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Debt and Financing Arrangements (Notes) | 12 Months Ended
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Sep. 30, 2017
Debt Disclosure [Abstract] |
DEBT AND FINANCING ARRANGEMENTS | DEBT AND FINANCING ARRANGEMENTS Short-term debt consisted of the following (in millions):
| September 30,
| 2017 |  | 2016
Bank borrowings and commercial paper | $ | 1,214 |  |  | $ | 1,078 |
Weighted average interest rate on short-term debt outstanding | 1.6 | % |  | 1.1 | %
In connection with the Tyco Merger, JCI Inc. replaced its $2.5 billion committed five-year credit facility scheduled to mature in August 2018 with a $2.0 billion committed four-year credit facility scheduled to mature in August 2020. Additionally, TSarl, a wholly-owned subsidiary of Johnson Controls, entered into a $1.0 billion committed four-year credit facility scheduled to mature in August 2020. The facilities are used to support the Company's outstanding commercial paper. There were no draws on either committed credit facilities during the fiscal years ended September 30, 2017 and 2016. Commercial paper outstanding as of September 30, 2017 and 2016 was $954 million and $440 million, respectively. In September 2017, the Company entered into a 364-day 150 million euro, floating rate, term loan scheduled to expire in September 2018. Proceeds from the loan were used for general corporate purposes. In March 2017, the Company entered into a 364-day $150 million committed revolving credit facility scheduled to expire in March 2018. As of September 30, 2017, there were no draws on the facility. In February 2017, the Company entered into a 364-day $150 million committed revolving credit facility scheduled to expire in February 2018. As of September 30, 2017, there were no draws on the facility. In January 2017, the Company entered into a 364-day $250 million committed revolving credit facility scheduled to expire in January 2018. As of September 30, 2017, there were no draws on the facility. In December 2016, the Company entered into a 364-day 100 million euro floating rate term loan scheduled to mature in December 2017. Proceeds from the term loan were used for general corporate purposes. Principal and accrued interest were fully repaid in March 2017. In December 2016, a $100 million committed revolving credit facility expired. There were no draws on the facility. In November 2016, a $35 million committed revolving credit facility expired. There were no draws on the facility. In October 2016, the Company repaid two ten-month floating rate term loans totaling $325 million, plus accrued interest, scheduled to expire in October 2016. In October 2016, the Company repaid a nine-month $100 million floating rate term loan, plus accrued interest, scheduled to expire in November 2016. In October 2016, the Company repaid a nine-month 100 million euro floating rate term loan, plus accrued interest, scheduled to expire in October 2016. Long-term debt consisted of the following (in millions; due dates by fiscal year):
| September 30,
| 2017 |  | 2016
Unsecured notes |  |  |
JCI Inc. - 7.125% due in 2017 ($150 million par value) | $ | — |  |  | $ | 149 |
JCI Inc. - 2.6% due in 2017 ($400 million par value) | — |  |  | 404 |
JCI Inc. - 2.355% due in 2017 ($46 million par value) | — |  |  | 46 |
JCI plc - 1.4% due in 2018 ($259 million par value) | 259 |  |  | — |
JCI Inc. - 1.4% due in 2018 ($41 million par value in 2017; $300 million par value in 2016) | 42 |  |  | 301 |
JCI plc - 3.75% due in 2018 ($49 million par value) | 49 |  |  | — |
Tyco International Finance S.A. ("TIFSA") - 3.75% due in 2018 ($18 million par value in 2017; $67 million par value in 2016) | 18 |  |  | 69 |
JCI plc - 5.00% due in 2020 ($453 million par value) | 452 |  |  | — |
JCI Inc. - 5.00% due in 2020 ($47 million par value in 2017; $500 million par value in 2016) | 47 |  |  | 499 |
JCI plc - 4.25% due in 2021 ($447 million par value) | 446 |  |  | — |
JCI Inc. - 4.25% due in 2021 ($53 million par value in 2017; $500 million par value in 2016) | 53 |  |  | 498 |
JCI plc - 3.75% due in 2022 ($428 million par value) | 427 |  |  | — |
JCI Inc. - 3.75% due in 2022 ($22 million par value in 2017; $450 million par value in 2016) | 22 |  |  | 448 |
JCI plc - 4.625% due in 2023 ($35 million par value) | 38 |  |  | — |
TIFSA - 4.625% due in 2023 ($7 million par value in 2017; $42 million par value in 2016) | 8 |  |  | 46 |
JCI plc - 1.00% due in 2023 (€1,000 million par value) | 1,171 |  |  | — |
JCI plc - 3.625% due in 2024 ($468 million par value) | 468 |  |  | — |
JCI Inc. - 3.625% due in 2024 ($31 million par value in 2017; $500 million par value in 2016) | 31 |  |  | 500 |
Adient - 3.5% due in 2024 (€1,000 million par value) | — |  |  | 1,119 |
JCI plc - 1.375% due in 2025 (€423 million par value) | 510 |  |  | — |
TIFSA - 1.375% due in 2025 (€58 million par value in 2017; €500 million par value in 2016) | 70 |  |  | 571 |
JCI plc - 3.90% due in 2026 ($698 million par value) | 763 |  |  | — |
TIFSA - 3.90% due in 2026 ($51 million par value in 2017; $750 million par value in 2016) | 53 |  |  | 824 |
Adient - 4.875% due in 2026 ($900 million par value) | — |  |  | 900 |
JCI plc - 6.00% due in 2036 ($392 million par value) | 388 |  |  | — |
JCI Inc. - 6.00% due in 2036 ($8 million par value in 2017; $400 million par value in 2016) | 8 |  |  | 396 |
JCI plc - 5.70% due in 2041 ($270 million par value) | 269 |  |  | — |
JCI Inc. - 5.70% due in 2041 ($30 million par value in 2017; $300 million par value in 2016) | 30 |  |  | 299 |
JCI plc - 5.25% due in 2042 ($242 million par value) | 242 |  |  | — |
JCI Inc. - 5.25% due in 2042 ($8 million par value in 2017; $250 million par value in 2016) | 8 |  |  | 250 |
JCI plc - 4.625% due in 2044 ($445 million par value) | 441 |  |  | — |
JCI Inc. - 4.625% due in 2044 ($6 million par value in 2017; $450 million par value in 2016) | 6 |  |  | 447 |
JCI plc - 5.125% due in 2045 ($727 million par value) | 872 |  |  | — |
TIFSA - 5.125% due in 2045 ($23 million par value in 2017; $750 million par value in 2016) | 23 |  |  | 903 |
JCI plc - 6.95% due in 2046 ($121 million par value) | 121 |  |  | — |
JCI Inc. - 6.95% due in 2046 ($4 million par value in 2017; $125 million par value in 2016) | 4 |  |  | 125 |
JCI plc - 4.50% due in 2047 ($500 million par value) | 495 |  |  | — |
JCI plc - 4.95% due in 2064 ($435 million par value) | 434 |  |  | — |
JCI Inc. - 4.95% due in 2064 ($15 million par value in 2017; $450 million par value in 2016) | 15 |  |  | 449 |
TSarl - Term Loan A - LIBOR plus 1.50% due in 2020 | 3,700 |  |  | 4,000 |
Adient - Term Loan A - LIBOR plus 1.005% due in 2021 | — |  |  | 1,500 |
Capital lease obligations | 19 |  |  | 24 |
Other foreign-denominated debt |  |  |
Euro | 43 |  |  | 61 |
Japanese Yen | 311 |  |  | 367 |
Other | 47 |  |  | 39 |
Gross long-term debt | 12,403 |  |  | 15,234 |
Less: current portion | 394 |  |  | 628 |
Less: debt issuance costs | 45 |  |  | 74 |
Less: current portion - liabilities held for sale | — |  |  | 38 |
Less: long-term debt - noncurrent liabilities held for sale | — |  |  | 3,441 |
Net long-term debt | $ | 11,964 |  |  | $ | 11,053 |
At September 30, 2017, the Company’s other foreign-denominated long-term debt was at fixed and floating rates with a weighted-average interest rate of 1.2%. At September 30, 2016, the Company’s other foreign-denominated long-term debt was at fixed and floating rates with a weighted-average interest rate of 1.3%. The installments of long-term debt maturing in subsequent fiscal years are: 2018 - $394 million; 2019 - $27 million; 2020 - $4,201 million; 2021 - $501 million; 2022 - $804 million; 2023 and thereafter - $6,476 million. The Company’s long-term debt includes various financial covenants, none of which are expected to restrict future operations. Total interest paid on both short and long-term debt for the fiscal years ended September 30, 2017, 2016 and 2015 was $448 million, $319 million and $373 million, respectively. The Company uses financial instruments to manage its interest rate exposure (see Note 10, "Derivative Instruments and Hedging Activities," and Note 11, "Fair Value Measurements," of the notes to consolidated financial statements). These instruments affect the weighted average interest rate of the Company’s debt and interest expense. Financing Arrangements Debt Exchange In connection with the Tyco Merger, on December 28, 2016, the Company completed its offer to exchange all validly tendered and accepted notes of certain series (the “existing notes”) issued by JCI Inc. or TIFSA, as applicable, each of which is a wholly owned subsidiary of the Company, for new notes (the "New Notes") to be issued by the Company, and the related solicitation of consents to amend the indentures governing the existing notes (the offers to exchange and the related consent solicitation together the “exchange offers”). Pursuant to the exchange offers, the Company exchanged approximately $5.6 billion of $6.0 billion in aggregate principal amount of dollar denominated notes and approximately 423 million euro of 500 million euro in aggregate principal amount of euro denominated notes. All validly tendered and accepted existing notes have been canceled. Immediately following such cancellation, $380.9 million aggregate principal amount of existing notes (not including the TIFSA Euro Notes) remained outstanding across seventeen series of dollar-denominated existing notes and 77.4 million euro aggregate principal amount of TIFSA Euro Notes remained outstanding across one series. In connection with the settlement of the exchange offers, the New Notes were registered under the Securities Act of 1933 and their terms are described in the Company’s Prospectus dated December 19, 2016, as filed with the SEC under Rule 424(b)(3) of the Act on that date. The issuance of the New Notes occurred on December 28, 2016. The new notes are unsecured and unsubordinated obligations of the Company and rank equally with all other unsecured and unsubordinated indebtedness of the Company issued from time to time. Financing in connection with Tyco Merger Simultaneously with the closing of the Tyco Merger on September 2, 2016, TSarl borrowed $4.0 billion under the Term Loan Credit Agreement dated as of March 10, 2016 with a syndicate of lenders, providing for a three and a half year senior unsecured term loan facility to finance the cash consideration for, and fees, expenses and costs incurred in connection with the Merger. During fiscal 2017, the Company partially repaid $300 million of the $4.0 billion floating rate term loan scheduled to expire in March 2020. As of September 30, 2017, the outstanding term loan balance was $3.7 billion. In October 2017, the Company completed the previously announced sale of its Scott Safety business to 3M, and net cash proceeds from the transaction of $1.9 billion were used to further repay a significant portion of the $4.0 billion term loan. Financing in connection with Adient spin-off In August 2016, Adient Global Holdings, Ltd. ("AGH"), a wholly-owned subsidiary of the Company, issued a one billion euro, 3.5% fixed rate, 8-year senior unsecured note scheduled to mature in August 2024. AGH also issued a $900 million, 4.875%, 10-year senior unsecured note scheduled to mature in August 2026. The proceeds from the notes were deposited into escrow and released in connection with the spin-off. The notes were not guaranteed by the Company or any of its subsidiaries that are not subsidiaries of Adient following the spin-off. Approximately $1.5 billion of the proceeds were distributed to the Company in connection with the spin-off and approximately $500 million of the proceeds were used for Adient's general corporate purposes. In July 2016, AGH entered into a 5-year, $1.5 billion Term A loan facility and a 5-year, $1.5 billion revolving credit facility scheduled to mature in July 2021. The term loan was fully drawn in August 2016. As of September 30, 2016, there were no draws on the revolving credit facility. Upon completion of the spin-off of Adient, AGH became a wholly-owned subsidiary of Adient. On the date of the spin-off, Adient and certain of its wholly-owned subsidiaries guaranteed the debt, and the guarantees of the Company were automatically released. The Company used the proceeds of the term loan to early repay its four tranches of euro-denominated floating rate credit facilities, totaling 390 million euro, that were outstanding as of September 30, 2016; three term loans of $500 million, $200 million and $125 million that were entered into during fiscal 2016, plus accrued interest, and a $90 million outstanding credit facility. The remainder of the proceeds were used for general corporate purposes. Other financing arrangements In September 2017, the Company entered into a five-year 35 billion yen syndicated floating rate term loan scheduled to expire in September 2022. Proceeds from the loan were used for general corporate purposes. In July 2017, the Company retired $150 million in principal amount, plus accrued interest, of its 7.125% fixed rate notes that expired in July 2017. In July 2017, the Company repurchased, at a discount, 4 million euro of its TIFSA 1.375% fixed rate notes, plus accrued interest, scheduled to mature in 2025. In March 2017, the Company issued one billion euro in principal amount of 1.0% senior unsecured fixed rate notes due in fiscal 2023. Proceeds from the issuance were used to repay existing debt and for other general corporate purposes. In March 2017, the Company retired $46 million in principal amount, plus accrued interest, of its 2.355% fixed rate notes that expired in March 2017. In March and February 2017, the Company repurchased, at a discount, 15 million euro of its TIFSA 1.375% fixed rate notes, plus accrued interest, scheduled to expire in 2025. In February 2017, the Company issued $500 million aggregate principal amount of 4.5% senior unsecured fixed rate notes due in fiscal 2047. Proceeds from the issuance were used to repay outstanding commercial paper borrowings and for other general corporate purposes. In December 2016, the Company retired $400 million in principal amount, plus accrued interest, of its 2.6% fixed rate notes that expired in December 2016. In November 2016, the Company fully repaid its 37 billion yen syndicated floating rate term loan, plus accrued interest scheduled to expire in June 2020. Net Financing Charges The Company's net financing charges line item in the consolidated statements of income for the years ended September 30, 2017, 2016 and 2015 contained the following components (in millions):
| Year Ended September 30,
| 2017 |  | 2016 |  | 2015
Interest expense, net of capitalized interest costs | $ | 466 |  |  | $ | 293 |  |  | $ | 275 |
Banking fees and bond cost amortization | 67 |  |  | 30 |  |  | 21 |
Interest income | (19 | ) |  | (12 | ) |  | (7 | )
Net foreign exchange results for financing activities | (18 | ) |  | (22 | ) |  | (15 | )
Net financing charges | $ | 496 |  |  | $ | 289 |  |  | $ | 274 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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