Johnson Controls International plc Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Johnson Controls International plc filed its quarterly report (10-Q) for the period ending March 31, 2024, detailing financial performance and position.</b>

AI Summary

Johnson Controls International plc (JCI) filed a Quarterly Report (10-Q) with the SEC on May 1, 2024. Johnson Controls International plc reported financial results for the quarter and six months ended March 31, 2024. The company's fiscal year ends on September 30. The filing includes data related to various debt instruments with maturity dates ranging from 2024 to 2064. Revenue is broken down into 'Products and Systems' and 'Service' segments. Key financial metrics such as common stock, treasury stock, and parent equity are reported as of various dates in 2023 and 2024.

Why It Matters

For investors and stakeholders tracking Johnson Controls International plc, this filing contains several important signals. This 10-Q filing provides investors with an updated view of Johnson Controls' financial health and operational performance for the second quarter of fiscal year 2024. The detailed breakdown of debt instruments and segment revenues offers insights into the company's capital structure and business drivers.

Risk Assessment

Risk Level: medium — Johnson Controls International plc shows moderate risk based on this filing. The filing is a standard quarterly report, indicating ongoing financial reporting obligations. The presence of various debt instruments suggests potential financial leverage and associated risks.

Analyst Insight

Investors should review the detailed financial statements and risk factors within the 10-Q to assess Johnson Controls' current financial standing and future prospects.

Revenue Breakdown

Key Numbers

• 2024-03-31 — Period End Date (Quarterly Report)
• 2024-05-01 — Filing Date (10-Q Filing)
• 3585 — SIC Code (Air Cond & Warm Air Heating Equip & Comm & Indl Refrigerig Equip)
• 001-13836 — SEC File Number (Johnson Controls Filing)

Key Players & Entities

• Johnson Controls International plc (company) — Filer
• 0000833444 (company) — Central Index Key
• 3585 (industry) — Standard Industrial Classification
• Tyco International plc (company) — Former Company Name
• Tyco International Ltd (company) — Former Company Name
• 2024-03-31 (date) — Period of Report
• 2024-05-01 (date) — Filed As Of Date
• 414-524-1200 (phone) — Business Phone

FAQ

Key Dates

• 2024-03-31: Quarter End — Financial reporting period end for the 10-Q.
• 2024-05-01: Filing Date — Date the 10-Q was officially filed with the SEC.

Key Financial Figures

• $0.01 — Registered Ordinary Shares, Par Value $0.01 JCI New York Stock Exchange 3.625% Se

Filing Documents

• jci-20240331.htm (10-Q) — 1686KB
• q2ex102fy2410-q.htm (EX-10.2) — 20KB
• q2ex311fy2410-q.htm (EX-31.1) — 10KB
• q2ex312fy2410-q.htm (EX-31.2) — 9KB
• q2ex32fy2410-q.htm (EX-32.1) — 5KB
• 0000833444-24-000029.txt (&nbsp;) — 10103KB
• jci-20240331.xsd (EX-101.SCH) — 62KB
• jci-20240331_cal.xml (EX-101.CAL) — 88KB
• jci-20240331_def.xml (EX-101.DEF) — 345KB
• jci-20240331_lab.xml (EX-101.LAB) — 749KB
• jci-20240331_pre.xml (EX-101.PRE) — 551KB
• jci-20240331_htm.xml (XML) — 1872KB

Financial Information

Part I. Financial Information

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) Consolidated Statements of Income for the Three and Six Month Periods Ended March 31, 2024 and 2023 3 Consolidated Statements of Comprehensive Income for the Three and Six Month Periods Ended March 31, 2024 and 2023 4 Consolidated Statements of Financial Position at March 31, 2024 and September 30, 2023 5 Consolidated Statements of Cash Flows for the Three and Six Month Periods Ended March 31, 2024 and 2023 6 Consolidated Statements of Shareholders' Equity for the Three and Six Month Periods Ended March 31, 2024 and 2023 7

Notes to Consolidated Financial Statements 8

Notes to Consolidated Financial Statements 8

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 38

Quantitative and Qualitative Disclosures About Market Risk 49

Item 3. Quantitative and Qualitative Disclosures About Market Risk 49

Controls and Procedures 49

Item 4. Controls and Procedures 49

Other Information

Part II. Other Information

Legal Proceedings 50

Item 1. Legal Proceedings 50

Risk Factors 50

Item 1A. Risk Factors 50

Unregistered Sales of Equity Securities and Use of Proceeds 50

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50

Other Information 51

Item 5. Other Information 51

Exhibits 52

Item 6. Exhibits 52 Signatures 53

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Johnson Controls International plc Consolidated Statements of Income (in millions, except per share data; unaudited) Three Months Ended March 31, Six Months Ended March 31, 2024 2023 2024 2023 Net sales Products and systems $ 4,985 $ 5,083 $ 9,474 $ 9,639 Services 1,714 1,603 3,319 3,115 6,699 6,686 12,793 12,754 Cost of sales Products and systems 3,459 3,516 6,621 6,629 Services 1,059 929 1,999 1,793 4,518 4,445 8,620 8,422 Gross profit 2,181 2,241 4,173 4,332 Selling, general and administrative expenses 2,251 1,579 3,764 3,150 Restructuring and impairment costs 254 418 293 763 Net financing charges 93 71 192 138 Equity income 56 50 118 112 Income (loss) before income taxes ( 361 ) 223 42 393 Income tax (benefit) provision ( 127 ) 49 ( 128 ) 63 Net income (loss) ( 234 ) 174 170 330 Less: Income attributable to noncontrolling interests 43 41 73 79 Net income (loss) attributable to Johnson Controls $ ( 277 ) $ 133 $ 97 $ 251 Earnings (loss) per share attributable to Johnson Controls Basic $ ( 0.41 ) $ 0.19 $ 0.14 $ 0.37 Diluted ( 0.41 ) 0.19 0.14 0.36 The accompanying notes are an integral part of the consolidated financial statements. 3 Johnson Controls International plc Consolidated Statements of Comprehensive Income (in millions; unaudited) Three Months Ended March 31, Six Months Ended March 31, 2024 2023 2024 2023 Net income (loss) $ ( 234 ) $ 174 $ 170 $ 330 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments ( 95 ) 10 ( 33 ) 100 Realized and unrealized gains (losses) on derivatives 27 20 ( 15 ) 3 Pension and postretirement plans ( 1 ) — ( 2 ) ( 1 ) Other comprehensive income (loss) ( 69 ) 30 ( 50 ) 102 Total comprehensive income (loss) ( 303 ) 204 120 432 Comprehensive income attributable to noncontrolling interests: Net income 43 41 73 79 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments ( 3 )

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements March 31, 2024 (unaudited) 1. BASIS OF PRESENTATION The consolidated financial statements include the consolidated accounts of Johnson Controls International plc, a public limited company organized under the laws of Ireland, and its subsidiaries (Johnson Controls International plc and all its subsidiaries, hereinafter collectively referred to as the "Company" or "Johnson Controls"). In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (which include normal recurring adjustments) necessary to state fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2023 filed with the SEC on December 14, 2023. The results of operations for the three and six month periods ended March 31, 2024 are not necessarily indicative of results for the Company's 2024 fiscal year because of seasonal and other factors. 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. The Company is committed to helping its customers win and creating greater value for all of its stakeholders through its strategic focus on b

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements March 31, 2024 (unaudited) also be referred to as reverse factoring, payables finance, or structured payables arrangements. The amendments require a buyer that uses supplier finance programs to make annual disclosures about the program's key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period, and associated rollforward information. 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 maintains agreements with third-party financial institutions who offer voluntary supply chain financing ("SCF") programs to its suppliers. The SCF programs enable suppliers to sell their receivables to third-party financial institutions and receive payments earlier than the negotiated commercial terms between the suppliers and the Company, which generally range from 90 to 120 days. Suppliers sell receivables to third-party financial institutions on terms negotiated between the supplier and the respective third-party financial institution. The Company remains obligated to make payments under the terms of the original commercial arrangement regardless of whether the supplier receivable is sold, and does not pledge any assets as security or provide other forms of guarantees for the committed payment to the third-party financial institutions. Amounts outstanding related to SCF programs are included in accounts payable in the consolidated statements of financial position. Accounts payable included in the SCF programs were approximately $ 561 million and $ 566 million as of March 31, 2024, and September 30, 2023, respectively. Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, "I

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements March 31, 2024 (unaudited) 4. ASSETS AND LIABILITIES HELD FOR SALE During the three and six months ended March 31, 2023, the Company recorded impairment charges primarily due to reductions in the estimated fair value of its Global Retail business of $ 210 million and $ 438 million, respectively. During the six months ended March 31, 2023, the Company also recorded an impairment charge for a business in the Building Solutions Asia Pacific segment of $ 60 million. Both businesses were classified as held for sale as of March 31, 2023. All of the impairments were recorded within restructuring and impairment costs in the consolidated statements of income. No assets and liabilities were classified as held for sale as of March 31, 2024 or September 30, 2023. 5. REVENUE RECOGNITION Disaggregated Revenue The following tables present the Company's revenues disaggregated by segment and by Products & Systems and Services revenue (in millions): Three Months Ended March 31, 2024 2023 Products & Systems Services Total Products & Systems Services Total Building Solutions North America $ 1,700 $ 1,039 $ 2,739 $ 1,554 $ 966 $ 2,520 Building Solutions EMEA/LA 572 492 1,064 582 449 1,031 Building Solutions Asia Pacific 308 183 491 479 188 667 Global Products 2,405 — 2,405 2,468 — 2,468 Total $ 4,985 $ 1,714 $ 6,699 $ 5,083 $ 1,603 $ 6,686 Six Months Ended March 31, 2024 2023 Products & Systems Services Total Products & Systems Services Total Building Solutions North America $ 3,218 $ 2,008 $ 5,226 $ 3,005 $ 1,882 $ 4,887 Building Solutions EMEA/LA 1,144 958 2,102 1,134 872 2,006 Building Solutions Asia Pacific 645 353 998 952 361 1,313 Global Products 4,467 — 4,467 4,548 — 4,548 Total $ 9,474 $ 3,319 $ 12,793 $ 9,639 $ 3,115 $ 12,754 The following table presents further disaggregation of Global Products segment revenues by product type (in millions): Three Months Ended March 31, Six Months Ended March

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements March 31, 2024 (unaudited) Contract Balances Contract assets relate to the Company's right to consideration for performance obligations satisfied but not billed. Contract liabilities relate to customer payments received in advance of satisfaction of performance obligations under the contract. Contract balances are classified as assets or liabilities on a contract-by-contract basis at the end of each reporting period. The following table presents the location and amount of contract balances in the Company's consolidated statements of financial position (in millions): Location of contract balances March 31, 2024 September 30, 2023 Contract assets - current Accounts receivable - net $ 2,063 $ 2,370 Contract assets - noncurrent Other noncurrent assets 5 12 Contract liabilities - current Deferred revenue 2,331 1,996 Contract liabilities - noncurrent Other noncurrent liabilities 310 297 For the three months ended March 31, 2024 and 2023, the Company recognized revenue of $ 372 million and $ 319 million, respectively, that was included in the contract liability balance at the end of the prior fiscal year. For the six months ended March 31, 2024 and 2023, the Company recognized revenue of $ 1,261 million and $ 1,165 million, respectively, that was included in the contract liability balance at the end of the prior fiscal year. Performance Obligations A performance obligation is a distinct good, service, or a 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

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements March 31, 2024 (unaudited) The following table presents the location and amount of costs to obtain or fulfill a contract recorded in the Company's consolidated statements of financial position (in millions): March 31, 2024 September 30, 2023 Other current assets $ 204 $ 156 Other noncurrent assets 263 224 Total $ 467 $ 380 During the three months ended March 31, 2024 and 2023, the C ompany recognized amortization expense of $ 77 million and $ 61 million, respectively, related to costs to obtain or fulfill a contract. During the six months ended March 31, 2024 and 2023, the Company recognized amortization expense of $ 134 million and $ 122 million, respectively, relate d to costs to obtain or fulfill a contract. There were no impairment losses recognized in the three and six months ended March 31, 2024 and 2023. 6. ACCOUNTS RECEIVABLE The Company sold $ 702 million of accounts receivable under factoring agreements during the six months ended March 31, 2024. No amounts were sold during the three months ended March 31, 2024 as the Company discontinued its receivable factoring program. The Company sold $ 427 million and $ 836 million of accounts receivable during the three and six months ended March 31, 2023, respectively. Previously sold receivables still outstanding were $ 82 million and $ 681 million as of March 31, 2024 and September 30, 2023, respectively. 7. INVENTORIES Inventories consisted of the following (in millions): March 31, 2024 September 30, 2023 Raw materials and supplies $ 1,218 $ 1,203 Work-in-process 267 226 Finished goods 1,506 1,347 Inventories $ 2,991 $ 2,776 8. GOODWILL AND O

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