Johnson Controls 2010 Annual Report Download - page 44

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44
In March 2010, the Company retired approximately $31 million in principal amount of its fixed rate bonds that
was scheduled to mature on January 15, 2011. The Company used cash to fund the repurchase.
In April 2010, a total of 200 bonds ($200,000 par value) of 6.5% convertible senior notes scheduled to mature
on September 30, 2012 were redeemed for Johnson Controls, Inc. common stock.
In May 2010, the Company retired approximately $18 million in principal amount of its fixed rate bonds
scheduled to mature on January 15, 2011. The Company used cash to fund the repurchases.
In September 2010, the Company entered into a new, $100 million committed revolving facility scheduled to
mature in December 2011. At September 30, 2010, there were no draws outstanding.
The Company also selectively makes use of short-term credit lines. The Company estimates that, as of
September 30, 2010, it could borrow up to $2.6 billion at its current debt ratings on committed credit lines.
The Company believes its capital resources and liquidity position at September 30, 2010 are adequate to meet
projected needs. The Company believes requirements for working capital, capital expenditures, dividends,
minimum pension contributions, debt maturities and any potential acquisitions in fiscal 2011 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 $2.05
billion revolving credit facility, which extends until December 2011. There were no draws on the revolving
credit facility as of September 30, 2010. As such, the Company believes it has sufficient financial resources to
fund operations and meet its obligations for the foreseeable future.
The Company’s debt financial covenants require a minimum consolidated shareholders’ equity attributable to
Johnson Controls, Inc. of at least $1.31 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, 2010,
consolidated shareholders’ equity attributable to Johnson Controls, Inc. as defined per our covenants was $9.6
billion and there were no outstanding amounts for liens and pledges. 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.
A summary of the Company’s significant contractual obligations as of September 30, 2010 is as follows (in
millions):
2016
Total
2011
2012-2013
2014-2015
and Beyond
Contractual Obligations
Long-term debt
(including capital lease obligations)*
$
3,314
$
662
$
450
$
132
$
2,070
Interest on long-term debt
(including capital lease obligations)*
1,583
160
285
241
897
Operating leases
1,028
296
412
205
115
Purchase obligations
2,934
2,079
714
92
49
Pension and postretirement contributions
550
115
96
98
241
Total contractual cash obligations
$
9,409
$
3,312
$
1,957
$
768
$
3,372
* See "Capitalization" for additional information related to the Company's long-term debt.