SEC Comment Letter for Johnson Controls International plc (JCI) (CIK 0000833444) (JCI) — May 25, 2016
Johnson Controls International plc (JCI) (CIK 0000833444)
Date: May 25, 2016 · CIK: 0000833444 · Accession: 0000000000-16-077958
AI Filing Summary & Sentiment
Reasoning
Letter
Mail Stop 3720 May 24, 2016 Ms. Judith A. Reinsdorf General Counsel Tyco International plc 9 Roszel Road Princeton, NJ 08540
Re: Tyco International plc Registration Statement on Form S -4 Amended May 17, 2016 File No. 333 -210588
Dear Ms. Reinsdorf:
We have limited our review of your amended registration statement to those issues we have addressed in our comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter by amending your registration statement and providing the requested information. If you do not believe our comments apply to your facts and circumstances or do not bel ieve an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your registration st atement and the information you provide in response to these comments, we may have additional comments.
Risk Factors, page 42
The Internal Revenue Service may not agree that the combined company should be treated as a non-U.S. corporation for U.S. federal income tax purposes…, page 54
1. Tell us whether management plans to obtain a tax opinion prior to closing of the merger suppor ting the tax conclusions relating to Section 7874 of the Tax Code.
Ms. Judith A. Reinsdorf Tyco International plc May 24, 2016 Page 2
The Merger, page 95
Background of the Merger, page 97
2. We note that the Johnson Controls’ Board and its financial advisor considered potential annual tax savings of $150 million resulting from the merger. Clarify the effect of the Temporary Section 7874 Regulations and the future potential changes to the tax laws identified in your risk factor on page 56 on the anticipated annual tax savings.
U.S. Federal Income Tax Consequences of the M erger to the Combined Company, page 219
3. Please discuss whether the contemplated spin -off of Adient Corporation would potentially impact the determination of the 60% and 80% ownership tests under Temporary Section 7874 Regulations.
4. We note that in paragraphs six and ten you make conclusions about the application of the 80% ownership text and 60% ownership test, respectively, of Johnson Controls under Temporary Section 7874 Regulations. Please advise us whether these conclusions represent the opinion of the company, or are the opinion of tax counsel.
Unaudited Pro Forma Combined Financial Information, page 238
6. Balance Sheet Adjustments, page 255
5. Refer to adjustment (m)(3)(i). Please explain to us why $1.5 billion of incremental deferred tax lia bilities (i.e., $1.9 billion less $334 million in jurisdictions with offsetting deferred tax assets) was accounted for as a purchase accounting adjustment instead of recorded in Tyco’s historical financial statements.
Ms. Judith A. Reinsdorf Tyco International plc May 24, 2016 Page 3
You may contact Kathryn Jacobson, Senior Staff Accountant, at (202) 551 -3365, or Dean Suehiro, Senior Staff Accountant, at (202) 551 -3384, if you have questions regarding comments on the financial statements and related matters. Please contact Paul Fischer, Attorney -Advisor, at (202) 551 -3415, or me at (202) 551 -3810, with any other questions.
Sincerely,
/s/ Larry Spirgel
Show Raw Text
Mail Stop 3720
May 24, 2016
Ms. Judith A. Reinsdorf
General Counsel
Tyco International plc
9 Roszel Road
Princeton, NJ 08540
Re: Tyco International plc
Registration Statement on Form S -4
Amended May 17, 2016
File No. 333 -210588
Dear Ms. Reinsdorf:
We have limited our review of your amended registration statement to those issues we
have addressed in our comments. In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.
Please respond to this letter by amending your registration statement and providing the
requested information. If you do not believe our comments apply to your facts and
circumstances or do not bel ieve an amendment is appropriate, please tell us why in your
response.
After reviewing any amendment to your registration st atement and the information you
provide in response to these comments, we may have additional comments.
Risk Factors, page 42
The Internal Revenue Service may not agree that the combined company should be treated as a
non-U.S. corporation for U.S. federal income tax purposes…, page 54
1. Tell us whether management plans to obtain a tax opinion prior to closing of the merger
suppor ting the tax conclusions relating to Section 7874 of the Tax Code.
Ms. Judith A. Reinsdorf
Tyco International plc
May 24, 2016
Page 2
The Merger, page 95
Background of the Merger, page 97
2. We note that the Johnson Controls’ Board and its financial advisor considered potential
annual tax savings of $150 million resulting from the merger. Clarify the effect of the
Temporary Section 7874 Regulations and the future potential changes to the tax laws
identified in your risk factor on page 56 on the anticipated annual tax savings.
U.S. Federal Income Tax Consequences of the M erger to the Combined Company, page 219
3. Please discuss whether the contemplated spin -off of Adient Corporation would
potentially impact the determination of the 60% and 80% ownership tests under
Temporary Section 7874 Regulations.
4. We note that in paragraphs six and ten you make conclusions about the application of the
80% ownership text and 60% ownership test, respectively, of Johnson Controls under
Temporary Section 7874 Regulations. Please advise us whether these conclusions
represent the opinion of the company, or are the opinion of tax counsel.
Unaudited Pro Forma Combined Financial Information, page 238
6. Balance Sheet Adjustments, page 255
5. Refer to adjustment (m)(3)(i). Please explain to us why $1.5 billion of incremental
deferred tax lia bilities (i.e., $1.9 billion less $334 million in jurisdictions with offsetting
deferred tax assets) was accounted for as a purchase accounting adjustment instead of
recorded in Tyco’s historical financial statements.
Ms. Judith A. Reinsdorf
Tyco International plc
May 24, 2016
Page 3
You may contact Kathryn Jacobson, Senior Staff Accountant, at (202) 551 -3365, or Dean
Suehiro, Senior Staff Accountant, at (202) 551 -3384, if you have questions regarding comments
on the financial statements and related matters. Please contact Paul Fischer, Attorney -Advisor,
at (202) 551 -3415, or me at (202) 551 -3810, with any other questions.
Sincerely,
/s/ Larry Spirgel
Larry Spirgel
Assistant Director
AD Office 11 - Telecommunications
Cc: Alan M. Klein, Esq.
Simpson Thacher & Bartlett LLP