Johnson Controls International plc (JCI) · Material Event (8-K) SEC Filing

EX-99.1 2 q3ex991xq3fy26earningsrele.htm EX-99.1 Document Exhibit 99.1 FOR IMMEDIATE RELEASE Johnson Controls Reports Strong Q3 Results Raises FY26 Guidance______________________________________________________________________________________ Q3 sales increased 9% and organic sales increased 10%* Q3 GAAP EPS of $1.23 Q3 Adjusted EPS* of $1.42 Q3 orders +27% organically year-over-year Backlog of $21.0 billion increased 32% organically year-over-year* This earnings release contains non-GAAP financial measures. Definitions and reconciliations of the non-GAAP financial measures can be found in the attached footnotes. Non-GAAP measures should be considered in addition to, and not as replacements for, the most comparable GAAP measures. _____________________________________________________________________________________CORK, Ireland July 29, 2026 Johnson Controls International plc (NYSE JCI), a global leader in thermal management, mission-critical building systems, energy efficiency, and decarbonization, is proud to announce fiscal third quarter 2026 GAAP earnings per share ( EPS ) of $1.23. Adjusted EPS was $1.42. Q3 sales increased 9% to $6.6 billion and organic sales increased 10%. For the quarter, GAAP net income from continuing operations attributable to JCI was $749 million and adjusted net income from continuing operations was $868 million. We delivered another strong quarter, highlighted by 10% organic revenue growth, sustained order momentum, and continued margin expansion, said Joakim Weidemanis, Chief Executive Officer of Johnson Controls. While we remain early in our journey deploying our proprietary business system, the progress we are seeing demonstrates the potential to further improve execution, productivity and customer outcomes. Our third-quarter performance and continued momentum give us confidence in our raised full-year outlook. FISCAL Q3 SEGMENT RESULTSThe financial highlights presented in the tables below exclude discontinued operations and are in accordance with GAAP, unless otherwise indicated. All comparisons are to the third quarter of fiscal 2025. Orders and backlog metrics included in the release relate to the Company's Solutions and Services businesses. Orders prior to Q1 2026 exclude certain equipment-only sales for longer cycle projects. Backlog has been restated to include this new category.A slide presentation to accompany the results can be found in the Investor Relations section of Johnson Controls website at http investors.johnsoncontrols.com.1 Americas Fiscal Q3 (in millions) 2026 2025 Change Sales $4,504 $4,042 11 % Segment EBIT 847 654 30 % Segment EBIT Margin % 18.8% 16.2% 260 bp Segment EBITA (non-GAAP) 926 742 25 % Adjusted Segment EBITA (non-GAAP) 951 746 27 % Adjusted Segment EBITA Margin % (non-GAAP) 21.1% 18.5% 260 bp Sales in the quarter of $4.5 billion increased 11% over the prior year. Organic sales also increased 11% led by continued strength across Applied HVAC. Products and Systems sales increased 12% and Services increased 10%.Excluding acquisitions and divestitures and adjusted for foreign currency, orders increased 37% year-over-year and backlog of $15.9 billion increased 40% year-over-year. The increase in orders and backlog was supported by sustained demand from data centers and other mission-critical environments.Segment EBIT margin and adjusted Segment EBITA margin increased 260 bp compared to the prior year. The increases were primarily driven by strong operating leverage on higher revenue. Adjusted Segment EBITA in both Q3 2026 and Q3 2025 excludes transformation costs. 2 EMEA (Europe, Middle East, Africa) Fiscal Q3 (in millions) 2026 2025 Change Sales $1,264 $1,273 (1 %) Segment EBIT 172 159 8 % Segment EBIT Margin % 13.6% 12.5% 110 bp Segment EBITA (non-GAAP) 179 177 1 % Adjusted Segment EBITA (non-GAAP) 181 179 1 % Adjusted Segment EBITA Margin % (non-GAAP) 14.3% 14.1% 20 bp Sales in the quarter of approximately $1.3 billion decreased 1% over the prior year. Organic sales increased 1% versus the prior year quarter constrained by continued pressure in the region due to the conflicts in the Middle East. Both Products and Systems and Services grew 1% organically. Excluding acquisitions and divestitures and adjusted for foreign currency, orders increased 6% year-over-year and backlog of $3.1 billion increased 14% year-over-year. Segment EBIT margin increased 110 bp and adjusted Segment EBITA margin increased 20 bp compared to the prior year. The increases were primarily driven by favorable pricing and productivity improvements, partially offset by the impact of business divestitures. Adjusted Segment EBITA in Q3 2026 and Q3 2025 excludes transformation costs. APAC (Asia Pacific) Fiscal Q3 (in millions) 2026 2025 Change Sales $846 $737 15 % Segment EBIT 171 139 23 % Segment EBIT Margin % 20.2% 18.9% 130 bp Segment EBITA (non-GAAP) 175 143 22 % Adjusted Segment EBITA (non-GAAP) 179 143 25 % Adjusted Segment EBITA Margin % (non-GAAP) 21.2% 19.4% 180 bp Sales in the quarter of $846 million increased 15% versus the prior year. Organic sales increased 15% versus the prior year quarter, led by 20% growth in Product and Systems and continued strength in Applied HVAC.Excluding acquisitions and divestitures and adjusted for foreign currency, orders increased 12% and backlog of $2.0 billion increased 12% year-over-year. Segment EBIT margin increased 130 bp and adjusted Segment EBITA margin increased 180 bp compared to the prior year, primarily driven by productivity improvements, favorable business mix and higher revenues. Adjusted Segment EBITA in Q3 2026 excludes transformation costs.3 Corporate Fiscal Q3 (in millions) 2026 2025 Change Corporate Expense GAAP $167 $141 18 % Adjusted (non-GAAP) 100 93 8 % Adjusted Corporate expense in both Q3 2026 and Q3 2025 excludes certain transaction separation costs and transformation costs. The increase year-over-year is primarily due to increased corporate accruals related to incentive compensation and the timing of certain corporate expenses.OTHER Q3 ITEMS Cash provided by operating activities was $1,289 million. Free cash flow was $1,194 million and adjusted free cash flow was $1,179 million. The Company paid dividends of $245 million.GUIDANCEThe following forward-looking statements are non-GAAP financial measures. These non-GAAP financial measures are derived by excluding certain amounts from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts excluded is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period and the high variability of certain amounts, such as mark-to-market adjustments. Organic revenue growth excludes the effect of acquisitions, divestitures and foreign currency. The Company is unable to present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to its most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict the necessary components of such GAAP measures without unreasonable effort or expense. The unavailable information could have a significant impact on the Company s fiscal 2026 fourth quarter and full year GAAP financial results.The Company initiated fiscal 2026 fourth quarter continuing operations guidance Organic sales growth of 9% to 10% Operating leverage of 45% to 50% Adjusted EPS of $1.55The Company's fiscal 2026 full year continuing operations guidance is as follows Organic sales growth of 8% (previously up 6%) Operating leverage of 45% to 50% (previously 50%) Adjusted EPS of $5.05 (previously $4.85) Adjusted free cash flow conversion of 100% (unchanged)4 CONFERENCE CALL WEBCAST INFO Johnson Controls will host a conference call to discuss this quarter s results at 8 30 a.m. ET today, which can be accessed via webcast at https johnson-controls-q3-2026-earnings.open-exchange.net. A slide presentation will accompany the prepared remarks and has been posted on the investor relations section of the Johnson Controls website at https investors.johnsoncontrols.com news-and-events events-and-presentations. A replay will be made available approximately two hours following the conclusion of the conference call. ABOUT JOHNSON CONTROLSJohnson Controls, a global leader in thermal management, mission-critical building systems, energy efficiency, and decarbonization, helps customers use energy more productively, reduce carbon emissions, and operate with the precision and resilience required in rapidly expanding industries such as data centers, healthcare, pharmaceuticals, advanced manufacturing, and higher education.For more than 140 years, Johnson Controls has delivered performance where it really matters. Backed by advanced technology, lifecycle services and an industry-leading field organization, we elevate customer performance, turn goals into real-world results and help move society forward.Visit johnsoncontrols.com for more information and follow Johnsoncontrols on social platforms.JOHNSON CONTROLS CONTACTS INVESTOR CONTACT MEDIA CONTACT Michael Gates Danielle Canzanella Direct +1 414.524.5785 Direct +1 203.499.8297 Email michael.j.gates jci.com Email danielle.canzanella jci.com ###5 JOHNSON CONTROLS INTERNATIONAL PLC CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSJohnson Controls International plc (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 develop or acquire new products and technologies that achieve market acceptance and meet applicable quality and regulatory requirements 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 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 any associated supply chain disruptions the ability to execute on the Company s operating model and drive organizational improvement 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 customers the ability to manage disruptions caused by international conflicts, including Russia and Ukraine and the ongoing conflicts in the Middle East the ability to successfully execute and complete portfolio simplification actions, 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 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 the ability to hire and retain senior management and other key personnel changes or uncertainty in laws, regulations, rates, policies, or interpretations that impact 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 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, 2025 filed with the United States Securities and Exchange Commission ( SEC ) on November 14, 2025, 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.6FINANCIAL STATEMENTSJohnson Controls International plcConsolidated Statements of Income(in millions, except per share data unaudited) Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Net sales Products and systems $ 4,596 $ 4,122 $ 12,687 $ 11,672 Services 2,018 1,930 5,866 5,482 6,614 6,052 18,553 17,154 Cost of sales Products and systems 3,012 2,656 8,448 7,635 Services 1,128 1,150 3,295 3,278 4,140 3,806 11,743 10,913 Gross profit 2,474 2,246 6,810 6,241 Selling, general and administrative expenses 1,407 1,417 4,029 4,243 Restructuring and impairment costs 80 51 224 146 Net financing charges 71 77 197 243 Equity income 1 4 3 5 Income from continuing operations before income taxes 917 705 2,363 1,614 Income tax provision 165 87 443 160 Income from continuing operations 752 618 1,920 1,454 Income (loss) from discontinued operations, net of tax 160 (27) 301 Net income 752 778 1,893 1,755 Income attributable to noncontrolling interests Continuing operations 3 7 Discontinued operations 77 157 Net income attributable to Johnson Controls $ 749 $ 701 $ 1,886 $ 1,598 Income (loss) attributable to Johnson Controls Continuing operations $ 749 $ 618 $ 1,913 $ 1,454 Discontinued operations 83 (27) 144 Total $ 749 $ 701 $ 1,886 $ 1,598 Basic earnings (loss) per share attributable to Johnson Controls Continuing operations $ 1.23 $ 0.94 $ 3.13 $ 2.21 Discontinued operations 0.13 (0.04) 0.22 Total $ 1.23 $ 1.07 $ 3.09 $ 2.43 Diluted earnings (loss) per share attributable to Johnson Controls Continuing operations $ 1.23 $ 0.94 $ 3.12 $ 2.20 Discontinued operations 0.13 (0.04) 0.22 Total $ 1.23 $ 1.07 $ 3.08 $ 2.42 7Johnson Controls International plcCondensed Consolidated Statements of Financial Position(in millions unaudited) June 30, 2026 September 30, 2025 Assets Cash and cash equivalents $ 641 $ 379 Accounts receivable - net 6,970 6,269 Inventories 1,955 1,820 Current assets held for sale 4 14 Other current assets 1,711 1,680 Current assets 11,281 10,162 Property, plant and equipment - net 1,977 2,193 Goodwill 16,612 16,633 Other intangible assets - net 3,550 3,613 Noncurrent assets held for sale 225 140 Other noncurrent assets 5,114 5,198 Total assets $ 38,759 $ 37,939 Liabilities and Equity Short-term debt $ 865 $ 723 Current portion of long-term debt 311 566 Accounts payable 3,917 3,614 Accrued compensation and benefits 1,098 1,268 Deferred revenue 2,943 2,470 Current liabilities held for sale 5 12 Other current liabilities 2,144 2,288 Current liabilities 11,283 10,941 Long-term debt 8,299 8,591 Pension and postretirement benefit obligations 177 211 Noncurrent liabilities held for sale 34 9 Other noncurrent liabilities 5,451 5,233 Noncurrent liabilities 13,961 14,044 Shareholders equity attributable to Johnson Controls 13,482 12,927 Noncontrolling interests 33 27 Total equity 13,515 12,954 Total liabilities and equity $ 38,759 $ 37,939 8Consolidated Statements of Cash Flows(in millions unaudited) Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Operating Activities of Continuing Operations Income from continuing operations Attributable to Johnson Controls $ 749 $ 618 $ 1,913 $ 1,454 Attributable to noncontrolling interests 3 7 Total 752 618 1,920 1,454 Adjustments to reconcile net income to cash provided by operating activities of continuing operations Depreciation and amortization 162 190 495 585 Pension and postretirement benefits (11) (15) (39) (52) Deferred income taxes (61) (39) (58) (146) Noncash restructuring and impairment charges 56 23 160 56 Equity-based compensation 29 48 95 107 (Gain) loss on business divestiture (13) (86) 6 Other - net (23) (24) 2 2 Changes in assets and liabilities Accounts receivable (368) (172) (757) (79) Inventories (26) (52) (166) (79) Other assets (35) (76) 62 (289) Restructuring reserves 1 5 (25) 2 Accounts payable and accrued liabilities 701 258 764 31 Accrued income taxes 125 23 205 (12) Cash provided by operating activities from continuing operations 1,289 787 2,572 1,586 Investing Activities of Continuing Operations Capital expenditures (95) (94) (243) (304) Acquisitions of businesses, net of cash acquired (291) (1) (291) (9) Divestitures of businesses, net of cash divested 122 1 331 2 Other - net (12) 9 (32) 9 Cash used by investing activities from continuing operations (276) (85) (235) (302) Financing Activities of Continuing Operations Net proceeds (payments) from borrowings with maturities less than three months (259) (75) (194) 283 Proceeds from debt 229 545 1,369 Repayments of debt (639) (1,096) Stock repurchases and retirements (635) (310) (850) (970) Payment of cash dividends (245) (243) (734) (733) Employee equity-based compensation withholding taxes (2) (2) (62) (33) Other - net (4) (7) (12) 69 Cash used by financing activities from continuing operations (916) (637) (1,946) (1,111) Discontinued Operations Cash (used) provided by operating activities 208 (98) 255 Cash used by investing activities (155) (25) (155) (52) Cash used by financing activities (109) (174) Cash (used) provided by discontinued operations (155) 74 (253) 29 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1) (201) 122 (216) Change in cash, cash equivalents and restricted cash held for sale 4 3 Increase (decrease) in cash, cash equivalents and restricted cash (55) (62) 260 (11) Cash, cash equivalents and restricted cash at beginning of period 713 818 398 767 Cash, cash equivalents and restricted cash at end of period 658 756 658 756 Less Restricted cash 17 25 17 25 Cash and cash equivalents at end of period $ 641 $ 731 $ 641 $ 731 9FOOTNOTES1.Sale of Residential and Light Commercial HVAC BusinessIn 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 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.2.Non-GAAP MeasuresThe Company reports various non-GAAP measures in this earnings release and the related earnings presentation. Non-GAAP measures should be considered in addition to, and not as replacements for, the most comparable GAAP measures. Refer to the following footnotes for further information on the calculations of the non-GAAP measures and reconciliations of the non-GAAP measures to the most comparable GAAP measures. Organic salesOrganic sales growth excludes the impact of acquisitions, divestitures and foreign currency. Management believes organic sales growth is useful to investors in understanding period-over-period sales results and trends.Cash flowManagement believes free cash flow and adjusted free cash flow measures are useful to investors in understanding the strength of the Company and its ability to generate cash. These non-GAAP measures can also be used to evaluate the Company s ability to generate cash flow from operations and the impact that this cash flow has on its liquidity. Management also believes adjusted free cash flows are useful to investors in understanding period-over-period cash flows, cash trends and ongoing cash flows of the Company.Adjusted free cash flow and adjusted free cash flow conversion are non-GAAP measures which exclude the impacts of the following JC Capital cash flows primarily include activity associated with finance notes receivables and inventory and or capital expenditures related to lease arrangements. JC Capital net income is primarily related to interest income on the finance notes receivable and profit recognized on arrangements with sales-type lease components. The impact of the accounts receivables factoring program which was discontinued in March 2024. Cash payments related to the water systems AFFF settlement and cash receipts for AFFF-related insurance recoveries. Prepayment of royalty fees associated with certain IP licensed to divested businesses. Discrete tax payments are non-recurring tax settlements for certain non-US jurisdictions.Adjusted financial measuresAdjusted financial measures are non-GAAP measures that are derived by excluding certain amounts from the corresponding financial measures determined in accordance with GAAP. The determination of the excluded amounts is a matter of management judgment and depends upon the nature and variability of the underlying expense or income amounts and other factors. 10As detailed in the tables included in footnotes four through seven, the following items were excluded from certain financial measures Net mark-to-market adjustments are the result of adjusting restricted asbestos investments and pension and postretirement plan assets to their current market value. These adjustments may have a favorable or unfavorable impact on results. Restructuring and impairment costs represents restructuring costs attributable to Johnson Controls including costs associated with exit plans or other restructuring plans that will have a more significant impact on the underlying cost structure of the organization. Impairment costs primarily relate to write-downs of goodwill, intangible assets and assets held for sale to their fair value. Water systems AFFF settlement and insurance recoveries include amounts related to a settlement with a nationwide class of public water systems concerning the use of AFFF manufactured and sold by a subsidiary of the Company, and AFFF-related insurance recoveries. Transaction separation costs include costs associated with significant mergers and acquisitions. Transformation costs represent incremental expenses incurred in association with strategic growth initiatives and cost saving opportunities in order to realize the benefits of portfolio simplification and the Company's lifecycle solutions strategy. ERP asset - accelerated depreciation represents a change in ERP strategy within the EMEA segment, which led to certain assets being abandoned and the useful lives reduced. Loss (gain) on divestiture relates to the sale of the ADT Mexico Security and ADTi businesses. EMEA joint venture loss relates to certain non-recurring losses associated with the equity method accounting of a joint venture company. Discrete tax items, net includes the net impact of discrete tax items within the period, including the following types of items changes in estimates associated with valuation allowances, changes in estimates associated with reserves for uncertain tax positions, withholding taxes recorded upon changes in indefinite re-investment assertions for businesses to be disposed of and impacts from statutory rate changes. Related tax impact includes the tax impact of the various excluded items.Management believes the exclusion of these items is useful to investors due to the unusual nature and or magnitude of the amounts. When considered together with unadjusted amounts, adjusted financial measures are useful to investors in understanding period-over-period operating results, business trends and ongoing operations of the Company. Management may also use these metrics as guides in forecasting, budgeting and long-term planning processes and for compensation purposes.Operating leverageOperating leverage is defined as the ratio of the change in adjusted EBIT for the period, divided by the corresponding change in net revenues. Management believes operating leverage is a useful metric to reflect enterprise value creation, capturing the impact of scale and cost discipline across the organization.Debt ratiosManagement believes that net debt to adjusted EBITDA, a non-GAAP measure, is useful to understanding the Company's financial condition as the ratio provides an overview of the extent to which the Company relies on external debt financing for its funding and also is a measure of risk to its shareholders. 113. SalesThe following tables detail the changes in sales from continuing operations attributable to organic growth, foreign currency, acquisitions, divestitures and other (unaudited) Net sales Three Months Ended June 30 (in millions) Americas EMEA APAC Total Net sales - 2025 $ 4,042 $ 1,273 $ 737 $ 6,052 Base year adjustments Divestitures and other (41) (5) (46) Foreign currency 8 15 3 26 Adjusted base net sales 4,050 1,247 735 6,032 Organic growth 454 17 111 582 Net sales - 2026 $ 4,504 $ 1,264 $ 846 $ 6,614 Growth % Net sales 11 % (1) % 15 % 9 % Organic growth 11 % 1 % 15 % 10 % Net sales Nine Months Ended June 30 (in millions) Americas EMEA APAC Total Net sales - 2025 $ 11,506 $ 3,631 $ 2,017 $ 17,154 Base year adjustments Divestitures and other (78) (5) (83) Foreign currency 38 169 19 226 Adjusted base net sales 11,544 3,722 2,031 17,297 Acquisitions 3 3 Organic growth 924 82 247 1,253 Net sales - 2026 $ 12,468 $ 3,807 $ 2,278 $ 18,553 Growth % Net sales 8 % 5 % 13 % 8 % Organic growth 8 % 2 % 12 % 7 % 12 Products and systems revenue Three Months Ended June 30 (in millions) Americas EMEA APAC Total Products and systems revenue - 2025 $ 2,847 $ 756 $ 519 $ 4,122 Base year adjustments Divestitures and other (1) (1) (2) Foreign currency 8 11 3 22 Adjusted products and systems revenue 2,855 766 521 4,142 Organic growth 339 11 104 454 Products and systems revenue - 2026 $ 3,194 $ 777 $ 625 $ 4,596 Growth % Products and systems revenue 12 % 3 % 20 % 11 % Organic growth 12 % 1 % 20 % 11 % Products and systems revenue Nine Months Ended June 30 (in millions) Americas EMEA APAC Total Products and systems revenue - 2025 $ 8,094 $ 2,177 $ 1,401 $ 11,672 Base year adjustments Divestitures and other (1) (1) Foreign currency 35 113 15 163 Adjusted products and systems revenue 8,129 2,290 1,415 11,834 Acquisitions 3 3 Organic growth 580 45 225 850 Products and systems revenue - 2026 $ 8,709 $ 2,338 $ 1,640 $ 12,687 Growth % Products and systems revenue 8 % 7 % 17 % 9 % Organic growth 7 % 2 % 16 % 7 % 13 Service revenue Three Months Ended June 30 (in millions) Americas EMEA APAC Total Service revenue - 2025 $ 1,195 $ 517 $ 218 $ 1,930 Base year adjustments Divestitures and other (40) (4) (44) Foreign currency 4 4 Adjusted base service revenue 1,195 481 214 1,890 Organic growth 115 6 7 128 Service revenue - 2026 $ 1,310 $ 487 $ 221 $ 2,018 Growth % Service revenue 10 % (6) % 1 % 5 % Organic growth 10 % 1 % 3 % 7 % Service revenue Nine Months Ended June 30 (in millions) Americas EMEA APAC Total Service revenue - 2025 $ 3,412 $ 1,454 $ 616 $ 5,482 Base year adjustments Divestitures and other (78) (4) (82) Foreign currency 3 56 4 63 Adjusted base service revenue 3,415 1,432 616 5,463 Organic growth 344 37 22 403 Service revenue - 2026 $ 3,759 $ 1,469 $ 638 $ 5,866 Growth % Service revenue 10 % 1 % 4 % 7 % Organic growth 10 % 3 % 4 % 7 % 144. Cash Flow, Free Cash Flow and Free Cash Flow ConversionThe following table includes operating cash flow conversion, free cash flow and free cash flow conversion (unaudited) Three Months Ended June 30, Nine Months Ended June 30, (in millions) 2026 2025 2026 2025 Cash provided by operating activities from continuing operations $ 1,289 $ 787 $ 2,572 $ 1,586 Income from continuing operations attributable to Johnson Controls 749 618 1,913 1,454 Operating cash flow conversion 172 % 127 % 134 % 109 % Cash provided by operating activities from continuing operations $ 1,289 $ 787 $ 2,572 $ 1,586 Capital expenditures (95) (94) (243) (304) Free cash flow (non-GAAP) $ 1,194 $ 693 $ 2,329 $ 1,282 Income from continuing operations attributable to Johnson Controls $ 749 $ 618 $ 1,913 $ 1,454 Free cash flow conversion from net income (non-GAAP) 159 % 112 % 122 % 88 % The following table includes adjusted free cash flow and adjusted free cash flow conversion (unaudited) Three Months Ended June 30, Nine Months Ended June 30, (in millions) 2026 2025 2026 2025 Free cash flow (non-GAAP) $ 1,194 $ 693 $ 2,329 $ 1,282 Adjustments JC Capital cash provided (used) by operating activities (8) 34 (33) 111 Water systems AFFF settlement cash payments and insurance recoveries (7) (3) (165) 383 Prepaid IP royalties for divested businesses (29) Impact from discontinued factoring program 1 15 Discrete tax payments 31 Adjusted free cash flow (non-GAAP) $ 1,179 $ 725 $ 2,133 $ 1,791 Adjusted net income attributable to JCI (non-GAAP) $ 868 $ 693 $ 2,145 $ 1,664 JC Capital net (income) loss 26 (8) 22 (4) Adjusted net income attributable to JCI, excluding JC Capital (non-GAAP) $ 894 $ 685 $ 2,167 $ 1,660 Adjusted free cash flow conversion (non-GAAP) 132 % 106 % 98 % 108 % 155. EBIT, Segment Profitability and Corporate ExpenseThe following table reconciles income from continuing operations before income taxes to EBIT and adjusted EBIT. Three Months Ended June 30, Nine Months Ended June 30, (in millions unaudited) 2026 2025 2026 2025 Income from continuing operations Attributable to Johnson Controls $ 749 $ 618 $ 1,913 $ 1,454 Attributable to noncontrolling interests 3 7 Income from continuing operations 752 618 1,920 1,454 Less Income tax provision (1) 165 87 443 160 Income before income taxes 917 705 2,363 1,614 Net financing charges 71 77 197 243 EBIT $ 988 $ 782 $ 2,560 $ 1,857 EBIT margin 14.9 % 12.9 % 13.8 % 10.8 % Adjusting items Net mark-to-market adjustments 28 21 16 7 Restructuring and impairment costs (80) (51) (224) (146) Water systems AFFF insurance recoveries 17 1 148 13 Transaction separation costs (18) (9) (43) (27) Transformation costs (80) (45) (197) (124) Gain on divestiture 70 Adjusted EBIT (non-GAAP) $ 1,121 $ 865 $ 2,790 $ 2,134 Adjusted EBIT margin (non-GAAP) 16.9 % 14.3 % 15.0 % 12.4 % (1) Adjusted income tax provision excludes the related tax impacts of pre-tax adjusting items.16The following tables reconcile Segment EBIT to Segment EBITA (non-GAAP) as reported and reconcile Segment EBIT and Segment EBITA (non-GAAP) as reported to adjusted Segment EBIT and Segment EBITA (non-GAAP) and adjusted Segment EBIT and Segment EBITA (non-GAAP) margin (unaudited) Three Months Ended June 30, (in millions) Americas EMEA APAC 2026 2025 2026 2025 2026 2025 Sales $ 4,504 $ 4,042 $ 1,264 $ 1,273 $ 846 $ 737 Segment EBIT 847 654 172 159 171 139 Amortization 79 88 7 18 4 4 Segment EBITA (non-GAAP) 926 742 179 177 175 143 Adjusting items Transformation costs 25 4 2 2 4 Adjusted Segment EBIT (non-GAAP) 872 658 174 161 175 139 Adjusted Segment EBITA (non-GAAP) 951 746 181 179 179 143 Segment EBIT margin % 18.8 % 16.2 % 13.6 % 12.5 % 20.2 % 18.9 % Adjusted Segment EBIT margin % (non-GAAP) 19.4 % 16.3 % 13.8 % 12.6 % 20.7 % 18.9 % Segment EBITA margin % (non-GAAP) 20.6 % 18.4 % 14.2 % 13.9 % 20.7 % 19.4 % Adjusted Segment EBITA margin % (non-GAAP) 21.1 % 18.5 % 14.3 % 14.1 % 21.2 % 19.4 % Nine Months Ended June 30, (in millions) Americas EMEA APAC 2026 2025 2026 2025 2026 2025 Sales $ 12,468 $ 11,506 $ 3,807 $ 3,631 $ 2,278 $ 2,017 Segment EBIT 2,096 1,764 502 392 427 325 Amortization 232 274 21 56 11 12 Segment EBITA (non-GAAP) 2,328 2,038 523 448 438 337 Adjusting items Transformation costs 57 6 13 2 4 Adjusted Segment EBIT (non-GAAP) 2,153 1,770 515 394 431 325 Adjusted Segment EBITA (non-GAAP) 2,385 2,044 536 450 442 337 Segment EBIT margin % 16.8 % 15.3 % 13.2 % 10.8 % 18.7 % 16.1 % Adjusted Segment EBIT margin % (non-GAAP) 17.3 % 15.4 % 13.5 % 10.9 % 18.9 % 16.1 % Segment EBITA margin % (non-GAAP) 18.7 % 17.7 % 13.7 % 12.3 % 19.2 % 16.7 % Adjusted Segment EBITA margin % (non-GAAP) 19.1 % 17.8 % 14.1 % 12.4 % 19.4 % 16.7 % 17The following table reconciles adjusted Segment EBITA (non-GAAP) to adjusted Segment EBITA margin (non-GAAP) (unaudited) Three Months Ended June 30, Nine Months Ended June 30, (in millions) 2026 2025 2026 2025 Adjusted Segment EBITA (non-GAAP) Americas $ 951 $ 746 $ 2,385 $ 2,044 EMEA 181 179 536 450 APAC 179 143 442 337 Sales 6,614 6,052 18,553 17,154 Adjusted Segment EBITA margin (non-GAAP) 19.8 % 17.6 % 18.1 % 16.5 % The following table reconciles Corporate expense from continuing operations as reported to the comparable adjusted amounts (unaudited) Three Months Ended June 30, Nine Months Ended June 30, (in millions) 2026 2025 2026 2025 Corporate expense (GAAP) $ 167 $ 141 $ 475 $ 498 Adjusting items Transaction separation costs (18) (9) (43) (27) Transformation costs (49) (39) (123) (116) Adjusted Corporate expense (non-GAAP) $ 100 $ 93 $ 309 $ 355 6. Net Income and Diluted Earnings Per Share The following tables reconcile net income from continuing operations attributable to JCI and diluted earnings per share from continuing operations as reported to the comparable adjusted amounts (unaudited) Three Months Ended June 30, Income from continuing operations attributable to JCI Diluted earnings per share (in millions, except per share) 2026 2025 2026 2025 As reported (GAAP) $ 749 $ 618 $ 1.23 $ 0.94 Adjusting items Net mark-to-market adjustments (28) (21) (0.05) (0.03) Restructuring and impairment costs 80 51 0.13 0.08 Water systems AFFF insurance recoveries (17) (1) (0.03) Transaction separation costs 18 9 0.03 0.01 Transformation costs 80 45 0.13 0.07 Related tax impact (14) (8) (0.02) (0.01) Adjusted (non-GAAP)* $ 868 $ 693 $ 1.42 $ 1.05 * May not sum due to rounding18 Nine Months Ended June 30, Income from continuing operations attributable to JCI Diluted earnings per share (in millions, except per share) 2026 2025 2026 2025 As reported (GAAP) $ 1,913 $ 1,454 $ 3.12 $ 2.20 Adjusting items Net mark-to-market adjustments (16) (7) (0.03) (0.01) Restructuring and impairment costs 224 146 0.37 0.22 Water systems AFFF insurance recoveries (148) (13) (0.24) (0.02) Transaction separation costs 43 27 0.07 0.04 Transformation costs 197 124 0.32 0.19 Gain on divestiture (70) (0.11) Discrete tax items 11 (36) 0.02 (0.05) Related tax impact (9) (31) (0.01) (0.05) Adjusted (non-GAAP)* $ 2,145 $ 1,664 $ 3.50 $ 2.52 * May not sum due to roundingThe following table reconciles the denominators used to calculate basic and diluted earnings per share (in millions unaudited) Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Weighted average shares outstanding Basic weighted average shares outstanding 608 655 610 659 Effect of dilutive securities Stock options, unvested restricted stock and unvested performance share awards 2 2 2 2 Diluted weighted average shares outstanding 610 657 612 661 197. Debt RatiosThe following table includes continuing operations and details net debt to income before income taxes and net debt to adjusted EBITDA (unaudited) (in millions) June 30, 2026 March 31, 2026 June 30, 2025 Short-term debt $ 865 $ 882 $ 1,277 Current portion of long-term debt 311 28 570 Long-term debt 8,299 8,613 8,446 Total debt 9,475 9,523 10,293 Less cash and cash equivalents 641 698 731 Net debt $ 8,834 $ 8,825 $ 9,562 Last twelve months income before income taxes $ 2,718 $ 2,506 $ 2,262 Net debt to income before income taxes 3.3 x 3.5 x 4.2 x Last twelve months adjusted EBITDA (non-GAAP) $ 4,553 $ 4,325 $ 3,843 Net debt to adjusted EBITDA (non-GAAP) 1.9x 2.0x 2.5x The following table reconciles income from continuing operations to adjusted EBIT and adjusted EBITDA (unaudited) Twelve Months Ended (in millions) June 30, 2026 March 31, 2026 June 30, 2025 Income from continuing operations $ 2,190 $ 2,056 $ 1,992 Income tax provision 528 450 270 Income before income taxes 2,718 2,506 2,262 Net financing charges 273 279 339 EBIT 2,991 2,785 2,601 Adjusting items Net mark-to-market adjustments (3) 4 (12) Restructuring and impairment costs 624 595 279 Water systems AFFF insurance recoveries (174) (158) (29) Transaction separation costs 55 46 44 Transformation costs 253 218 124 ERP asset - accelerated depreciation 102 102 Loss (gain) on divestiture (70) (70) 42 EMEA joint venture loss 17 Adjusted EBIT (non-GAAP) 3,778 3,522 3,066 Depreciation and amortization 775 803 777 Adjusted EBITDA (non-GAAP) $ 4,553 $ 4,325 $ 3,843 8. Income TaxesAfter adjusting for certain non-recurring items, the Company's effective tax rate for continuing operations was approximately 17% for the three and nine months ending June 30, 2026 and approximately 12% for the three and nine months ending June 30, 2025.20