Johnson Controls International plc

Previous wording

Johnson Controls International plc, headquartered in Cork, Ireland, a global leader in thermal management, mission-critical building systems, energy efficiency, and decarbonization, helps customers use energy more productively, reduce carbon emissions, and operate with the precision and resilience required in rapidly expanding industries such as data centers, healthcare, pharmaceuticals, advanced manufacturing, and higher education.

Current wording

Johnson Controls International plc, headquartered in Cork, Ireland, is a global leader in thermal management, mission-critical building systems, energy efficiency, and decarbonization. The Company helps customers create, maintain, and optimize indoor operating environments that use energy more productively, reduce carbon emissions, and support the precise, reliable and resilient operating conditions in rapidly expanding industries such as data centers, healthcare, pharmaceuticals, advanced manufacturing, and higher education.

Previous wording

The Company is a global leader in engineering, manufacturing, commissioning and retrofitting building products and systems, including commercial heating, ventilating, air-conditioning ("HVAC") equipment, industrial refrigeration systems, controls, security systems, fire-detection systems and fire-suppression solutions. The Company further serves customers by providing technical services, including maintenance, management, repair, retrofit and replacement of equipment (in the HVAC, industrial refrigeration, controls, security and fire-protection space) and energy-management consulting. The Company partners with customers by leveraging its broad product portfolio and digital capabilities, together with its direct channel capabilities, to deliver solutions and services addressing distinct and diverse operating environments and regulatory requirements that address customers’ needs in their core missions.

Current wording

The Company is a fully integrated industrial technology company that engineers, manufactures, commissions and retrofits building products and systems, including commercial heating, ventilating, air-conditioning ("HVAC") equipment, industrial refrigeration systems, controls, security systems, fire-detection systems and fire-suppression solutions. The Company further serves customers by providing technical services through a large global field workforce and service network along with its system integration expertise and managing the full lifecycle of critical indoor environments — from design and commissioning through ongoing service and retrofit. Combining its broad product portfolio, digital capabilities, direct channel and lifecycle service expertise, the Company partners with customers to address distinct and diverse operating environments, regulatory requirements, and the critical operational needs of their facilities.

Previous wording

The following information should be read in conjunction with the September 30, 2025 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, 2025 filed with the SEC on November 14, 2025. References in the following discussion and analysis to "Three Months," "Second Quarter" or similar language refer to the three months ended March 31, 2026 compared to the three months ended March 31, 2025, while "Year-to-Date" refers to six months ended March 31, 2026 compared to the six months ended March 31, 2025.

Current wording

The following information should be read in conjunction with the September 30, 2025 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, 2025 filed with the SEC on November 14, 2025. References in the following discussion and analysis to "Three Months," "Third Quarter" or similar language refer to the three months ended June 30, 2026 compared to the three months ended June 30, 2025, while "Year-to-Date" refers to nine months ended June 30, 2026 compared to the nine months ended June 30, 2025.

Previous wording

The Company maintains global operations. 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. 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, India 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. Although the Company has been largely able to mitigate the impact of tariffs that have been enacted to date, if additional tariffs and reciprocal tariffs are implemented (whether as currently proposed or otherwise), such actions could negatively impact the Company's revenue growth and margins in future periods through decreased sales and increased cost of goods sold. In February 2026, certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA), were invalidated by the U.S. Supreme Court. However, the United States has since imposed new tariffs and duties in their place. The Company is currently evaluating its options to mitigate the impact of prior IEEPA tariffs through participation in the IEEPA refund process. To date, the tariffs enacted by the United States and other countries have not had a material impact on the Company's financial performance for the periods presented.

Current wording

The Company maintains global operations. 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. 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, India 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. Although the Company has been largely able to mitigate the impact of tariffs that have been enacted to date, if additional tariffs and reciprocal tariffs are implemented (whether as currently proposed or otherwise), such actions could negatively impact the Company's revenue growth and margins in future periods through decreased sales and increased cost of goods sold. In February 2026, certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"), were invalidated by the U.S. Supreme Court. However, the United States has since imposed new tariffs and duties in their place. The Company is participating in the IEEPA refund process. To date, the tariffs enacted by the United States and other countries and refunds claimed under the IEEPA refund process have not had a material impact on the Company's financial performance for the periods presented.

Previous wording

Geopolitical and economic tensions, including the ongoing conflicts in the Middle East, have the potential to cause disruptions in global supply chains, increase costs and create overall volatility. The ongoing conflicts in the Middle East have disrupted energy supplies and supply chains, increased costs for energy and other supplies and created volatility in the capital markets, among other impacts. The net effect of these events will continue to depend on the Company’s ability to successfully mitigate and offset their impacts.

Current wording

Geopolitical and economic tensions, including the ongoing conflicts in the Middle East, have the potential to cause disruptions in global supply chains, increase costs and create overall volatility. The ongoing conflicts in the Middle East have disrupted energy supplies and supply chains, increased costs for energy and other supplies and created volatility in the capital markets, among other impacts. The continued net effect of these events will continue to depend on the Company’s ability to successfully mitigate and offset their impacts.

Previous wording

The Company continues to observe trends demonstrating increased interest and demand for its products and services that enable smart, 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, EU Heat Transition, 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 commitments in both the public and private sectors to reduce emissions and/or achieve net zero emissions. In addition, the increased maturity and adoption of AI and high-performance computing is currently impacting the microchip and data center industry and driving technology innovation, which has led to increased demand for hyperscale and data center cooling solutions that deliver heat management and energy efficiency. The Company seeks to capitalize on these trends to enable delivery of sustainable, high-efficiency products and tailored services to empower customers to achieve their sustainability, heat management and energy efficiency 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, efficient and sustainable buildings, which are driven in part by increased maturity and adoption of AI and high-performance computing is currently impacting the microchip and data center industry and driving technology innovation, which has led to increased demand for hyperscale and data center cooling solutions that deliver heat management and energy efficiency. This trend has contributed to increases in the Company’s orders and backlog. In addition, the Company continues to observe increased demand driven 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, EU Heat Transition, 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 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 empower customers to achieve their sustainability, heat management and energy efficiency 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, 2025 filed with the United States Securities and Exchange Commission ("SEC") on November 14, 2025. 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, 2025 filed on February 4, 2026 and in Part II, Item 1A of this Quarterly Report on Form 10-Q.

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, 2025 filed with the United States Securities and Exchange Commission ("SEC") on November 14, 2025. Certain of these risk factors have been updated and supplemented in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Previous wording

The increase in net sales for the three months ended March 31, 2026 was due to higher organic sales ($360 million) and the favorable impact of foreign currency translation ($128 million), partially offset by the impact of divestitures ($22 million). Excluding the impact of foreign currency translation and business divestitures, net sales increased 6% over the prior year, driven by growth across all segments, led by the Americas.

Current wording

The increase in net sales for the three months ended June 30, 2026 was due to higher organic sales ($582 million) and the favorable impact of foreign currency translation ($26 million), partially offset by the impact of divestitures ($46 million). Excluding the impact of foreign currency translation and business divestitures, net sales increased 10% over the prior year, driven by growth across all segments, led by strength in Applied HVAC and continued growth across both Products and Systems and Services. Products and Systems sales increased 11% and Services increased 7%.

Previous wording

The increase in net sales for the six months ended March 31, 2026 was due to higher organic sales ($671 million) and the favorable impact of foreign currency translation ($200 million), partially offset by the net impact of acquisitions and divestitures ($34 million). Excluding the impact of foreign currency translation and business acquisitions and divestitures, net sales increased 6% over the prior year, driven by growth across all segments, led by the Americas.

Current wording

The increase in net sales for the nine months ended June 30, 2026 was due to higher organic sales ($1,253 million) and the favorable impact of foreign currency translation ($226 million), partially offset by the net impact of acquisitions and divestitures ($80 million). Excluding the impact of foreign currency translation and business acquisitions and divestitures, net sales increased 7% over the prior year, driven by growth across all segments, led by strength in Applied HVAC and growth across both Products and Systems and Services. Products and Systems and Services sales both increased 7%.

Previous wording

The increase in gross profit for the three and six months ended March 31, 2026 was primarily due to organic sales growth, productivity improvements and better operating leverage.

Current wording

The increase in gross profit for the three and nine months ended June 30, 2026 was primarily due to organic sales growth, productivity improvements and better operating leverage.

Previous wording

The decrease in SG&A for the three months ended March 31, 2026 was primarily due to benefits from ongoing cost reduction actions.

Current wording

The decrease in SG&A for the three months ended June 30, 2026 was primarily due to AFFF insurance recoveries related to the previously disclosed water systems settlement ($16 million).

Previous wording

The decrease in SG&A for the six months ended March 31, 2026 was primarily due to AFFF insurance recoveries related to the previously disclosed water systems settlement ($119 million), the gain on the ADT Mexico business divestiture ($70 million) and benefits from ongoing cost actions.

Current wording

The decrease in SG&A for the nine months ended June 30, 2026 was primarily due to AFFF insurance recoveries related to the previously disclosed water systems settlement ($135 million), the gain on the ADT Mexico business divestiture ($70 million) and benefits from ongoing cost actions.

Previous wording

Refer to Note 3, "Divestitures" and Note 14, "Restructuring and Related Costs," of the notes to the consolidated financial statements for further disclosure related to the Company's restructuring actions and impairment costs.

Current wording

Refer to Note 3, "Acquisitions and Divestitures" and Note 14, "Restructuring and Related Costs," of the notes to the consolidated financial statements for further disclosure related to the Company's restructuring actions and impairment costs.

Previous wording

•The increase in Americas was due to organic growth ($470 million) and foreign currency translation ($30 million). Excluding the impact of foreign currency translation, sales increased 6%, led by continued strength across Applied HVAC. Products and Systems sales increased 5% and Services increased 10%.

Current wording

•The increase in Americas was due to organic growth ($454 million) and the favorable impact of foreign currency translation ($8 million). Excluding the impact of foreign currency translation, sales increased 11%, led by continued strength across Applied HVAC. Products and Systems sales increased 12% and Services increased 10%.

Previous wording

•The increase in Americas was due to organic growth ($260 million) and foreign currency translation ($24 million). Excluding the impact of foreign currency translation, sales increased 7%, led by continued strength across Applied HVAC. Products and Systems sales increased 5% and Services increased 10%.

Current wording

•The increase in Americas was due to organic growth ($924 million) and foreign currency translation ($38 million). Excluding the impact of foreign currency translation, sales increased 8%, led by continued strength across Applied HVAC. Products and Systems sales increased 7% and Services increased 10%.

Previous wording

•The increase in EMEA was due to the favorable impact of foreign currency translation ($154 million) and organic growth ($65 million), partially offset by the net impact of business acquisitions and divestitures ($34 million). Excluding the impact of foreign currency translation and business acquisitions and divestitures, sales increased 3%. Products and Systems sales increased 2% and Services increased 3%.

Current wording

•The increase in EMEA was due to the favorable impact of foreign currency translation ($169 million) and organic growth ($82 million), partially offset by the net impact of business acquisitions and divestitures ($75 million). Excluding the impact of foreign currency translation and business acquisitions and divestitures, sales increased 2%, as growth was constrained by pressure in the region due to the conflicts in the Middle East. Products and Systems sales increased 2% and Services increased 3%.

Previous wording

•The increase in EMEA was primarily driven by productivity improvements and improved leverage on higher revenue.

Current wording

•The increase in Americas was primarily driven by strong operating leverage on higher revenue.

Previous wording

•The increase in Americas was primarily driven by favorable pricing, productivity improvements and increased volumes.

Current wording

•The increase in EMEA was primarily driven by favorable pricing and productivity improvements, partially offset by the impact of business divestitures.

Previous wording

•The increase in EMEA was primarily driven by productivity improvements and improved leverage on higher revenue.

Current wording

•The increase in APAC was primarily driven by productivity improvements, favorable business mix and higher revenues.

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. 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. The Company believes backlog is a useful measure for evaluating its operational performance and relationship to total orders. 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

Orders and backlog are additional metrics that are meant to provide management with a deeper level of insight into the progress of specific strategic and growth initiatives. 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. The Company believes backlog is a useful measure for evaluating its operational performance and relationship to total orders. However, the timing and conversion of orders and backlog 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 March 31, 2025 (backlog) and the three months ended March 31, 2025 (orders) and excludes the impact of acquisitions, divestitures and foreign currency.

Current wording

(1) Change is compared to the three months ended June 30, 2025 (orders) and June 30, 2025 (backlog) and excludes the impact of acquisitions, divestitures and foreign currency.

Previous wording

Orders increased 30%, reflecting sustained demand in large projects across our core markets, including our solutions for large-scale data center projects.

Current wording

Orders increased 27%, reflecting sustained demand in large projects across the Company's core markets, including the Company's solutions for large-scale data center projects.

Previous wording

•The 40% increase in orders for Americas was led by 57% growth in Products and Systems and 4% growth in Services.

Current wording

•The 37% increase in orders for Americas was led by 55% growth in Products and Systems and 4% growth in Services.

Previous wording

•The 11% increase in orders for EMEA was led by 26% growth in Products and Systems, partially offset by an 8% decrease in Services.

Current wording

•The 6% increase in orders for EMEA was led by 7% growth in Products and Systems and 4% growth in Services.

Previous wording

Backlog increased 26%, led by growth in Products and Systems.

Current wording

Backlog increased 32%, reflecting sustained orders growth and led by growth in Products and Systems.

Previous wording

•The 32% increase in backlog for Americas was led by 37% growth in Products and Systems, partially offset by a 2% decrease in Services.

Current wording

•The 40% increase in backlog for Americas was led by 47% growth in Products and Systems, partially offset by a 1% decrease in Services.

Previous wording

•The 13% increase in backlog for EMEA was due to 14% growth in Services and 13% growth in Products and Systems.

Current wording

•The 14% increase in backlog for EMEA was due to 19% growth in Services and 13% growth in Products and Systems.

Previous wording

•The 14% increase in backlog for APAC was due to 14% growth in Products and Systems and 6% growth in Services.

Current wording

•The 12% increase in backlog for APAC was due to 12% growth in Products and Systems and 9% growth in Services.

Previous wording

Remaining performance obligations were $26.3 billion at March 31, 2026. Differences between the Company’s remaining performance obligations and backlog are primarily due to:

Current wording

Remaining performance obligations were $27.1 billion at June 30, 2026. Differences between the Company’s remaining performance obligations and backlog are primarily due to:

Previous wording

The increase in working capital at March 31, 2026 as compared to September 30, 2025 was primarily due to increases in cash and accounts receivable and decreases in accrued compensation and the current portion of long-term debt, partially offset by an increase in deferred revenue and the net impact of other current assets and liabilities.

Current wording

The increase in working capital at June 30, 2026 as compared to September 30, 2025 was primarily due to increases in cash and accounts receivable and decreases in accrued compensation and the current portion of long-term debt, partially offset by increases in deferred revenue and accounts payable.

Previous wording

The change in investing activities was due to proceeds from the ADT Mexico divestiture.

Current wording

The change in investing activities was primarily due to proceeds from the ADT Mexico and ADT Spain divestitures and a decrease in capital expenditures, partially offset by the acquisitions of Alloy Enterprises and Nantum AI.

Previous wording

•The Company completed its previously announced accelerated share repurchase ("ASR") program in the second quarter of fiscal 2026 and resumed open market repurchases after final settlement of the ASR transactions. In total, the Company invested $5.0 billion to repurchase 43,693,817 shares at an average price of $114.43 per share. As of March 31, 2026, approximately $4.5 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

•The Company completed its previously announced accelerated share repurchase ("ASR") program in the second quarter of fiscal 2026 and resumed open market repurchases after final settlement of the ASR transactions. In total, the Company invested $5.0 billion to repurchase 43,693,817 shares at an average price of $114.43 per share. As of June 30, 2026, approximately $3.9 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 believes its capital resources and liquidity position, including cash and cash equivalents of $698 million at March 31, 2026, 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 $641 million at June 30, 2026, 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 $441 million as of March 31, 2026 and $400 million as of September 30, 2025.

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 $200 million as of June 30, 2026 and $400 million as of September 30, 2025.

Previous wording

The following table presents the net loss attributable to the Parent Company and TFSCA (collectively, the "Obligor Group") and the net income (loss) attributable to intercompany transactions between the Obligor Group and subsidiaries of the Parent Company other than TFSCA (collectively, the "Non-Obligor Subsidiaries") which are excluded from the Net loss attributable to the Obligor Group (in millions):

Current wording

The following table presents the net loss attributable to the Parent Company and TFSCA (collectively, the "Obligor Group") and the net loss attributable to intercompany transactions between the Obligor Group and subsidiaries of the Parent Company other than TFSCA (collectively, the "Non-Obligor Subsidiaries") which are excluded from the Net loss attributable to the Obligor Group (in millions):