XML 37 R27.htm IDEA: XBRL DOCUMENT

Segment Information (Notes)

12 Months Ended

Sep. 30, 2019

ASC 280, "Segment Reporting," establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280, the Company has determined that it has four reportable segments for financial reporting purposes.

•

Building Solutions North America designs, sells, installs, and services HVAC and controls systems, integrated electronic security systems (including monitoring), and integrated fire detection and suppression systems for commercial, industrial, retail, small business, institutional and governmental customers in North America. Building Solutions North America also provides energy efficiency solutions and technical services, including inspection, scheduled maintenance, and repair and replacement of mechanical and control systems, to non-residential building and industrial applications in the North American marketplace.


•	Building Solutions EMEA/LA designs, sells, installs, and services HVAC, controls, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and provides technical services to markets in Europe, the Middle East, Africa and Latin America.


•	Building Solutions Asia Pacific designs, sells, installs, and services HVAC, controls, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and provides technical services to the Asia Pacific marketplace.


•	Global Products designs and produces heating and air conditioning for residential and commercial applications, and markets products and refrigeration systems to replacement and new construction market customers globally. The Global Products business also designs, manufactures and sells fire protection and security products, including intrusion security,

anti-theft devices, and access control and video management systems, for commercial, industrial, retail, residential, small business, institutional and governmental customers worldwide. Global Products also includes the Johnson Controls-Hitachi joint venture.

During the first quarter of fiscal 2019, the Company determined that the Power Solutions business met the criteria to be classified as a discontinued operation, which required retrospective application to financial information for all periods presented. Refer to Note 3, "Discontinued Operations," of the notes to consolidated financial statements for further information regarding the Company's discontinued operations.

On October 1, 2018, the Company adopted ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." The new standard requires the mark-to-market of marketable securities investments previously recorded within accumulated other comprehensive income on the statement of financial position be recorded in the statement of income on a prospective basis beginning as of the adoption date. As these restricted investments do not relate to the underlying operating performance of its business, the Company’s definition of segment earnings excludes the mark-to-market adjustments beginning in the first quarter of fiscal 2019.

Management evaluates the performance of its business segments primarily on segment earnings before interest, taxes and amortization ("EBITA"), which represents income from continuing operations before income taxes and noncontrolling interests, excluding general corporate expenses, intangible asset amortization, net financing charges, restructuring and impairment costs, and net mark-to-market adjustments related to pension and postretirement plans and restricted asbestos investments.

Financial information relating to the Company’s reportable segments is as follows (in millions):



	Year Ended September 30,
	2019		2018		2017
Net Sales

Building Solutions North America	$	9,031	$	8,679	$	8,341
Building Solutions EMEA/LA	3,655		3,696		3,595
Building Solutions Asia Pacific	2,658		2,553		2,444
Global Products	8,624		8,472		8,455
Total net sales	$	23,968	$	23,400	$	22,835



	Year Ended September 30,
	2019			2018			2017
Segment EBITA

Building Solutions North America (1)	$	1,153		$	1,109		$	1,039
Building Solutions EMEA/LA (2)	368			344			290
Building Solutions Asia Pacific (3)	341			347			323
Global Products (4)	1,179			1,338			1,179
Total segment EBITA	$	3,041		$	3,138		$	2,831

Amortization of intangible assets	(377		)	(376		)	(481		)
Corporate expenses (5)	(405		)	(584		)	(770		)
Net financing charges	(350		)	(401		)	(466		)
Restructuring and impairment costs	(235		)	(255		)	(347		)
Net mark-to-market adjustments	(618		)	24			384

Income from continuing operations before income taxes	$	1,056		$	1,546		$	1,151



	September 30,
	2019		2018		2017
Assets
Building Technologies & Solutions (6)
Building Solutions North America (7)	$	15,562	$	15,384	$	15,228
Building Solutions EMEA/LA (8)	4,786		4,997		4,885
Building Solutions Asia Pacific (9)	2,657		2,743		2,575
Global Products (10)	13,945		14,261		14,018
	36,950		37,385		36,706
Assets held for sale	158		8,203		10,725
Unallocated	5,179		3,209		4,453

Total	$	42,287	$	48,797	$	51,884



	Year Ended September 30,
	2019		2018		2017
Depreciation/Amortization
Building Technologies & Solutions
Building Solutions North America	$	233	$	236	$	272
Building Solutions EMEA/LA	112		110		140
Building Solutions Asia Pacific	23		28		37
Global Products	396		390		410
	764		764		859
Corporate	61		60		60
Continuing Operations	825		824		919
Discontinued Operations	32		261		269

Total	$	857	$	1,085	$	1,188



	Year Ended September 30,
	2019		2018		2017
Capital Expenditures
Building Technologies & Solutions
Building Solutions North America	$	119	$	114	$	107
Building Solutions EMEA/LA	93		73		98
Building Solutions Asia Pacific	26		26		27
Global Products	310		307		421
	548		520		653
Corporate	38		125		107
Continuing Operations	586		645		760
Discontinued Operations	197		385		583

Total	$	783	$	1,030	$	1,343


(1)	Building Solutions North America segment EBITA for the year ended September 30, 2018 and 2017 excludes $20 million and $59 million, respectively, of restructuring and impairment costs.


(2)	Building Solutions EMEA/LA segment EBITA for the years ended September 30, 2018 and 2017 excludes $56 million and $74 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2019, 2018 and 2017, EMEA/LA segment EBITA includes $12 million, $1 million and $5 million, respectively, of equity income.


(3)	Building Solutions Asia Pacific segment EBITA for the year ended September 30, 2018 and 2017 excludes $16 million and $16 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2019, 2018 and 2017, Asia Pacific segment EBITA includes $1 million, $1 million and $1 million, respectively, of equity income.


(4)	Global Products segment EBITA for the years ended September 30, 2019, 2018 and 2017 excludes $235 million, $113 million and $32 million, respectively, of restructuring and impairment costs. For the years ended September 30, 2019, 2018 and 2017, Global Products segment EBITA includes $179 million, $175 million and $151 million, respectively, of equity income.


(5)	Corporate expenses for the years ended September 30, 2018 and 2017 excludes $50 million and $166 million, respectively, of restructuring and impairment costs.


(6)	Current year and prior year amounts exclude assets held for sale. Refer to Note 3, "Discontinued Operations," of the notes to consolidated financial statements for further information regarding the Company's disposal groups classified as held for sale.


(7)	Buildings Solutions North America assets as of September 30, 2019, 2018 and 2017 include $8 million, $8 million and $8 million, respectively, of investments in partially-owned affiliates.


(8)	Building Solutions EMEA/LA assets as of September 30, 2019, 2018 and 2017 include $109 million, $99 million and $107 million, respectively, of investments in partially-owned affiliates.


(9)	Building Solutions Asia Pacific assets as of September 30, 2019 and 2018 include $6 million and $1 million, respectively, of investments in partially-owned affiliates.


(10)	Global Products assets as of September 30, 2019, 2018 and 2017 include $730 million, $740 million and $629 million, respectively, of investments in partially-owned affiliates.

In fiscal years 2019, 2018 and 2017 no customer exceeded 10% of consolidated net sales.

Geographic Segments

Financial information relating to the Company’s operations by geographic area is as follows (in millions):



	Year Ended September 30,
	2019		2018		2017
Net Sales
United States	$	11,773	$	11,306	$	11,353
China	1,424		1,480		1,448
Japan	1,943		1,903		1,816
Germany	629		616		576
United Kingdom	1,042		1,075		872
Taiwan	612		661		625
Other foreign	4,625		4,423		4,222
Other European countries	1,920		1,936		1,923

Total	$	23,968	$	23,400	$	22,835

Long-Lived Assets (Year-end)
United States	$	1,824	$	1,879	$	1,824
China	326		332		171
Japan	228		209		180
Germany	20		19		19
United Kingdom	77		73		109
Taiwan	141		154		169
Other foreign	568		464		595
Other European countries	164		170		274

Total	$	3,348	$	3,300	$	3,341

Net sales attributed to geographic locations are based on the location of the assets producing the sales. Long-lived assets by geographic location consist of net property, plant and equipment.