SCENARIO 1: EXPLANATION OF SHARE DISTRIBUTION at …
SCENARIO 1: EXPLANATION OF SHARE DISTRIBUTION
at Close of the Adient Spin Off
Following the timeline outlined below, on the "Adient Record Date" Joe owns 82 shares in the new Johnson Controls. He's wondering what will happen to those shares after the close of the Adient spin off.
Joe's 82 shares in the new Johnson Controls make him eligible to:
retain his new Johnson Controls shares, and receive Adient shares and a fractional cash consideration
after the close of the Adient spin off.
How many shares of the new Johnson Controls and Adient will Joe own?
Shareholders in the new Johnson Controls will receive one Adient share for every 10 shares of new Johnson Controls they own at the close of the record date for the distribution.
82 new Johnson
Controls shares
=
8.2 Adient shares
10
Joe will retain his 82 new Johnson Controls shares and be entitled to receive 8.2 Adient shares on the
distribution date. The receipt of these shares is a taxable event.
What does Joe receive for this fractional shares?
Joe owns 8.2 Adient shares. The .2 is a fractional share, which will be cashed out. This cash will be deposited into Joe's brokerage account.
The receipt of these shares and cash from the fractional share is a taxable event.
Joe ultimately owns 8 shares of Adient, which are held
in his brokerage account.
What are Joe's holdings post-spin?
Joe's holdings will now consist of three components:
Value of 82 new Johnson Controls shares
+
Value of 8 Adient shares
+
Cash from fractional Adient share
KEY ACTIONS:
October 1, 2016 Projected Merger Close Date
Adient Record Date
Adient Distribution Date
Fractional Share Payout Date
DISCLAIMER: The description of Johnson Controls employees and the examples are illustrative only and are not intended to bear any likeness to actual Johnson Controls employees. Employees are advised to consult their advisors for tax and financial advice.
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