Johnson Controls International plc
For the period ended Sep 30, 2024. Filed Nov 19, 2024.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Nov 19, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
12. Fair Value Measurements
- FAIR VALUE MEASUREMENTS
The following tables present the Company’s fair value hierarchy for those assets and liabilities measured at fair value (in millions):
| Fair Value Measurements Using: | ||||
|---|---|---|---|---|
| Total as of September 30, 2024 | Quoted Pricesin ActiveMarkets(Level 1) | SignificantOtherObservableInputs(Level 2) | SignificantUnobservableInputs(Level 3) | |
| Other current assets | ||||
| Foreign currency exchange derivatives | $20 | $— | $20 | $— |
| Commodity derivatives | 2 | — | 2 | — |
| Other noncurrent assets | ||||
| Deferred compensation plan assets | 56 | 56 | — | — |
| Exchange traded funds (fixed income)1 | 81 | 81 | — | — |
| Exchange traded funds (equity)1 | 200 | 200 | — | — |
| Total assets | $359 | $337 | $22 | $— |
| Other current liabilities | ||||
| Foreign currency exchange derivatives | $25 | $— | $25 | $— |
| Commodity derivatives | 1 | — | 1 | — |
| Contingent earn-out liabilities | 14 | — | — | 14 |
| Other noncurrent liabilities | ||||
| Contingent earn-out liabilities | 14 | — | — | 14 |
| Total liabilities | $54 | $— | $26 | $28 |
1 Classified as restricted investments for payment of asbestos liabilities. Refer to Note 21, "Commitments and Contingencies" of the notes to consolidated financial statements for further details.
| Fair Value Measurements Using: | ||||
|---|---|---|---|---|
| Total as of September 30, 2023 | Quoted Pricesin ActiveMarkets(Level 1) | SignificantOtherObservableInputs(Level 2) | SignificantUnobservableInputs(Level 3) | |
| Other current assets | ||||
| Foreign currency exchange derivatives | $29 | $— | $29 | $— |
| Interest rate swaps | 22 | — | 22 | — |
| Other noncurrent assets | ||||
| Cross-currency interest rate swaps | 5 | — | 5 | — |
| Deferred compensation plan assets | 45 | 45 | — | — |
| Exchange traded funds (fixed income)1 | 76 | 76 | — | — |
| Exchange traded funds (equity)1 | 155 | 155 | — | — |
| Total assets | $332 | $276 | $56 | $— |
| Other current liabilities | ||||
| Foreign currency exchange derivatives | $25 | $— | $25 | $— |
| Commodity derivatives | 2 | — | 2 | — |
| Contingent earn-out liabilities | 48 | — | — | 48 |
| Other noncurrent liabilities | ||||
| Contingent earn-out liabilities | 76 | — | — | 76 |
| Total liabilities | $151 | $— | $27 | $124 |
1 Classified as restricted investments for payment of asbestos liabilities. Refer to Note 21, "Commitments and Contingencies" of the notes to consolidated financial statements for further details.
The following table summarizes the changes in contingent earn-out liabilities, which are valued using significant unobservable inputs (Level 3) (in millions):
| Balance at September 30, 2023 | $124 |
|---|---|
| Payments | (26) |
| Reduction for change in estimates | (71) |
| Currency translation | 1 |
| Balance at September 30, 2024 | $28 |
Valuation Methods
Commodity derivatives: The commodity derivatives are valued under a market approach using publicized prices, where available, or dealer quotes.
Contingent earn-out liabilities: The contingent earn-out liabilities are generally established using a Monte Carlo simulation based on the forecasted operating results and the earn-out formulas specified in the purchase agreements.
Cross-currency interest rate swaps: The fair value of cross-currency interest rate swaps represents the difference between the swap's reference rate and exchange rate and the interest and exchange rates for a similar instrument as of the reporting period. Cross-currency interest rate swaps are valued under a market approach using publicized prices.
Deferred compensation plan assets: Assets held in the deferred compensation plans will be used to pay benefits under certain of the Company's non-qualified deferred compensation plans. The investments primarily consist of mutual funds which are publicly traded on stock exchanges and are valued using a market approach based on the quoted market prices. Unrealized gains (losses) on the deferred compensation plan assets are recognized in the consolidated statements of income where they offset unrealized gains and losses on the related deferred compensation plan liability.
Exchange traded funds: Investments in exchange traded funds are valued using a market approach based on quoted market prices, where available, or broker/dealer quotes of identical or comparable instruments. Refer to Note 21, "Commitments and Contingencies," of the notes to consolidated financial statements for further information.
Foreign currency exchange derivatives: The foreign currency exchange derivatives are valued under a market approach using publicized spot and forward prices.
Interest rate swaps: The fair value of interest rate swaps represents the difference between the swap's reference rate and the interest rate for a similar instrument as of the reporting period. Interest rate swaps are valued under a market approach using publicized prices.
The following table presents the portion of unrealized gains recognized in the consolidated statements of income that relate to equity securities still held at September 30, 2024 and 2023 (in millions):
| Year Ended September 30, | ||
|---|---|---|
| 2024 | 2023 | |
| Deferred compensation plan assets | $10 | $5 |
| Investments in exchange traded funds | 58 | 24 |
The fair values of cash and cash equivalents, accounts receivable, short-term debt and accounts payable approximate their carrying values.
The fair value of long-term debt was as follows (in billions):
| September 30, | ||
|---|---|---|
| 2024 | 2023 | |
| Public debt | $8.1 | $7.1 |
| Other long-term debt | 0.2 | 0.4 |
| Total fair value of long-term debt | $8.3 | $7.5 |
The fair value of public debt was determined primarily using market quotes which are classified as Level 1 inputs within the ASC 820 fair value hierarchy. The fair value of other long-term debt was determined using quoted market prices for similar instruments and are classified as Level 2 inputs within the ASC 820 fair value hierarchy.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.