
|
$
(490)
|
|
|
$
(120)
|
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,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
Adjusted
Non-GAAP
|
|
Actual
|
|
Adjusted
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
North America
|
|
|
$
267
|
|
$
267
|
|
$
250
|
|
$
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions
EMEA/LA
|
|
|
75
|
|
75
|
|
104
|
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building Solutions Asia
Pacific
|
|
|
68
|
|
68
|
|
68
|
|
68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
Products
|
|
|
382
|
|
422
|
|
301
|
|
301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITA
|
|
|
792
|
|
832
|
|
723
|
|
723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses
(2)
|
|
|
(109)
|
|
(82)
|
|
(70)
|
|
(70)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (3)
|
|
|
(104)
|
|
(104)
|
|
(118)
|
|
(111)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net mark-to-market
gains (4)
|
|
|
3
|
|
-
|
|
57
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
impairment costs (5)
|
|
|
(345)
|
|
-
|
|
(49)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (6)
|
|
|
237
|
|
646
|
|
543
|
|
542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT margin (6)
|
|
|
3.9 %
|
|
10.6 %
|
|
9.3 %
|
|
9.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financing
charges
|
|
|
(67)
|
|
(67)
|
|
(53)
|
|
(53)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
170
|
|
579
|
|
490
|
|
489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
(7)
|
|
|
(14)
|
|
(78)
|
|
(71)
|
|
(66)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
156
|
|
501
|
|
419
|
|
423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income attributable to
noncontrolling interests (8)
|
|
|
(38)
|
|
(38)
|
|
(38)
|
|
(43)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to JCI
|
|
|
$
118
|
|
$
463
|
|
$
381
|
|
$
380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company's press
release contains financial information regarding total segment
EBITA, 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
because these costs 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.
|
A reconciliation of
total segment EBITA to net income is shown earlier within this
footnote. The following is the three months ended December 31, 2022
and 2021 reconciliation of total 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
|
|
Consolidated
JCI plc
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Segment EBITA as
reported
|
$ 267
|
|
$
250
|
|
$
75
|
|
$
104
|
|
$
68
|
|
$
68
|
|
$
382
|
|
$
301
|
|
$
792
|
|
$
723
|
Segment EBITA margin as
reported (9)
|
11.3 %
|
|
11.6 %
|
|
7.7 %
|
|
10.8 %
|
|
10.5 %
|
|
10.1 %
|
|
18.4 %
|
|
14.5 %
|
|
13.1 %
|
|
12.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse fire loss
(10)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
40
|
|
-
|
|
40
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA
|
$ 267
|
|
$
250
|
|
$
75
|
|
$
104
|
|
$
68
|
|
$
68
|
|
$
422
|
|
$
301
|
|
$
832
|
|
$
723
|
Adjusted segment EBITA
margin
|
11.3 %
|
|
11.6 %
|
|
7.7 %
|
|
10.8 %
|
|
10.5 %
|
|
10.1 %
|
|
20.3 %
|
|
14.5 %
|
|
13.7 %
|
|
12.3 %
|
|
(2) Adjusted Corporate
expenses for the three months ended December 31, 2022 excludes
certain transaction/separation costs of $27 million.
|
(3) Adjusted
amortization of intangible assets for the three months ended
December 31, 2021 excludes $7 million of nonrecurring intangible
asset amortization related to Silent-Aire purchase
accounting.
|
(4) Adjusted results
for the three months ended December 31, 2022 exclude net
mark-to-market gains on restricted asbestos investments and pension
and postretirements plans of $3 million. Adjusted results for the
three months ended December 31, 2021 exclude net mark-to-market
gains on restricted asbestos investments and pension and
postretirements plans of $57 million.
|
(5) Adjusted results
for the three months ended December 31, 2022 exclude restructuring
and impairment costs of $345 million. These costs are related
primarily to the impairment of assets associated with businesses
classified as held for sale, workforce reductions and other related
costs. Adjusted results for the three months ended December 31,
2021 exclude restructuring and impairment costs of $49 million.
These costs are related primarily to workforce reductions and other
related costs.
|
(6) 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 EBIT to net income is shown earlier within this
footnote.
|
(7) 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. Adjusted
income tax provision for the three months ended December 31, 2021
excludes the net tax expense of pre-tax adjusting items of $5
million.
|
(8) Adjusted income
attributable to noncontrolling interests for the three months ended
December 31, 2021 excludes $5 million impact from restructuring and
impairment costs.
|
(9) Segment EBITA
margin is defined as segment EBITA divided by segment net sales, as
disclosed in the Company's press release.
|
(10) Adjusted segment
EBITA for the three months ended December 31, 2022 excludes a $40
million uninsured loss attributable to a fire at a warehouse in
Menominee, Michigan.
|
|
The Company's press
release and earnings presentation include forward-looking
statements regarding organic revenue growth, adjusted segment EBITA
margin improvement, 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 2023 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,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share as
reported for JCI plc
|
$ 0.17
|
|
$
0.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
mark-to-market adjustments
|
-
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
-
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
and impairment costs
|
0.50
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
(0.08)
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NCI impact of
restructuring and impairment costs
|
-
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction/separation costs
|
0.04
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silent-Aire
other nonrecurring costs
|
-
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse fire
loss
|
0.06
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax
impact
|
(0.01)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share for JCI plc*
|
$ 0.67
|
|
$
0.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding for JCI plc
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding
|
687.0
|
|
704.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options,
unvested restricted stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
unvested performance share awards
|
3.3
|
|
5.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
690.3
|
|
709.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
Organic Growth
Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
change in net sales for the three months ended December 31, 2022
versus the three months ended December 31, 2021, including organic
growth, are shown below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Net Sales
for the Three
Months Ended
December 31, 2021
|
|
Base Year Adjustments
-
Divestitures and Other
|
|
Base Year Adjustments
-
Foreign Currency
|
|
Adjusted Base Net
Sales for the Three
Months Ended
December 31, 2021
|
|
Acquisitions
|
|
Organic
Growth
|
|
Net Sales for the
Three Months Ended
December 31, 2022
|
|
Building Solutions
North America
|
$
2,152
|
|
$
-
|
|
-
|
|
$
(15)
|
|
-1 %
|
|
$
2,137
|
|
$
7
|
|
-
|
|
$ 223
|
|
10 %
|
|
$
2,367
|
|
10 %
|
|
Building Solutions
EMEA/LA
|
959
|
|
(18)
|
|
-2 %
|
|
(89)
|
|
-9 %
|
|
852
|
|
20
|
|
2 %
|
|
103
|
|
12 %
|
|
975
|
|
2 %
|
|
Building Solutions Asia
Pacific
|
675
|
|
-
|
|
-
|
|
(71)
|
|
-11 %
|
|
604
|
|
-
|
|
-
|
|
42
|
|
7 %
|
|
646
|
|
-4 %
|
|
Total field
|
3,786
|
|
(18)
|
|
-
|
|
(175)
|
|
-5 %
|
|
3,593
|
|
27
|
|
1 %
|
|
368
|
|
10 %
|
|
3,988
|
|
5 %
|
|
Global
Products
|
2,076
|
|
-
|
|
-
|
|
(125)
|
|
-6 %
|
|
1,951
|
|
-
|
|
-
|
|
129
|
|
7 %
|
|
2,080
|
|
-
|
|
Total net sales
|
$
5,862
|
|
$
(18)
|
|
-
|
|
$
(300)
|
|
-5 %
|
|
$
5,544
|
|
$
27
|
|
-
|
|
$ 497
|
|
9 %
|
|
$
6,068
|
|
4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
change in total service revenue for the three months ended December
31, 2022 versus the three months ended December 31, 2021, including
organic growth, is shown below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Service Revenue
for the
Three Months Ended
December 31, 2021
|
|
Base Year Adjustments
-
Divestitures and Other
|
|
Base Year Adjustments
-
Foreign Currency
|
|
Adjusted Base
Service
Revenue for the
Three Months Ended
December 31, 2021
|
|
Acquisitions
|
|
Organic
Growth
|
|
Service Revenue
for the Three
Months Ended
December 31, 2022
|
|
Building Solutions
North America
|
$
853
|
|
$
-
|
|
-
|
|
$
(6)
|
|
-1 %
|
|
$
847
|
|
$
6
|
|
1 %
|
|
$
63
|
|
7 %
|
|
$ 916
|
|
7 %
|
|
Building Solutions
EMEA/LA
|
415
|
|
(11)
|
|
-3 %
|
|
(41)
|
|
-10 %
|
|
363
|
|
4
|
|
1 %
|
|
56
|
|
15 %
|
|
423
|
|
2 %
|
|
Building Solutions Asia
Pacific
|
174
|
|
-
|
|
-
|
|
(18)
|
|
-10 %
|
|
156
|
|
-
|
|
-
|
|
17
|
|
11 %
|
|
173
|
|
-1 %
|
|
Total field
|
1,442
|
|
(11)
|
|
-1 %
|
|
(65)
|
|
-5 %
|
|
1,366
|
|
10
|
|
1 %
|
|
136
|
|
10 %
|
|
1,512
|
|
5 %
|
|
Global
Products
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total service revenue
|
$
1,442
|
|
$
(11)
|
|
-1 %
|
|
$
(65)
|
|
-5 %
|
|
$
1,366
|
|
$
10
|
|
1 %
|
|
$ 136
|
|
10 %
|
|
$
1,512
|
|
5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the
change in total segment EBITA for the three months ended December
31, 2022 versus the three months ended December 31, 2021, including
organic growth, is shown below (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Adjusted Segment
EBITA for the
Three Months Ended
December 31, 2021
|
|
Base Year Adjustments
-
Divestitures and Other
|
|
Base Year Adjustments
-
Foreign Currency
|
|
Adjusted Base
Segment
EBITA for the
Three Months Ended
December 31, 2021
|
|
Acquisitions
|
|
Organic
Growth
|
|
Adjusted Segment
EBITA for the
Three Months Ended
December 31, 2022
|
|
Total segment
EBITA
|
$
723
|
|
$
(1)
|
|
-
|
|
$
(36)
|
|
-5 %
|
|
$
686
|
|
$
5
|
|
1 %
|
|
$ 141
|
|
21 %
|
|
$ 832
|
|
15 %
|
4.
|
Free Cash Flow
Conversion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's press
release contains financial information regarding free cash flow and
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. Free cash flow is
defined as cash provided by operating activities less capital
expenditures. Free cash flow conversion from net income is defined
as free cash flow divided by net income attributable to JCI. Free
cash flow conversion is defined as free cash flow divided by
adjusted net income attributable to JCI. 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, 2022 and 2021 reconciliation of
free cash flow and the calculations of free cash flow conversion
from net income and free cash flow conversion
(unaudited):
|
|
|
Three Months
Ended
|
(in
millions)
|
December 31,
2022
|
|
December 31,
2021
|
Cash provided (used) by
operating activities from continuing
operations
|
$
(296)
|
|
$
392
|
Capital
expenditures
|
(134)
|
|
(135)
|
Free cash
flow
|
$
(430)
|
|
$
257
|
|
|
|
|
|
|
|
|
Net income attributable
to JCI
|
$
118
|
|
$
381
|
Free cash flow
conversion from net income
|
|
|
-364 %
|
|
|
|
67 %
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to JCI
|
$
463
|
|
$
380
|
Free cash flow
conversion
|
|
|
-93 %
|
|
|
|
68 %
|
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 it provides an overview of the extent to
which the Company relies on external debt financing for its funding
and is a measure of risk to its shareholders. The following is the
December 31, 2022, September 30, 2022, and December 31, 2021
calculation of net debt to income before income taxes and net debt
to adjusted EBITDA (unaudited):
|
|
(in
millions)
|
December 31,
2022
|
|
September 30,
2022
|
|
December 31,
2021
|
Short-term debt and
current portion of long-term debt
|
$
1,963
|
|
$
1,534
|
|
$
612
|
Long-term
debt
|
7,784
|
|
7,426
|
|
7,437
|
Total debt
|
9,747
|
|
8,960
|
|
8,049
|
Less: cash and cash
equivalents
|
1,509
|
|
2,031
|
|
1,207
|
Total net
debt
|
$
8,238
|
|
$
6,929
|
|
$
6,842
|
|
|
|
|
|
|
|
|
|
|
|
|
Last twelve months
income before income taxes
|
$
1,390
|
|
$
1,710
|
|
$
2,671
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net debt to
income before income taxes
|
5.9x
|
|
4.1x
|
|
2.6x
|
|
|
|
|
|
|
|
|
|
|
|
|
Last twelve months
adjusted EBITDA
|
$
3,783
|
|
$
3,693
|
|
$
3,599
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net debt to
adjusted EBITDA
|
2.2x
|
|
1.9x
|
|
1.9x
|
|
The following is the
last twelve months ended December 31, 2022, September 30, 2022, and
December 31, 2021 reconciliation of income to adjusted EBIT and
adjusted EBITDA, which are non-GAAP performance measures
(unaudited):
|
|
(in
millions)
|
Last Twelve
Months
Ended
December 31, 2022
|
|
Last Twelve
Months
Ended
September 30, 2022
|
|
Last Twelve
Months
Ended
December 31, 2021
|
Net income
|
$
1,460
|
|
$
1,723
|
|
$
1,793
|
Income tax (benefit)
provision
|
(70)
|
|
(13)
|
|
878
|
Net financing
charges
|
227
|
|
213
|
|
200
|
EBIT
|
1,617
|
|
1,923
|
|
2,871
|
Adjusting
items:
|
|
|
|
|
|
Net
mark-to-market adjustments
|
20
|
|
(34)
|
|
(438)
|
Restructuring and impairment costs
|
1,017
|
|
721
|
|
291
|
Environmental remediation and related reserves
adjustment
|
255
|
|
255
|
|
-
|
Silent-Aire other nonrecurring costs
|
|
|
6
|
|
13
|
|
|
|
30
|
Silent-Aire earn-out adjustment
|
|
|
(43)
|
|
(43)
|
|
|
|
-
|
Warehouse
fire loss
|
|
|
40
|
|
-
|
|
|
|
-
|
Charges
attributable to the suspension of operations in Russia
|
11
|
|
11
|
|
-
|
Transaction/separation costs
|
|
|
57
|
|
30
|
|
|
|
-
|
Adjusted EBIT
(1)
|
2,980
|
|
2,876
|
|
2,754
|
Depreciation and
amortization
|
803
|
|
817
|
|
845
|
Adjusted EBITDA
(1)
|
$
3,783
|
|
$
3,693
|
|
$
3,599
|
(1) The Company's
definition of adjusted EBIT and adjusted EBITDA excludes special
items because these costs 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 from continuing operations excluding net mark-to-market
adjustments, restructuring and impairment costs, Silent-Aire
nonrecurring intangible asset amortization, certain
transaction/separation costs and warehouse fire loss for the three
months ended December 31, 2022 and December 31, 2021 is
approximately 13.5%.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/johnson-controls-reports-strong-growth-in-q1-and-updates-fy23-guidance-301735529.html
SOURCE Johnson Controls International plc