MILWAUKEE, Oct. 30, 2014 /PRNewswire/ -- For the fiscal 2014 fourth quarter, Johnson Controls (NYSE: JCI), a global multi-industrial company, reported net income from continuing operations of $311 million, or $0.46 per share, on $11.0 billion in revenues. Excluding restructuring and non-recurring items in the 2014 and 2013 fiscal fourth quarters, highlights (non-GAAP) include:
-- Net revenues of $11.0 billion vs. $10.7 billion in Q4 2013, up three percent -- Record income from business segments of $983 million compared with $889 million a year ago, up 11 percent -- Record net income from continuing operations of $700 million versus $629 million in Q4 2013, up 11 percent -- Diluted earnings per share from continuing operations of $1.04 versus $0.91 in the same quarter last year, up 14 percent
Non-recurring items that impacted reported Q4 2014 and Q4 2013 income include:
2014 fourth quarter (net charge of $0.58 per share)
-- Non-cash mark-to-market and pension settlement losses of $290 million ($218 million after-tax) -- Transaction and integration costs of $23 million ($18 million after-tax) -- Restructuring and non-cash impairment charges of $162 million ($135 million after-tax) primarily related to the Building Efficiency reorganization -- Non-recurring net tax expense of $18 million
2013 fourth quarter (net charge of $0.83 per share):
-- A $22 million net loss ($22 million after-tax) on the sale of a business -- A $730 million ($666 million after-tax) restructuring and non-cash impairment charge -- A non-cash mark-to-market and pension settlement gain of $474 million ($278 million after-tax) -- Tax charges of $165 million primarily related to valuation allowance provisions
"We ended fiscal 2014 with solid contributions from all of our primary businesses, continuing the strong performance we have seen throughout the year," said Alex Molinaroli, Johnson Controls chairman and chief executive officer. "While the macro-economic environment continues to be challenging in some key markets, each of our businesses generated top line growth in the fourth quarter. Importantly, Building Efficiency orders were higher for the first time in a year. During the quarter, we announced a number of organizational and management changes that we believe will drive further improvements in shareholder value in 2015 and beyond."
In the fourth quarter, the company announced it was reorganizing its Building Efficiency business, with the North America branch business to operate separately from the global products business to better align with the company's long-term strategies and accelerate profitable global growth. Bill Jackson, who led the successful effort to return the Automotive Interiors business to profitability in 2014, was named president of Building Efficiency.
R. Bruce McDonald was named vice chairman, a new role designed to drive operational and financial performance within the businesses while also directing specific enterprise functions and strategic initiatives. Brian J. Stief was appointed executive vice president and chief financial officer. These appointments increase executive management bandwidth and are expected to help the company deliver on its short- and long-term commitments.
Johnson Controls also announced its intention to divest the Global Workplace Solutions (GWS) business, reflecting the company's previously stated intention to invest in businesses that are core to its long-term growth strategy and multi-industrial portfolio.
Business segments, excluding restructuring and non-recurring items (non-GAAP)
Building Efficiency sales in the fiscal 2014 fourth quarter were $3.9 billion, 1 percent higher than the same quarter last year, with growth in Asia and the revenue associated with the Air Distribution Technologies (ADT) acquisition partially offset by lower revenues in North America. GWS sales were slightly lower.
Orders in the quarter, including the incremental contribution of the ADT acquisition and excluding foreign exchange, were 11 percent higher year-over-year. Excluding ADT and the impact of foreign exchange, orders increased 2 percent, marking the first order growth in a year. The backlog of projects at the end of the quarter, adjusted for divestitures and foreign exchange, increased 1 percent, to $4.8 billion.
Building Efficiency segment income was $393 million, up 11 percent from $355 million in the fiscal 2013 fourth quarter, primarily the result of the incremental contribution by ADT and GWS segment income, which more than doubled compared with the 2013 fourth quarter as its business improvement program continued to gain traction.
Automotive Experience sales in the quarter grew 3 percent to $5.3 billion versus $5.1 billion last year on industry production growth of 8 percent in North America and a 1 percent decline in Europe. Revenues in China, which are primarily generated through non-consolidated joint ventures, increased 17 percent to $1.8 billion, while industry production increased 8 percent versus last year.
Automotive Experience segment income was $261 million, 27 percent higher than the same quarter last year. Seating segment income increased by 8 percent to $218 million while Interiors reported a profit of $43 million versus $3 million last year due to improved operational efficiencies and the benefits of earlier restructuring actions.
Power Solutions sales in the fourth quarter of 2014 increased 5 percent to $1.8 billion versus $1.7 billion in the same period last year. Unit shipments rose 4 percent, with increases in the global original equipment (OE) and replacement markets. Higher unit shipments in the Americas and Asia were partially offset by slightly lower aftermarket demand in Europe. The company said its production of AGM lead acid batteries for fuel-saving Start-Stop vehicles rose 23 percent compared with the fourth quarter of last year.
Power Solutions segment income was level with the fourth quarter of fiscal 2013, at $329 million. Segment margins for the 2014 fourth quarter were 18.4 percent. Segment margins for the 2014 fiscal year increased 60 basis points, to 16.1 percent.
Full year 2014 results
Johnson Controls fiscal 2014 revenues were $42.8 billion, an increase of 3 percent from $41.4 billion in 2013. Income from business segments totaled $3.1 billion, up 20 percent from $2.6 billion last year. Segment income margins for the year improved by 90 basis points.
Several actions intended to improve long-term shareholder value were undertaken in fiscal 2014, including:
-- Announced $3.65 billion share repurchase program; $1.2 billion completed in Q1 2014 -- Increased quarterly dividend by 16 percent -- Implementing the Johnson Controls Operating System to leverage scale, technology and expertise across the enterprise -- Business portfolio activities including: -- Acquisition of ADT, increasing Building Efficiency product breadth and distribution -- Divestiture of the Automotive Electronics business -- Memorandum of Understanding to create a joint venture with Hitachi to expand Building Efficiency product offerings -- Announced joint venture plans for the Automotive Interiors business -- Reorganization of the Building Efficiency business -- Decision to divest Global Workplace Solutions
"We began 2014 with a focus on execution and with an action plan to change our portfolio and our organization. Our earnings performance throughout the year proves our success in driving operational excellence throughout the company, and our progress around portfolio and the organizational changes in just one year exceeded our expectations," said Molinaroli. "We believe initiatives to improve the profitability of our businesses continue to gain momentum. Our 2014 results provide a foundation that we believe will position us to deliver record sales and earnings in 2015."
Fiscal 2015 outlook
For the first quarter of 2015, the company expects earnings of $0.74 - $0.77 per diluted share. Johnson Controls will provide full fiscal year 2015 guidance at its annual New York analyst day on Dec. 2, 2014.
Molinaroli added, "We have a good start to fiscal 2015 in all of our businesses and have begun to see recovery in some of our late cycle markets. Through our capital allocation strategies, we're focusing Johnson Controls on new growth markets with higher returns, and our large and growing China presence in all our businesses continues to be a differentiator. Executing on our strategies and delivering on our commitments remains our highest priority. I would like to thank all Johnson Controls employees across the globe for embracing the continuing changes to our company as we work together to achieve higher levels of success."
FORWARD-LOOKING STATEMENTS
Johnson Controls, Inc. has made statements in this document that are forward-looking and, therefore, are subject to risks and uncertainties. All statements in this document other than statements of historical fact are statements that are, or could be, deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding future financial position, sales, costs, earnings, cash flows, other measures of results of operations, capital expenditures or debt levels and plans, objectives, outlook, targets, guidance or goals are forward-looking statements. Words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "forecast," "project" or "plan" or terms of similar meaning are also generally intended to identify forward-looking statements. Johnson Controls cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Johnson Controls' control, that could cause Johnson Controls' actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include required regulatory approvals that are material conditions for proposed transactions to close, strength of the U.S. or other economies, automotive vehicle production levels, mix and schedules, energy and commodity prices, availability of raw materials and component products, currency exchange rates, and cancellation of or changes to commercial contracts, as well as other factors discussed in Item 1A of Part I of Johnson Controls' most recent Annual Report on Form 10-K for the year ended September 30, 2013. 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 document are only made as of the date of this document, and Johnson Controls assumes no obligation, and disclaims any obligation, to update forward-looking statements to reflect events or circumstances occurring after the date of this document.
ABOUT JOHNSON CONTROLS
Johnson Controls is a global diversified technology and industrial leader serving customers in more than 150 countries. Our 170,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful. In 2014, Corporate Responsibility Magazine recognized Johnson Controls as the #12 company in its annual "100 Best Corporate Citizens" list. For additional information, please visit http://www.johnsoncontrols.com or follow us on Twitter @johnsoncontrols.
CONTACT: Glen L. Ponczak (Investors) (414) 524-2375 Fraser Engerman (Media) (414) 524-2733
JOHNSON CONTROLS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended September 30, ----------------------------- 2014 2013 (Revised) ---- ------------- Net sales $10,979 $10,700 Cost of sales 9,137 8,675 ----- ----- Gross profit 1,842 2,025 Selling, general and administrative expenses (1,294) (756) Loss on business divestiture - (22) Restructuring and impairment costs (162) (730) Net financing charges (66) (54) Equity income 122 94 --- --- Income from continuing operations before income taxes 442 557 Income tax provision 94 469 --- --- Net income from continuing operations 348 88 Income (loss) from discontinued operations, net of tax (2) 51 --- --- Net income 346 139 37 34 Less: Income from continuing operations attributable to noncontrolling interests --- Net income attributable to JCI $309 $105 ==== ==== Income from continuing operations $311 $54 Income (loss) from discontinued operations (2) 51 --- --- Net income attributable to JCI $309 $105 ==== ==== Diluted earnings per share from continuing operations $0.46 $0.08 Diluted earnings per share from discontinued operations 0.00 0.07 ---- ---- Diluted earnings per share $0.46 $0.15 ===== ===== Diluted weighted average shares 673.0 690.7 ===== ===== Shares outstanding at period end 665.5 684.5 ===== =====
JOHNSON CONTROLS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Twelve Months Ended September 30, ------------------------------ 2014 2013 (Revised) ---- ------------- Net sales $42,828 $41,410 Cost of sales 36,201 34,945 ------ ------ Gross profit 6,627 6,465 Selling, general and administrative expenses (4,308) (3,780) Gain (loss) on business divestitures (111) 7 Restructuring and impairment costs (324) (957) Net financing charges (244) (247) Equity income 395 399 --- --- Income from continuing operations before income taxes 2,035 1,887 Income tax provision 482 696 --- --- Net income from continuing operations 1,553 1,191 Income (loss) from discontinued operations, net of tax (218) 101 ---- --- Net income 1,335 1,292 120 114 Less: Income from continuing operations attributable to noncontrolling interests --- Net income attributable to JCI $1,215 $1,178 ====== ====== Income from continuing operations $1,433 $1,077 Income (loss) from discontinued operations (218) 101 ---- --- Net income attributable to JCI $1,215 $1,178 ====== ====== Diluted earnings per share from continuing operations $2.12 $1.56 Diluted earnings (loss) per share from discontinued operations (0.32) 0.15 ----- ---- Diluted earnings per share $1.80 $1.71 ===== ===== Diluted weighted average shares 674.8 689.2 ===== ===== Shares outstanding at period end 665.5 684.5 ===== =====
JOHNSON CONTROLS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) September 30, September 30, 2014 2013 ---- ---- ASSETS Cash and cash equivalents $409 $1,055 Accounts receivable - net 5,871 7,206 Inventories 2,477 2,325 Assets held for sale 2,157 804 Other current assets 2,072 2,308 ----- ----- Current assets 12,986 13,698 Property, plant and equipment - net 6,314 6,585 Goodwill 7,127 6,589 Other intangible assets - net 1,639 999 Investments in partially-owned affiliates 1,018 1,024 Noncurrent assets held for sale 630 - Other noncurrent assets 2,712 2,623 ----- ----- Total assets $32,426 $31,518 ============ LIABILITIES AND EQUITY Short-term debt and current portion of long-term debt $323 $938 Accounts payable and accrued expenses 6,394 7,533 Liabilities held for sale 1,801 402 Other current liabilities 3,130 3,244 ----- ----- Current liabilities 11,648 12,117 Long-term debt 6,357 4,560 Other noncurrent liabilities 2,665 2,110 Redeemable noncontrolling interests 194 157 Shareholders' equity attributable to JCI 11,311 12,314 Noncontrolling interests 251 260 --- --- Total liabilities and equity $32,426 $31,518 =====================
JOHNSON CONTROLS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended September 30, ----------------------------- 2014 2013 ---- ---- Operating Activities Net income attributable to JCI $309 $105 Income from continuing operations attributable to noncontrolling interests 37 34 --- --- Net income 346 139 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 224 256 Pension and postretirement benefit expense (income) 296 (470) Pension and postretirement contributions (102) (36) Equity in earnings of partially- owned affiliates, net of dividends received (57) (37) Deferred income taxes (269) 282 Non-cash restructuring and impairment charges 93 537 Gain on business divestitures - (454) Fair value adjustment of equity investment (19) (24) Other - net 23 6 Changes in assets and liabilities, excluding acquisitions and divestitures: Receivables (221) (188) Inventories 2 54 Restructuring reserves 17 167 Accounts payable and accrued liabilities 394 374 Change in other assets and liabilities 505 531 --- --- Cash provided by operating activities 1,232 1,137 ----- ----- Investing Activities Capital expenditures (323) (448) Sale of property, plant and equipment 18 63 Acquisition of businesses, net of cash acquired (16) (10) Business divestitures 266 761 Other - net 19 17 Cash provided (used) by investing activities (36) 383 --- --- Financing Activities Decrease in short and long-term debt - net (744) (541) Stock repurchases (50) (125) Payment of cash dividends (146) (130) Proceeds from the exercise of stock options 13 81 Other - net (25) (67) --- --- Cash used by financing activities (952) (782) ---- ---- Effect of exchange rate changes on cash and cash equivalents (5) (70) Cash held for sale 10 (4) --- --- Increase in cash and cash equivalents $249 $664 ==== ====
JOHNSON CONTROLS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Twelve Months Ended September 30, ------------------------------ 2014 2013 ---- ---- Operating Activities Net income attributable to JCI $1,215 $1,178 Income from continuing operations attributable to noncontrolling interests 120 114 --- --- Net income 1,335 1,292 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 955 952 Pension and postretirement benefit expense (income) 321 (475) Pension and postretirement contributions (161) (97) Equity in earnings of partially- owned affiliates, net of dividends received (153) (86) Deferred income taxes (329) 273 Non-cash restructuring and impairment charges 181 586 Loss (gain) on business divestitures 111 (483) Fair value adjustment of equity investment (38) (106) Other - net 80 43 Changes in assets and liabilities, excluding acquisitions and divestitures: Receivables (18) (182) Inventories (311) (97) Restructuring reserves (31) 234 Accounts payable and accrued liabilities 213 691 Change in other assets and liabilities 240 141 --- --- Cash provided by operating activities 2,395 2,686 ----- ----- Investing Activities Capital expenditures (1,199) (1,377) Sale of property, plant and equipment 79 116 Acquisition of businesses, net of cash acquired (1,733) (123) Business divestitures 225 761 Other - net 35 43 Cash used by investing activities (2,593) (580) ------ ---- Financing Activities Increase (decrease) in short and long- term debt - net 1,241 (573) Stock repurchases (1,249) (350) Payment of cash dividends (568) (513) Proceeds from the exercise of stock options 186 254 Other - net (22) (32) --- --- Cash used by financing activities (412) (1,214) ---- ------ Effect of exchange rate changes on cash and cash equivalents (20) (98) Cash held for sale (16) (4) --- --- Increase (decrease) in cash and cash equivalents $(646) $790 ===== ====
FOOTNOTES 1. Business Unit Summary In the second quarter of fiscal 2014, the Company began reporting its Automotive Experience Electronics business as a discontinued operation, which required retrospective application to previously reported financial information. As a result, the segment income amounts shown below are for continuing operations and exclude the Electronics business segment income of $507 million for the fiscal 2013 fourth quarter and $607 million for fiscal 2013 year-to-date. The fiscal 2013 Electronics business segment income included a $476 million gain on sale of the HomeLink business.
Three Months Ended Twelve Months Ended (in millions) September 30, September 30, ------------- ------------- 2014 2013 (Revised) % 2014 2013 (Revised) % ---- ------------- --- ---- ------------- --- (unaudited) (unaudited) Net Sales --------- Building Efficiency $3,931 $3,891 1% $14,164 $14,591 -3% Automotive Experience 5,258 5,112 3% 22,032 20,461 8% Power Solutions 1,790 1,697 5% 6,632 6,358 4% Net Sales $10,979 $10,700 $42,828 $41,410 ======= ======= ======= ======= Segment Income(1) ---------------- Building Efficiency $371 $361 3% $930 $984 -5% Automotive Experience 248 230 8% 886 698 27% Power Solutions 325 345 -6% 1,061 1,004 6% Segment Income 944 936 (2) 2,877 (3) 2,686 (3) --- --- ----- ----- Restructuring and impairment costs (162) (730) (324) (957) Net financing charges (66) (54) (244) (247) (274) 405 (274) 405 Mark-to-market benefit (charge) for pension and postretirement plans Income from continuing operations before income taxes $442 $557 $2,035 $1,887 ==== ==== ====== ====== Net Sales --------- Products and systems $8,912 $8,522 5% $34,978 $33,092 6% Services 2,067 2,178 -5% 7,850 8,318 -6% $10,979 $10,700 $42,828 $41,410 ======= ======= ======= ======= Cost of Sales ------------- Products and systems $7,504 $6,967 8% $29,910 $28,189 6% Services 1,633 1,708 -4% 6,291 6,756 -7% $9,137 $8,675 $36,201 $34,945 ====== ====== ======= =======
(1) Management evaluates the performance of the business units based primarily on segment income, which represents income from continuing operations before income taxes and noncontrolling interests, excluding net financing charges, significant restructuring and impairment costs, and net mark-to-market adjustments on pension and postretirement plans. Building Efficiency- Provides facility systems and services including comfort, energy and security management for the non- residential buildings market and provides heating, ventilating, and air conditioning products and services for the residential and non- residential building markets. Automotive Experience - Designs and manufactures interior systems and products for passenger cars and light trucks, including vans, pick-up trucks and sport/crossover utility vehicles. Power Solutions - Services both automotive original equipment manufacturers and the battery aftermarket by providing advanced battery technology, coupled with systems engineering, marketing and service expertise. (2) These fourth quarter reported segment income numbers include non-recurring/unusual items and transaction/integration costs. The pre-tax impacts are reported as follows:
Building Efficiency Automotive Experience Power Solutions Consolidated JCI ------------------- --------------------- --------------- ---------------- 2014 2013 (Revised) 2014 2013 (Revised) 2014 2013 (Revised) 2014 2013 (Revised) ---- ------------- ---- ------------- ---- ------------- ---- ------------- Segment income, as reported $371 $361 $248 $230 $325 $345 $944 $936 Non-recurring/unusual items: Transaction/integration costs 15 - 8 - - - 23 - Loss on business divestiture - 22 - - - - - 22 Pension settlement (gain) loss 7 (28) 5 (25) 4 (16) 16 (69) --- --- --- --- --- --- --- --- Segment income, excluding non- recurring/unusual items $393 $355 $261 $205 $329 $329 $983 $889 ==== ==== ==== ==== ==== ==== ==== ==== (3) These full year reported segment income numbers include non-recurring/unusual items and transaction/integration costs. The pre-tax impacts are reported as follows: Building Efficiency Automotive Experience Power Solutions Consolidated JCI ------------------- --------------------- --------------- ---------------- 2014 2013 (Revised) 2014 2013 (Revised) 2014 2013 (Revised) 2014 2013 (Revised) ---- ------------- ---- ------------- ---- ------------- ---- ------------- Segment income, as reported $930 $984 $886 $698 $1,061 $1,004 $2,877 $2,686 Non-recurring/unusual items: Transaction/integration costs 35 - 8 - - - 43 - Loss on business divestitures 25 22 95 - - - 120 22 Equity affiliate gain - - - (82) - - - (82) Pension settlement (gain) loss 7 (28) 5 (25) 4 (16) 16 (69) --- --- --- --- --- --- --- --- Segment income, excluding non- recurring/unusual items $997 $978 $994 $591 $1,065 $988 $3,056 $2,557 ==== ==== ==== ==== ====== ==== ====== ======
2. Earnings Per Share Reconciliation A reconciliation of earnings per share, as reported, to earnings per share, excluding non- recurring/unusual items and transaction/ integration costs, for the respective quarters and annual periods is shown below:
Net Income Attributable Net Income Attributable to JCI to JCI from Continuing Operations ----------------------- ------------------------ Three Months Ended Three Months Ended September 30, September 30, ------------- ------------- 2014 2013 (Revised) 2014 2013 (Revised) ---- ------------- ---- ------------- (unaudited) (unaudited) Earnings per share, as reported $0.46 $0.15 $0.46 $0.08 Non-recurring/unusual items, net of tax: Pension settlement (gain) loss 0.01 (0.06) 0.01 (0.06) Mark-to-market (gains)/charges for pension and postretirement plans 0.31 (0.34) 0.31 (0.34) Transaction/integration costs 0.03 - 0.03 - Loss (gain) on business divestitures - (0.34) - 0.03 Restructuring and impairment costs 0.20 1.00 0.20 0.96 Foreign earnings repatriation provision 0.05 0.30 0.05 - Tax valuation allowances and other tax items (0.03) 0.24 (0.03) 0.24 ----- ---- ----- ---- Earnings per share, excluding non- recurring/unusual items* $1.04 $0.95 $1.04 $0.91 ===== ===== ===== ===== Net Income Attributable Net Income Attributable to JCI to JCI from Continuing Operations ----------------------- ------------------------ Twelve Months Ended Twelve Months Ended September 30, September 30, ------------- ------------- 2014 2013 (Revised) 2014 2013 (Revised) ---- ------------- ---- ------------- (unaudited) (unaudited) Earnings per share, as reported $1.80 $1.71 $2.12 $1.56 Non-recurring/unusual items, net of tax: Equity affiliate fair value adjustment - (0.07) - (0.07) Pension settlement (gain) loss 0.01 (0.06) 0.01 (0.06) Mark-to-market (gains)/charges for pension and postretirement plans 0.31 (0.34) 0.31 (0.34) Transaction/integration costs 0.05 - 0.05 - Loss (gain) on business divestitures 0.23 (0.34) 0.23 0.03 Restructuring and impairment costs 0.42 1.27 0.42 1.23 Electronics divestiture related costs 0.38 - - - Foreign earnings repatriation provision 0.05 0.30 0.05 - Tax valuation allowances and other tax items (0.03) 0.20 (0.03) 0.20 ----- ---- ----- ---- Earnings per share, excluding non- recurring/unusual items* $3.24 $2.66 $3.18 $2.55 ===== ===== ===== ===== * May not sum due to rounding.
3. Income Taxes The Company's effective tax rate from continuing operations before consideration of non- cash tax charges, restructuring and impairment costs, other non-recurring items and transaction/integration costs for the fourth quarter and year ending September 30, 2014 is approximately 20 percent and 19 percent, respectively. 4. Restructuring The fiscal 2014 fourth quarter includes restructuring and impairment costs of $162 million related primarily to cost reduction initiatives in the Building Efficiency business. The costs consist primarily of workforce reductions and a goodwill impairment charge of $47 million related to Building Efficiency. The fiscal 2013 fourth quarter includes restructuring and impairment costs of $730 million related to cost reduction initiatives in the Automotive Experience, Building Efficiency and Power Solutions businesses. The costs consist primarily of workforce reductions and a goodwill impairment charge of $430 million related to Automotive Interiors. 5. Business Divestitures The sale of the Company's remaining Automotive Electronics business to Visteon closed on July 1, 2014. The Electronics business met the criteria to be classified as a discontinued operation and the condensed consolidated financial statements have been revised for all periods presented. In the fourth quarter of fiscal 2013, the Company completed the sale of its HomeLink business, which had been part of the Automotive Experience Electronics segment. The Company received cash proceeds of approximately $700 million and recorded a net gain of $476 million ($257 million after-tax) as a result of the sale. The remaining Electronics business was shown as assets held for sale and liabilities held for sale in the accompanying condensed consolidated statement of financial position as of September 30, 2013. In the fourth quarter of fiscal 2013, the Company also sold its commercial refrigeration business in France. The Company recorded a net loss of $22 million as a result of the sale. 6. Held for Sale On September 30, 2014, the Company announced its intention to divest its Global Workplace Solutions (GWS) business. The GWS business met the reporting requirements for held for sale classification in the accompanying condensed consolidated statement of financial position as of September 30, 2014. As disclosed in the third quarter of fiscal 2014, the majority of the Automotive Interiors business met the reporting requirements for held for sale classification and is reported as such in the accompanying condensed consolidated statement of financial position as of September 30, 2014. 7. Mark-to-Market Pension and Postretirement Plans The pension and postretirement mark-to-market gain or charge for each period is treated as a non-recurring/unusual item. The fiscal 2014 fourth quarter includes a mark-to- market charge for pension and postretirement plans of $274 million ($0.31/share). The fiscal 2013 fourth quarter includes a mark-to-market gain for pension and postretirement plans of $405 million ($0.34/share). 8. Earnings Per Share The following table reconciles the numerators and denominators used to calculate basic and diluted earning per share (in millions):
Three Months Ended Twelve Months Ended September 30, September 30, ------------- ------------- 2014 2013 2014 2013 ---- ---- ---- ---- (unaudited) (unaudited) Income Available to Common Shareholders Income from continuing operations $311 $54 $1,433 $1,077 Income (loss) from discontinued operations (2) 51 (218) 101 --- --- ---- --- Basic and diluted income available to common shareholders $309 $105 $1,215 $1,178 ==== ==== ====== ====== Weighted Average Shares Outstanding Basic weighted average shares outstanding 665.3 683.8 666.9 683.7 Effect of dilutive securities: Stock options and unvested restricted stock 7.7 6.9 7.9 5.5 Diluted weighted average shares outstanding 673.0 690.7 674.8 689.2 ===== ===== ===== =====
SOURCE Johnson Controls