Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statements for Forward-Looking Information

Unless otherwise indicated, references to "Johnson Controls," the "Company," "we," "our" and "us" in this Quarterly Report on Form 10-Q refer to Johnson Controls International plc and its consolidated subsidiaries.

The Company has made statements in this document that are forward-looking and therefore are subject to risks and uncertainties. All statements in this document other than statements of historical fact are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding the Company’s future financial position, sales, costs, earnings, cash flows, other measures of results of operations, synergies and integration opportunities, capital expenditures, debt levels and market outlook are forward-looking statements. Words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "forecast," "project" or "plan" and terms of similar meaning are also generally intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. The Company cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, that could cause the Company’s actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: the ability to manage macroeconomic and geopolitical volatility, including changes to laws or policies governing foreign trade, including tariffs, economic sanctions, foreign exchange and capital controls, import/export controls or other trade restrictions as well as supply chain disruptions; the ability to manage general economic, business and capital market conditions, including the impacts of trade restrictions, recessions, economic downturns and global price inflation; the Company's ability to develop or acquire new products and technologies that achieve market acceptance and meet applicable quality and regulatory requirements; the ability of the Company to execute on its operating model and drive organizational improvement; the Company's ability to successfully execute and complete portfolio simplification, including the completion of the divestiture of the Residential and Light Commercial business, as well as the possibility that the expected benefits of such actions will not be realized or will not be realized within the expected time frame; the ability to hire and retain senior management and other key personnel, including successfully completing the Company's Chief Executive Officer transition; the ability to innovate and adapt to emerging technologies, ideas and trends in the marketplace, including the incorporation of technologies such as artificial intelligence; fluctuations in the cost and availability of public and private financing for the Company's customers; the ability to manage disruptions caused by international conflicts, including Russia and Ukraine and the ongoing conflicts in the Middle East; managing the risks and impacts of potential and actual security breaches, cyberattacks, privacy breaches or data breaches, maintaining and improving the capacity, reliability and security of the Company's enterprise information technology infrastructure; the ability to manage the lifecycle cybersecurity risk in the development, deployment and operation of the Company's digital platforms and services; fluctuations in currency exchange rates; changes or uncertainty in laws, regulations, rates, policies, or interpretations that impact the Company's business operations or tax status; the ability to adapt to global climate change, climate change regulation and successfully meet the Company's public sustainability commitments; the outcome of litigation and governmental proceedings; the risk of infringement or expiration of intellectual property rights; the Company's ability to manage disruptions caused by catastrophic or geopolitical events, such as natural disasters, armed conflict, political change, climate change, pandemics and outbreaks of contagious diseases and other adverse public health developments; any delay or inability of the Company to realize the expected benefits and synergies of recent portfolio transactions; the tax treatment of recent portfolio transactions; significant transaction costs and/or unknown liabilities associated with such transactions; labor shortages, work stoppages, union negotiations, labor disputes and other matters associated with the labor force; and the cancellation of or changes to commercial arrangements. A detailed discussion of risks related to Johnson Controls' business is included in the section entitled "Risk Factors" in Johnson Controls' Annual Report on Form 10-K for the year ended September 30, 2024 filed with the United States Securities and Exchange Commission ("SEC") on November 19, 2024, which is available at www.sec.gov and www.johnsoncontrols.com under the "Investors" tab. The description of certain of these risks is supplemented in Item 1A of Part II of Johnson Controls subsequently filed Quarterly Reports on Form 10-Q. The forward-looking statements included in this document are made only as of the date of this document, unless otherwise specified, and, except as required by law, Johnson Controls assumes no obligation, and disclaims any obligation, to update such statements to reflect events or circumstances occurring after the date of this document.

Overview

Johnson Controls International plc, headquartered in Cork, Ireland, is a global leader in smart, safe, healthy and sustainable buildings, serving a wide range of customers around the globe. The Company’s products, services, systems and solutions

advance the safety, comfort and intelligence of spaces to serve people, places and the planet. The Company is committed to helping its customers win and creating greater value for all of its stakeholders through its strategic focus on buildings.

The Company is a global leader in engineering, manufacturing, commissioning and retrofitting building products and systems, including residential and 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'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, 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.

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 assesses performance and makes decisions regarding the allocation of resources following portfolio simplification actions, realigned into three reportable segments (Americas, EMEA and APAC) from four reportable segments (Global Products, Building Solutions North America, Building Solutions EMEA/LA and Building Solutions APAC). The Company will begin reporting under this segment structure when it reports its quarterly results for the fiscal third quarter ending June 30, 2025.

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

Macroeconomic Trends

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

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

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

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

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

Recently, certain of our customers, including governmental and institutional customers, have exhibited increased uncertainty regarding future spending decisions due to various political and economic factors, including budget reductions, reprioritization of spending, interest rate fluctuation and economic uncertainty. This uncertainty has and may in the future impact the Company's ability to predict and forecast the revenue and backlog associated with these customers.

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

Portfolio Simplification Transactions

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

Restructuring and Cost Optimization Initiatives

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

incurred and savings to be achieved in fiscal 2025; however, depending on the finalization of the carve-out of the R&LC HVAC business, including post-closing separation obligations, the timing of the closing of the transaction and the ability to execute more significant aspects of the planned restructuring actions, the impact of costs on net income could be material in fiscal 2025. Restructuring costs will be incurred across all segments and Corporate functions.

Cybersecurity Incident

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

The Company is completing its analysis of the impacted data and believes based on its assessment to date that certain data, including employee, job applicant, consultant and other third party personally identifiable information and other related data, was impacted by the incident. The Company will, as determined appropriate, notify impacted individuals and regulatory authorities.

Based on the information reviewed to date, the Company has not observed evidence of any impact to its digital products, services and solutions, including OpenBlue and Metasys.

Net Sales

			Three Months Ended March 31,																		Six Months Ended March 31,
(in millions)			2025						2024						Change						2025						2024						Change
Net sales			$	5,676					$	5,597					1		%				$	11,102					$	10,806					3		%

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

The increase in net sales for the six months ended March 31, 2025 was due to higher organic sales ($861 million), partially offset by the net impact of acquisitions and divestitures ($463 million) and the unfavorable impact of foreign currency translation ($102 million). Excluding the impact of foreign currency translation and business acquisitions and divestitures, net sales increased 8% over the prior year, driven by strong growth in Products and Systems in the Building Solutions North America, Building Solutions Asia Pacific and Global Products segments and growth in Services in all Building Solutions segments.

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

Cost of Sales / Gross Profit

			Three Months Ended March 31,																		Six Months Ended March 31,
(in millions)			2025						2024						Change						2025						2024						Change
Cost of sales			$	3,607					$	3,675					(2		%)				$	7,107					$	7,106					—		%
Gross profit			2,069						1,922						8		%				3,995						3,700						8		%
% of sales			36.5		%				34.3		%				220		bp				36.0		%				34.2		%				180		bp

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

Refer to the "Segment Analysis" below within this Item 2 for a discussion of segment earnings before interest, taxes and amortization ("EBITA").

Selling, General and Administrative Expenses

			Three Months Ended March 31,																		Six Months Ended March 31,
(in millions)			2025						2024						Change						2025						2024						Change
SG&A			$	1,427					$	2,064					(31		%)				$	2,826					$	3,398					(17		%)
% of sales			25.1		%				36.9		%				(1,180)		bp				25.5		%				31.4		%				(590)		bp

For the three months ended March 31, 2025, the decrease in SG&A was primarily due to the favorable impact of the prior year water systems AFFF settlement agreement costs ($750 million), partially offset by higher transformation costs ($46 million) and the impact of net mark-to-market adjustments ($28 million).

For the six months ended March 31, 2025, the decrease in SG&A was primarily due to the favorable impact of the prior year water systems AFFF settlement agreement costs ($750 million), partially offset by higher transformation costs ($79 million) and the impact of net mark-to-market adjustments ($51 million).

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

Restructuring and Impairment Costs

			Three Months Ended March 31,															Six Months Ended March 31,
(in millions)			2025						2024												2025						2024
Goodwill and other intangible asset impairments			$	22					$	230											$	22					$	230
Restructuring and related costs			40						9												73						44
Restructuring and impairment costs			$	62					$	239											$	95					$	274

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

Net Financing Charges

			Three Months Ended March 31,															Six Months Ended March 31,
(in millions)			2025						2024												2025						2024
Interest expense, net of capitalized interest costs			$	56					$	96											$	123					$	182
Other financing charges			4						4												10						26
Interest income			(2)						(5)												(5)						(10)
Net foreign exchange results for financing activities			22						(6)												38						(22)
Net financing charges			$	80					$	89											$	166					$	176

Refer to Note 8, "Debt and Financing Arrangements," of the notes to the consolidated financial statements for further disclosure related to the Company's debt.

Income Tax Provision (Benefit)

			Three Months Ended March 31,															Six Months Ended March 31,
(in millions)			2025						2024												2025						2024
Income tax provision (benefit)			$	26					$	(153)											$	73					$	(173)
Effective tax rate			5.2		%				32.5		%										8.0		%				114.6		%

Refer to Note 15, "Income Taxes" of the notes to the consolidated financial statements for further disclosure related to the Company's income taxes.

Segment Analysis

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 corporate expenses, amortization of intangible assets, restructuring and impairment costs, the water systems AFFF settlement costs and insurance recoveries, net mark-to-market gains and losses related to pension and postretirement plans and restricted asbestos investments, and net financing charges.

Net Sales

			Three Months Ended March 31,																		Six Months Ended March 31,
(in millions)			2025						2024						Change						2025						2024						Change
Building Solutions North America			$	2,916					$	2,739					6		%				$	5,660					$	5,226					8		%
Building Solutions EMEA/LA			1,085						1,064						2		%				2,158						2,102						3		%
Building Solutions Asia Pacific			542						491						10		%				1,069						998						7		%
Global Products			1,133						1,303						(13		%)				2,215						2,480						(11		%)
			$	5,676					$	5,597					1		%				$	11,102					$	10,806					3		%

Three Months:

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

• The increase in Building Solutions EMEA/LA was primarily due to organic growth ($48 million) and incremental sales related to business acquisitions ($9 million), partially offset by the unfavorable impact of foreign currency translation ($36 million). Excluding the impact of business acquisitions and foreign currency translation, sales growth was primarily led by 9% growth in Services.

• The increase in Building Solutions Asia Pacific was primarily due to organic growth ($62 million), partially offset by the unfavorable impact of foreign currency translation ($11 million). Excluding the impact of foreign currency translation, sales growth was led by 15% growth in Services and 12% growth in Products and Systems.

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

Year to Date:

• The increase in Building Solutions North America was primarily due to organic growth ($447 million), partially offset by the unfavorable impact of foreign currency translation ($13 million). Excluding the impact of foreign currency translation, sales growth was led by growth in Applied HVAC and Controls.

• The increase in Building Solutions EMEA/LA was primarily due to organic growth ($105 million) and incremental sales related to business acquisitions ($12 million), partially offset by the unfavorable impact of foreign currency translation ($61 million). Excluding the impact of business acquisitions and foreign currency translation, sales growth was primarily led by growth in Services.

• The increase in Building Solutions Asia Pacific was primarily due to organic growth ($85 million), partially offset by the unfavorable impact of foreign currency translation ($14 million). Excluding the impact of foreign currency translation, sales growth was led by strong growth in Services as well as growth in Products and Systems.

• The decrease in Global Products was primarily due to the impact of business divestitures ($475 million) and the unfavorable impact of foreign currency translation ($14 million), partially offset by organic growth ($224 million). Excluding the impact of business divestitures and foreign currency, sales growth was led by positive price and volume growth, including strong growth in Applied HVAC.

Segment EBITA

			Three Months Ended March 31,																		Six Months Ended March 31,
(in millions)			2025						2024						Change						2025						2024						Change
Building Solutions North America			$	390					$	373					5		%				$	722					$	658					10		%
Building Solutions EMEA/LA			136						89						53		%				244						169						44		%
Building Solutions Asia Pacific			79						54						46		%				128						100						28		%
Global Products			341						290						18		%				667						557						20		%

Three Months:

• The increase in Building Solutions North America was primarily due to higher margin backlog conversion and productivity improvements.

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

• The increase in Building Solutions Asia Pacific was primarily driven by productivity improvements.

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

Year to Date:

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

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

• The increase in Building Solutions Asia Pacific was primarily driven by productivity improvements.

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

Backlog and Orders

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

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

			Backlog												Orders
(in billions)			March 31, 2025												Year-over-Year Change (1)						Three Months Ended March 31, 2025												Year-over-Year Change (1)
Building Solutions North America			$	9.8											11		%				$	3.4											4		%
Building Solutions EMEA/LA			2.7												10		%				1.2												10		%
Building Solutions Asia Pacific			1.5												21		%				0.6												—		%
Total Building Solutions			$	14.0											12		%				$	5.2											5		%

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

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

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

• Remaining performance obligations exclude service contracts with an original expected duration of one year or less and contracts that are cancellable without substantial penalty versus backlog which includes short-term and cancellable contracts; and

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

Liquidity and Capital Resources

Working Capital

(in millions)			March 31, 2025						September 30, 2024						Change
Current assets			$	11,350					$	11,179
Current liabilities			11,817						11,955
Working capital			$	(467)					$	(776)					(40)		%
Accounts receivable - net			$	5,858					$	6,051					(3)		%
Inventories			1,756						1,774						(1)		%
Accounts payable			3,254						3,389						(4)		%

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

Cash Flows From Continuing Operations

						Six Months Ended March 31,
(in millions)						2025						2024
Cash provided (used) by operating activities						$	799					$	(437)
Cash used by investing activities						(217)						(196)
Cash provided (used) by financing activities						(474)						740

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

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

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

Capitalization

(in millions)			March 31, 2025						September 30, 2024
Short-term debt			$	1,261					$	953
Current portion of long-term debt			558						536
Long-term debt			8,167						8,004
Total debt			9,986						9,493
Less: Cash and cash equivalents			795						606
Net debt			$	9,191					$	8,887
Shareholders’ equity attributable to Johnson Controls ordinary shareholders ("Equity")			$	15,805					$	16,098
Total capitalization (Total debt plus Equity)			25,791						25,591
Net capitalization (Net debt plus Equity)			24,996						24,985
Total debt as a % of Total capitalization			38.7		%				37.1		%
Net debt as a % of Net capitalization			36.8		%				35.6		%

• Net debt and net debt as a percentage of net capitalization are non-GAAP financial measures. The Company believes the percentage of net debt to net capitalization is useful to understanding the Company’s financial condition as it provides a view of the extent to which the Company relies on external debt financing for its funding and is a measure of risk to its shareholders.

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

• The Company declared a dividend of $0.37 per common share in the quarter ended March 31, 2025 and intends to continue paying dividends throughout fiscal 2025.

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

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

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

–The Company maintains a shelf registration statement with the SEC under which it may issue additional debt securities, ordinary shares, preferred shares, depository shares, warrants, purchase contracts and units that may be offered in one or more offerings on terms to be determined at the time of the offering. The Company anticipates that the proceeds of any offering would be used for general corporate purposes, including repayment of indebtedness, acquisitions, additions to working capital, repurchases of ordinary shares, dividends, capital expenditures and investments in the Company's subsidiaries.

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

• The Company's ability to access the global capital markets and the related cost of financing is dependent upon, among other factors, the Company's credit ratings. As of March 31, 2025, the Company's credit ratings and outlook were as follows:

Rating Agency						Short-Term Rating						Long-Term Rating						Outlook
S&P						A-2						BBB+						Stable
Moody's						P-2						Baa2						Positive

The security ratings set forth above are issued by unaffiliated third party rating agencies and are not a recommendation to buy, sell or hold securities. The ratings may be subject to revision or withdrawal by the assigning rating organization at any time.

• Financial covenants in the Company's revolving credit facilities require a minimum consolidated shareholders’ equity attributable to Johnson Controls of at least $3.5 billion at all times. The revolving credit facility also limits the amount of debt secured by liens that may be incurred to a maximum aggregated amount of 10% of consolidated shareholders’ equity attributable to Johnson Controls for liens and pledges. For purposes of calculating these covenants, consolidated shareholders’ equity attributable to Johnson Controls is calculated without giving effect to (i) the application of Accounting Standards Codification ("ASC") 715-60, "Defined Benefit Plans - Other Postretirement," or (ii) the cumulative foreign currency translation adjustment. As of March 31, 2025, the Company was in compliance with all covenants and other requirements set forth in its credit agreements and the indentures governing its notes, and expects to remain in compliance for the foreseeable future. None of the Company’s debt agreements limit access to stated borrowing levels or require accelerated repayment in the event of a decrease in the Company's credit rating.

• The Company earns a significant amount of its income outside of the parent company. Outside basis differences in these subsidiaries are deemed to be permanently reinvested except in limited circumstances. However, in the first quarter of fiscal 2024, the Company recorded income tax expense related to a change in the Company's assertion over the outside basis differences of the Company’s investment in certain consolidated subsidiaries as a result of the planned divestiture of its R&LC HVAC business. The Company currently does not intend nor foresee a need to repatriate undistributed earnings included in the outside basis differences other than in tax efficient manners. The Company's intent is to reduce basis differences only when it would be tax efficient. The Company expects existing U.S. cash and liquidity to continue to be sufficient to fund the Company’s U.S. operating activities and cash commitments for investing and financing activities for at least the next twelve months and thereafter for the foreseeable future. In the U.S., should the Company require more capital than is generated by its operations, the Company could elect to raise capital in the U.S. through debt or equity issuances. The Company has borrowed funds in the U.S. and continues to have the ability to borrow funds in the U.S. at reasonable interest rates. In addition, the Company expects existing non-U.S. cash, cash equivalents, short-term investments and cash flows from operations to continue to be sufficient to fund the Company’s non-U.S. operating activities and cash commitments for investing activities, such as material capital expenditures, for at least the next twelve

months and thereafter for the foreseeable future. Should the Company require more capital at its Luxembourg and Ireland holding and financing entities, other than amounts that can be provided in tax efficient methods, the Company could also elect to raise capital through debt or equity issuances. These alternatives could result in increased interest expense or other dilution of the Company’s earnings.

• The Company may from time to time purchase its outstanding debt through open market purchases, privately negotiated transactions or otherwise. Purchases or retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

• Refer to Note 8, "Debt and Financing Arrangements," of the notes to the consolidated financial statements for additional information on debt balances and items impacting capitalization.

Co-Issued Securities: Summarized Financial Information

The following information is provided in compliance with Rule 13-01 of Regulation S-X under the Securities Exchange Act of 1934 with respect to the following unsecured, unsubordinated senior notes (collectively, ("the Notes) which were issued by Johnson Controls International plc ("Parent Company") and Tyco Fire & Security Finance S.C.A. (“TFSCA”):

• €500 million aggregate principal amount of 0.375% Senior Notes due 2027

• €600 million aggregate principal amount of 3.000% Senior Notes due 2028

• $700 million aggregate principal amount of 5.500% Senior Notes due 2029

• $625 million aggregate principal amount of 1.750% Senior Notes due 2030

• $500 million aggregate principal amount of 2.000% Sustainability-Linked Senior Notes due 2031

• €500 million aggregate principal amount of 1.000% Senior Notes due 2032

• $650 million aggregate principal amount of 4.900% Senior Notes due 2032

• €500 million aggregate principal amount of 3.125% Senior Notes due 2033

• €800 million aggregate principal amount of 4.250% Senior Notes due 2035

TFSCA is a corporate partnership limited by shares (société en commandite par actions) incorporated and organized under the laws of the Grand Duchy of Luxembourg (“Luxembourg”) and is a wholly-owned consolidated subsidiary of the Company that is 99.924% owned directly by the Parent Company and 0.076% owned by TFSCA’s sole general partner and manager, Tyco Fire & Security S.à r.l., which is itself wholly-owned by the Company. The Parent Company is incorporated and organized under the laws of Ireland. TFSCA is incorporated and organized under the laws of Luxembourg. The bankruptcy, insolvency, administrative, debtor relief and other laws of Luxembourg or Ireland, as applicable, may be materially different from, or in conflict with, those of the United States, including in the areas of rights of creditors, priority of governmental and other creditors, ability to obtain post-petition interest and duration of the proceeding. The application of these laws, or any conflict among them, could adversely affect noteholders’ ability to enforce their rights under the Notes in those jurisdictions or limit any amounts that they may receive.

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

						Six Months Ended March 31, 2025						Year Ended September 30, 2024
Net loss attributable to the Obligor Group						$	(374)					$	(609)
Net income (loss) attributable to intercompany transactions						(27)						511

The Obligor Group does not have sales, gross profit or amounts attributable to noncontrolling interests.

The following table presents summarized balance sheet information of the Obligor Group and intercompany balances between the Obligor Group and the Non-Obligor Subsidiaries which are excluded from the Obligor Group amounts (in millions):

						Obligor Group												Intercompany Balances
						March 31, 2025						September 30, 2024						March 31, 2025						September 30, 2024
Current assets						$	66					$	1,339					$	693					$	823
Noncurrent assets						243						243						9,362						7,522
Current liabilities						8,379						6,726						3,298						2,789
Noncurrent liabilities						8,031						7,836						8,306						9,028

The same accounting policies as described in Note 1, "Summary of Significant Accounting Policies," of the Company's Annual Report on 10-K for the year ended September 30, 2024 are used by the Parent Company and each of its subsidiaries in connection with the summarized financial information presented above.

New Accounting Standards

Refer to Note 2, "New Accounting Standards," of the notes to the consolidated financial statements.

Critical Accounting Estimates

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). This requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. The Company’s critical accounting estimates requiring significant judgement that could materially impact the Company's results of operations, financial position and cash flows are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024. Since the date of the Company’s most recent Annual Report, there have been no material changes in the Company’s critical accounting estimates or assumptions.