Johnson Controls said its subsidiary Tyco Fire Products LP agreed to a settlement with a nationwide class of public water systems that detected PFAS in their drinking water, which the systems allege is associated with AFFF products, and that Tyco will contribute $750 million to the settlement. The settlement releases claims against Tyco, Chemguard, Inc. and related corporate entities.

1. 01

   Johnson Controls said its subsidiary Tyco Fire Products LP agreed to a settlement with a nationwide class of public water systems that detected PFAS in their drinking water, which the systems allege is associated with AFFF products, and that Tyco will contribute $750 million to the settlement. The settlement releases claims against Tyco, Chemguard, Inc. and related corporate entities.

2. 02

   The company said it recorded a charge of $750 million in the quarter ended March 31, 2024. Tyco expects to contribute an initial $250 million on or about May 25, 2024, with the remaining $500 million due 6 months after preliminary court approval of the settlement. It said Tyco expects to apply insurance proceeds to a substantial portion of the total payment, but the amount and timing of insurance recoveries are uncertain.

3. 03

   The company said the settlement covers public water systems that had detected PFAS in their drinking water sources as of May 15, 2024. It said the settlement does not resolve opt-out systems, personal injury or property damage cases, or claims brought by state attorneys general. It also said the settlement is subject to MDL Court approval and other conditions, and that it does not constitute an admission of liability.

4. 04

   The company said it discontinued its receivables factoring programs for the 3 months ended March 31, 2024, did not factor any receivables in that period, and does not expect to engage in any receivables factoring for the rest of fiscal 2024. It said it plans to fund its working capital and other funding needs from operations, supplemented by borrowings and debt issuances.

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