What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-11-14 compared with 2024-11-19 · 294 added, 349 removed, 1570 unchanged (29% of the section changed)

10 unchanged sentences

Acquisitions and Divestitures

Assets and Liabilities Held for Sale and Discontinued Operations

Assets and Liabilities Held for Sale

Revenue Recognition

Accounts Receivable

Property, Plant and Equipment

5 unchanged sentences

Earnings Per Share

Retirement Plans

Accumulated Other Comprehensive Income (Loss)

Pension and Retirement Plans

Restructuring and Related Costs

72 unchanged sentences

Income from continuing operations 1,724 1,411 1,581

Income from discontinued operations, net of tax (Note 3) 489 452 429

Income from discontinued operations, net of tax 1,789 489 452

Net income 3,513 1,900 2,033

23 unchanged sentences

Realized and unrealized gains (losses) on derivatives 15 ( 19 ) 25

Cumulative currency translation adjustment release 783 — —

Pension and postretirement plans ( 6 ) ( 4 ) ( 1 )

5 unchanged sentences

Foreign currency translation adjustments ( 37 ) 25 ( 15 )

Realized and unrealized gains on derivatives — ( 1 ) 1

Realized and unrealized gains (losses) on derivatives

Other comprehensive income (loss) ( 32 ) 25 ( 16 )

7 unchanged sentences

Cash and cash equivalents $ 379 $ 606

Accounts receivable - net 6,051 5,494

Accounts receivable, less allowance for

expected credit losses of $ 205 and $ 210 , respectively

Inventories 1,820 1,774

79 unchanged sentences

Financing Activities of Continuing Operations

Net proceeds (payments) from borrowings with maturities less than three months 48 ( 75 ) 379

Net proceeds from (repayments of) borrowings with maturities less than three months 38 48 ( 75 )

Proceeds from debt 1,765 1,281 1,173

5 unchanged sentences

Discontinued Operations

Cash provided by operating activities 530 365 753

Cash used by investing activities ( 37 ) ( 91 ) ( 105 )

Cash provided (used) by operating activities ( 1,155 ) 530 365

Cash provided (used) by investing activities 6,546 ( 37 ) ( 91 )

Cash used by financing activities ( 604 ) ( 132 ) ( 115 )

2 unchanged sentences

Change in cash, cash equivalents and restricted cash held for sale ( 255 ) ( 6 ) ( 5 )

Increase (decrease) in cash, cash equivalents and restricted cash ( 150 ) ( 1,147 ) 725

Decrease in cash, cash equivalents and restricted cash ( 369 ) ( 150 ) ( 1,147 )

Cash, cash equivalents and restricted cash at beginning of period 767 917 2,064

9 unchanged sentences

Beginning Balance $ 16,098 $ 16,545 $ 16,268

Ordinary Shares - Beginning and ending balance

Ordinary Shares

Beginning balance 7 7 7

Repurchases and retirements of ordinary shares ( 1 ) — —

Ending balance 6 7 7

Ordinary Shares Held in Treasury, at Cost

5 unchanged sentences

Share-based compensation expense 104 85 85

Repurchases and retirements of ordinary shares ( 2,826 ) — —

Other, including options exercised 112 41 40

8 unchanged sentences

Beginning balance ( 964 ) ( 955 ) ( 911 )

Other comprehensive loss ( 9 ) ( 44 ) ( 477 )

Other comprehensive gain (loss) 322 ( 9 ) ( 44 )

Ending balance ( 642 ) ( 964 ) ( 955 )

4 unchanged sentences

Dividends attributable to noncontrolling interests ( 562 ) ( 108 ) ( 152 )

Divestiture of noncontrolling interest ( 805 ) — —

Other ( 59 ) 2 ( 1 )

10 unchanged sentences

Nature of Operations

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.

The Company’s products, services, systems and solutions advance the safety, comfort and intelligence of spaces to serve people, places and the planet.

Johnson Controls International plc, headquartered in Cork, Ireland, is a global leader in smart, safe, healthy and sustainable buildings, serving a wide range of customers around the globe.

The Company’s products 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.

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.

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.

As discussed in more detail in Note 3, "Assets and Liabilities Held for Sale and Discontinued Operations", the Company has entered into a definitive agreement to sell its Residential and Light Commercial (“R&LC") HVAC business, including the North America Ducted business and the global Residential joint venture with Hitachi Global Life Solutions, Inc.

(“Hitachi”), of which Johnson Controls owns 60 % and Hitachi owns 40 %.

The R&LC HVAC business, which was previously reported in the Global Products segment, meets the criteria to be classified as a discontinued operation and, as a result, its historical financial results are reflected in the consolidated financial statements as a discontinued operation, and assets and liabilities were reclassified as held for sale for all periods presented.

The Company 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 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.

In July 2025, the Company sold its Residential and Light Commercial ("R&LC") HVAC business, including the North America Ducted business and the global Residential joint venture with Hitachi Global Life Solutions, Inc.

("Hitachi"), of which Johnson Controls owned 60 % and Hitachi owned 40 %.

The R&LC HVAC business, which was previously reported in the Global Products segment prior to the Company's resegmentation, met the criteria to be classified as a discontinued operation and, as a result, its historical financial results are reflected in the consolidated financial statements as a discontinued operation.

Unless otherwise noted, all activities and amounts reported in the following footnotes relate to the continuing operations of the Company and exclude activities and amounts related to the R&LC HVAC business.

Refer to Note 2, "Acquisitions and Divestitures," of the notes to consolidated financial statements for more information.

Principles of Consolidation

The consolidated financial statements include the accounts of Johnson Controls International plc and its subsidiaries that are consolidated in conformity with accounting principles generally accepted in the United States of America ("U.S.

All significant intercompany transactions have been eliminated.

The results of companies acquired or disposed of during the year are included in the consolidated financial statements from the effective date of acquisition or up to the date of disposal.

The consolidated financial statements include the consolidated accounts of Johnson Controls International plc and its subsidiaries in conformity with U.S.

The results of companies acquired or disposed of during the reporting period are included in the consolidated financial statements from the effective date of acquisition or up to the date of disposal.

Investments in partially-owned affiliates are accounted for by the equity method when the Company exercises significant influence, which typically occurs when its ownership interest exceeds 20%, and the Company does not have a controlling interest.

The Company consolidates variable interest entities ("VIE") when it has the power to direct the significant activities of the entity and the obligation to absorb losses or receive benefits from the entity that may be significant.

The Company did not have any material consolidated or nonconsolidated VIEs in its continuing operations for the presented reporting periods.

The Company did not have any material consolidated or nonconsolidated VIE's for the presented reporting periods.

Use of Estimates

47 unchanged sentences

The Company evaluates the reasonableness of the allowance for expected credit losses on a quarterly basis.

The allowance for expected credit losses was $ 210 million as of September 30, 2024 and $ 88 million as of September 30, 2023.

The Company has previously entered into various factoring agreements to sell certain accounts receivable to third-party financial institutions.

8 unchanged sentences

Estimated useful lives generally range from 3 to 40 years for buildings and improvements, up to 15 years for subscriber systems, and from 3 to 15 years for machinery and equipment.

Interest on borrowings is capitalized during the active construction period of major capital projects, added to the cost of the underlying assets and amortized over the useful lives of the assets.

Interest on borrowings is capitalized during the active

construction period of major capital projects, added to the cost of the underlying assets and amortized over the useful lives of the assets.

Goodwill and Indefinite-Lived Intangible Assets

1 unchanged sentence

Goodwill is reviewed for impairment during the fourth fiscal quarter (as of July 31) or more frequently if events or changes in circumstances indicate the asset might be impaired.

The Company performs impairment reviews for its reporting units, which have been determined to be the Company’s operating segments or one level below the operating segments, using a qualitative assessment or a quantitative test.

The Company performs impairment reviews for its reporting units, which have been determined to be one level below the Company's operating segments, using a qualitative assessment or a quantitative test.

A qualitative assessment is performed when prior quantitative assessments have resulted in significant excess of fair value over the carrying value of a reporting unit, and consideration of qualitative factors allow the Company to conclude it is more likely than not that the fair value of the reporting unit remains greater than its carrying value.

When performing a quantitative goodwill impairment test, the fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date.

To estimate the fair value, the Company uses a discounted cash flow model or estimated sales price for reporting units held for sale.

To estimate the fair value, the Company uses a discounted cash flow model, the guideline company method under the market approach, or estimated sales price for reporting units held for sale.

The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." The estimated fair value is then compared to the carrying amount of the reporting unit, including recorded goodwill.

12 unchanged sentences

To determine the present value of lease payments, the Company uses its incremental borrowing rate based on information available on the lease commencement date or the implicit rate if it is readily determinable.

The Company determines its incremental borrowing rate based on a comparable

market yield curve consistent with its credit rating, term of the lease and relative economic environment.

The Company determines its incremental borrowing rate based on a comparable market yield curve consistent with its credit rating, term of the lease and relative economic environment.

The Company has elected to combine lease and nonlease components for its leases.

35 unchanged sentences

Revenue associated with the sale of equipment and related installations are generally recognized over time on a cost-to-cost input method, while the revenue for monitoring and maintenance services are recognized over time as services are rendered.

The transaction price is allocated to each performance obligation based on the relative standalone selling price method.

The transaction price is allocated to each performance

obligation based on the relative standalone selling price method.

In order to estimate relative standalone selling price, market data and transfer price studies are utilized.

25 unchanged sentences

Pooled subscriber system assets and related deferred revenue are depreciated using a straight-line method with lives up to 12 years and considering customer attrition.

Non-pooled subscriber systems (primarily in Europe, Latin America and Asia) and related deferred revenue are depreciated using a straight-line method with a 15 -year life, with remaining balances written off upon customer termination.

Non-pooled subscriber systems (primarily in Europe, Latin America and Asia) and related deferred revenue are depreciated using a straight-line method with lives up to 15 years, with remaining balances written off upon customer termination.

Certain contracts and related customer relationships result from purchasing residential security monitoring contracts from an external network of independent dealers who operate under the ADT dealer program, primarily outside of North America.

34 unchanged sentences

Treasury yield curve in effect at the time of grant.

• For grants in fiscal 2024 and 2023, expected volatility is based on the historical volatility of the Company's stock corresponding to the expected life as of the grant date.

For grants in fiscal 2022, expected volatility is based on the historical volatility of the Company's stock since October 2016 and certain peer companies' stock prior to October 2016 over the most recent period corresponding to the expected life as of the grant date.

• Expected volatility is based on the historical volatility of the Company's stock corresponding to the expected life as of the grant date.

• The expected dividend yield is based on the expected annual dividend as a percentage of the market value of the Company’s ordinary shares as of the grant date.

34 unchanged sentences

For most of these liabilities, claims incurred but not yet reported are estimated by utilizing actuarial valuations based upon historical claims experience.

Receivables from third party insurers are recorded when recovery has been determined to be probable.

The Company maintains captive insurance companies to manage its insurable liabilities.

8 unchanged sentences

The Company also evaluates the recoverability of its insurance receivable on an annual basis.

The Company evaluates all of these factors and determines

whether a change in the estimate of its liability for pending and future claims and defense costs or insurance receivable is warranted.

The Company evaluates all of these factors and determines whether a change in the estimate of its liability for pending and future claims or insurance receivable is warranted.

The Company records asbestos-related insurance recoveries that are probable.

4 unchanged sentences

A valuation allowance is provided to reduce the carrying or book value of deferred tax assets if, based upon the available evidence, including consideration of tax planning strategies, it is more-likely-than-not that some or all of the deferred tax assets will not be realized.

The Company’s federal income tax returns and certain non-U.S.

income tax returns for various fiscal years remain under various stages of audit by the IRS and respective non-U.S.

tax authorities.

Although the outcome of tax audits is always uncertain, management believes that it has appropriate support for the positions taken on its tax returns and that its annual tax provisions included amounts sufficient to pay assessments, if any, which may be proposed by the taxing authorities.

At September 30, 2025, the Company had recorded a liability of $ 1.9 billion for its best estimate of the probable loss on certain of its tax positions, the majority of which is included in other noncurrent liabilities in the consolidated statements of financial position.

New Accounting Pronouncements

4 unchanged sentences

Only the amount outstanding at the end of the period must be disclosed in interim periods.

The Company adopted the new disclosures, other than the rollforward disclosure, as required at the beginning of fiscal 2024.

The rollforward disclosure will be adopted as required at the beginning of fiscal 2025.

The Company adopted the new disclosures as required at the beginning of fiscal 2024, other than the rollforward disclosure which was adopted for the annual period ended September 30, 2025.

The Company maintains agreements with third-party financial institutions who offer voluntary supply chain financing ("SCF") programs to its suppliers.

4 unchanged sentences

Accounts payable included in the SCF programs were approximately $ 835 million and $ 703 million as of September 30, 2025, and September 30, 2024 respectively.

The following table presents the Company's outstanding obligations confirmed as valid related to the SCF programs (in millions):

Year Ended September 30, 2025

Confirmed obligations outstanding at beginning of period $ 703

Invoices confirmed during the period 2,249

Confirmed invoices paid during the period ( 2,120 )

Currency impact 3

Confirmed obligations outstanding at end of period $ 835

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures," which is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and contain other disclosure requirements.

The Company adopted the new annual disclosures as required for fiscal 2025 and will adopt the interim disclosures as required beginning with the first quarter of fiscal 2026.

Refer to Note 18, "Segment Information," of the notes to consolidated financial statements for the Company's segment disclosures.

Recently Issued Accounting Pronouncements

6 unchanged sentences

The amendments require that on an annual basis, entities disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

In addition, the amendments require that entities disclose additional information about income taxes paid as well as additional disclosures of pretax income and income tax expense, and remove the requirement to disclose certain

items that are no longer considered cost beneficial or relevant.

The Company expects to adopt the new annual disclosures as required for fiscal 2026.

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures," which is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses.

The Company expects to adopt the new annual disclosures as required for fiscal 2025 and the interim disclosures as required beginning with the first quarter of fiscal 2026.

In September 2025, the FASB issued ASU 2025-06, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software," which is intended to increase the operability of the recognition guidance considering different methods of software development.

The amendments remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40, and instead specify an entity is required to start capitalizing software costs when both of the following occur:

(1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to complete recognition threshold”).

The Company expects to adopt the new guidance as required for fiscal 2029 and is evaluating the impact the new standard will have on its consolidated financial statements.

Other recently issued accounting pronouncements are not expected to have a material impact on the Company's consolidated financial statements.

ACQUISITIONS AND DIVESTITURES

During fiscal 2024, the Company completed three divestitures, including the divestiture of its Air Distribution Technologies ("ADTi") business which was included within the Global Products segment.

The combined selling price, net of cash divested, was $ 347 million, of which $ 332 million was received as of September 30, 2024.

In connection with the closing of the ADTi transaction, the Company recorded a pre-tax loss of $ 42 million within selling, general and administrative expenses in the consolidated statements of income.

An impairment of $ 56 million was recorded within restructuring and impairment costs in the consolidated statements of income while the business was classified as held for sale.

Net cash proceeds from the divestitures were used for general corporate purposes.

The businesses did not meet the criteria to be classified as discontinued operations as the divestitures did not represent a strategic shift that will have a major effect on the Company's operations and financial results.

In July 2023, the Company completed its acquisition of FM:Systems, a leading digital workplace management and Internet of Things ("IoT") solutions provider for facilities and real estate professionals, for $ 540 million, net of cash acquired, which was comprised of an upfront cash payment of $ 465 million, and the estimated fair value at the acquisition date of contingent earn-out liabilities which are primarily based upon the achievement of certain defined operating results in the two years following the acquisition.

In connection with the acquisition and subsequent measurement period adjustments, the Company recorded goodwill of $ 407 million in the Building Solutions North America segment.

Goodwill is attributable primarily to expected synergies, expanded market opportunities and other benefits that the Company believes will result from integrating the products and capabilities of FM:Systems into its operations.

The goodwill created in the acquisition is not deductible for tax purposes.

During fiscal 2023, the Company acquired several other businesses for a combined purchase price, net of cash acquired, of $ 306 million, of which $ 260 million was paid as of September 30, 2023.

Intangible assets associated with these acquisitions totaled $ 116 million and primarily relate to customer relationships and technology.

The Company recorded goodwill associated with these acquisitions of $ 119 million in the Global Products segment, $ 55 million in the Building Solutions Asia Pacific segment and $ 13 million in the Building Solutions EMEA/LA segment.

ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

In July 2024, the Company entered into a definitive agreement to sell its R&LC HVAC business, which includes the North America Ducted businesses and the global Residential joint venture with Hitachi, of which Johnson Controls owns 60 % and Hitachi owns 40 %, to Bosch Group for approximately $ 8.1 billion in cash with the Company’s portion of the aggregate consideration being approximately $ 6.7 billion, inclusive of an upfront royalty payment for the licensing of the York tradename.

The transaction is expected to close in the fourth quarter of fiscal 2025, subject to required regulatory approvals and other customary closing conditions.

The R&LC HVAC business, which was previously reported in the Global Products segment, meets the criteria to be classified as discontinued operations as it represents a strategic shift in the Company's operations and results in the exit of substantially all of its residential and light commercial HVAC businesses.

As a result, results of the business are presented in discontinued operations for all periods presented.

The Company determined that the assets and liabilities for the R&LC HVAC business met the held for sale criteria during the fourth quarter of 2024.

Accordingly, the businesses' assets and liabilities were reclassified in the consolidated balance sheets at September 30, 2024 and 2023 to held for sale, and the Company ceased recording depreciation and amortization for the held for sale assets.

The following table summarizes the results of the R&LC HVAC business which are reported as discontinued operations (in millions):

In July 2024, the Company entered into a definitive agreement to sell its Residential and Light Commercial ("R&LC") HVAC business, which includes the North America Ducted businesses and the global Residential joint venture with Hitachi, of which Johnson Controls owns 60 % and Hitachi owns 40 %.

The Company completed the sale of its R&LC HVAC business on July 31, 2025 for proceeds of $ 5.6 billion, net of cash disposed, after tax and transaction-related expenses.

In connection with the sale, the Company recognized a gain, net of transaction and other costs, of $ 2.7 billion ($ 1.5 billion after tax) for the year ended September 30, 2025, subject to final post-closing working capital and net debt adjustments, within income from discontinued operations, net of tax , in the consolidated statements of income.

The Company determined that the R&LC HVAC business, which was previously reported in the Global Products segment prior to the Company's resegmentation, met the criteria to be classified as a discontinued operation as it represented a strategic shift in the Company's operations and resulted in the exit of substantially all of its residential and light commercial HVAC businesses.

As a result, the R&LC HVAC business was presented in discontinued operations separate from continuing operations for all periods presented.

The Company determined that the assets and liabilities for the R&LC HVAC business met the held for sale criteria during the fourth quarter of 2024 and ceased recording depreciation and amortization for the held for sale assets upon meeting the held for sale criteria.

The major classes of line items constituting income from discounted operations, net, in millions:

Year Ended September 30,

12 unchanged sentences

Income from discontinued operations $ 1,570 $ 298 $ 287

The following table summarizes the assets and liabilities of the R&LC HVAC business which were classified as held for sale (in millions):

The carrying amounts of major classes of assets and liabilities included as part of the R&LC HVAC business discontinued operations and reported as held for sale, were as follows, in millions:

September 30, 2024

10 unchanged sentences

Total assets classified as held for sale $ 4,805

Short-term debt $ — $ 24

Accounts payable $ 917

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Total liabilities classified as held for sale $ 1,836

In conjunction with the divestiture, we entered into Transition Services Agreements to provide administrative services to the buyers.

The fees for services rendered under each of the Transition Service Agreements were not material to our results of operations.

During fiscal 2024, the Company completed three divestitures, including the divestiture of its Air Distribution Technologies ("ADTi") business which was previously reported in the Global Products segment prior to the Company's resegmentation.

The combined selling price, net of cash divested, was $ 347 million, of which $ 332 million was received as of September 30, 2024.

An impairment of $ 56 million was recorded within restructuring and impairment costs in the consolidated statements of income while the business was classified as held for sale.

Net cash proceeds from the divestitures were used for general corporate purposes.

ASSETS AND LIABILITIES HELD FOR SALE

During the third quarter of fiscal 2025, the Company signed a definitive agreement to sell its ADT Mexico residential security business.

The ADT Mexico business, which was reported in the EMEA segment, did not meet the criteria to be classified as discontinued operations as it did not represent a strategic shift in the Company's operations nor result in the exit of substantially all of its residential security businesses.

The Company determined that the assets and liabilities of the ADT Mexico business met the held for sale criteria during the third quarter of 2025.

Accordingly, $ 154 million of assets and $ 21 million of liabilities associated with the ADT Mexico business were reclassified to held for sale in the consolidated balance sheet at September 30, 2025.

Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell.

As of September 30, 2024, the estimated fair value less costs to sell of the held for sale businesses exceeded their carrying value, and therefore, no adjustment was necessary.

During the year ended September 30, 2023, the Company recorded impairment charges for the Global Retail business of $ 438 million and the Building Solutions Asia Pacific segment of $ 60 million.

The impairment charges were primarily due to reductions in the estimated fair values of the businesses to be disposed as a result of negotiations with potential buyers and were recorded within restructuring and impairment costs in the consolidated statements of income.

As of September 30, 2025, the estimated fair value less costs to sell of the held for sale business exceeded their carrying value, and therefore, no adjustment was necessary.

The transaction closed on October 31, 2025 and the gain on sale, net of transaction and other costs, is still being finalized, but will not be material.

During the year ended September 30, 2023, the Company recorded impairment charges for the Global Retail business of $ 438 million.

The impairment charges were primarily due to reductions in the estimated fair values of the business to be disposed as a result of negotiations with potential buyers and were recorded within restructuring and impairment costs in the consolidated statements of income.

During the third quarter of fiscal 2023, the Company concluded that its Global Retail business no longer met the criteria to be classified as held for sale, as it was no longer probable that it would be sold in the next 12 months.

5 unchanged sentences

Products & Systems Services Total Products & Systems Services Total

Building Solutions North America $ 7,099 $ 4,249 $ 11,348 $ 6,368 $ 3,962 $ 10,330

Building Solutions EMEA/LA 2,314 1,982 4,296 2,275 1,821 4,096

Building Solutions Asia Pacific 1,483 754 2,237 1,987 759 2,746

Global Products 5,071 — 5,071 5,159 — 5,159

Total $ 15,967 $ 6,985 $ 22,952 $ 15,789 $ 6,542 $ 22,331

The following table presents further disaggregation of Global Products revenues by product type (in millions):

Year Ended September 30,

HVAC $ 2,280 $ 2,358

Fire & Security 2,370 2,446

Industrial Refrigeration 421 355

$ 11,187 $ 4,644 $ 15,831 $ 11,206 $ 4,400 $ 15,606

2,977 1,991 4,968 2,789 1,831 4,620

1,960 837 2,797 1,972 754 2,726

Total $ 16,124 $ 7,472 $ 23,596 $ 15,967 $ 6,985 $ 22,952

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Performance Obligations

A performance obligation is a distinct good, service, or bundle of goods and services promised in a contract.

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

When contracts with customers require significant and complex integration, contain goods or services which are highly interdependent or interrelated, or are goods or services which significantly modify or customize other promises in the contracts and, therefore, are not distinct, then the entire contract is accounted for as a single performance obligation.

For any contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation based on the estimated relative standalone selling price of each distinct good or service in the contract.

For product sales, each product sold to a customer typically represents a distinct performance obligation.

Performance obligations are satisfied as of a point in time or over time.

1 unchanged sentence

As of September 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 22.7 billion, of which approximately 63 % is expected to be recognized as revenue over the next two years .

The remaining performance obligations expected to be recognized in revenue beyond two years primarily relate to large, multi-purpose contracts to construct hospitals, schools and other governmental buildings, which include services to be performed over the building's lifetime, with average initial contract terms of 25 to 35 years.

The remaining performance obligations expected to be recognized in revenue beyond two years primarily relate to large, multi-purpose construction contracts, which include services to be performed over the building's lifetime, with average initial contract terms of 25 to 35 years.

Future contract modifications could affect both the timing and the amount of the remaining performance obligations.

2 unchanged sentences

The Company recognizes the incremental costs incurred to obtain or fulfill a contract with a customer as an asset when the costs are recoverable.

These costs consist primarily of sales commissions and bid/proposal costs.

These costs consist primarily of sales commissions and design costs that relate to a contract or an anticipated contract that the Company expects to recover.

Costs to obtain or fulfill a contract are capitalized when incurred and amortized to expense over the period of contract performance.

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Amortization of costs to obtain or fulfill a contract was $ 373 million and $ 312 million during the years ended September 30, 2025 and 2024, respectively.

There were no impairment losses recognized in the year ended September 30, 2024 or 2023.

ACCOUNTS RECEIVABLE

The Company discontinued its receivable factoring program in March 2024.

The Company sold $ 641 million and $ 1,717 million of accounts receivable under factoring agreements during the years ended September 30, 2024, and 2023, respectively.

The cost of factoring such receivables was not material.

Previously sold receivables still outstanding were $ 16 million and $ 615 million as of September 30, 2024 and 2023, respectively.

Inventories consisted of the following (in millions):

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Property, plant and equipment - net $ 2,193 $ 2,403

During the fourth quarter of fiscal 2025, the Company determined that a triggering event had occurred for the Americas Retail asset group within the Americas segment, primarily as a result of customer contract terminations and the related impact on demand and forecasted operating results and cash flows.

The Company conducted the two-step impairment test required in accordance with ASC 360, "Property, Plant & Equipment" and determined that the carrying amount of the asset group exceeded its fair value.

A non-cash impairment charge of $ 156 million, comprised of $ 81 million of property, plant, and equipment and $ 75 million of definite-lived intangible assets, was recorded and is included in restructuring and impairment costs in the consolidated statements of income.

During the fourth quarter of fiscal 2025, the Company determined that a triggering event had also occurred for the Subscriber asset groups within the EMEA segment due to a decline in the market value of the Subscriber business.

A non-cash impairment charge of $ 184 million, comprised of $ 94 million of property, plant, and equipment and $ 90 million of definite-lived intangible assets, was recorded and is included in restructuring and impairment costs in the consolidated statements of income.

The Company used a discounted cash flow model to estimate the fair value of the asset group.

The primary assumptions and inputs used in the model included estimated proceeds from the disposition of the asset groups, management's internal projections of future cash flows, and the weighted-average cost of capital.

The fair value measurement is classified as Level 3 within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement" due to the unobservable inputs used.

During the fourth quarter of fiscal 2023, the Company determined that a triggering event had occurred in the asset group comprising the security subscriber business of Argentina, primarily as a result of the significant devaluation of the Argentine peso that occurred during the quarter and the resulting impact on operating results and cash flows.

7 unchanged sentences

Year Ended September 30, 2025

Building Solutions North America Building Solutions EMEA/LA Building Solutions Asia Pacific Global Products Total

Goodwill $ 14,118 $ 2,409 $ 1,393 17,920

1 unchanged sentence

Balance at beginning of period 13,200 2,132 1,393 16,725

Impairments — ( 230 ) — — ( 230 )

Foreign currency translation and other (1)

1 unchanged sentence

Balance at end of period $ 13,174 $ 2,111 $ 1,348 $ 16,633

(1) Includes measurement period adjustments and the allocation of $ 21 million of goodwill from Global Products to the ADTi disposal group classified as held for sale in June 2024 and subsequently divested in July 2024.

Refer to Note 2, "Acquisitions and Divestitures" of the notes to the consolidated financial statements for further information.

(1) Includes measurement period adjustments and the allocation of $ 86 million of goodwill from EMEA to the ADT Mexico residential security business disposal group classified as held for sale.

Refer to Note 3, "Assets and Liabilities Held for Sale," of the notes to consolidated financial statements for further information.

Year Ended September 30, 2024

Building Solutions North America Building Solutions EMEA/LA Building Solutions Asia Pacific Global Products Total

Goodwill $ 14,090 $ 2,302 $ 1,345 17,737

1 unchanged sentence

Balance at beginning of period 13,172 2,255 1,345 16,772

Acquisitions 399 13 55 119 586

Impairments — ( 230 ) — ( 230 )

Foreign currency translation and other (1)

28 107 48 183

Balance at end of period $ 13,200 $ 2,132 $ 1,393 $ 16,725

Management completed its fiscal 2024 annual impairment test as of July 31, which included a qualitative assessment of all but one of its reporting units.

(1) Includes measurement period adjustments and the allocation of $ 21 million of goodwill from the ADTi disposal group classified as held for sale in June 2024 and subsequently divested in July 2024.

Refer to Note 2, "Acquisitions and Divestitures," of the notes to consolidated financial statements for further information.

At April 1, 2025, the Company reallocated goodwill of reporting units impacted by the change in reportable segments described in Note 18, "Segment Information," of the notes to consolidated financial statements and assessed goodwill for impairment.

The Company determined that the estimated fair value of each reporting unit exceeded its corresponding carrying amount including recorded goodwill, and as such, no impairment existed at April 1, 2025.

Management completed its fiscal 2025 annual impairment test as of July 31, which included a qualitative assessment of all of its reporting units.

The Company did not identify any qualitative factors that suggest that it is more likely than not that the fair value of its reporting units is less than their carrying amount, including goodwill, and as such, a quantitative impairment test was not necessary.

The Company performed a quantitative goodwill impairment test of one reporting unit with $ 214 million of goodwill, and its fair value was in excess of its carrying value.

However, for this reporting unit, a 200 basis point increase in the discount rate, or a 200 basis point decrease in the revenue growth rates, would cause the fair value to be less than the carrying value.

While no impairment was recorded, it is possible that future changes in circumstances could result in a non-cash impairment charge.

In the second quarter of fiscal 2024, the Company determined a triggering event had occurred for one of its reporting units in the Business Solutions EMEA/LA segment due to year-to-date results and projections for the remainder of fiscal 2024 being lower than the forecast used in the previous annual goodwill impairment test, and a quantitative test of goodwill for possible impairment was necessary.

During the third quarter of fiscal 2025, the Company signed a definitive agreement to sell its ADT Mexico residential security business, which resulted in a triggering event to assess the remaining goodwill in the reporting Subscriber reporting unit.

The Company performed a quantitative goodwill impairment test of the remaining $ 174 million of goodwill, and its fair value was slightly in excess of its carrying value.

While no impairment was recorded, it is possible that future changes in circumstances could result in a non-cash impairment charge as the fair value of this reporting unit approximates its carrying amount.

The Company used a discounted cash flow model to estimate the fair value of the reporting unit.

The primary assumptions used in the model were management's internal projections of future cash flows, the weighted-average cost of capital and the long-term growth rate, which are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." As noted in Note 6, "Property, Plant & Equipment", the Company identified a triggering event in the EMEA Subscriber asset groups in the fourth quarter, resulting in an impairment of long-lived asset groups, which has the effect of lowering the carrying value of the Subscriber reporting unit.

This reporting unit was previously disclosed as being at risk of impairment in the Company’s Annual Report on Form 10-K for the year-ended September 30, 2024.

During fiscal 2024, the Company determined a triggering event had occurred for one of its reporting units which was previously reported in the Business Solutions EMEA/LA segment due to year-to-date results and projections for the remainder of fiscal

2024 being lower than the forecast used in the previous annual goodwill impairment test, and a quantitative test of goodwill for possible impairment was necessary.

As a result of the goodwill impairment test, the Company recorded a non-cash impairment charge of $ 230 million within restructuring and impairment costs in the consolidated statements of income, which was determined by comparing the carrying amount of the reporting unit to its fair value.

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In the second quarter of fiscal 2023, management completed an updated comprehensive review of the Silent-Aire reporting unit, which is included in the Global Products segment.

During fiscal 2023, management completed an updated comprehensive review of the Silent-Aire reporting unit, which was previously reported in the Global Products segment.

Because actual results were lower than planned and the nearer term forecast was revised to reflect lower margins and earnings, the Company determined a triggering event had occurred and a quantitative test of goodwill for possible impairment was necessary.

As a result of the goodwill impairment test, the Company recorded a non-cash impairment charge of $ 184 million within restructuring and impairment costs in the consolidated statements of income in fiscal 2023, which was determined by comparing the carrying amount of the reporting unit to its fair value.

During its fiscal 2022 annual impairment test, the Company recorded a non-cash impairment charge of $ 75 million of Silent Aire goodwill within restructuring and impairment costs in the consolidated statements of income.

The Company used a discounted cash flow model to estimate the fair value of the Silent-Aire reporting unit in both fiscal 2023 and 2022.

The Company used a discounted cash flow model to estimate the fair value of the Silent-Aire reporting unit.

The primary assumptions and inputs used in the model included management's internal projections of future cash flows, the weighted-average cost of capital and the long-term growth rate.

The fair value measurement is classified as Level 3 within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement" due to the unobservable inputs used.

The Silent-Aire reporting unit had no remaining goodwill balance as of September 30, 2024 and 2023.

During fiscal 2022, the Company concluded it had a triggering event requiring assessment of goodwill impairment for its North America Retail reporting unit in conjunction with classifying its Global Retail business as held for sale.

As a result, the Company recorded a non-cash impairment charge of $ 235 million within restructuring and impairment costs in the consolidated statements of income in fiscal 2022.

The North America Retail reporting unit had no remaining goodwill balance as of September 30, 2024 and 2023.

The Company used the market approach to estimate the fair value of the reporting unit based on the relative estimated sales proceeds for the planned disposal of the Global Retail business attributable to the North America Retail reporting unit.

The inputs utilized in the analysis are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement."

The Silent-Aire reporting unit had no remaining goodwill balance as of September 30, 2023.

There were no other triggering events requiring that an impairment assessment be conducted in fiscal 2025, 2024 or 2023.

15 unchanged sentences

Total intangible assets $ 6,110 $ ( 2,497 ) $ 3,613 $ 7,082 $ ( 2,952 ) $ 4,130

During the fourth quarter of fiscal 2024, the Company impaired $ 32 million and $ 13 million of miscellaneous intangible assets in the Global Products segment and Building Solutions North America segment, respectively.

During the fourth quarter of fiscal 2025, the Company impaired $ 59 million and $ 90 million of customer relationships in the Americas segment and EMEA segment, respectively, and $ 16 million of technology in the Americas segment.

Refer to Note 6, "Property, Plant, and Equipment," for additional disclosure regarding impairments in the Americas and EMEA segments.

During the fourth quarter of fiscal 2024, the Company impaired $ 32 million and $ 13 million of miscellaneous intangible assets previously reported in the Global Products segment and Building Solutions North America segment, respectively.

These non-cash charges were recorded within restructuring and impairment costs in the consolidated statement of income.

During the fourth quarter of fiscal 2023, the Company impaired $ 18 million of miscellaneous intangible assets in the Global Products segment and $ 10 million of a trademark in the Building Solutions Asia Pacific segment.

These non-cash charges were recorded within restructuring and impairment costs in the consolidated statements of income.

There were no impairments of other indefinite-lived intangible assets in any of these years, other than as disclosed above.

For all other remaining indefinite-lived intangible assets, the Company estimated fair values were greater than the carrying values, with the exception of two other registered trademarks in which the estimated fair values were consistent with their carrying values which totaled $ 335 million as of July 31, 2024.

For all other remaining indefinite-lived intangible assets, the Company estimated fair values were greater than the carrying values, with the exception of two registered trademarks with estimated fair values that were consistent with their carrying values, which totaled $ 320 million as of July 31, 2025.

Amortization of other intangible assets included within continuing operations for the years ended September 30, 2025, 2024 and 2023 was $ 439 million, $ 476 million and $ 426 million, respectively.

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The following table presents future minimum rental payments for operating lease liabilities as of September 30, 2025 (in millions):

After 2029 314

Total operating lease payments 1,516

11 unchanged sentences

Long-term debt consisted of the following (in millions):

due dates by fiscal year):

September 30,

1 unchanged sentence

US dollar debt

JCI plc 3.625 % 2024 $ — $ 453

3.625 % 2024 — 31

JCI plc 3.90 % 2026 487 487

3.90 % 2026 51 51

JCI plc 3.90 % February 2026 $ 487 $ 487

3.90 % February 2026 51 51

JCI plc and TFSCA 2

5.50 % 2029 700 —

5.50 % April 2029 700 700

JCI plc and TFSCA 2

1.75 % 2030 625 625

1.75 % September 2030 625 625

JCI plc and TFSCA 2

2.00 % 2031 500 500

2.00 % September 2031 500 500

JCI plc and TFSCA 2

4.90 % 2033 400 400

JCI plc 6.00 % 2036 342 342

6.00 % 2036 8 8

JCI plc 5.70 % 2041 190 190

5.70 % 2041 30 30

JCI plc 5.25 % 2042 155 155

5.25 % 2042 6 6

JCI plc 4.625 % 2044 444 444

4.625 % 2044 6 6

JCI plc 5.125 % 2045 253 372

5.125 % 2045 23 23

JCI plc 6.95 % 2046 32 32

6.95 % 2046 4 4

JCI plc 4.50 % 2047 500 500

JCI plc 4.95 % 2064 341 341

4.95 % 2064 15 15

4.90 % December 2032 650 400

JCI plc 6.00 % January 2036 342 342

JCI inc 6.00 % January 2036 8 8

JCI plc 5.70 % March 2041 190 190

JCI inc 5.70 % March 2041 30 30

JCI plc 5.25 % December 2041 155 155

JCI inc 5.25 % December 2041 6 6

JCI plc 4.625 % July 2044 444 444

JCI inc 4.625 % July 2044 6 6

JCI plc 5.125 % September 2045 246 253

5.125 % September 2045 23 23

JCI plc 6.95 % December 2045 32 32

JCI plc 6.95 % December 2045 4 4

JCI plc 4.50 % February 2047 500 500

JCI plc 4.95 % July 2064 341 341

JCI plc 4.95 % July 2064 15 15

JCI plc 1.375 % February 2025 — 472

1.375 % February 2025 — 60

JCI plc EURIBOR plus 0.75 %

JCI plc 1.375 % 2025 472 448

1.375 % 2025 60 57

April 2027 176 —

JCI plc and TFSCA 2

0.375 % 2027 559 530

0.375 % September 2027 587 559

JCI plc and TFSCA 2

3.00 % 2028 670 636

3.00 % September 2028 704 670

JCI plc and TFSCA 2

1.00 % 2032 559 530

1.00 % September 2032 587 559

JCI plc and TFSCA 2

4.25 % 2035 894 849

3.125 % December 2033 587 —

JCI plc and TFSCA 2

4.25 % May 2035 939 894

Japanese yen debt

JCI plc TORF plus 0.40 %

September 2027 203 211

Gross long-term debt 9,195 8,568

8 unchanged sentences

Total $ 9,195

As of September 30, 2024, the Company had syndicated committed revolving credit facilities of $ 2.5 billion which is scheduled to expire in December 2028 and $ 500 million which is scheduled to expire in December 2024.

As of September 30, 2025, the Company had two syndicated committed revolving credit facilities including $ 2.5 billion which is scheduled to expire in December 2028 and $ 500 million which is scheduled to expire in December 2025.

There were no draws on the facilities as of September 30, 2025.

2 unchanged sentences

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Unless otherwise noted, all activities and amounts reported in this footnote include both continuing operations of the Company and activities and amounts related to the R&LC HVAC business.

See Note 3, "Assets and Liabilities Held for Sale and Discontinued Operations" for additional details regarding divestiture of the R&LC HVAC business.

Cash Flow Hedges

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The Company hedges 70 % to 90 % of the notional amount of each of its known foreign exchange transactional exposures.

The Company selectively hedges anticipated transactions that are subject to commodity price risk, primarily using commodity hedge contracts, to minimize overall price risk associated with its purchases of copper and aluminum in cases where commodity price risk cannot be naturally offset or hedged through supply base fixed price contracts.

The Company selectively hedges anticipated transactions that are subject to commodity price risk, primarily using commodity hedge contracts, to minimize overall price risk associated with the Company's purchases of copper and aluminum in cases where commodity price risk cannot be naturally offset or hedged through supply base fixed price contracts.

Commodity risks are systematically managed pursuant to policy guidelines.

The maturities of the commodity hedge contracts coincide with the expected purchase of the commodities.

As cash flow hedges under ASC 815, "Derivatives and Hedging," the hedge gains or losses due to changes in fair value are initially recorded as a component of AOCI and are subsequently reclassified into earnings when the hedged transactions occur and affect earnings.

These contracts were highly effective in hedging the variability in future cash flows attributable to changes in currency exchange rates during the years ended September 30, 2024 and 2023.

Under ASC 815, "Derivatives and Hedging," cash flow hedge gains or losses due to changes in fair value are initially recorded as a component of accumulated other comprehensive income ("AOCI") and are subsequently reclassified into earnings when the hedged transactions occur and affect earnings.

These contracts were highly effective in hedging the variability in future cash flows attributable to changes in currency exchange rates and commodity prices during the years ended September 30, 2025 and 2024.

The Company had the following outstanding contracts to hedge forecasted commodity purchases (in metric tons):

3 unchanged sentences

Aluminum 703 2,450

The Company may enter into forward-starting interest rate swaps in conjunction with anticipated note issuances.

The Company may enter into forward-starting interest rate swaps in conjunction with anticipated note issuances to manage exposure to interest rate changes.

The forward-starting interest swaps are terminated when the anticipated notes are issued.

1 unchanged sentence

Accumulated amounts previously recorded in AOCI were not material and were recognized as net financing charges in the consolidated statements of income when the swaps were terminated.

During fiscal 2023, the Company terminated forward-starting interest rate swaps with a combined notional amount of € 400 million when the related anticipated debt was issued.

Accumulated amounts recorded in AOCI as of the date of the debt issuance are amortized to interest expense over the life of the respective debt to reflect the difference between the swap's reference rate and the fixed rate of the note.

Net Investment Hedges

6 unchanged sentences

Yen-denominated debt designated as a net investment hedge in Japan ¥ 30 ¥ 30

US dollar vs.

Yen cross-currency interest rate swap designated as a net investment hedge in Japan — ¥ 14

Derivatives Not Designated as Hedging Instruments

The Company holds certain foreign currency forward contracts not designated as hedging instruments under ASC 815 to hedge foreign currency exposure resulting from monetary assets and liabilities denominated in nonfunctional currencies.

The changes in fair value of these foreign currency exchange derivatives are recorded in the consolidated statements of income where they offset foreign currency transactional gains and losses on the nonfunctional currency denominated assets and liabilities being hedged.

The changes in fair value of these foreign currency forward exchange derivatives are recorded in the consolidated statements of income where they offset foreign currency transactional gains and losses on the nonfunctional currency denominated assets and liabilities being hedged.

Fair Value of Derivative Instruments

The following table presents the location and fair values of derivative instruments and hedging activities included in the Company’s consolidated statements of financial position (in millions):

as Hedging Instruments Not Designated

Derivatives and Hedging Activities Designated

as Hedging Instruments

Derivatives and Hedging Activities Not Designated

as Hedging Instruments

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

2 unchanged sentences

Commodity derivatives 1 2 — —

Interest rate swaps — 22 — —

Other noncurrent assets

Cross-currency interest rate swap — 5 — —

Total assets $ 15 $ 21 $ — $ 1

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The Company enters into ISDA master netting agreements with counterparties that permit the net settlement of amounts owed under the derivative contracts.

The master netting agreements generally provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event.

The master netting agreements generally provide for net settlement of all

outstanding contracts with a counterparty in the case of an event of default or a termination event.

The Company has not elected to offset the fair value positions of the derivative contracts recorded in the consolidated statements of financial position.

24 unchanged sentences

Commodity derivatives Cost of sales 2 — ( 8 )

Interest rate swaps Net financing charges — — ( 2 )

Total $ 12 $ 1 $ ( 12 )

8 unchanged sentences

Interest rate swaps Net financing charges — — 1

Equity swap Selling, general and administrative — — ( 5 )

Total $ ( 96 ) $ 37 $ ( 118 )

3 unchanged sentences

Net investment hedges $ ( 159 ) $ ( 173 ) $ ( 223 )

No gains or losses were reclassified from CTA into income for the years ended September 30, 2024, 2023 and 2022.

FAIR VALUE MEASUREMENTS

16 unchanged sentences

Contingent earn-out liabilities 19 — — 19

Other noncurrent liabilities

Contingent earn-out liabilities 14 — — 14

Total liabilities $ 43 $ — $ 24 $ 19

7 unchanged sentences

Foreign currency exchange derivatives $ 20 $ — $ 20 $ —

Interest rate swaps 22 — 22 —

Commodity derivatives

Other noncurrent assets

Cross-currency interest rate swaps 5 — 5 —

Deferred compensation plan assets 56 56 — —

11 unchanged sentences

Refer to Note 20, "Commitments and Contingencies," of the notes to consolidated financial statements for further details.

The following table summarizes the changes in contingent earn-out liabilities, which are valued using significant unobservable inputs (Level 3) (in millions):

Balance at September 30, 2023 $ 124

Payments ( 26 )

Reduction for change in estimates ( 71 )

Currency translation 1

Balance at September 30, 2024 $ 28

Valuation Methods

3 unchanged sentences

The contingent earn-out liabilities are generally established using a Monte Carlo simulation based on the forecasted operating results and the earn-out formulas specified in the purchase agreements.

Cross-currency interest rate swaps:

The fair value of cross-currency interest rate swaps represents the difference between the swap's reference rate and exchange rate and the interest and exchange rates for a similar instrument as of the reporting period.

Cross-currency interest rate swaps are valued under a market approach using publicized prices.

Deferred compensation plan assets :

7 unchanged sentences

The foreign currency exchange derivatives are valued under a market approach using publicized spot and forward prices.

Interest rate swaps:

The fair value of interest rate swaps represents the difference between the swap's reference rate and the interest rate for a similar instrument as of the reporting period.

Interest rate swaps are valued under a market approach using publicized prices.

The following table presents the portion of unrealized gains recognized in the consolidated statements of income that relate to equity securities still held at September 30, 2025 and 2024 (in millions):

3 unchanged sentences

The fair values of cash and cash equivalents, accounts receivable, short-term debt and accounts payable approximate their carrying values.

The fair value of long-term debt was as follows (in billions):

The fair value of long-term debt at September 30, 2025 and 2024 was as follows (in billions):

September 30,

6 unchanged sentences

Unless otherwise noted, all activities and amounts reported in this footnote include both continuing operations of the Company and activities and amounts related to the R&LC HVAC business.

See Note 3, "Assets and Liabilities Held for Sale and Discontinued Operations" for additional details regarding divestiture of the R&LC HVAC business.

See Note 2, "Acquisitions and Divestitures" for additional details regarding divestiture of the R&LC HVAC business.

The Johnson Controls International plc 2021 Equity and Incentive Plan authorizes stock options, stock appreciation rights, restricted (non-vested) stock/units, performance shares, performance units and other stock-based awards.

8 unchanged sentences

Tax impact from exercise and vesting of equity settled awards 14 1 7

Compensation expense is recorded in selling, general and administrative expenses.

Substantially all compensation expense is recorded in selling, general and administrative expenses.

The Company does not settle stock options granted under share-based payment arrangements in cash.

63 unchanged sentences

Stock options and unvested restricted stock 0.1 0.3 0.2

The authority to declare and pay dividends is vested in the Board of Directors.

The timing, declaration and payment of future dividends to holders of the Company's ordinary shares is determined by the Company's Board of Directors and depends upon many factors, including the Company's financial condition and results of operations, the capital requirements of the Company's businesses, industry practice and any other relevant factors.

Under Irish law, dividends may only be paid (and share repurchases and redemptions must generally be funded) out of "distributable reserves." The creation of distributable reserves was accomplished by way of a capital reduction, which the Irish High Court approved on December 18, 2014 and as acquired in conjunction with the Merger.

Share Repurchase Program

As of September 30, 2024, approximately $ 1.7 billion remained available under the share repurchase program which was approved by the Company's Board of Directors in March 2021.

The share repurchase program does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice.

Accumulated Other Comprehensive Income

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table includes changes attributable to both continuing and discontinued operations in AOCI attributable to Johnson Controls (in millions, net of tax):

3 unchanged sentences

Balance at beginning of period $ ( 956 ) $ ( 970 ) $ ( 901 )

Aggregate adjustment for the period 14 ( 69 ) ( 480 )

Net adjustment for the period 318 14 ( 69 )

Balance at end of period ( 638 ) ( 956 ) ( 970 )

13 unchanged sentences

(1) Refer to Note 10, "Derivative Instruments and Hedging Activities," of the notes to consolidated financial statements for disclosure of the line items in the consolidated statements of income affected by reclassifications from AOCI into income related to derivatives.

RETIREMENT PLANS

PENSION AND RETIREMENT PLANS

Unless otherwise noted, all activities and amounts reported in this footnote include both continuing operations of the Company and activities and amounts related to the R&LC HVAC business.

See Note 3, "Assets and Liabilities Held for Sale and Discontinued Operations" for additional details regarding divestiture of the R&LC HVAC business.

See Note 2, "Acquisitions and Divestitures" for additional details regarding divestiture of the R&LC HVAC business.

Pension Benefits

17 unchanged sentences

The Company contributed $ 31 million to the defined benefit plans in fiscal 2025 and expects to contribute approximately $ 21 million in cash in fiscal 2026.

None of contributions made by the Company were voluntary.

None of the contributions made by the Company were voluntary.

Projected benefit payments from the plans as of September 30, 2025 are estimated as follows (in millions):

13 unchanged sentences

Fair value of plan assets 24 26

The Company contributed $ 2 million to the postretirement benefit plans in fiscal 2024 and expects to contribute approximately $ 2 million in cash in fiscal 2025.

Projected benefit payments from the plans as of September 30, 2024 are estimated as follows (in millions):

2030 - 2034 25

Defined Contribution Plans

3 unchanged sentences

Multiemployer Benefit Plans

The Company contributes to multiemployer benefit plans based on obligations arising from collective bargaining agreements related to certain of its hourly employees in the U.S.

The Company contributes to multiemployer benefit plans based on obligations arising from collective bargaining agreements related to certain of its hourly employees in the U.S and Canada.

These plans provide retirement benefits to participants based on their service to contributing employers.

The benefits are paid from assets held in trust for that purpose.

The trustees typically are responsible for determining the level of benefits to be provided to participants as well as for such matters as the investment of the assets and the administration of the plans.

The trustees typically

are responsible for determining the level of benefits to be provided to participants as well as for such matters as the investment of the assets and the administration of the plans.

The risks of participating in these multiemployer benefit plans are different from single-employer benefit plans in the following aspects:

53 unchanged sentences

Corporate/Other 260 170 90

Hedge Fund 22 — 22 —

Real Estate 4 4

86 unchanged sentences

Benefits and settlements paid ( 133 ) ( 144 ) ( 96 ) ( 132 ) ( 9 ) ( 13 )

Divestitures — — ( 131 ) ( 5 ) — —

Other — — ( 3 ) 2 — ( 1 )

5 unchanged sentences

Employer and employee contributions 2 2 32 26 3 4

Benefits paid ( 144 ) ( 85 ) ( 67 ) ( 61 ) ( 13 ) ( 12 )

Settlement payments — ( 215 ) ( 65 ) ( 65 ) — —

Benefits and settlements paid ( 133 ) ( 144 ) ( 96 ) ( 132 ) ( 9 ) ( 13 )

Divestitures — — ( 168 ) — — —

Other — — ( 2 ) 1 — —

18 unchanged sentences

pension and postretirement plans, the Company uses a discount rate provided by an independent third party calculated based on an appropriate mix of high quality bonds.

For the non-U.S.

pension and postretirement plans, the Company consistently uses the relevant country specific benchmark indices for

determining the various discount rates.

pension and postretirement plans, the Company consistently uses the relevant country specific benchmark indices for determining the various discount rates.

The Company has elected to utilize a full yield curve approach in the estimation of service and interest components of net periodic benefit cost (credit) for pension and other postretirement for plans that utilize a yield curve approach.

The full yield curve approach applies the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

The fiscal 2024 net actuarial losses related to changes in the projected benefit obligation were primarily the result of the decrease in discount rates globally.

The fiscal 2025 net actuarial gains related to changes in the projected benefit obligation were primarily the result of the increase in discount rates globally.

The fiscal 2024 net actuarial losses related to changes in the projected benefit obligation were primarily the result of the decrease in discount rates globally.

Net Periodic Benefit Cost

16 unchanged sentences

Rate of compensation increase N/A N/A N/A 3.01 % 2.90 % 3.00 % N/A N/A N/A

Interest crediting rate 6.00 % N/A N/A 1.63 % 1.69 % 1.44 % N/A N/A N/A

Interest crediting rate 6.00 % 6.00 % N/A 1.58 % 1.63 % 1.69 % N/A N/A N/A

RESTRUCTURING AND RELATED COSTS

7 unchanged sentences

Year Ended September 30, 2025

Building Solutions North America $ 12

Building Solutions EMEA/LA 45

Building Solutions Asia Pacific 11

Global Products 38

The following table summarizes changes in the restructuring reserve, which is included within other current liabilities in the consolidated statements of financial position (in millions):

The following table summarizes changes in the reserve under the Company's restructuring plan announced in the fourth quarter of fiscal 2024, which is included within other current liabilities in the consolidated statements of financial position (in millions):

Employee Severance and Termination Benefits Long-Lived Asset Impairments Other Total

3 unchanged sentences

Balance at September 30, 2025

Additional restructuring and related costs 71 41 31 143

Utilized—cash ( 138 ) — ( 25 ) ( 163 )

Utilized—noncash — ( 41 ) ( 1 ) ( 42 )

Other 32 — — 32

Balance at September 30, 2024 $ 58 $ — $ 17 $ 75

$ 39 $ — $ 5 $ 44

The components of the Company’s income tax provision from continuing operations are as follows (in millions):

5 unchanged sentences

federal tax rate

63 42 ( 101 )

Income subject to rates different than the statutory rate ( 181 ) ( 204 ) 44

5 unchanged sentences

Effective tax rate 12 % 7 % ( 42 ) %

For fiscal 2025, the effective tax rate for continuing operations was 12 % and was lower than the statutory tax rate primarily due to the favorable impact of impairment and restructuring charges and the benefits of continuing global tax planning initiatives, partially offset by the unfavorable impact of tax audit resolutions.

For fiscal 2024, the effective tax rate for continuing operations was 7 % and was lower than the statutory tax rate primarily due to tax reserve adjustments as the result of tax audit resolutions and expired statute of limitations for certain tax years, valuation allowance adjustments and the benefits of continuing global tax planning initiatives, partially offset by the establishment of a deferred tax liability on the outside basis difference of the Company’s investment in certain subsidiaries as a result of the planned divestiture of its R&LC HVAC business and the unfavorable impact of impairment and restructuring charges.

resolutions and remeasurements, valuation allowance adjustments and the benefits of continuing global tax planning initiatives, partially offset by the unfavorable impact of impairment and restructuring charges.

For fiscal 2022, the effective tax rate for continuing operations was ( 16 )% and was lower than the statutory tax rate primarily due to favorable impact of tax reserve adjustments as the result of expired statute of limitations for certain tax years and the benefits of continuing global tax planning initiatives, partially offset by the unfavorable impact of impairment and restructuring charges and the establishment of a deferred tax liability on the outside basis difference of the Company's investment in certain subsidiaries as a result of the planned divestitures.

For fiscal 2023, the effective tax rate for continuing operations was ( 42 )% and was lower than the statutory tax rate primarily due to the favorable tax impacts of intellectual property tax adjustments, tax reserve adjustments as the result of tax audit resolutions and remeasurements, valuation allowance adjustments and the benefits of continuing global tax planning initiatives, partially offset by the unfavorable impact of impairment and restructuring charges.

Valuation Allowances

33 unchanged sentences

Net accrued interest 459 398 329

In fiscal 2024, as the result of tax audit resolutions and statute expirations in various jurisdictions, the Company adjusted its reserve for uncertain tax positions which resulted in a $ 91 million net benefit to income tax expense.

In fiscal 2023, as the result of tax audit resolutions, statute expirations, and remeasurements of ongoing controversy matters in various jurisdictions, the Company adjusted its reserve for uncertain tax positions which resulted in a $ 438 million net benefit to income tax expense.

In fiscal 2022, the statute of limitations for certain tax years expired, which resulted in a $ 301 million benefit to income tax expense.

In the U.S., fiscal years 2019 through 2020 are currently under audit and fiscal years 2017 through 2018 are currently under appeal with the Internal Revenue Service (“IRS”) for certain legal entities.

In addition, fiscal years 2016 through 2019 are also under exam by the IRS in relation to a separate consolidated filing group.

Additionally, the Company is currently under exam in the following major non-U.S.

3 unchanged sentences

Germany 2007 - 2021

Mexico 2016 - 2019

United Kingdom 2014 - 2015;

4 unchanged sentences

Impacts of Tax Legislation and Change in Statutory Tax Rates

On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was signed into law by the president of the United States.

It includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both U.S.

and non-U.S.), and expanding certain Inflation Reduction Act incentives while accelerating the phase-out of others.

The impact on tax expense in the 2025 fiscal year is not material and the Company does not anticipate the OBBB to have a material impact on tax expense in subsequent years.

On December 18, 2023, the president of Ireland signed into law the Finance (No.

2) Bill 2023, which included legislation regarding the implementation of the Pillar Two global minimum tax.

The Pillar Two legislation is effective for the Company’s fiscal year beginning October 1, 2024.

The Pillar Two legislation went into effect for the Company’s 2025 fiscal year.

The impact on tax expense in the 2025 fiscal year is not material.

On September 11, 2023, the Schaffhausen parliament approved a partial revision of the cantonal act on direct taxation:

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As a result, in fiscal 2024, the Company recorded a noncash discrete net tax benefit of $ 80 million due to the remeasurement of deferred tax assets and liabilities related to Switzerland and the canton of Schaffhausen.

On August 16, 2022, the U.S.

enacted the Inflation Reduction Act (“IRA”) which, among other things, created a new book minimum tax of at least 15% of consolidated GAAP pre-tax income for corporations with average book income in excess of $1 billion.

The book minimum tax was first applicable in fiscal 2024 and did not have a material impact on the Company's effective tax rate.

During fiscal 2025, 2024 and 2023, other tax legislation was adopted in various jurisdictions.

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Income taxes paid (1)

$ 606 $ 704 $ 294

(1) The Company also paid $ 1.4 billion of taxes related to the operation and disposition of the Residential & Light Commercial HVAC Business, which is reported through Discontinued Operations.

At September 30, 2025 and 2024, the Company recorded within the consolidated statements of financial position in other current assets approximately $ 562 million and $ 100 million, respectively, of income tax assets.

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Subsidiaries, joint ventures and partnerships 193 440

Intangible assets — 248

Operating lease right-of-use assets 327 294

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SEGMENT INFORMATION

ASC 280, "Segment Reporting," establishes the standards for reporting information about segments in financial statements.

In applying the criteria set forth in ASC 280, the Company has determined that it has four reportable segments for financial reporting purposes.

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.

Management evaluates the performance of its segments primarily on segment earnings before interest, taxes and amortization ("EBITA"), which represents income from continuing operations before income taxes and noncontrolling interests, excluding amortization of intangible assets, corporate expenses, restructuring and impairment costs, the water systems AFFF settlement costs and AFFF insurance recoveries, net financing charges, loss on divestiture and net mark-to-market gains and losses related to pension and postretirement plans and restricted asbestos investments.

On April 1, 2025, the Company, 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 ("CODM") assesses performance and makes decisions regarding the allocation of resources following portfolio simplification actions, realigned into three reportable segments (Americas, EMEA and APAC).

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.

The Chief Executive Officer, the Company’s CODM, evaluates the performance of its segments and allocates resources based on two profitability measures, Segment EBITA and Segment EBIT:

• Segment earnings before interest, taxes, and amortization (“EBITA”) represents income from continuing operations, before income taxes and noncontrolling interests, excluding corporate expenses, restructuring and impairment costs, AFFF related settlement costs and insurance recoveries, gains or losses on divestitures, net mark-to-market gains and losses related to pension and post-retirement plans and restricted asbestos investments, net finance charges, and amortization.

Segment EBITA is used as a tool to allow the CODM to evaluate the recurring profitability of the segments, including revenues and expenses that are within the operational control of the segments, and excluding the impact of certain non-cash and non-recurring items.

Segment EBITA also provides the CODM with performance comparability across periods and for more accurate benchmarking against peer companies that may not have similar historical acquisition activity, by holding constant the impact of significant acquisitions.

• Segment earnings before interest and taxes ("EBIT") represents Segment EBITA, adding back the impact of amortization of intangible assets.

Segment EBIT allows the CODM to review profitability, inclusive of the impact of significant acquisition activity, informing the CODM of how the business is integrating key strategic initiatives and generating synergies.

Both EBITA and EBIT are reviewed by the CODM and compared against the profit plan and forecast for the current and prior year.

Segment EBITA and Segment EBIT are not defined under GAAP and may not be comparable to similarly titled measures used by other companies.

Measures of total assets by reportable segment are not provided to the CODM.

Therefore, asset information by segment is not disclosed.

Financial information relating to the Company’s reportable segments is as follows (in millions):

Year Ended September 30, 2025

Net sales $ 15,831 $ 4,968 $ 2,797

Cost of sales 9,742 3,228 1,777

Selling, general and administrative expenses 3,206 1,094 548

Equity income (loss)

1 ( 3 ) ( 4 )

Building Solutions North America $ 11,348 $ 10,330 $ 9,367

Building Solutions EMEA/LA 4,296 4,096 3,845

Building Solutions Asia Pacific 2,237 2,746 2,714

Global Products 5,071 5,159 4,711

Total net sales $ 22,952 $ 22,331 $ 20,637

Segment EBITA 2,882 649 476

Amortization of intangible assets

Segment EBIT $ 2,526 $ 581 $ 461

Year Ended September 30, 2024

Net sales $ 15,606 $ 4,620 $ 2,726

Cost of sales 9,922 3,024 1,692

Selling, general and administrative expenses 3,003 996 558

Equity income (loss)

Segment EBITA 2,679 561 478

Amortization of intangible assets

Segment EBIT $ 2,300 $ 481 $ 461

Year Ended September 30, 2023

Net sales $ 14,529 $ 4,491 $ 3,311

Cost of sales 9,241 3,035 2,102

Selling, general and administrative expenses 2,945 1,039 602

Equity income (loss)

— ( 1 ) ( 2 )

Segment EBITA 2,343 418 609

Building Solutions North America $ 1,663 $ 1,394 $ 1,122

Building Solutions EMEA/LA (1)

Building Solutions Asia Pacific 261 343 332

Global Products 1,403 1,317 970

Total segment EBITA 3,718 3,370 2,782

Amortization of intangible assets

Segment EBIT $ 2,006 $ 344 $ 594

A reconciliation of segment EBIT and segment EBITA to consolidated income before income taxes is as follows (in millions):

Year Ended September 30,

2025 2024 2023

Segment EBITA $ 4,007 $ 3,718 $ 3,370

Amortization of intangible assets 439 476 426

Segment EBIT 3,568 3,242 2,944

Corporate expenses 767 490 429

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Water systems AFFF settlement (1)

AFFF insurance recoveries (2)

Water systems AFFF insurance recoveries (1)

( 39 ) ( 367 ) —

Net financing charges 319 342 258

Loss on divestiture

Net mark-to-market (gain) loss ( 47 ) 95 ( 18 )

Net mark-to-market adjustments 6 ( 47 ) 95

Income from continuing operations before income taxes $ 1,969 $ 1,522 $ 1,113

(1) EBITA for the Building Solutions EMEA/LA segment includes equity income (loss) of $( 39 ) million, $ 1 million and $ 6 million for the years ended September 30, 2024, 2023 and 2022, respectively.

(2) Refer to Note 21, "Commitments and Contingencies," of the notes to the consolidated financial statements for further disclosure related to the water systems AFFF settlement and insurance recoveries.

September 30,

2024 2023 2022

Building Solutions North America $ 16,159 $ 15,603 $ 15,226

Building Solutions EMEA/LA (1)

5,072 5,202 4,991

Building Solutions Asia Pacific 2,571 2,645 2,474

Global Products 10,011 10,844 10,620

33,813 34,294 33,311

Assets held for sale 4,805 4,657 4,700

Unallocated 4,077 3,291 4,147

Total $ 42,695 $ 42,242 $ 42,158

(1) Assets for the Building Solutions EMEA/LA segment includes investments in partially-owned affiliates of $ 57 million, $ 130 million and $ 115 million, as of September 30, 2024, 2023 and 2022, respectively.

(1) Refer to Note 20, "Commitments and Contingencies," of the notes to consolidated financial statements for further disclosure related to the water systems AFFF settlement and insurance recoveries.

Year Ended September 30,

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Depreciation/Amortization

Building Solutions North America $ 248 $ 225 $ 213

Building Solutions EMEA/LA 105 101 96

Building Solutions Asia Pacific 19 23 21

Global Products 325 351 348

$ 490 $ 528 $ 528

Corporate 224 119 45

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Capital Expenditures

Building Solutions North America $ 53 $ 104 $ 141

Building Solutions EMEA/LA 105 119 119

Building Solutions Asia Pacific 15 33 22

Global Products 153 140 152

$ 151 $ 190 $ 197

Corporate 158 168 50

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In fiscal 2025, 2024 and 2023, no customer exceeded 10% of consolidated net sales.

Geographic Segments

Geographic Areas

Financial information relating to the Company’s operations by geographic area is as follows (in millions):

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United States $ 13,303 $ 13,171 $ 12,408

Europe 4,486 4,366 4,052

Asia Pacific 2,856 3,427 3,319

Other Non-U.S.

2,439 2,130 1,929

Other Non-United States 10,293 9,781 9,923

Total $ 23,596 $ 22,952 $ 22,331

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United States $ 1,108 $ 1,137 $ 1,277

Europe 613 479 384

Asia Pacific 252 233 235

Other Non-U.S.

Other Non-United States 1,085 1,266 1,097

Total $ 2,193 $ 2,403 $ 2,374

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Long-lived assets by geographic location consist of net property, plant and equipment.

Certain of the Company's subsidiaries at the business segment level have guaranteed the performance of third-parties and provided financial guarantees for uncompleted work and financial commitments.

Certain of the Company's subsidiaries at the business segment level guarantee the performance of third-parties and provide financial guarantees for uncompleted work and financial commitments.

The terms of these guarantees vary with end dates ranging from the current fiscal year through the completion of such transactions and would typically be triggered in the event of nonperformance.

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The Company offers warranties to its customers depending upon the specific product and terms of the customer purchase agreement.

A typical warranty program requires that the Company replace defective products within a specified time period from the date of sale.

The changes in the carrying amount of the Company’s total product warranty liability were as follows (in millions).

Generally, the Company's warranties require the repair or replacement of defective products within a specified time period from the date of sale.

The following table summarizes changes in the total product warranty liability (in millions).

Year Ended September 30,

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Changes in estimates to pre-existing warranties — 31

Accruals from acquisitions and divestitures — 1

Currency translation — 2

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Environmental Matters

The Company accrues for potential environmental liabilities when it is probable a liability has been incurred and the amount of the liability is reasonably estimable.

The following table presents the location and amount of reserves for environmental liabilities in the Company's consolidated statements of financial position (in millions):

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(“Tyco Fire Products”) Fire Technology Center ("FTC") located in Marinette, Wisconsin and surrounding areas in the City of Marinette and Town of Peshtigo, Wisconsin, as well as the continued remediation of PFAS, arsenic and other contaminants at the Tyco Fire Products Stanton Street manufacturing facility also located in Marinette, Wisconsin (the “Stanton Street Facility”).

Tyco Fire Products has discontinued the production and sale of fluorinated firefighting foams, including AFFF products, and has transitioned to non-fluorinated foam alternatives.

PFOA, PFOS, and other PFAS compounds are being studied by the U.S.

Environmental Protection Agency ("EPA") and other environmental and health agencies and researchers.

In March 2021, EPA published its final determination to regulate PFOS and PFOA in drinking water.

On April 10, 2024, EPA announced the final National Primary Drinking Water Regulation (“NPDWR”) for six PFAS compounds including PFOA and PFOS.

The NPDWR established legally enforceable levels, called Maximum Contaminant Levels, of 4.0 parts per trillion ("ppt") for each of PFOA and PFOS, 10 ppt for each of PFHxS, PFNA, and HFPO-DA (commonly known as GenX Chemicals), and a Hazard Index of one for mixtures containing two or more of PFHxS, PFNA, HFPO-DA, and PFBA.

In April 2024, EPA published National Primary Drinking Water Regulation (“NPDWR”) for six PFAS compounds including PFOA and PFOS.

In February 2024, EPA released two proposed rules relating to PFAS under the Resource Conservation and Recovery Act (“RCRA”):

one rule proposes to list nine PFAS (including PFOA and PFOS) as “hazardous constituents,” and a second rule proposes to clarify that hazardous waste regulated under the rule includes not only substances listed or identified as hazardous waste in the regulations, but also any substances that meet the statutory definition of hazardous waste.

In August 2022, EPA published a proposed rule that would designate PFOA and PFOS as “hazardous substances” under Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").

In April 2023, EPA issued an Advanced Notice of Proposed Rulemaking ("ANPR") seeking input on whether it should expand the proposed rule to designate as "hazardous substances" under CERCLA:

(1) seven additional PFAS;

(2) the precursors to PFOA, PFOS, and the seven additional PFAS;

or (3) entire categories of PFAS.

On April 17, 2024, the EPA Administrator signed the final rule designating PFOA and PFOS, along with their salts and structural isomers, as “hazardous substances.”

It is not possible to estimate the Company’s ultimate level of liability at many remediation sites due to the large number of other parties that may be involved, the complexity of determining the relative liability among those parties, the financial viability of other potentially responsible parties and third-party indemnitors, the uncertainty as to the nature and scope of the investigations and remediation to be conducted, changes in environmental regulations, changes in permissible levels of specific compounds in soil, groundwater and drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages, the uncertainty in the application of law and risk assessment, the various choices and costs associated with diverse technologies that may be used in corrective actions at the sites, and the often quite lengthy periods over which eventual remediation may occur.

It is possible that technological, regulatory or enforcement developments, the results of additional environmental studies or other factors could change the Company's expectations with respect to future charges and cash outlays, and such changes could be material to the Company's future results of operations, financial condition or cash

In April 2024, EPA finalized a rule designating PFOA and PFOS, along with their salts and structural isomers, as "hazardous substances" under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").

In May 2025, EPA announced that it will retain the 4.0 ppt limit on PFOS and PFOA but will institute a two-year delay in the compliance deadline from 2029 until 2031.

EPA also announced its intent to rescind and reconsider the limits on four other types of PFAS (PFHxS, PFNA, HFPO-DA, and PFBS).

other potentially responsible parties and third-party indemnitors, the uncertainty as to the nature and scope of the investigations and remediation to be conducted, changes in environmental regulations, changes in permissible levels of specific compounds in soil, groundwater and drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages, the uncertainty in the application of law and risk assessment, the various choices and costs associated with diverse technologies that may be used in corrective actions at the sites, and the often quite lengthy periods over which eventual remediation may occur.

Nevertheless, the Company does not currently believe that any claims, penalties or costs in addition to the amounts accrued will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

In addition, the Company has identified asset retirement obligations for environmental matters that are expected to be addressed at the retirement, disposal, removal or abandonment of existing owned facilities.

Conditional asset retirement obligations were $ 7 million and $ 8 million at September 30, 2024 and 2023, respectively.

Conditional asset retirement obligations were $ 7 million at both September 30, 2025 and 2024, respectively.

FTC-Related Matters

FTC Remediation

FTC and Stanton Street Remediation

The use of fire-fighting foams at the FTC was primarily for training and testing purposes to ensure that such products sold by the Company’s affiliates, Chemguard, Inc.

("Chemguard") and Tyco Fire Products, were effective at suppressing high intensity fires that may occur at military installations, airports or elsewhere.

During the three months ended June 30, 2024, Tyco Fire Products completed its previously announced plan to discontinue the production and sale of fluorinated firefighting foams, including AFFF products, and has transitioned to non-fluorinated foam alternatives.

Tyco Fire Products has been engaged in remediation activities at the Stanton Street Facility since 1990.

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Tyco Fire Products has also completed the removal and disposal of PFAS-affected soil from the FTC.

The Company is also continuing to replace private drinking water wells that may have been impacted by PFAS migrating from the FTC.

The Company's reserves for continued remediation of the FTC, the Stanton Street Facility and surrounding areas in Marinette and Peshtigo are based on estimates of costs associated with the long-term remediation actions, including the continued operation of the GETS, the implementation of long-term drinking water solutions for the area impacted by groundwater migrating from the FTC, continued monitoring and testing of groundwater monitoring wells, the operation and wind-down of other legacy remediation and treatment systems and the completion of ongoing investigation obligations.

FTC-Related Litigation

On June 21, 2019, the WDNR announced that it had received from the Wisconsin Department of Health Services (“WDHS”) a recommendation for groundwater quality standards as to, among other compounds, PFOA and PFOS.

The WDHS recommended a groundwater enforcement standard for PFOA and PFOS of 20 parts per trillion.

Although Wisconsin approved final regulatory standards for PFOA and PFOS in drinking water and surface water in February 2022, the Wisconsin Natural Resources Board did not approve WDNR's proposed standards for PFOA and PFOS in groundwater.

Wisconsin approved final regulatory standards for PFOA and PFOS in drinking water and surface water in February 2022.

In August 2024, WDNR issued a new proposed rule to adopt the EPA Maximum Contaminant Levels for PFAS in drinking water.

The WDNR initiated a rulemaking proceeding that would establish groundwater quality standards for PFOA, PFOS, perfluorobutane sulfonic acid and its potassium salt (“PFBS”) and hexafluoropropylene oxide dimer acid and its ammonium salt (“HFPO-DA”).

Pursuant to state law, the WDNR has stopped work on the proposed rule and notified the state legislature that, following economic analysis, the proposed costs would exceed statutory thresholds.

As a result, the state legislature is required to authorize the WDNR to allow the rulemaking to continue.

In February 2025, the Wisconsin Department of Health Services ("WDHS") recommended individual groundwater enforcement standards of 4 ng/L for PFOA and PFOS, 10 ng/L for PFHxS, PFNA, and HFPO-DA, and 2,000 ng/L for PFBS.

Following the February 2025 WDHS recommendation, the WDNR Secretary and the Governor signed the WDNR scope statement and WDNR is in the early stages of rule development for enforcement standards for these six PFAS constituents.

In July 2019, the Company received a letter from the WDNR directing the expansion of the evaluation of PFAS in the Marinette region to include (1) biosolids sludge produced by the City of Marinette Waste Water Treatment Plant and spread on certain fields in the area and (2) the Menominee and Peshtigo Rivers.

On October 16, 2019, the WDNR issued a “Notice of Noncompliance” to Tyco Fire Products and Johnson Controls, Inc.

On October 16, 2019, the WDNR issued a “Notice of

Noncompliance” to Tyco Fire Products and Johnson Controls, Inc.

regarding the WDNR’s July 2019 letter.

The WDNR issued a further letter regarding the issue on November 4, 2019.

In February 2020, the WDNR sent a letter to Tyco Fire Products and

Johnson Controls, Inc.

In February 2020, the WDNR sent a letter to Tyco Fire Products and Johnson Controls, Inc.

further directing the expansion of the evaluation of PFAS in the Marinette region to include investigation activities south and west of the previously defined FTC study area.

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The WDOJ seeks monetary penalties and an injunction ordering these two subsidiaries to complete a site investigation and cleanup of PFAS contamination in accordance with the WDNR's requests.

The parties are engaged in summary judgment and pretrial motions and the court has set a trial date of March 3, 2025.

The parties have completed briefing of summary judgment and pretrial motions.

The Court has continued the trial previously scheduled for March 3, 2025 and has not yet set a new trial date.

The parties are actively working toward the finalization of a settlement to resolve the matter.

In October 2022, the Town of Peshtigo filed a tort action in Wisconsin state court against Tyco Fire Products, Johnson Controls Inc., Chemguard, Inc., and ChemDesign, Inc.

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Plaintiffs generally seek compensatory damages, including damages for alleged personal injuries, medical monitoring, diminution in property values, investigation and remediation costs, and natural resources damages, and also seek punitive damages and injunctive relief to address remediation of the alleged contamination.

In September 2018, Tyco Fire Products and Chemguard filed a Petition for Multidistrict Litigation with the United States Judicial Panel on Multidistrict Litigation (“JPML”) seeking to consolidate all existing and future federal cases into one jurisdiction.

jurisdiction.

On December 7, 2018, the JPML issued an order transferring various AFFF cases to the MDL.

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The settlement releases these claims against Tyco Fire Products, Chemguard, and other related corporate entities.

In connection with the settlement, a charge for $ 750 million was recorded in selling, general and administrative expenses in the consolidated statements of income.

Tyco Fire Products contributed an initial payment of $ 250 million in June 2024, with the remaining $ 500 million due by the first quarter of fiscal 2025.

Prior to the date of the final contribution, Tyco Fire Products has agreed to contribute any applicable insurance recoveries in excess of the initial $ 250 million payment, up to the remaining $ 500 million due, within a specified period following the receipt of such recovery.

During fiscal 2024, the Company recorded expected insurance recoveries of $ 371 million in selling, general and administrative expenses in the consolidated statements of income and collected insurance recoveries of $ 349 million.

In accordance with its agreement and recent insurance recovery, Tyco Fire Products made an additional payment during the fourth quarter of fiscal 2024 of approximately $ 85 million, reducing its final payment to approximately $ 415 million.

The amounts and timing of any additional insurance recoveries are uncertain.

There are still several procedural and legal steps that must occur before the settlement is final and the remaining payment is made.

The settlement is subject to final approval by the MDL court and other contingencies, and that process is expected to be completed in the first half of fiscal 2025.

In accordance with the terms of the settlement agreement, Tyco Fire Products made its final required payment of $ 415 million in December 2024 and has now paid the full settlement amount.

The class of public water systems included in this settlement broadly includes any public water system (as defined in the settlement agreement) that has detected PFAS in its drinking water sources as of May 15, 2024.

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The settlement does not constitute an admission of liability or wrongdoing by Tyco Fire Products or Chemguard.

If the MDL court does not approve the agreement or certain terms are not fulfilled, Tyco Fire Products and Chemguard will continue to defend themselves in the litigation.

AFFF Putative Class Actions

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All of these cases have been direct-filed in or transferred to the MDL.

In addition, six proposed class actions were filed in Canada (British Columbia, Manitoba, Quebec and Ontario) in the past year against Tyco Fire Products and other

manufacturers on behalf of various classes of members who consumed or were exposed to products or supplies that were allegedly contaminated by AFFF.

In addition, seven proposed class actions were filed in Canada (British Columbia, Manitoba, Quebec and Ontario), which name Tyco Fire Products and other manufacturers as defendants, on behalf of various classes of members (including individuals and government entities) who seek to recover for remediation (past and future) costs, claim property or other environmental damages, or claim personal injuries or other harms arising from alleged exposure to or contamination with PFAS or PFAS-containing products (including AFFF).

AFFF Individual or Mass Actions

There are more than 12,400 individual or “mass” actions pending that were filed in state or federal courts originating from 53 states and territories against Chemguard and Tyco Fire Products and other defendants in which the plaintiffs generally seek compensatory damages, including damages for alleged personal injuries, medical monitoring, and alleged diminution in property values.

The cases involve plaintiffs from various states including approximately 7,000 plaintiffs in Colorado and more than 8,300 other plaintiffs.

The vast majority of these matters have been tagged for transfer to, transferred to, or directly-filed in the MDL, and it is anticipated that several newly-filed state court actions will be similarly tagged and transferred.

There are several matters that are proceeding in state courts, including actions in Arizona, Illinois, Virginia and Wisconsin.

The Company is currently unable to determine a precise count of personal injury claimants currently pending.

The vast majority of these matters have been tagged for transfer to, transferred to, or directly-filed in the MDL, and it is

anticipated that several newly-filed state court actions will be similarly tagged and transferred.

There are several matters that are or will be proceeding in state courts, including actions in Arizona, Illinois and Washington.

Tyco and Chemguard are also periodically notified by other individuals that they may assert claims regarding PFOS and/or PFOA contamination allegedly resulting from the use of AFFF.

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The states and territories are:

Arkansas, Arizona, California, Colorado, Connecticut, Delaware, the District of

Columbia, Florida, Hawaii, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Maine, Michigan, Mississippi, New Hampshire, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Washington, Wisconsin, Guam, the Northern Mariana Islands, and Puerto Rico.

Arkansas, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Hawaii, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Maine, Michigan, Mississippi, New Hampshire, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Washington, Wisconsin, Guam, the Northern Mariana Islands, and Puerto Rico.

All of these complaints, if not filed directly in the MDL, have been removed to federal court and transferred to the MDL.

In addition, an affiliate of the Company has been named with other manufacturers as a third party by the Canadian Federal Government who is seeking contribution and indemnity in respect of a single-plaintiff action filed in Ontario relating to alleged PFAS and benzene contamination of a private well from the use of AFFF in firefighting training.

Other AFFF Related Matters

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In October 2022, the Red Cliff Band of Lake Superior Chippewa Indians (a federally recognized tribe) filed a lawsuit in the United States District Court for the Western District of Wisconsin against a number of manufacturers, including affiliates of the Company, with respect to PFAS contamination allegedly resulting from the use and disposal of AFFF at Duluth Air National Guard Base in Duluth, Minnesota.

This complaint has been transferred to the MDL.

This case has been transferred to the MDL.

In July 2023, the Fond du Lac Band of Lake Superior Chippewa (a federally recognized tribe) direct-filed a lawsuit in the MDL against a number of manufacturers, including affiliates of the Company, with respect to PFAS contamination allegedly resulting from the use and disposal of AFFF at Duluth Air National Guard Base in Duluth, Minnesota.

In September 2025, the Leech Lake Band of Ojibwe (one of six federally recognized sovereign bands that make up the federally recognized Minnesota Chippewa Tribe) filed a lawsuit in Minnesota state court against a number of manufacturers, including affiliates of the Company, with respect to PFAS contamination allegedly resulting from, among other things, the alleged use and disposal of AFFF on and near the Band’s property.

This case has been transferred to the MDL.

Four AFFF property damage proceedings have been filed in Belgium against numerous defendants, including an affiliate of the Company .

The cases are currently on hold pending efforts to dismiss the proceedings.

The Company is vigorously defending all of the above AFFF matters and believes that it has meritorious defenses to class certification and the claims asserted, including statutes of limitations, the government contractor defense, various medical and scientific defenses, and other factual and legal defenses.

The Company has a historical general liability insurance program and is pursuing coverage under the program from various insurers through insurance claims discussions and litigation pending in a state court in Wisconsin and a federal district court in South Carolina.

The Company has reached settlements with certain insurers and remains in discussions and litigation with the remaining carriers.

The Company is unable to predict the amount and timing of any future recoveries under its insurance policies with the remaining carriers.

The insurance litigation involves numerous factual and legal issues.

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September 30,

Cash $ 6 $ 20

Investments 290 281

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Key variables and assumptions include the number and type of new claims that are filed each year, the average cost of resolution of claims, the identity of defendants, the resolution of coverage issues with insurance carriers, amount of insurance, and the solvency risk with respect to the Company's insurance carriers.

Many of these factors are closely linked, such that a change in one variable or assumption may impact one or more of the others, and no single variable or assumption predominately influences the determination of the Company's asbestos-related liabilities and insurance-related assets.

Furthermore, predictions with respect to these variables are subject to greater uncertainty in the later portion of the projection period.

Other factors that may affect the Company's liability and cash payments for asbestos-related matters include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms of state or federal tort legislation and the applicability of insurance policies among subsidiaries.

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The Company is involved in various lawsuits, claims and proceedings incident to the operation of its businesses, including those pertaining to product liability, environmental, safety and health, intellectual property, employment, commercial and contractual matters, and various other casualty matters.

Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to the Company, it is management’s opinion that

none of these will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to the Company, it is management’s opinion that none of these will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Costs related to such matters were not material to the periods presented.

1 unchanged sentence

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 8. Financial Statements and Supplementary Data