Johnson Controls 2013 Annual Report Download - page 43

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• In March 2012, the Company remarketed $46 million aggregate principal amount of 11.5% subordinated notes due in fiscal
2042, on behalf of holders of Corporate Units and holders of separate notes, by issuing $46 million aggregate principal
amount of 2.355% senior notes due on March 31, 2017.
• In November 2012, the Company retired $100 million in principal amount, plus accrued interest of its 5.8% fixed rate
notes that matured November 2012. The Company used cash to fund the payment.
• In November 2012, the Company entered into a five-year, 70 million euro, floating rate credit facility scheduled to mature
in fiscal 2018. The Company drew on the credit facility during the quarter ended December 31, 2012. Proceeds from the
facility were used for general corporate purposes.
• In August 2013, the Company made a partial repayment of 43 million euro, plus accrued interest, of its 100 million euro
floating rate credit facility scheduled to mature in February 2017. The Company used cash to fund the payment.
• In August 2013, the Company replaced its $2.5 billion committed four-year credit facility, scheduled to mature in February
2015, with a $2.5 billion committed five-year credit facility scheduled to mature in August 2018. The facility is used to
support the Company's outstanding commercial paper. There were no draws on the facility as of September 30, 2013.
• In September 2013, the Company retired $300 million in principal amount, plus accrued interest, of its 4.875% fixed rate
notes that matured in September 2013. The Company used cash to fund the payment.
• The Company also selectively makes use of short-term credit lines. The Company estimates that, as of September 30, 2013,
it could borrow up to $2.1 billion on committed credit lines.
• The Company believes its capital resources and liquidity position at September 30, 2013 are adequate to meet projected
needs. The Company believes requirements for working capital, capital expenditures, dividends, stock repurchases,
minimum pension contributions, debt maturities and any potential acquisitions in fiscal 2014 will continue to be funded
from operations, supplemented by short- and long-term borrowings, if required. The Company currently manages its short-
term debt position in the U.S. and euro commercial paper markets and bank loan markets. In the event the Company is
unable to issue commercial paper, it would have the ability to draw on its $2.5 billion revolving credit facility, which
matures in August 2018. There were no draws on the revolving credit facility as of September 30, 2013. As such, the
Company believes it has sufficient financial resources to fund operations and meet its obligations for the foreseeable future.
• The Company earns a significant amount of its operating income outside the U.S., which is deemed to be permanently
reinvested in foreign jurisdictions. The Company currently does not intend nor foresee a need to repatriate these funds.
The Company’s intent is for such earnings to be reinvested by the subsidiaries or to be repatriated only when it would be
tax effective through the utilization of foreign tax credits. The Company expects existing domestic cash and liquidity to
continue to be sufficient to fund the Company’s domestic operating activities and cash commitments for investing and
financing activities for at least the next twelve months and thereafter for the foreseeable future. In addition, the Company
expects existing foreign cash, cash equivalents, short-term investments and cash flows from operations to continue to be
sufficient to fund the Company’s foreign operating activities and cash commitments for investing activities, such as material
capital expenditures, for at least the next twelve months and thereafter for the foreseeable future. Should the Company
require more capital in the U.S. than is generated by operations domestically, the Company will elect to raise capital in the
U.S. through debt or equity issuances. This alternative could result in increased interest expense or other dilution of the
Company’s earnings. The Company has borrowed funds domestically and continues to have the ability to borrow funds
domestically at reasonable interest rates.
• The Company’s debt financial covenants require a minimum consolidated shareholders’ equity attributable to Johnson
Controls, Inc. of at least $3.5 billion at all times and allow a maximum aggregated amount of 10% of consolidated
shareholders’ equity attributable to Johnson Controls, Inc. for liens and pledges. For purposes of calculating the Company’s
covenants, consolidated shareholders’ equity attributable to Johnson Controls, Inc. is calculated without giving effect to
(i) the application of ASC 715-60, “Defined Benefit Plans - Other Postretirement,” or (ii) the cumulative foreign currency
translation adjustment. As of September 30, 2013, consolidated shareholders’ equity attributable to Johnson Controls, Inc.
as defined per the Company’s debt financial covenants was $11.9 billion and there was a maximum of $273 million of
liens and pledges outstanding. The Company expects to remain in compliance with all covenants and other requirements
set forth in its credit agreements and indentures for the foreseeable future. None of the Company’s debt agreements limit
access to stated borrowing levels or require accelerated repayment in the event of a decrease in the Company’s credit rating.