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Johnson Controls, Inc.

Name and address of the reporting corporation: Johnson Controls, Inc.
P O Box 591
Attn: Tax Department X-81
Milwaukee, WI 53201-05915
Date of transaction: 9/2/16
Description of the transaction

On September 2, 2016, Jagara Merger Sub LLC, a limited liability company that was wholly owned, directly or indirectly, by Tyco, merged with and into JCI, with JCl as the surviving corporation (the "merger"). In the merger, each share of JCI common stock was converted into, based upon the election of the holder of such share, prorated consideration of either (i) $5,7293 in cash and 0.8357 shares of Tyco (with cash in lieu of fractional shares), or (ii) $34.88 in cash.

The merger was a taxable transaction for U.S. federal income tax purposes. Following the merger. Tyco changed its name to "Johnson Controls International plc."

Certain holders of JCI shares that also held (actually or constructively) Tyco stock prior to the merger in certain specific proportions may have received, as a result of their ownership of Tyco stock, the cash component of their. merger consideration as a dividend pursuant to Section 304(a)(1) of the Code. Such shareholders would generally be subject to different tax consequences as a result of the merger and should consult with their own tax advisors with respect to the specific tax consequences of the merger to them depending on their facts and circumstances. In particular, while the merger is not a reorganization to which Section 367(a) of the Code applies, any holders of JCI shares that are treated as having received the cash component of the merger consideration as a dividend pursuant to Section 304(a)(1) of the Code as a result of their actual or constructive ownership of Tyco and JCI shares prior to the merger could be deemed, pursuant to Section 304(a)(1) of the Code, to have contributed a portion of their JCl shares to an indirect foreign subsidiary of Tyco in a transaction to which Section 351(a) of the Code applies. Such deemed contribution could be subject to Section 367(a) of the Code. For more information, please refer to the "Additional Information Relating to the Federal Income Tax Consequences of the Johnson Controls/Tyco Merger to Former Holders of Johnson Controls Common Stock," available on the JCI Investor Relations website, as well as the proxy statement, noting especially the discussion under the heading “Certain Tax Consequences of the Merger-U.S. Federal Income Tax Considerations.”

Did the reporting corporation’s shareholders receive any stock or other property in exchange for their stock in  the reporting corporation, for which the reporting corporation has reasonably determined that the shareholders are required to recognize gain (if any).from the exchange of such stock? Yes
Fair market value of the stock or other property received

Fair market value generally is the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the facts. U.S. federal income tax law does not specifically prescribe how former JCI shareholders should determine the fair market value of the Tyco ordinary shares received in the merger.

One possible method of determining the fair market value of one Tyco ordinary share is to use the average of the high and low trading prices on the date of the merger, which was $45.69.

Using this figure, former JCI shareholders that elected to receive shares in the merger would receive cash and Tyco ordinary shares worth approximately $43.91 per share of JCI common stock exchanged in the merger (assuming no cash received in lieu of fractional shares). The total
number of Tyco ordinary shares received in the merger in exchange for shares of JCl common stock was 527,445,124 (excluding fractional shares), and the total amount of cash received in the merger in exchange for shares of JCI common stock was $3,864,759,424.15 (including cash in lieu of fractional shares). Using the assumed fair market value of $45.69 above the total fair market value of the consideration received by all former JCl shareholders in the merger in exchange for their shares ofJCl common stock was $27,963,727,139.71.

Other methods for determining the fair market value of Tyco ordinary shares are possible.  Former JCI shareholders are not bound by the approach described above and may, in consultation with their tax advisors, use another approach.

Description of the stock or other property received See Description of the Transaction above

 

Page Last Reviewed or Updated: 22-Feb-2017