What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-12-14 compared with 2022-11-15 · 100 added, 86 removed, 155 unchanged (55% of the section changed)

3 unchanged sentences

The Company is committed to helping its customers win and creating greater value for all of its stakeholders through its strategic focus on buildings.

Johnson Controls was originally incorporated in the state of Wisconsin in 1885 as Johnson Electric Service Company to manufacture, install and service automatic temperature regulation systems for buildings and was renamed Johnson Controls, Inc.

In 2005, Johnson Controls acquired York International, a global supplier of heating, ventilating, air-conditioning ("HVAC") and refrigeration equipment and services.

In 2005, Johnson Controls acquired York International, a global supplier of heating, ventilating and air-conditioning ("HVAC") and refrigeration equipment and services.

In 2014, Johnson Controls acquired Air Distribution Technologies, Inc., one of the largest independent providers of air distribution and ventilation products in North America.

7 unchanged sentences

The Company further serves customers by providing technical services, including maintenance, management, repair, retrofit and replacement of equipment (in the HVAC, industrial refrigeration, security and fire-protection space), and energy-management consulting.

In 2020, the Company launched its OpenBlue software platform, enabling enterprises to manage all aspects of their physical spaces by combining the Company's building products and services with cutting-edge technology and digital capabilities to enable data-driven “smart building” services and solutions.

The Company's OpenBlue digital software platform enables enterprises to better manage their physical spaces by combining the Company's building products and services with cutting-edge technology and digital capabilities to enable data-driven “smart building” services and solutions.

The Company partners with customers by leveraging its broad product portfolio and digital capabilities powered by OpenBlue, together with its direct channel service and solutions capabilities, to deliver outcome-based solutions across the lifecycle of a building that address customers’ needs to improve energy efficiency, enhance security, create healthy environments and reduce greenhouse gas emissions.

1 unchanged sentence

The Company conducts its business through four business segments:

Building Solutions North America, Building Solutions EMEA/LA, Building Solutions Asia Pacific and Global Products.

Building Solutions North America:

Building Solutions North America designs, sells, installs and services HVAC, controls, building management, refrigeration, integrated electronic security and integrated fire-detection and suppression systems for commercial, industrial, retail, small business, institutional and governmental customers in the United States and Canada.

Building Solutions North America also provides energy efficiency solutions and technical services, including inspection, scheduled maintenance, and repair and replacement of mechanical and controls systems, as well as data-driven “smart building” solutions, to non-residential building and industrial applications in the United States and Canadian marketplace.

Building Solutions EMEA/LA:

Building Solutions EMEA/LA designs, sells, installs and services HVAC, controls, building management, refrigeration, integrated electronic security, integrated fire-detection and suppression systems, and provides technical services, including data-driven “smart building” solutions, to markets in Europe, the Middle East, Africa and Latin America.

Building Solutions Asia Pacific:

Building Solutions Asia Pacific designs, sells, installs and services HVAC, controls, building management, refrigeration, integrated electronic security, integrated fire-detection and suppression systems, and provides technical services, including data-driven “smart building” solutions, in the Asia Pacific marketplace.

Global Products:

Global Products designs, manufactures and sells HVAC equipment, controls software and software services for residential and commercial applications to commercial, industrial, retail, residential, small business, institutional and governmental customers worldwide.

In addition, Global Products designs, manufactures and sells refrigeration equipment and controls globally.

The Global Products business also designs, manufactures and sells fire protection, fire suppression and security products, including intrusion security, anti-theft devices, access control, and video surveillance and management systems, for commercial, industrial, retail, residential, small business, institutional and governmental customers worldwide.

Global Products includes the Johnson Controls-Hitachi joint venture.

• Building Solutions North America which operates in the United States and Canada;

• Building Solutions EMEA/LA which operates in Europe, the Middle East, Africa and Latin America;

• Building Solutions Asia Pacific which operates in Asia Pacific;

• Global Products which operates worldwide and includes the Johnson Controls-Hitachi joint venture.

The Building Solutions segments:

• Design, sell, install and service HVAC, controls, building management, refrigeration, integrated electronic security and integrated fire-detection and suppression systems;

• Provide energy-efficiency solutions and technical services, including data-driven "smart building" solutions as well as inspection, scheduled maintenance, and repair and replacement of mechanical and controls systems.

The Global Products segment designs, manufactures and sells:

• HVAC equipment, controls software and software services for residential and commercial applications;

• Refrigeration equipment and controls;

• Fire protection and suppression;

• Security products, including intrusion security, anti-theft devices, access control, and video surveillance and management systems.

The Company’s segments provide products and services to commercial, institutional, industrial, data center, governmental and residential customers.

For more information on the Company’s segments, refer to Note 19, "Segment Information," of the notes to consolidated financial statements.

1 unchanged sentence

The Company sells and installs its commercial HVAC equipment and systems, control systems, security systems, fire-detection and fire suppression systems, equipment and services primarily through its extensive direct channel, consisting of a global network of sales and service offices.

Significant sales are also generated through global third-party channels, such as distributors of air-conditioning, controls, security and fire-detection and suppression products.

Significant sales are also generated through global third-party channels, such as

distributors of air-conditioning, controls, security and fire-detection and suppression products.

The Company’s large base of current customers leads to significant repeat business for the maintenance, retrofit and replacement markets.

The Company is also able to leverage its installed base to generate sales for its service business.

Trusted building brands, such as YORK®, Hitachi Air Conditioning, Metasys ®, Ansul, Ruskin® , Titus®, Frick®, PENN®, Sabroe®, Silent-Aire®, Simplex® and

Grinnell®, together with the breadth and depth of the products, systems and solutions offered by the Company, give it what it believes to be the most diverse portfolio in the building technology industry.

Trusted building brands, such as YORK®, Hitachi Air Conditioning, Metasys®, Ansul, Ruskin®, Titus®, Frick®, FM:Systems®, PENN®, Sabroe®, Silent-Aire®, Simplex® and Grinnell®, together with the breadth and depth of the products, systems and solutions offered by the Company, give it what it believes to be the most diverse portfolio in the building technology industry.

The Company has developed software platforms, including on-premises platforms and cloud-based software services, and integrated its products and services with digital capabilities to provide data-driven solutions to create smarter, safer and more sustainable buildings.

The Company's OpenBlue platform enables enterprises to manage all aspects of their physical spaces delivering sustainability, new occupant experiences, safety and security by combining the Company’s building expertise with cutting-edge technology, including AI-powered service solutions such as remote diagnostics, predictive maintenance, compliance monitoring and advanced risk assessments.

The Company's OpenBlue platform enables enterprises to better manage their physical spaces delivering sustainability, new occupant experiences, safety and security by combining the Company’s building expertise with cutting-edge technology, including artificial intelligence and machine learning-powered service solutions such as remote diagnostics, predictive maintenance, workplace management, compliance monitoring and advanced risk assessments.

The Company leverages its digital and data-driven products and services to offer integrated and customizable solutions focused on delivering outcomes to customers, including OpenBlue Buildings-as-a-Service, OpenBlue Net Zero Buildings-as-a-Service and OpenBlue Healthy Buildings.

These services are generally designed to generate recurring revenue for the Company as it supports its customers in achieving their desired outcomes.

In fiscal 2022, approximately 37% of sales originated from product offerings, 39% of sales originated from installations and 24% of sales originated from service offerings.

In fiscal 2023, products and systems accounted for 76% of sales and services accounted for 24% of sales.

The Company conducts its operations through a significant number of individual contracts that are either negotiated or awarded on a competitive basis.

Key factors in the award of contracts include system and service performance, quality, price, design, reputation, technology, application engineering capability and construction or project management expertise.

Key factors in the award of contracts include system and service performance, quality, price, design, reputation, technology, application engineering capability, availability of financing and construction or project management expertise.

Competitors for HVAC equipment, security, fire-detection, fire suppression and controls in the residential and non-residential marketplace include many local, regional, national and international providers.

16 unchanged sentences

The Company believes that it is well positioned to capitalize on the emerging and prevalent trends in the buildings industry, including sustainability, healthy buildings/indoor environmental quality and smart buildings.

To capitalize on these trends, the Company remains focused on maintaining leading positions in commercial HVAC and building management systems, as well as enabling growth through digital, to develop and leverage new digital technologies and capabilities into outcomes powered by its OpenBlue software platform.

To capitalize on these trends, the Company remains focused on maintaining leading positions in delivering building products, systems and solutions, as well as enabling growth through digital, to develop and leverage new digital technologies and capabilities into outcomes powered by its OpenBlue software platform.

In furtherance of these goals, the Company has three strategic priorities:

4 unchanged sentences

Accelerate in High Growth Digital Services, Regions and Verticals :

The Company is focused on transforming its large service business through its digital technologies, further enabled by the Company’s installed base, domain expertise and global coverage.

The Company is focused on transforming its large service business through digital technology, further enabled by the Company’s installed base, domain expertise and global coverage.

The Company is focused on developing and deploying connected equipment, systems and controls that will support the provision of digital services and solutions.

The Company further intends to expand its presence in high growth regions and invest in high growth verticals within the markets it serves, including healthcare, commercial offices/campus, education and data centers.

The Company further intends to expand its presence in high growth regions and

invest in high growth verticals within the markets it serves, including healthcare, commercial offices/campus, education and data centers.

Sustain a High-Performance, Customer-Centric Culture :

5 unchanged sentences

The Company’s backlog is applicable to its sales of systems and services.

At September 30, 2022, the backlog was $11.7 billion, of which $11.1 billion was attributable to the field business.

At September 30, 2023, the backlog was $13.6 billion, of which $12.1 billion was attributable to the building solutions (field) business.

The backlog amount outstanding at any given time is not necessarily indicative of the amount of revenue to be earned in the upcoming fiscal year.

1 unchanged sentence

Differences between the Company’s remaining performance obligations and backlog are primarily due to the following:

• Remaining performance obligations include large, multi-purpose contracts to construct hospitals, schools and other governmental buildings, which are services to be performed over the building's lifetime with average initial contract terms of 25 to 35 years for the entire term of the contract versus backlog which includes only the lifecycle period of these contracts which approximates five years;

• Remaining performance obligations exclude certain customer contracts with a term of one year or less and contracts that are cancelable without substantial penalty versus backlog which includes short-term and cancelable contracts;

• Remaining performance obligations include large, multi-purpose contracts including services to be performed over the initial term of the building contract (typically 25 to 35 years) versus backlog which includes only the lifecycle period of the contract (approximately five years);

• Remaining performance obligations exclude certain customer contracts with a term of one year or less and contracts that are cancellable without substantial penalty versus backlog which includes short-term and cancellable contracts;

• Remaining performance obligations include the full remaining term of service contracts with substantial termination penalties versus backlog which includes one year for all outstanding service contracts.

The Company will continue to report backlog as it believes it is a useful measure of evaluating the Company's operational performance and relationship to total orders.

The Company believes backlog is a useful measure of evaluating the Company's operational performance and relationship to total orders.

Raw Materials

1 unchanged sentence

The Company also uses semiconductors and other electronic components in the manufacture of its products.

During fiscal 2022, the Company experienced material cost increases due to global inflation, supply chain disruptions, labor shortages, increased demand and other regulatory and macroeconomic factors.

These trends had an unfavorable impact on the Company’s results of operations in fiscal 2022, as discussed in Item 7.

During fiscal 2022 and portions of fiscal 2023, the Company experienced material cost increases due to global inflation, supply chain disruptions, labor shortages, increased demand and other regulatory and macroeconomic factors.

The collective impact of these trends were favorable to revenue due to increased demand and price increases to offset inflation, while negatively impacting margins due to supply chain disruptions and cost pressures.

However, throughout fiscal 2023, the Company experienced improved margins as supply chain disruptions eased and higher priced backlog was converted to sales, as discussed in Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The Company believes that the macroeconomic trends experienced in fiscal 2022 will continue into fiscal 2023.

Therefore, the Company could experience further disruptions, shortages and price inflation in the future, the effect of which will depend on the Company’s ability to successfully mitigate and offset the impact of these events.

Although the Company has experienced recent improvement in its supply chain, the Company could experience further disruptions, shortages and price inflation in the future, the effect of which will depend on the Company’s ability to successfully mitigate and offset the impact of these events.

In fiscal 2024, commodity prices and availability could fluctuate throughout the year and could significantly affect the Company’s results of operations.

3 unchanged sentences

Generally, the Company seeks statutory protection for strategic or financially important intellectual property developed in connection with its business.

The Company protects its intellectual property investments in a variety of ways.

The Company works actively in the U.S.

and internationally to ensure the enforcement of copyright, trademark, trade secret, and other

protections that apply to the Company's products, services, software, solutions, and branding.

Certain intellectual property, where appropriate, is protected by contracts, licenses, confidentiality or other agreements.

From time to time, the Company takes action to protect its businesses by asserting its intellectual property rights against third-party infringers.

The Company owns numerous U.S.

patents (and their respective counterparts), the more important of which cover those technologies and inventions embodied in current products or which are used in the manufacture of those products.

While the Company believes patents are important to its business operations and in the aggregate constitute a valuable asset, no single

patent, or group of patents, is critical to the success of the business.

Internal development allows the Company to maintain competitive advantages that come from product differentiation and closer technical control over its products and services.

While the Company believes patents are important to its business operations and in the aggregate constitute a valuable asset, no single patent, or group of patents, is critical to the success of the business.

The Company, from time to time, grants licenses under its patents and technology and receives licenses under patents and technology of others.

17 unchanged sentences

Such matters typically are resolved with regulatory authorities through commitments to compliance, abatement or remediation programs and, in some cases, payment of penalties.

In addition, governments in the United States and internationally have increasingly been regulating perfluorooctane sulfonate ("PFOS"), perfluorooctanoic acid ("PFOA"), and/or other per- and poly-fluoroalkyl substances ("PFAS"), which are contained in certain of the Company's firefighting foam products.

These regulations include declining emission standards and limits set as to the presence of certain compounds.

See Note 21, "Commitments and Contingencies," of the notes to consolidated financial statements for further discussion of environmental matters.

8 unchanged sentences

In addition, government regulation of fire safety codes can impact the Company's fire businesses.

The Company’s businesses may also be affected by changes in governmental regulation of refrigerants and energy efficiency standards, noise regulation and product safety regulations, including changes related to hydro fluorocarbons/emissions reduction efforts, energy conservation standards and the regulation of fluorinated gases.

These and other laws and regulations impact the manner in which the Company conducts its business, and changes in legislation or government policies can affect the Company's worldwide operations, both favorably and unfavorably.

The Company’s businesses may also be affected by changes in governmental regulation of refrigerants, PFAS, energy efficiency standards, noise regulation and product safety regulations, including changes related to hydro fluorocarbons/emissions reduction efforts, energy conservation standards and the regulation of fluorinated gases.

These and other laws and regulations impact the manner in which the Company conducts its

business, and changes in legislation or government policies can affect the Company's worldwide operations, both favorably and unfavorably.

For a more detailed description of the various laws and regulations that affect the Company's business, see Item 1A.

3 unchanged sentences

The Company makes capital expenditures to design and upgrade its fire and security products to comply with or exceed standards applicable to the alarm, fire suppression and security industries.

The Company also makes capital expenditures to meet or exceed energy efficiency standards, including the regulation of refrigerants, hydro fluorocarbons/emissions reductions efforts and the regulation of fluorinated gasses, particularly with respect

to the Company’s HVAC products and solutions.

The Company also makes capital expenditures to meet or exceed energy efficiency standards and comply with applicable regulations, including the regulation of refrigerants, hydro fluorocarbons/emissions reduction efforts and the regulation of fluorinated gasses, particularly with respect to the Company’s HVAC products and solutions.

The Company’s ongoing environmental compliance program also results in capital expenditures.

5 unchanged sentences

Overview and Governance

The Company strives to continuously drive and develop its High-Performance Culture.

The Company’s High-Performance Culture represents the practices and behaviors, underpinned by the Company’s values, that lead to sustained growth, winning results and satisfied customers.

The development of a High-Performance Culture enables the Company to achieve its purpose to build smarter, healthier, and more sustainable tomorrows.

The Company’s strategic drivers provide the direction that guides its workforce toward a culture of continuous improvement and innovation to exceed customers’ expectations and provide solutions for global challenges in the building systems industry.

The responsibility to develop and maintain a High-Performance Culture is owned, embedded and executed throughout the Company.

The Chief Human Resources Officer ("CHRO") is responsible for establishing the Company’s strategy to drive a High-Performance Culture and ensuring its execution across the Company.

The Compensation and Talent Development Committee of the Board of Directors is the primary overseer of the Company’s High-Performance Culture strategy and execution.

The Chief Executive Officer ("CEO"), the CHRO, the Vice President of Diversity and Inclusion and other senior leaders within the Company are responsible for the execution of the strategy and engage with the Compensation and Talent Development Committee, the Governance and Sustainability Committee and the full Board of Directors on the critical components driving the Company’s High-Performance Culture, including discussions of human capital trends, practices and operations, diversity and inclusion, health and safety, leadership development and succession planning.

The Compensation and Talent Development Committee of the Board of Directors is the primary overseer of the Company’s High-Performance Culture strategy and execution, ensuring that the Company presents an employee value proposition that supports retention and the attraction of external talent.

The Governance and Sustainability Committee is the primary overseer of employee health and safety.

The Chief Executive Officer ("CEO"), the CHRO, the General Counsel, the Vice President of Global Environment Health & Safety, the Vice President of Diversity, Equity and Inclusion and other senior leaders within the Company are responsible for the execution of the strategy and engage with the Compensation and Talent Development Committee, the Governance and Sustainability Committee and the full Board of Directors on the critical components driving the Company’s High-Performance Culture, including discussions of future of work, human capital trends, processes and practices, diversity, equity and inclusion, health and safety, talent development, succession planning, and talent and culture best practices.

Key components driving the Company’s High-Performance Culture include:

2 unchanged sentences

The Company’s health and safety programs are designed around global standards with appropriate variations addressing multiple jurisdictions and regulations, specific hazards and unique working environments of the Company’s manufacturing, service and install, and headquarter operations.

In its continuous efforts to ensure the health, safety and well-being of its employees and workplaces, during fiscal 2022, the Company created new Zero Harm Well-Being and Zero Harm Sustainability Behaviors, each of them consisting of ten guiding principles to protect employees and the environment.

In addition, the Company launched a vehicle telematics program to identify unsafe driving practices and further reduce the occurrence of motor vehicle accidents.

Today, the Company’s focus on employee well-being continues with the utilization of global and regional well-being councils, addressing physical, mental, social and financial aspects of employee well-being.

The Company requires each of its locations to perform regular safety audits to ensure proper safety policies, program procedures, analyses and training are in place.

In addition, the Company engages an independent third-party conformity assessment and certification vendor to audit selected operations for adherence to its global health and safety standards.

Safety culture and behavior-based safety initiatives have been deployed within the Company, including a multi-faceted policy focused on preventing distracted driving and the design and rollout of a new style of platform ladder built to provide a safe working platform for employees.

One safety policy that applies to all employees around the globe, regardless of rank, is every individual worker’s right to apply the “Stop Work” principle when uncertain about the health and safety of a particular task.

Safety culture and values-based safety initiatives have been deployed within the Company to sustain and further enhance performance.

The Company utilizes a mixture of leading and lagging indicators to assess the health and safety performance of its operations.

1 unchanged sentence

In fiscal 2023, the Company had a TRIR of 0.37 and a LTIR of 0.12.

Diversity and Inclusion

Diversity and inclusion are embedded throughout the Company’s strategy to drive a High-Performance Culture.

The Company recognizes that an inclusive culture that is diverse adds value to the Company and its customers through:

the creation and delivery of innovative and outstanding products, services and outcomes;

the cultivation of an engaged and empowered environment where employee productivity drives company growth;

and the onboarding of high-performing talent into the

organization to propel the Company's transformation and future.

The Company believes that all employees and leaders are responsible for creating a diverse and inclusive workplace.

Employees are empowered to take an active role in creating a culture that values uniqueness, celebrates creativity and drives innovation.

The Company places a high value on inclusion, engaging employees in Business Resource Groups ("BRGs") — employee-led voluntary organizations of people with similar interests, experiences, or demographic characteristics.

The Company maintains its BRG chapters worldwide across nine categories:

Diversity, Equity and Inclusion

The Company is dedicated to creating a workplace where diversity is celebrated, where every employee feels included and valued, and where equitable practices are the norm.

By prioritizing diversity, equity, and inclusion, the Company aims to foster a culture of innovation, collaboration, and respect that drives its success in the global marketplace.

Diversity, Equity, and Inclusion (“DEI”) is a core component of the Company’s strategy to drive a High-Performance Culture, recognized as adding value to the Company’s creation and delivery of innovative high performing products and enabling solutions to its customers’ toughest problems.

The Company has recently elevated its focus on ‘equity’ to further enable all employees to have access to the opportunities, resources, support and networks they need to develop and succeed.

The Company empowers employees to take an active role in creating a culture that values uniqueness, celebrates creativity and drives innovation.

The Company encourages employees to enable an inclusive culture through active participation in Business Resource Groups ("BRGs") - employee-led voluntary organizations of people with similar interests, experiences, or demographic characteristics.

The Company continues to increase participation in its BRG chapters worldwide across nine categories:

African American, Asia Pacific, LGBTQ+, Emerging Leaders, Hispanic, Disabilities, Veterans, Women and Sustainability.

The Company uses these groups to serve as a source of inclusion and to support the acquisition and development of diverse talent internally and externally.

In 2023, the Company established BRGs focused on Wellness and Caregiving in response to feedback through its Voice of the Employee events.

Each BRG is open to all employees and sponsored and supported by senior leaders across the enterprise.

The Company’s BRG structure includes monthly learning series, an active recruitment platform, an innovation hub, and community engagement.

In fiscal 2022, the Company continued to realize meaningful growth in BRG membership.

The Company has implemented several measures that focus on ensuring accountabilities exist for making progress in diversity:

• Diversity Performance Goals:

The Company’s BRG structure includes monthly learning series, an active recruitment platform, an innovation hub, community engagement and feedback sessions.

The Company also engages BRGs to support the acquisition and development of diverse talent internally and externally.

As a world leader in building technologies, the Company is committed to enabling employees to bring their authentic selves to work each day, which in turn adds value, fosters creativity, and inspires change across the organization.

The Company recognizes that it is its people that make the Company exceptional.

The Company has developed robust policies and strategies to support this vision in its operations and its communities, including strategies addressing social impact and employee experience.

The Company is committed to the implementation of its DEI mission, vision and roadmap including a focus on employee experience, business resource groups, learning and development and external impact.

The Company recognizes that fostering a diverse, equitable, and inclusive environment requires ongoing commitment, accountability, and continuous improvement.

The Company regularly assesses its progress, recognizes employee contributions, and holds leaders accountable for driving DEI initiatives.

The Company also creates mechanisms for open dialogue and feedback from employees to ensure that everyone’s voices are heard.

The Company has implemented several measures that focus on ensuring accountabilities exist for fostering a diverse, equitable and inclusive environment:

• Diversity Objectives:

The CEO and other senior leaders have diversity and inclusion objectives in their annual performance goals.

• Attracting Diverse Talent:

The Company commits to having a diverse talent pipeline by partnering with its business units in their workforce planning forecasts, as well as external organizations, to develop initiatives and goals to recruit diverse talent across all leadership and skill areas.

In furtherance of this commitment, the Company continues to enhance its Future Leaders Internship Program, an enterprise-wide internship program designed to build a sustainable, diverse pipeline of talent with the critical skills needed to support the Company’s growth initiatives.

• Facilitating Engagement:

The Company launched the Perspectives Listening Series to facilitate honest, courageous and authentic conversations between colleagues on topics that are relevant and important to employees, communities and society as a whole.

Topics covered include next generation leadership, gender equality, the social justice movement and fatherhood.

BRGs are instrumental in positively impacting the attraction of diverse talent to the Company.

BRGs support these efforts through external engagement and support of talent acquisition sourcing initiatives.

The Company’s global flagship Future Leaders Internship Program continues to expand the diversity of its outreach and focus on the skills needed to advance the Company’s growth initiatives.

• Honoring Employee Contributions:

The Company’s Diversity Distinction Awards serve as a recognition and encouragement for workforce contributions to the Company’s DEI efforts.

Awarded to eight employees three times per year, the nomination driven Diversity Distinction Awards have become a highly regarded recognition of employee’s contribution to the progress of the Company’s DEI journey.

Talent Development

To maintain a High-Performance Culture, the Company must ensure the continued development and advancement of its people.

Strategic talent reviews and succession planning occur on a planned cadence annually – globally and across all business areas.

The Company continues to provide opportunities for the Company's employees to grow their careers, with approximately half of open management positions filled internally during fiscal year 2022.

The Company believes that high performance is an outcome of a person’s ability to change, adapt, and grow their capabilities throughout their career.

The Company emphasizes real-life, real-time learning that enables a person to meet the demands of challenging and changing work and focuses on reinforcing key principles that are designed to support an individual’s effectiveness in his or her current job and in their future development.

To maintain a High-Performance Culture, the Company must ensure the continued development and advancement of its employees.

The Company has adopted a continual improvement approach to talent development, working to support employees’ growth while defining the skills and capabilities the organization will need in future years.

To assess current enterprise capabilities and define future needs, strategic talent reviews and succession planning occur on a planned cadence annually – globally and across all business areas.

The Company continues to provide opportunities for its employees to grow their careers, with approximately half of open management positions filled internally during fiscal year 2023.

The Company believes that high performance is an outcome of an employee’s ability to change, adapt, and grow their capabilities throughout their career.

This talent development approach includes self and multi-rater assessments, functional and

leadership competency models, providing employees a personalized approach to their development planning and skill acquisition.

The Company emphasizes real-life, real-time learning that enables each employee to meet the demands of challenging and changing work and focuses on reinforcing key principles that are designed to support an individual’s effectiveness in his or her current job and in their future development.

The Company provides technical and leadership training to employees, customers and suppliers who work for or with the Company’s products and services.

In particular, the Company’s focus on employee development has been structured over the last several years through programs designed to imbed essential skills and reinforce strategic goals that are aligned to the Company’s culture, including:

The Company’s focus on employee development has been structured over the last several years through programs designed to imbed essential skills with employees and reinforce strategic goals aligning with the Company’s culture, including:

• Digital Transformation:

In support of Company’s growth strategy, the Company is investing in developing digital leadership with personalized and targeted training programs designed to create digitally capable leaders, salespersons and technicians.

• Diversity and Inclusion:

The Company has developed a structured diversity and inclusion training continuum across the levels and stages of individuals' careers to develop and align employees with the Company’s diversity and inclusion strategy and values.

• Organizational Health:

The Company regularly assesses its progress using an Organizational Health Index survey and develops annual health plans comprised of priority initiatives to drive key behaviors and practices that is informed by the survey’s results.

These plans are specifically tailored for each business unit and regularly assessed during the year, with managers accountable for introducing and teaching new skills or toolsets to their teams.

In fiscal 2022, the Company offered a robust curriculum of over 232,000 learning activities available to employees, consisting of videos, courses, e-learning, documentation, articles and books, including over 4,000 active (in person or virtual) learning courses.

The Company has developed a structured diversity and inclusion training curriculum across the levels and stages of individuals' careers to develop and align employees with the Company’s diversity and inclusion strategy and values.

In fiscal year 2023, the Company expanded the diversity curriculum, adding new training programs to develop careers of under-represented talent and a toolkit for managers to guide their self-led inclusion efforts.

• Organizational Engagement:

The Company periodically measures the engagement of its employees using a quarterly pulse survey.

In fiscal 2023, the survey was launched and conducted three times.

The engagement survey provides managers with their own data dashboard to view their own engagement results and can be utilized by managers at all levels to understand how to improve the Company’s culture and employee engagement.

Managers are provided with resources to interpret their results and plan their actions following each survey.

In fiscal 2023, the Company offered a robust curriculum of over 197,000 activities that were completed by employees, consisting of videos, courses, e-learning, documentation, articles and books, including over 4,000 active (in person or virtual) learning courses.

In fiscal 2023, over 1.26 million learning activities were completed by approximately 86,300 employees.

learning hours consumed by employees was 1.02 million hours, averaging almost 11 hours per employee including time invested in formal learning and standard time invested in self-paced reading or video consumption.

The total learning hours consumed by employees was 1.22 million hours, averaging almost 14 hours per employee including time invested in formal learning and standard time invested in self-paced reading or video consumption.

Employee Population and Demographics

2 unchanged sentences

Employee Diversity as of September 30, 2023

Employees Male Female Minority (1)

Total 76% 24% 30%

Male Female Minority (1)

Total employees 76% 24% 32%

Managers 79% 21% 22%

9 unchanged sentences

The Company invests in enhancements to the capabilities of its product lines and services to support its strategy, meet consumer preferences and achieve regulatory compliance.

This includes investments in the development of the Company’s OpenBlue platform and related service offerings, digital product capabilities, energy efficiency and low GWP refrigerants and technology.

This includes investments in the development of the Company’s OpenBlue platform and related service offerings, digital product capabilities, energy efficient products, and low GWP refrigerants and technology.

Available Information

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business