XML 21 R11.htm IDEA: XBRL DOCUMENT v3.7.0.1
Discontinued Operations (Notes)
 9 Months Ended
Jun. 30, 2017
Discontinued Operations [Abstract]  
Discontinued Operations
Discontinued Operations

As discussed in Note 1, "Financial Statements," of the notes to consolidated financial statements, on October 31, 2016, the Company completed the spin-off of its Automotive Experience business by way of the transfer of the Automotive Experience Business from Johnson Controls to Adient plc. The Company did not retain any equity interest in Adient plc. During the first quarter of fiscal 2017, the Company determined that Adient met the criteria to be classified as a discontinued operation and, as a result, Adient’s historical financial results are reflected in the Company’s consolidated financial statements as a discontinued operation, and assets and liabilities were retrospectively reclassified as assets and liabilities held for sale. The Company did not allocate any general corporate overhead to discontinued operations.

The following table summarizes the results of Adient, reclassified as discontinued operations for the nine month period ended June 30, 2017, and the three and nine month periods ended June 30, 2016 (in millions). As the Adient spin-off occurred on October 31, 2016, there is only one month of Adient results included in the nine month period ended June 30, 2017.
 
Three Months Ended June 30,
 
Nine Months Ended
June 30,
 
2016
 
2017
 
2016
 
 
 
 
 
 
Net sales
$
4,362

 
$
1,434

 
$
12,893

 
 
 
 
 
 
Income from discontinued operations before income taxes
185

 
1

 
520

Provision for income taxes on discontinued operations
128

 
35

 
1,001

Income from discontinued operations attributable to noncontrolling
     interests, net of tax
21

 
9

 
61

Income (loss) from discontinued operations
$
36

 
$
(43
)
 
$
(542
)


For the nine months ended June 30, 2017, the income from discontinued operations before income taxes included separation costs of $79 million. For the three and nine months ended June 30, 2016, the income from discontinued operations before income taxes included separation costs of $127 million and $287 million, respectively.

For the nine months ended June 30, 2017, the effective tax rate was more than the U.S. federal statutory rate of 35% primarily due to the tax impacts of separation costs and Adient spin-off related tax expense, partially offset by non-U.S. tax rate differentials. For the three months ended June 30, 2016, the effective tax rate was more than the U.S. federal statutory rate of 35% primarily due to $85 million of income tax expense for changes in entity status, the jurisdictional mix of restructuring and impairment costs, and the tax impacts of separation costs, partially offset by non-U.S. tax rate differentials. For the nine months ended June 30, 2016, the effective tax rate was more than the U.S. federal statutory rate of 35% primarily due to $780 million of income tax expense recorded on foreign undistributed earnings of certain non-U.S. subsidiaries, $85 million of income tax expense for changes in entity status, the jurisdictional mix of restructuring and impairment costs, and the tax impacts of separation costs, partially offset by non-U.S. tax rate differentials.

Assets and Liabilities Held for Sale

The following table summarizes the carrying value of Adient, reclassified as assets and liabilities held for sale at September 30, 2016 (in millions):
 
 
September 30, 2016
 
 
 
Cash
 
$
105

Cash in escrow related to Adient debt
 
2,034

Accounts receivable - net
 
2,071

Inventories
 
672

Other current assets
 
756

   Assets held for sale
 
$
5,638

 
 
 
Property, plant and equipment - net
 
$
2,240

Goodwill
 
2,385

Other intangible assets - net
 
113

Investments in partially-owned affiliates
 
1,745

Other noncurrent assets
 
891

   Noncurrent assets held for sale
 
$
7,374

 
 
 
Short-term debt
 
$
41

Current portion of long-term debt
 
38

Accounts payable
 
2,764

Accrued compensation and benefits
 
430

Other current liabilities
 
975

   Liabilities held for sale
 
$
4,248

 
 
 
Long-term debt
 
$
3,441

Pension and postretirement benefits
 
188

Other noncurrent liabilities
 
259

   Noncurrent liabilities held for sale
 
$
3,888



The following table summarizes depreciation and amortization, capital expenditures, and significant operating and investing noncash items related to Adient for the nine month period ended June 30, 2017, and the three and nine month periods ended June 30, 2016 (in millions):
 
Three Months Ended June 30,
 
Nine Months Ended
June 30,
 
2016
 
2017
 
2016
 
 
 
 
 
 
Depreciation and amortization
$
86

 
$
29

 
$
257

Equity in earnings of partially-owned affiliates
(89
)
 
(31
)
 
(260
)
Deferred income taxes
(9
)
 
562

 
756

Non-cash restructuring and impairment charges
1

 
—

 
15

Equity-based compensation
4

 
1

 
11

Accrued income taxes
—

 
(808
)
 
—

Capital expenditures
(96
)
 
(91
)
 
(271
)


During the second quarter of fiscal 2017, the Company completed the divestiture of its ADT security business in South Africa within the Tyco segment. The assets and liabilities of this business were presented as held for sale in the consolidated statements of financial position as of September 30, 2016. The business did not meet the criteria to be classified as a discontinued operation.

During the second quarter of fiscal 2017, the Company signed a definitive agreement to sell its Scott Safety business of the Tyco segment to 3M Company. The transaction is expected to close in the first quarter of fiscal 2018, subject to customary closing conditions including required regulatory approval. The assets and liabilities of this business were presented as held for sale in the consolidated statements of financial position as of June 30, 2017. The business did not meet the criteria to be classified as a discontinued operation as the divestiture of the Scott Safety business will not have a major effect on the Company’s operations and financial results.

The following table summarizes the carrying value of the Tyco segment assets and liabilities held for sale at June 30, 2017 and September 30, 2016 (in millions):
 
June 30, 2017
 
September 30, 2016
 
 
 
 
Accounts receivable - net
$
101

 
$
9

Inventories
73

 
7

Other current assets
8

 
3

Property, plant and equipment - net
76

 
15

Goodwill
1,270

 
89

Other intangible assets - net
554

 
30

Other noncurrent assets
—

 
4

Assets held for sale
$
2,082

 
$
157

 
 
 
 
Accounts payable
$
34

 
$
9

Accrued compensation and benefits
10

 
—

Other current liabilities
22

 
19

Other noncurrent liabilities
181

 
—

Liabilities held for sale
$
247

 
$
28



At September 30, 2016, $17 million of certain Corporate assets were classified as held for sale. The assets were sold during the second quarter of fiscal 2017.