Johnson Controls International plc

Previous wording

The Company has made statements in this document that are forward-looking and therefore are subject to risks and uncertainties. All statements in this document other than statements of historical fact are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding the Company’s future financial position, sales, costs, earnings, cash flows, other measures of results of operations, synergies and integration opportunities, capital expenditures, debt levels and market outlook are forward-looking statements. Words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "forecast," "project" or "plan" and terms of similar meaning are also generally intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. The Company cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, that could cause the Company’s actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: The Company's ability to develop or acquire new products and technologies that achieve market acceptance and meet applicable quality and regulatory requirements; the ability of the Company to execute on its operating model and drive organizational improvement; the Company's ability to successfully execute and complete portfolio simplification, including the completion of the divestiture of the Residential and Light Commercial business, as well as the possibility that the expected benefits of such actions will not be realized or will not be realized within the expected time frame; the ability to hire and retain senior management and other key personnel, including successfully executing the Company's Chief Executive Officer succession plan; the ability to innovate and adapt to emerging technologies, ideas and trends in the marketplace, including the incorporation of technologies such as artificial intelligence; the ability to manage general economic, business and capital market conditions, including the impact of recessions, economic downturns and global price inflation; fluctuations in the cost and availability of public and private financing for the Company's customers; the ability to manage macroeconomic and geopolitical volatility, including supply chain shortages, restrictive trade measures and the conflict between Russia and Ukraine and the ongoing conflicts in the Middle East; managing the risks and impacts of potential and actual security breaches, cyberattacks, privacy breaches or data breaches, maintaining and improving the capacity, reliability and security of the Company's enterprise information technology infrastructure; the ability to manage the lifecycle cybersecurity risk in the…

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Current wording

The Company has made statements in this document that are forward-looking and therefore are subject to risks and uncertainties. All statements in this document other than statements of historical fact are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding the Company’s future financial position, sales, costs, earnings, cash flows, other measures of results of operations, synergies and integration opportunities, capital expenditures, debt levels and market outlook are forward-looking statements. Words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "forecast," "project" or "plan" and terms of similar meaning are also generally intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. The Company cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, that could cause the Company’s actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: the ability to manage macroeconomic and geopolitical volatility, including changes to laws or policies governing foreign trade, including tariffs, economic sanctions, foreign exchange and capital controls, import/export controls or other trade restrictions as well as supply chain disruptions; the ability to manage general economic, business and capital market conditions, including the impacts of trade restrictions, recessions, economic downturns and global price inflation; the Company's ability to develop or acquire new products and technologies that achieve market acceptance and meet applicable quality and regulatory requirements; the ability of the Company to execute on its operating model and drive organizational improvement; the Company's ability to successfully execute and complete portfolio simplification, including the completion of the divestiture of the Residential and Light Commercial business, as well as the possibility that the expected benefits of such actions will not be realized or will not be realized within the expected time frame; the ability to hire and retain senior management and other key personnel, including successfully completing the Company's Chief Executive Officer transition; the ability to innovate and adapt to emerging technologies, ideas and trends in the marketplace, including the incorporation of technologies such as artificial intelligence; fluctuations in the cost and availability of public and private financing for the Company's customers; the ability to manage disruptions caused by international conflicts, including Russia and Ukraine and the ongoing conflicts in the Middle East; managing the risks and impacts of potential and actual security breaches, cyb…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Johnson Controls International plc, headquartered in Cork, Ireland, is a global leader in smart, healthy and sustainable buildings, serving a wide range of customers around the globe. The Company’s products, services, systems and solutions advance the safety, comfort and intelligence of spaces to serve people, places and the planet. The Company is committed to helping its customers win and creating greater value for all of its stakeholders through its strategic focus on buildings.

Current wording

Johnson Controls International plc, headquartered in Cork, Ireland, is a global leader in smart, safe, healthy and sustainable buildings, serving a wide range of customers around the globe. The Company’s products, services, systems and solutions advance the safety, comfort and intelligence of spaces to serve people, places and the planet. The Company is committed to helping its customers win and creating greater value for all of its stakeholders through its strategic focus on buildings.

Previous wording

The following information should be read in conjunction with the September 30, 2024 consolidated financial statements and notes thereto, along with management’s discussion and analysis of financial condition and results of operations included in the Company's Annual Report on Form 10-K for the year ended September 30, 2024 filed with the SEC on November 19, 2024. References in the following discussion and analysis to "Three Months," "First Quarter" or similar language refer to the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

Current wording

The following information should be read in conjunction with the September 30, 2024 consolidated financial statements and notes thereto, along with management’s discussion and analysis of financial condition and results of operations included in the Company's Annual Report on Form 10-K for the year ended September 30, 2024 filed with the SEC on November 19, 2024. References in the following discussion and analysis to "Three Months," "Second Quarter" or similar language refer to the three months ended March 31, 2025 compared to the three months ended March 31, 2024, while "Year-to-Date" refers to six months ended March 31, 2025 compared to the six months ended March 31, 2024.

Previous wording

Much of the demand for the Company’s products and solutions is heavily dependent on general economic conditions, localized demand for real estate and the availability of credit, public funding or other financing sources. Positive or negative fluctuations in these dependencies could have a corresponding impact on the Company’s financial condition, results of operations and cash flows. While economic conditions in China stabilized in the three months ended December 31, 2024, industrial growth remains tempered, impacting the performance of the Building Solutions Asia Pacific segment. The Company expects economic conditions in China to continue to stabilize in fiscal 2025, however, if conditions do not stabilize, results of the Building Solutions Asia Pacific segment could be negatively impacted.

Current wording

Much of the demand for the Company’s products and solutions is heavily dependent on general economic conditions, localized demand for real estate and the availability of credit, public funding or other financing sources. Positive or negative fluctuations in these dependencies could have a corresponding impact on the Company’s financial condition, results of operations and cash flows.

Previous wording

The Company has experienced, and could again experience, increased material cost inflation and component shortages, as well as disruptions and delays in its supply chain, as a result of global macroeconomic trends, including increased global demand, the imposition of tariffs and other restrictive trade measures, geopolitical and economic tensions, including the conflict between Russia and Ukraine and Israel and Hamas, and labor shortages. Recently, the United States has announced tariffs on products manufactured in several jurisdictions, including, Mexico, China and Canada, and has made announcements regarding the potential imposition of tariffs on other jurisdictions, such as the European Union. The United States has and may in the future pause, reimpose or increase tariffs, and countries subject to such tariffs have and in the future may impose reciprocal tariffs or other restrictive trade measures in response to the imposition of tariffs by the United States. The Company is actively monitoring and evaluating the development and potential impacts of tariffs on its supply chain and results of operations.

Current wording

The Company maintains operations worldwide. Recently, the United States has announced tariffs and reciprocal tariffs on a wide range of products manufactured or produced worldwide, including Canada, China, the European Union, Japan and Mexico, among others. Several countries have similarly announced reciprocal or other tariffs impacting products manufactured or produced in the United States. In addition, the United States and other nations have, and may in the future, pause, reimpose, decrease or increase tariffs. If the actual and potential tariffs and reciprocal tariffs are implemented as currently enacted or proposed, the Company expects that such actions will negatively impact its revenue growth and margins in future periods through decreased sales and increased cost of goods sold. Further, the Company has experienced, and could again experience, increased material cost inflation and component shortages, as well as disruptions and delays in its supply chain, as a result of global macroeconomic trends including the imposition of tariffs and other restrictive trade measures, as well as geopolitical and economic tensions. The net effect of these events will depend on the Company’s ability to successfully mitigate and offset their impact.

Previous wording

The Company maintains operations worldwide, including the jurisdictions impacted by the recently announced and contemplated tariffs. If the actual and potential tariffs and reciprocal tariffs are implemented as currently proposed, the Company expects that such actions will negatively impact its revenue growth and margins in future periods. The net effect of these events will depend on the Company’s ability to successfully mitigate and offset their impact. The Company has historically taken actions to mitigate trade restrictions, supply chain disruptions and inflation, including, price increases, expanding and redistributing its supplier network, supplier financing, accelerated purchasing and productivity improvements. These actions have generally been successful in offsetting some, but not all, of the impact of these trends.

Current wording

The Company is currently taking actions to mitigate the actual and anticipated impact of these events, including strengthening the Company's in region, for region manufacturing strategy, pivoting to local sourcing in its supply chain, accelerating pricing actions and asserting contractual rights through change orders. The Company has historically taken a variety of actions to mitigate trade restrictions, supply chain disruptions and inflation, including through expanding and redistributing its supplier network, supplier financing, accelerated purchasing and productivity improvements. These actions have historically been successful in offsetting some, but not all, of the impact of these trends, and it is uncertain as to whether the actions taken or contemplated to be taken by the Company will be effective in mitigating the impact of current and future trade restrictions and their related impacts. The Company continues to actively monitor and evaluate the development and potential impacts of tariffs and other trade restrictions on its supply chain and results of operations.

Previous wording

As a result of the Company’s global presence, a significant portion of its revenues and expenses is denominated in currencies other than the U.S. dollar, which results in non-U.S. currency risks and exchange exposure. While the Company employs financial instruments to hedge some of its transactional foreign exchange exposure, these activities do not insulate it completely from those exposures. In addition, currency exposure from the translation of non-U.S. dollar functional currency subsidiaries cannot be hedged. Exchange rates can be volatile and a substantial weakening or strengthening of foreign currencies against the U.S. dollar could increase or reduce the Company’s profit margin, respectively, and impact the comparability of results from period to period. Revenue and profits were negatively impacted by movements in foreign exchange rates against the U.S. dollar during the three months ended December 31, 2024.

Current wording

As a result of the Company’s global presence, a significant portion of its revenues and expenses are denominated in currencies other than the U.S. dollar, which results in non-U.S. currency risks and exchange exposure. While the Company employs financial instruments to hedge some of its transactional foreign exchange exposure, these activities do not insulate it completely from those exposures. In addition, currency exposure from the translation of non-U.S. dollar functional currency subsidiaries cannot be hedged. Exchange rates can be volatile and a substantial weakening or strengthening of foreign currencies against the U.S. dollar could increase or reduce the Company’s profit margin, respectively, and impact the comparability of results from period to period. Revenue and profits were negatively impacted by movements in foreign exchange rates against the U.S. dollar during the three and six months ended March 31, 2025.

Previous wording

The Company continues to observe trends demonstrating increased interest and demand for its products and services that enable smart, safe, efficient and sustainable buildings, which are driven in part by government tax incentives, building performance standards and other regulations designed to limit emissions and combat climate change. In particular, legislative and regulatory initiatives such as the U.S. Climate Smart Buildings Initiative, U.S. Inflation Reduction Act and EU Energy Performance of Buildings Directive include provisions designed to fund and encourage investment in decarbonization and digital technologies for buildings. This demand is supplemented by an increase in commitments in both the public and private sectors to reduce emissions and/or achieve net zero emissions. Combined with its investment in digital and product capabilities, including its OpenBlue platform, the Company seeks to capitalize on these trends to enable delivery of sustainable, high-efficiency products and tailored services to enable customers to achieve their sustainability goals. The Company is leveraging its install base, together with data-driven products and services, to offer outcome-based solutions to customers with a focus on generating accelerated growth in services and recurring revenue.

Current wording

The Company continues to observe trends demonstrating increased interest and demand for its products and services that enable smart, safe, efficient and sustainable buildings, which are driven in part by government tax incentives, building performance standards and other regulations designed to limit emissions and combat climate change. In particular, legislative and regulatory initiatives such as the EU Energy Efficiency Directive, U.S. Inflation Reduction Act and EU Energy Performance of Buildings Directive include provisions designed to fund and encourage investment in decarbonization and digital technologies for buildings. This demand is supplemented by an increase in commitments in both the public and private sectors to reduce emissions and/or achieve net zero emissions. The Company seeks to capitalize on these trends to enable delivery of sustainable, high-efficiency products and tailored services to enable customers to achieve their sustainability goals. The Company is leveraging its install base, together with data-driven products and services, to offer outcome-based solutions to customers with a focus on generating accelerated growth in services and recurring revenue.

Previous wording

The extent to which the Company’s results of operations and financial condition are impacted by these and other factors in the future will depend on developments that are highly uncertain and cannot be predicted. See the section entitled "Risk Factors" in Johnson Controls' Annual Report on Form 10-K for the year ended September 30, 2024 filed with the United States Securities and Exchange Commission ("SEC") on November 19, 2024.

Current wording

The extent to which the Company’s results of operations and financial condition are impacted by these and other factors in the future will depend on developments that are highly uncertain and cannot be predicted. See the section entitled "Risk Factors" in Johnson Controls' Annual Report on Form 10-K for the year ended September 30, 2024 filed with the United States Securities and Exchange Commission ("SEC") on November 19, 2024. Certain of these risk factors have been updated and supplemented in the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2024 filed on February 5, 2025 and in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Previous wording

The Company has been engaged in an ongoing evaluation of its non-core product lines in connection with its objective to be a pure-play provider of comprehensive solutions for commercial buildings. During the fourth quarter of fiscal 2024, the Company completed the sale of its Air Distribution Technologies business included within the Global Products segment. During the fourth quarter of fiscal 2024, the Company entered into a definitive agreement to sell its Residential and Light Commercial ("R&LC") HVAC business to Robert Bosch GmbH (“Bosch”) for approximately $8.1 billion in cash with the Company's portion of the aggregate consideration being approximately $6.7 billion, inclusive of an upfront royalty payment for the licensing of the York tradename. The R&LC HVAC business includes the Company's North America Ducted business and Johnson Controls-Hitachi Air Conditioning Holding (UK) Ltd., the Company’s global residential joint venture with Hitachi Global Life Solutions, Inc. (“Hitachi”), of which the Company owns 60% and Hitachi owns 40%. The R&LC HVAC business, which was previously reported in the Global Products segment, meets the criteria to be classified as a discontinued operation and, as a result, its historical financial results are reflected in the consolidated financial statements as a discontinued operation, and assets and liabilities were reclassified as held for sale for all periods presented. The Company expects that the sale of the R&LC HVAC business will close in the fourth quarter of fiscal 2025.

Current wording

The Company continues to engage in an ongoing evaluation of its non-core product lines in connection with its objective to be a pure-play provider of comprehensive solutions for commercial buildings. During the fourth quarter of fiscal 2024, the Company entered into a definitive agreement to sell its Residential and Light Commercial ("R&LC") HVAC business to Robert Bosch GmbH (“Bosch”) for approximately $8.1 billion in cash with the Company's portion of the aggregate consideration being approximately $6.7 billion, inclusive of an upfront royalty payment for the licensing of the York tradename. The R&LC HVAC business includes the Company's North America Ducted business and Johnson Controls-Hitachi Air Conditioning Holding (UK) Ltd., the Company’s global residential joint venture with Hitachi Global Life Solutions, Inc. (“Hitachi”), of which the Company owns 60% and Hitachi owns 40%. The R&LC HVAC business, which was previously reported in the Global Products segment, meets the criteria to be classified as a discontinued operation and, as a result, its historical financial results are reflected in the consolidated financial statements as a discontinued operation, and assets and liabilities were reclassified as held for sale for all periods presented. The Company expects that the sale of the R&LC HVAC business will close in the second half of fiscal 2025.

Previous wording

During the fourth quarter of fiscal 2024, the Company committed to a multi-year restructuring plan to address stranded costs and further right-size its global operations as a result of previously announced portfolio simplification actions. It is expected that one-time restructuring costs, including severance and other employee termination benefits, contract termination costs, and certain other related cash and non-cash charges, of approximately $400 million will be incurred over the course of fiscal 2025, 2026 and 2027, resulting in expected annual cost savings of approximately $500 million upon full completion of the plan. The Company’s ability to execute the most significant aspects of the restructuring plan will be dependent on the timing of the close of the R&LC HVAC business divestiture transaction. Accordingly, the Company is unable to estimate the specific costs to be incurred and savings to be achieved in fiscal 2025; however, depending on the timing of the closing of the transaction and the ability to execute more significant aspects of the planned restructuring actions, the impact of costs on net income could be material in fiscal 2025. Restructuring costs will be incurred across all segments and Corporate functions.

Current wording

During the fourth quarter of fiscal 2024, the Company committed to a multi-year restructuring plan to address stranded costs and further right-size its global operations as a result of previously announced portfolio simplification actions. It is expected that one-time restructuring costs, including severance and other employee termination benefits, contract termination costs, and certain other related cash and non-cash charges, of approximately $400 million will be incurred over the course of fiscal 2025, 2026 and 2027, resulting in expected annual cost savings of approximately $500 million upon full completion of the plan. The Company’s ability to execute the most significant aspects of the restructuring plan will be dependent on the timing of the close of the R&LC HVAC business divestiture transaction. Accordingly, the Company is unable to estimate the specific costs to be incurred and savings to be achieved in fiscal 2025; however, depending on the finalization of the carve-out of the R&LC HVAC business, including post-closing separation obligations, the timing of the closing of the transaction and the ability to execute more significant aspects of the planned restructuring actions, the impact of costs on net income could be material in fiscal 2025. Restructuring costs will be incurred across all segments and Corporate functions.

Previous wording

During the weekend of September 23, 2023, the Company became aware of a cybersecurity incident impacting its internal information technology ("IT") infrastructure and applications. The overall impact of the cybersecurity incident did not have a material impact on net income, net of insurance recoveries, or cash flows from operations in the first quarter of fiscal 2024. A substantial portion of its direct costs incurred related to containing, investigating and remediating the incident, as well as business interruption losses, was reimbursed through insurance recoveries.

Current wording

During the weekend of September 23, 2023, the Company experienced a cybersecurity incident impacting its internal information technology ("IT") infrastructure and applications.

Previous wording

The increase in net sales for the three months ended December 31, 2024 was due to higher organic sales ($480 million), partially offset by the net impact of acquisitions and divestitures ($230 million) and the unfavorable impact of foreign currency translation ($33 million). Excluding the impact of foreign currency translation and business acquisitions and divestitures, net sales increased 10% over the prior year, driven by strong growth in Products and Systems in the Building Solutions North America and Global Products segments and growth in Services in all Building Solutions segments.

Current wording

The increase in net sales for the three months ended March 31, 2025 was due to higher organic sales ($381 million), partially offset by the net impact of acquisitions and divestitures ($233 million) and the unfavorable impact of foreign currency translation ($69 million). Excluding the impact of foreign currency translation and business acquisitions and divestitures, net sales increased 7% over the prior year, driven by strong growth in Products and Systems in the Building Solutions North America, Building Solutions Asia Pacific and Global Products segments and growth in Services in all Building Solutions segments.

Previous wording

The increase in gross profit for the three months ended December 31, 2024 was primarily due to margin improvements in the Building Solutions segments as a result of strategically building backlog with long-term, higher margin Systems projects.

Current wording

The increase in gross profit for the three and six months ended March 31, 2025 was primarily due to margin improvements in the Building Solutions segments as a result of converting backlog with increased mix of long-term, higher margin Systems projects and optimized Services mix.

Previous wording

Refer to the "Segment Analysis" below within this Item 2 for a discussion of segment EBITA.

Current wording

Refer to the "Segment Analysis" below within this Item 2 for a discussion of segment EBITA. Refer to Note 18, "Commitments and Contingencies," of the notes to the consolidated financial statements for further disclosure related to the water systems AFFF settlement.

Previous wording

•The increase in Building Solutions North America was primarily due to organic growth ($260 million). Sales growth was led by high teens growth in Applied HVAC and Controls. Products and systems sales increased 12% and Services increased 9%.

Current wording

•The increase in Building Solutions North America was primarily due to organic growth ($187 million), partially offset by the unfavorable impact of foreign currency translation ($10 million). Excluding the impact of foreign currency translation, sales growth was led by continued strength across Applied HVAC and Controls. Products and Systems sales increased 8% and Services increased 5%.

Previous wording

•The decrease in Global Products was primarily due to the impact of business divestitures ($233 million), partially offset by organic growth ($140 million). Excluding the impact of business divestitures and foreign currency, sales increased 15%, led by over 30% growth in Applied HVAC.

Current wording

•The decrease in Global Products was primarily due to the impact of business divestitures ($242 million) and the unfavorable impact of foreign currency translation ($12 million), partially offset by organic growth ($84 million). Excluding the impact of business divestitures and foreign currency, sales increased 8%, led by positive price and volume growth. Applied HVAC grew over 20%.

Previous wording

•The increase in Building Solutions North America was primarily due to higher margin backlog conversion, partially offset by impacts from ongoing growth investments.

Current wording

•The increase in Building Solutions North America was primarily due to higher margin backlog conversion and productivity improvements, partially offset by impacts from ongoing growth investments.

Previous wording

•The increase in Building Solutions Asia Pacific was primarily driven by positive mix from the Service business.

Current wording

•The increase in Building Solutions EMEA/LA was primarily driven by productivity improvements and positive mix from the growth in Services.

Previous wording

•The increase in Global Products was primarily due to increased volumes and enhanced operational efficiencies.

Current wording

•The increase in Global Products was primarily due to increased volumes and improved operational efficiencies, which more than offset the impact of divestitures.

Previous wording

Backlog and orders are additional metrics that are meant to provide management with a deeper level of insight into the progress of specific strategic and growth initiatives. Backlog is applicable to sales of products and systems and services and totaled $15.3 billion at December 31, 2024, including both the Building Solutions and Global Products segments. Orders provide management with a signal of customer demand for the Company's products and services, as well as an indication of future revenues and performance. However, the timing and conversion of backlog and orders are subject to numerous uncertainties and risks and are not necessarily indicative of the amount of revenue to be earned in the upcoming fiscal year.

Current wording

Backlog and orders are additional metrics that are meant to provide management with a deeper level of insight into the progress of specific strategic and growth initiatives. Backlog is applicable to sales of products and systems and services and totaled $16.0 billion at March 31, 2025, including both the Building Solutions and Global Products segments. Orders provide management with a signal of customer demand for the Company's products and services, as well as an indication of future revenues and performance. However, the timing and conversion of backlog and orders are subject to numerous uncertainties and risks and are not necessarily indicative of the amount of revenue to be earned in the upcoming fiscal year.

Previous wording

(1) Change is compared to December 31, 2023 (backlog) and the three months ended December 31, 2023 (orders) and excludes the impact of mergers, acquisitions, dispositions and foreign currency.

Current wording

(1) Change is compared to March 31, 2024 (backlog) and the three months ended March 31, 2024 (orders) and excludes the impact of mergers, acquisitions, divestitures and foreign currency.

Previous wording

Remaining performance obligations were $20.9 billion at December 31, 2024. Differences between the Company’s remaining performance obligations and backlog are primarily due to:

Current wording

Remaining performance obligations were $22.0 billion at March 31, 2025. Differences between the Company’s remaining performance obligations and backlog are primarily due to:

Previous wording

•The increase in working capital at December 31, 2024 as compared to September 30, 2024 was primarily due to an increase in cash and cash equivalents, a decrease in other current liabilities due to a payment related to the AFFF settlement agreement and a decrease in accounts payable due to timing, which were partially offset by a decrease in accounts receivable.

Current wording

•The increase in working capital at March 31, 2025 as compared to September 30, 2024 was primarily due to a decrease in other current liabilities due to a payment related to the AFFF settlement agreement and an increase in current assets held for sale primarily due to seasonal increases in inventory related to the R&LC HVAC business, partially offset by higher short-term debt and the net impact of various other current assets and liabilities.

Previous wording

•The increase in cash provided by operating activities was primarily due to decreases in accounts receivable and higher cash used for inventory in the first quarter of fiscal 2024, partially offset by the timing of accounts payable and accrued liabilities payments.

Current wording

•The increase in cash provided by operating activities reflects higher net income, decreases in accounts receivable and higher cash used for inventory in fiscal 2024, partially offset by the timing of accounts payable and accrued liabilities payments.

Previous wording

•The increase in cash used by investing activities was primarily due to increased capital expenditures.

Current wording

•The increase in cash used by investing activities was due to various investment transactions.

Previous wording

•The decrease in cash provided by financing activities was primarily due to changes in net debt activity and higher share repurchases, which were temporarily halted in the first quarter of fiscal 2024.

Current wording

•The increase in cash used by financing activities was primarily due to changes in net debt activity and higher share repurchases, which were temporarily halted in the first quarter of fiscal 2024.

Previous wording

•As of December 31, 2024, approximately $1.4 billion remains available under the Company's share repurchase authorization, which does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice. The Company expects to repurchase outstanding shares from time to time depending on market conditions, alternate uses of capital, liquidity, and the economic environment.

Current wording

•As of March 31, 2025, approximately $1.1 billion remains available under the Company's share repurchase authorization, which does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice. The Company expects to repurchase outstanding shares from time to time depending on market conditions, alternate uses of capital, liquidity, and the economic environment.

Previous wording

•The Company expects to receive net cash proceeds related to the sale of its R&LC HVAC business of approximately $5.0 billion after tax and transaction-related expenses when the transaction closes, likely in the fourth quarter of fiscal 2025. Consistent with its capital allocation policy, the Company expects to use a portion of the proceeds to pay down debt to the extent required to retain its investment grade rating, with the remaining proceeds expected to be returned to shareholders through share repurchases.

Current wording

•The Company expects to receive net cash proceeds related to the sale of its R&LC HVAC business of approximately $5.0 billion after tax and transaction-related expenses when the transaction closes, likely in the second half of fiscal 2025. Consistent with its capital allocation policy, the Company expects to use a portion of the proceeds to pay down debt to the extent required to retain its investment grade rating, with the remaining proceeds expected to be returned to shareholders through share repurchases.

Previous wording

•The Company believes its capital resources and liquidity position, including cash and cash equivalents of $1.2 billion at December 31, 2024, are adequate to fund operations and meet its cash obligations for the foreseeable future.

Current wording

•The Company believes its capital resources and liquidity position, including cash and cash equivalents of $0.8 billion at March 31, 2025, are adequate to fund operations and meet its cash obligations for the foreseeable future.

Previous wording

–The Company manages its short-term debt position in the U.S. and euro commercial paper and bank loan markets. Commercial paper outstanding totaled $309 million as of December 31, 2024 and $350 million as of September 30, 2024.

Current wording

–The Company manages its short-term debt position in the U.S. and euro commercial paper and bank loan markets. Commercial paper outstanding totaled $673 million as of March 31, 2025 and $350 million as of September 30, 2024.

Previous wording

–The Company also has the ability to draw on its $2.5 billion revolving credit facility which is scheduled to expire in December 2028 or its $0.5 billion revolving credit facility which was renewed in December 2024 and is now scheduled to expire in December 2025. There were no draws on the revolving credit facilities as of December 31, 2024 and September 30, 2024.

Current wording

–The Company also has the ability to draw on its $2.5 billion revolving credit facility which is scheduled to expire in December 2028 or its $0.5 billion revolving credit facility which is scheduled to expire in December 2025. There were no draws on the revolving credit facilities as of March 31, 2025 and September 30, 2024.