What changed in this filing

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Item 1. Business

2025-11-14 compared with 2024-11-19 · 96 added, 129 removed, 146 unchanged (61% of the section changed)

ITEM 1 BUSINESS

Johnson Controls International plc, headquartered in Cork, Ireland, is a global leader in smart, healthy and sustainable buildings, serving a wide range of customers in more than 150 countries.

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.

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 and air-conditioning ("HVAC") and refrigeration equipment and services.

Following this acquisition, Johnson Controls continued to expand its portfolio of building related product and service offerings for residential and commercial customers.

Following this acquisition, Johnson Controls continued to expand its portfolio of building-related product and service offerings.

In 2016, Johnson Controls, Inc.

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Following the Merger, Tyco changed its name to “Johnson Controls International plc.”

In 2016, the Company completed the spin-off of its automotive business into Adient plc, an independent, publicly traded company.

In 2019, the Company closed the sale of its Power Solutions business, completing the Company’s transformation into a pure-play building technologies and solutions provider.

In 2024, the Company announced that it was evaluating its non-core product lines in connection with its objective to be a pure-play provider of technologies and solutions for commercial buildings.

During the fourth quarter of fiscal 2024, the Company completed the sale of its Air Distribution Technologies business included within its 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”).

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 sale of the R&LC HVAC business is expected to be completed in the fourth quarter of fiscal 2025.

The Company is a global leader in engineering, manufacturing, commissioning and retrofitting building products and systems, including residential and commercial HVAC equipment, industrial refrigeration systems, controls, security systems, fire-detection systems and fire-suppression solutions.

On July 31, 2025, the Company completed the divestiture of its Residential and Light Commercial ("R&LC") HVAC business to Robert Bosch GmbH (“Bosch”).

The R&LC HVAC business included 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.

The Company is a global leader in engineering, manufacturing, commissioning and retrofitting building products and systems, including commercial 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, security and fire-protection space), and energy-management consulting.

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.

The Company partners with customers by leveraging its broad product portfolio with digital capabilities, together with its direct channel service and solutions capabilities, to deliver solutions and services addressing distinct and diverse operating environments and regulatory requirements that address customers’ needs in their core missions.

Business Segments

The Company conducts its business through four business segments:

• 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.

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;

• 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 primarily to commercial, institutional, industrial, data center, and governmental customers.

In connection with the divestiture of the R&LC HVAC business, the Company realigned its organizational structure into three regional reporting segments (Americas, EMEA and APAC) from four reporting segments (Global Products, Building Solutions North America, Building Solutions EMEA/LA and Building Solutions APAC).

The Company implemented this change effective April 1, 2025 as part of ongoing initiatives to drive simplification, accelerate growth, better reflect its organizational and operational structure and align with the manner in which the Company's chief operating decision maker assesses performance and makes decisions regarding the allocation of resources following portfolio simplification actions.

As a result, the Company conducts its business through three operating segments, all of which are reportable segments:

• Americas, which designs, manufactures, sells, installs and services HVAC, controls, building management, refrigeration, integrated electronic security systems, integrated fire detection and suppression systems, and digital (software) solutions for commercial, industrial, data center, institutional and governmental customers in the Americas (United States, Canada, and Latin America – Central and South America).

Americas also provides energy efficiency solutions and technical services, including inspection, scheduled maintenance, and repair and replacement of mechanical and control systems, as well as data-driven "smart building" solutions, to the Americas marketplace.

• EMEA, which designs, manufactures sells, installs and services HVAC, controls, building management, refrigeration, integrated electronic security systems, integrated fire detection and suppression systems, and digital (software) solutions for commercial, residential security (Subscriber business), industrial, data center, institutional, governmental, and marine customers and provides technical services, including data-driven “smart building” solutions, to markets in Europe, the Middle East and Africa.

• APAC, which designs, manufactures, sells, installs, and services HVAC, controls, building management, refrigeration, integrated electronic security systems, integrated fire detection and suppression systems, and digital (software) solutions for commercial, industrial, data center, institutional, and governmental customers and provides technical services, including data-driven “smart building” solutions, to the Asian and Pacific marketplaces.

For more information on the Company’s segments, refer to Note 18, "Segment Information," of the notes to consolidated financial statements.

Products, Systems, Services and Solutions

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.

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.

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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 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 product portfolio and service network, together with digital and data-driven technologies 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.

The Company's OpenBlue platform combines 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.

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

In fiscal 2024, products and systems accounted for 70% of sales from continuing operations and services accounted for 30% of sales from continuing operations.

In fiscal 2025, products and systems accounted for approximately 68% of sales from continuing operations and services accounted for 32% of sales from continuing operations.

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

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Trane Technologies plc;

Daikin Industries, Ltd.;

Lennox International, Inc.;

GC Midea Holding Co, Ltd.

and Gree Electric Appliances, Inc.

Vertiv Holdings Co., API Group and Daikin Industries, Ltd.

In addition, the Company competes in a highly fragmented building services market.

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Business Strategy

The Company’s business strategy is to sustain and expand its position as a leader in commercial building technology and solutions by offering a full spectrum of products and solutions for commercial customers across the globe.

In 2024, the Company acted to optimize its core commercial buildings portfolio with the sale of its Air Distribution Technologies business and the entry into a definitive agreement to sell its R&LC HVAC business.

Following these portfolio optimization actions, the Company’s core strategy remains focused on creating growth platforms, driving operational improvements and creating a high-performance, customer-centric culture.

The Company has strong positions in attractive and growing end-markets across HVAC, controls, fire, security and services, enhanced by its comprehensive product portfolio and substantial installed base.

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

To capitalize on these trends, the Company

remains focused on maintaining leading positions in delivering commercial building products, systems and solutions through its direct and indirect channels, as well as enabling growth through digital, to develop and leverage the breath of its portfolio to drive attachment, offer differentiated services and solutions over the building lifecycle and generate recurring revenue.

The Company’s business strategy is to sustain and expand its position as a leader in commercial building technology and solutions by developing and implementing solutions designed to address its customers’ vertical specific needs in their core missions.

In 2024 and 2025, the Company acted to optimize its core commercial buildings portfolio with the divestitures of its Air Distribution Technologies and R&LC HVAC businesses.

Following these portfolio optimization actions, the Company’s core strategy remains advancing smart, healthy and sustainable buildings to power its customers’ missions, enabled by a simpler, more focused company focused on driving growth, profit, and cash flow.

The Company has leading positions in attractive and growing end-markets across HVAC, controls, fire, security and services, enhanced by its comprehensive product portfolio, significant installed base and substantial field position.

To capitalize on these trends, the Company is focused on offering differentiated services and solutions designed to address its customers’ vertical specific needs in their core missions.

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

Capitalize on Key Growth Vectors:

Data centers, sustainable buildings, healthy buildings/indoor environmental quality and smart buildings represent key growth opportunities for the Company.

Data centers, decarbonization, sustainable buildings, smart buildings, energy efficiency and mission-critical environments represent key growth opportunities for the Company.

The Company seeks to leverage its existing portfolio breadth and investments in product development, combined with the expansion of its digital products and capabilities powered by OpenBlue, to offer differentiated solutions and innovative deal structures to help customers achieve their objectives.

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Bringing Value Across the Building Lifecycle :

The Company provides system and service solutions that maximize the opportunities around the lifecycle of the building, delivering outcomes to the customer that save energy, reduce emissions and optimize building lifecycle costs while improving the overall occupant experience.

The Company provides system and service solutions that maximize the opportunities around the lifecycle of the building, delivering outcomes to the customer that save energy, reduce emissions, maintain uptime, and optimize building lifecycle costs while delivering mission-critical environments and improving the overall occupant experience.

The Company’s ability to drive direct, integrated solutions within multiple domains enables opportunities for attachment, cross-selling, recurring revenue, and developing long-term relationships with customers from installation to service, retrofit, and replacement.

Accelerate in High Growth Digital Services, Regions and Verticals :

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.

Accelerate in High Growth Verticals :

The Company is focused on driving growth and profit by developing and implementing solutions designed to address its customers’ vertical specific needs in their core missions, enabled by the Company’s installed base, domain expertise and global coverage.

The Company further intends to expand its presence in high growth verticals within the markets it serves, including data centers, hospitals, university campuses, advanced manufacturing, class A offices, and airports.

Sustain a High-Performance, Customer-Centric Culture :

The Company recognizes that developing talent and creating positive customer experiences is central to accomplishing its business strategies.

The Company is investing in its talent to build a diverse workforce that is digital capable, solutions oriented and focused on continuous learning and growth.

The Company is investing in its talent to build a workforce that is digitally capable, solutions oriented and focused on continuous learning and growth.

The Company aims to leverage its talent capabilities and training to create a customer-focused culture to drive customer loyalty and decisions.

To realize these priorities, the Company is leveraging its technology leadership, comprehensive product portfolio, global presence, substantial installed base and strong channels to monetize the lifecycle opportunities of systems, service, retrofit and replacement which are established and delivered by the Company’s direct field businesses and third-party channels across the globe.

To realize these priorities, the Company is leveraging its technology leadership, product portfolio, global presence, substantial installed base, sizable field position and strong channels to monetize the lifecycle opportunities of systems, service, retrofit and replacement.

The Company is augmenting its strategic priorities with disciplined execution, productivity enhancements and sustainable cost management to create a path to realize expanded margins and enhanced profitability.

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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 $15.2 billion at September 30, 2024, including both the Building Solutions and Global Products segments.

Backlog is applicable to sales of both products and systems and services and totaled $16.6 billion at September 30, 2025.

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.

The following table summarizes backlog and orders for the Building Solutions segments:

The following table summarizes backlog and orders by segment for the Systems and Services based businesses:

Backlog Orders

(in billions) September 30, 2025 Year-over-Year Change (1)

September 30, 2024 Year-over-Year Change (1)

Building Solutions North America $ 9.1 10 % $ 12.3 9 %

Building Solutions EMEA/LA 2.5 10 % 4.6 9 %

Building Solutions Asia Pacific 1.5 (10) % 2.5 (8) %

Year Ended September 30, 2025 Year-over-Year Change (1)

$ 10.6 13 % $ 13.7 8 %

2.5 12 % 4.4 6 %

1.8 17 % 2.6 3 %

Total Building Solutions $ 14.9 13 % $ 20.7 7 %

(1) Change is compared to September 30, 2023 (backlog) and the year ended September 30, 2023 (orders) and excludes the impact of mergers, acquisitions, dispositions and foreign currency.

(1) Change is compared to September 30, 2024 (backlog) and the year ended September 30, 2024 (orders) and excludes the impact of acquisitions, dispositions and foreign currency.

Remaining performance obligations were $22.7 billion at September 30, 2025.

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

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 and 2024, the Company experienced improved margins as supply chain disruptions eased and higher priced backlog was converted to sales, as discussed in Item 7.

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

Recently, the Company has experienced increased raw material costs due to tariffs and reciprocal tariffs imposed by the United States and other nations.

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, as discussed in Item 7.

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

Although the Company has seen its supply chain normalize, 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.

The Company could experience further disruptions, shortages, tariffs 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 2026, commodity prices and availability could fluctuate throughout the year and could significantly affect the Company’s results of operations.

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The Company has expended substantial resources globally, both financial and managerial, to comply with environmental laws and worker safety laws and maintains procedures designed to foster and ensure compliance.

Certain of the Company’s businesses are, or have been, engaged in the handling or use of substances that may impact workplace health and safety or the environment.

Certain of the Company’s businesses are, or have been, engaged in the handling or use of substances that may impact workplace health and safety or the

The Company is committed to protecting its workers and the environment against the risks associated with these substances.

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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 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.

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See Note 20, "Commitments and Contingencies," of the notes to consolidated financial statements for further discussion of environmental matters.

Seasonal Factors

Certain of the Company's sales are seasonal as the demand for certain air conditioning equipment and services generally increases in the summer months.

This seasonality is mitigated by the other products and services provided by the Company that have no material seasonal effect.

Research and Development Expenditures

Refer to Note 1, "Summary of Significant Accounting Policies," of the notes to consolidated financial statements for research and development expenditures.

The Company has committed to invest a substantial portion of its new product research and development in developing products and services supporting energy efficiency, decarbonization and mission-critical environments.

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 efficient products, and low GWP refrigerants and technology.

Human Capital Management

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

As the Company enters its next 140 years of innovation leadership, people are at the center of how it delivers value to customers.

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, 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, company culture and succession planning.

The Chief Human Resources Officer ("CHRO") is responsible for establishing and driving the execution of the Company’s High-Performance Culture strategy, ensuring that the Company presents an employee value proposition that supports retention and the attraction of external talent.

The Company’s Board of Directors provides oversight of the Company’s High-Performance Culture, with the Compensation and Talent Development Committee overseeing the Company’s High-Performance Culture strategy and the Governance and Sustainability Committee overseeing 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 Employee Engagement and Inclusion and other senior leaders within the Company are responsible for the execution of the High-Performance Culture 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, engagement and inclusion, health and safety, talent development, company culture and succession planning.

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

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In fiscal 2025, the Company had a TRIR of 0.34 and a LTIR of 0.15.

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.

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

Employee Engagement and Inclusion

The Company is dedicated to creating a workplace where uniqueness is celebrated and where every employee feels valued and included.

The Company aims to foster a culture of engagement, innovation, collaboration, and respect that drives its success in the global marketplace.

Employee engagement and inclusion (“EEI”) is a 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 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 eleven categories:

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

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, community engagement and feedback sessions.

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

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:

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.

In 2024, the Company, in response to employee feedback, launched the Mindful Living and Parents and Caregivers Together ("PACT") BRG groups.

Interest and enthusiasm has been strong, and the new BRGs are growing membership at the fastest pace of any BRG group.

The Company recognizes that fostering an engaged 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 initiatives.

The Company has created 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 an engaged and inclusive environment.

• Organizational Engagement:

The Company measures the engagement of its employees using a quarterly pulse survey initially launched in fiscal 2023.

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, ensuring that all managers are reinforcing a continuous improvement culture.

• Inclusion and Engagement Objectives:

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

• Attracting High-Performing Talent:

The Company attracts high-performing talent by delivering a market and persona-based employee value proposition which incorporates the Company’s mission.

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

The Company provides formal recognition and encouragement for workforce contributions to the Company’s EEI efforts.

Awarded to eight employees three times per year, the nomination driven Inclusion Distinction Awards have become a highly regarded recognition of an employee’s contribution to creating an inclusive culture at the Company.

Talent Development

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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 more than half of open management positions filled internally during fiscal 2024.

The Company continues to provide opportunities for its employees to grow their careers, with more than two-thirds of open management positions filled internally during fiscal 2025.

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

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

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, engineers and technicians.

• Diversity and Inclusion:

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

The Dimensions training program is designed to develop careers of under-represented talent and a toolkit for managers to guide their self-led inclusion efforts.

In fiscal 2024, the program was expanded

beyond North America to a global audience.

The Company’s flagship Women in Leadership ("WIL") program continues to grow in participation with a total increase of 162% since inception in 2022.

The program is demonstrating measurable impact with 28% of original cohort participants being promoted since program completion.

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

• Front-Line Talent:

In support of the Company’s growth strategy, the Company is investing in developing front line talent to ensure a customer-ready workforce.

This includes investment in key learning curriculum and building skill-based career pathing for all front-line staff.

Retention of program participants continues to increase year over year.

• Leadership Development:

The Company has a strong leadership curriculum for first time managers, managers new to the Company, managers of managers and executive leaders.

In 2025, the high potential courses had a greater than 75% application of content to the job and a net promoter score ("NPS") of greater than 70.

• Engagement and Inclusion:

The Company has developed BRG-sponsored development programs structured across the levels and stages of individuals' careers to develop and align employees with the Company’s High-Performance Culture.

In fiscal 2025, the Company offered a robust curriculum of almost 225,000 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 2025, over 1.3 million learning activities were completed by over 75,000 employees (excluding non-wired).

The total learning hours consumed by employees was 1.58 million hours, averaging almost 20 hours per employee including time invested in formal learning and standard time invested in self-paced reading or video consumption.

Organizational Engagement

The Company measures the engagement of its employees using a quarterly pulse survey initially launched in fiscal 2023.

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

The total learning hours consumed by employees was 1.3 million hours, averaging over 17 hours per employee including time invested in formal learning and standard time invested in self-paced reading or video consumption.

Employee Population and Demographics

As of September 30, 2025, the Company employed approximately 87,000 people worldwide, of which approximately 31,000 were employed in the United States and approximately 56,000 were outside the United States.

The Company’s workforce declined from 2024 primarily due to divestitures including the R&LC HVAC business.

Approximately 18,000 employees are covered by collective bargaining agreements or works councils, and the Company believes that its relations with its labor unions are generally positive.

Employee Diversity as of September 30, 2024

Male Female Minority (1)

Total employees 77% 23% 31%

Managers 79% 21% 22%

(1) Male and female data represents all employees globally.

Minority data represents U.S.

employees only.

Seasonal Factors

Certain of the Company's sales are seasonal as the demand for residential air conditioning equipment and services generally increases in the summer months.

This seasonality is mitigated by the other products and services provided by the Company that have no material seasonal effect.

Research and Development Expenditures

Refer to Note 1, "Summary of Significant Accounting Policies," of the notes to consolidated financial statements for research and development expenditures.

The Company has committed to invest a substantial portion of its new product research and development in climate and efficiency-related innovation to develop sustainable products and services.

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.

The Company’s EEO-1 Report published on our website outlines additional details on its U.S.

workforce composition.

Available Information

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Copies of any materials the Company files with the SEC can also be obtained free of charge through the SEC’s website at http://www.sec.gov.

The Company also makes available, free of charge, its Code of Ethics, Corporate Governance Guidelines, Board of Directors committee charters and other information related to the Company on the Company’s Internet website or in printed form upon request.

The Company is not including the information contained on the Company’s website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K.

The Company also makes available, free of charge, its Code of Ethics, Corporate Governance Guidelines, Board of Directors committee charters and other information related to the Company on its Internet website or in printed form upon request.

The Company is not including the information contained on its website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K.

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